If a policyholder has a past-due amount owed for insurance premiums, how much will an insurer pay if a claim is submitted?

When a policyholder has a past-due amount owed for insurance premiums, the insurer typically pays the claim amount minus the unpaid premium. This is because insurers have a contractual obligation to uphold certain terms within the policy, including the requirement for premiums to be current. If premiums are not up-to-date, the insurer may deduct what is owed from the claim payout.

This policy reflects that while the insurer remains responsible for damages or losses covered under the policy, they also have a right to deduct any amount that is overdue to ensure that policyholders are maintaining their financial responsibilities. Thus, the payout for claims in such cases would be reduced by the amount that is owed, which aligns with the situational context of maintaining the integrity of the insurance agreement.