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Life Insurance Learning Center - Contract Provisions

Grace Period

The provision states:

Any premium after the first may be paid not more than thirty-one days after the date upon which such premium becomes payable, during which grace period the policy will be continued in full force. If death occurs within the grace period, the premium, if unpaid, will be deducted from the amount payable hereunder.

Grace period is common in a lot of other financial products, such as consumer loans, mortgages, credit card payments, etc. The grace period in a life insurance policy is meant to protect the insured. If there is a slight lapse in the payment of a premium, it is to prevent the life insurance company from forcing the insured to provide evidence of insurability again.

In this provision, there is no statement that says that interest needs to be paid to the life insurance company on a premium that is paid during the grace period.

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