What is Grace Period in Life Insurance? Maybe you often hear the term grace period in life insurance, but don’t know what Grace period actually means. Grace period is also known as grace period. The life insurance policy usually includes a grace period for advanced premium payments.
Continuing premiums are premiums that must be paid after the first premium, Grace period is a certain period of time, usually 30 or 31 days after the due date of further premium payments during which the premium can be paid without penalty.
In general, the grace period of 30 or 31 days is the minimum allowed grace period. There are also insurance companies that provide this type of insurance with a longer grace period, for example 2 months (60 days). During the grace period, the policy remains in force and if the premium is paid within the grace period, the insurance company will approve it as a timely payment. If the insured dies within the grace period, the company will pay the policy by reducing the unpaid premium.
If the continued premium of the policy is not paid during the grace period, then the policy is called lapse. However, if the policy already has a cash value, there are some of the best insurance companies that stipulate that the policy has not been considered void. Even though the insured does not pay the premium during the grace period.