Insurance Policy – Premium Grace Period
The underlying condition for making a claim in the event of the death of the policyholder is that the policy must be ‘in force’.
What is meant by policy in force?
It means that all the premiums are paid on the due date or else within the grace period allowed under the policy.
If the premium is paid within the grace period, it is considered as payment on time. There is no penalty payable in such cases.
The “Grace Period” clause grants the policyholder an additional period of time to pay the premium after it has become due.
The standard length of the grace period is one month or 31 days.
The days of grace may be computed from the next day after the due date is fixed for payment of premium.
The provision enables a policy that would otherwise have lapsed for non-payment of premium, to continue in force during the grace period.