Life Insurance Company Grace Period
Grace period is probably a familiar term that you have come across many times in your financial life. There are grace periods on credit card purchases, consumer and home mortgage/mortgage refinancing loans. However, in a life insurance company policy, the grace period is something a little bit different. Let's examine what the exact life insurance company provision says:
"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."
When you first initiate a life insurance company policy, the company will make sure that you are insurable, by requiring certain documents. However, it would not be fair if a life insurance company was
allowed to keep asking for evidence of insurability. Therefore, this clause is instated to protect the consumer. If there is a slight lapse in any given premium payment, a life insurance company is prevented from forcing the insured to provide evidence of insurability again.
Also, no interest needs to be paid during this grace period.
Grace Period
Incontestable Clause
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