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Grace period allows an insured's life insurance policy to remain in force even if the premium was not paid on the due date.
What is grace period?
A life insurance policy won't lapse during the grace period even though a payment is past due after a missed insurance premium is due. Every state in the US requires the grace period, a highly helpful provision, to be included in every life insurance policy. Depending on the rules of each state, the minimum grace period is from 28 to 31 days; however, some businesses may grant extended grace periods.
When the required number of days have gone, the grace period formally ends at the close of business on the day the missing premium payment is due. The grace period in a whole life, universal life, or variable universal life policy would only be applicable if the premium payment was past due and there was no cash value left in the policy. It is unlikely that a policy will enter "grace period status" if a premium payment is missed if cash value is still present as long as it may be utilised to pay the premium or at the very least draw a loan to pay the premium.
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