Life Insurance Policy Grace Period

Insurance companies give grace period as a part of good servicing to the customers. You also get reminders from Insurance Company if your premium is due (normally in case of Quarterly, Half-Yearly and Yearly modes). For Monthly policies, most of the companies now accept ECS only. Example of Grace period for life insurance policy. An insurance grace period is the time you have after your due date to pay your premium before your insurance company cancels your policy. It gives you a fair chance to pay your bill when circumstances outside your control delay your payment. It also specifies whether a claim will be paid if payment is received within the grace period.. The life insurance grace period exists to provide a window of security should you miss your payments, no matter what type of life insurance you have. The grace period ensures your policy won’t be canceled immediately. This isn’t an ideal situation for the insurer, as it risks them having to pay out despite not having received premium payments..

If the value slips near zero and there is not sufficient funds to cover the cost of life insurance, the policy will lapse. Term life insurance has no cash value. Therefore when a premium payment is missed, the policy will immediately go into grace period, and then lapse after the prescribed amount of time.. Knowing your insurance company’s grace period is key to keeping your coverage in force. Insurers will generally give you a cushion of time past your premium due date to pay up and still have your claims covered. But if you exceed that grace period, your insurance company could cancel your policy..

You’ll run into trouble if the grace period passes and you still haven’t paid your life insurance premium. Then the policy will “lapse,” meaning the coverage ends, and you might have to .... What is a Life Insurance Grace Period? A life insurance grace period refers to the period of time after premium payments are due, during which the policy is still active. It is also commonly referred to as a “lapsation grace period” as it is technically delaying an insurance policy lapse by the length of the grace period – typically 30 days from the premium due date..