Grace Period

​The time between the due date of a premium and policy lapse (typically 30 days). During the grace period, the insurance remains in force and payment may be made to keep the policy in good standing. If death occurs during the grace period, the death benefit would be paid (reduced by the amount of premium due) after company approval. Once the grace period has ended, the insurance has lapsed and coverage is no longer in force. Most policies provide for reinstatement of the insurance up to a specified period of time -- usually three years -- and cannot be any later than the expiration of the policy. The insured must provide proof of insurability, complete an application for reinstatement, and may have to submit to a new health examination. Payment in full of back premiums will also be required.​

Related Terms: Lapse, Reinstatement