Does the premium paid during the grace period affect the risk coverage in a life policy?
Amita Khanna, Chandigarh
Every life policy states the dates on which the renewal premium is payable by the insured. The policies also provide for a grace period for payment of premium which is different for different modes of premium payment viz. it is normally one month where the premium payable is yearly, half-yearly and quarterly and it is 15 days in case the premium is payable on monthly basis. During the grace period, the policy remains in full force, even if the due premium is not paid. Also, there is no additional interest charged on the premium paid during the grace period. Even in the case of a claim under the policy on account of death of the insured during the grace period, the claim is payable in full subject, however, to the deduction of the unpaid premium amount.
