Question

A policy with a 31-day grace period implies A) The policy is incontestable after 31 days of delivery. B) The policy benefits must be paid within 31 days after a claim is submitted. C) The policy will not lapse for 31 days if the premium is not paid when due. D) The policyholder may return the policy for a full refund within 31 days.

Answer 1

A 31-day grace period in an insurance policy means the policy will not lapse for 31 days even if the premium is not paid when due. This means the policyholder has an additional 31 days to pay without losing the coverage. It has nothing to do with incontestability, benefit payment time frames, or returning the policy.

Step-by-step explanation:

When an insurance policy indicates a 31-day grace period, it generally implies option C, i.e, the policy will not lapse for 31 days if the premium is not paid when due. In simpler terms, it means that the policyholder has an additional 31 days to pay the premium without losing the coverage. For instance, if a policyholder has missed their payment due date, the insurance policy will still cover and payout when medical expenses are incurred, when the policyholder dies, or when the policyholder's car is damaged, stolen, or causes damage to others, or when their dwelling is damaged or burglarized, up until the end of this grace period.

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