Question

What does the grace period allow a life insurance policyowner to do?

- A) Extend the policy term
- B) Convert the policy
- C) Make a late premium payment without penalty
- D) Cancel the policy without penalty

Answer 1

The grace period in life insurance allows for a late premium payment without the policy lapsing, which helps prevent unintentional cancellation due to a missed payment.

Step-by-step explanation:

The grace period in a life insurance policy allows the policyowner to make a late premium payment without penalty. This means that if the policyholder fails to pay the premium on time, they have an additional amount of time, often 30 days, to make the payment without the policy lapsing. The grace period does not allow for extending the policy term, converting the policy, or canceling the policy without penalty.