Glossary

Grace period

The window after a missed premium due date, usually 30 or 31 days, when life insurance stays in force and the overdue premium can still be paid.

A grace period is the extra time a life insurance policy gives you to pay a premium after its due date before coverage lapses. State laws require one in individual life policies. For most whole life and term policies it is 30 or 31 days. Universal life policies commonly allow 61 days, counted from when the cash value can no longer cover the monthly charges rather than from a bill date.

Coverage continues during the grace period. If the insured dies before the overdue premium is paid, the insurer pays the claim minus the unpaid premium. Say, hypothetically, a $250,000 term policy's $40 monthly premium was due June 1 and the insured died June 20 without paying it: the beneficiary receives $249,960.

Once the grace period ends unpaid, the policy lapses, unless a permanent policy has an automatic premium loan or a nonforfeiture option that keeps some coverage going. Getting coverage back then usually means applying for reinstatement, which can require new health evidence and back premiums with interest. Insurers send lapse notices, and many states let you name a second person to receive one too. See grace periods and lapses.

Last reviewed October 4, 2026

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Related terms

Lapse The end of coverage because a premium went unpaid past the grace period or, in universal life, because cash value could no longer cover the charges. Reinstatement Restoring a lapsed life insurance policy to force, usually by paying overdue premiums with interest and proving the insured is still insurable. Premium The amount a policy owner pays an insurer, monthly, quarterly, yearly or in one sum, to keep life insurance coverage in force. Universal life insurance Permanent life insurance with flexible premiums and an adjustable death benefit, built on an account credited with interest and charged monthly costs. Modal premium The amount due per installment when you pay monthly, quarterly or semiannually instead of yearly, which usually costs more in total over a year.

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