What is the term for the period granted to pay the premium after its due date without the policy lapsing?

The period granted to pay the premium after its due date without the policy lapsing is known as the grace period. This is an important feature of life insurance policies that allows policyholders a specified amount of extra time—typically 30 days—to make their premium payment. During this grace period, the insurance coverage remains in force despite the lapse in payment.

If the premium remains unpaid after the grace period expires, the policy may lapse, meaning the coverage is terminated, and the insurer is not liable for any claims thereafter. The grace period provides necessary flexibility for policyholders, ensuring they do not lose coverage immediately due to a missed payment.

In contrast, reinstatement refers to the process of restoring a lapsed policy after the grace period has ended, while the automatic premium loan option allows insurers to automatically use the policy's cash value to pay the premium when due. Loan deferment involves postponing payments on a loan, which does not directly connect to the concept of maintaining an active insurance policy during late payment.