What is the after-due date period during which a premium payment can still be made to avoid coverage discontinuance?

What is the after-due date period during which a premium payment can still be made to avoid coverage discontinuance?

• A. Recovery period
• B. Grace period
• C. Reinstatement period
• D. Coverage extension period

Answer: (B)

The term that describes the after-due date period during which a premium payment can still be made to avoid coverage discontinuance is known as the grace period. This is a common feature in insurance contracts that allows policyholders a specific timeframe, typically 30 days, to pay their premium after the due date without losing coverage. If the premium is paid during this grace period, the policy remains active, and the insurer cannot deny benefits based on non-payment. The grace period is essential because it provides financial flexibility to policyholders who may experience temporary difficulties in making timely payments. It also helps maintain continuous coverage and prevents unintentional lapses that could affect the policyholder's financial security and access to benefits.

The term that describes the after-due date period during which a premium payment can still be made to avoid coverage discontinuance is known as the grace period. This is a common feature in insurance contracts that allows policyholders a specific timeframe, typically 30 days, to pay their premium after the due date without losing coverage. If the premium is paid during this grace period, the policy remains active, and the insurer cannot deny benefits based on non-payment.

The grace period is essential because it provides financial flexibility to policyholders who may experience temporary difficulties in making timely payments. It also helps maintain continuous coverage and prevents unintentional lapses that could affect the policyholder's financial security and access to benefits.