A set amount of time after a premium due date during which you can make a late payment without losing coverage. Grace periods are typically 10 to 31 days depending on the type of insurance and state regulations.
Related Terms
Lapse
The termination of an insurance policy due to non-payment of premiums or failure to renew. A lapsed policy provides no coverage. Reinstating a lapsed policy may require a new application, medical exam (for life insurance), or evidence of insurability.
Premium
The amount you pay to an insurance company to maintain your coverage, typically billed monthly, quarterly, or annually. Premiums are determined by factors such as risk level, coverage amount, deductible, location, and claims history.
Cancellation
The termination of an insurance policy before its expiration date, initiated by either the policyholder or the insurer. Insurers may cancel a policy for non-payment, fraud, or a significant increase in risk. Policyholders can cancel at any time, though a short-rate penalty may apply.