Which of the following statements about the grace period in a whole life insurance contract is (are)true?
I.The purpose of the grace period is to prevent the policy from lapsing by giving the policyowner additional time to pay an overdue premium.
II.If the insured dies during the grace period,the death benefit is reduced by 50 percent.

Question

Quizplus · Accepted Answer

Statement I is true. The grace period is a specified period of time (usually 30 or 31 days) during which the policyowner has the option to pay the premium due, and the policy remains in force. The purpose of the grace period is to prevent the policy from lapsing by giving the policyowner additional time to pay an overdue premium.

Statement II is false. If the insured dies during the grace period, the death benefit is paid in full, with no reduction.

Which of the Following Statements About the Grace Period in a Whole