Grace Period

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Grace Period A grace period in insurance is a period of time after the premium is due in which a policyholder can make a premium payment without coverage lapsing. This gives policyholders a little extra time to get their payment in order, if needed. Grace periods vary by insurer, policy, and jurisdictions. They can range from 24 hours to three months. Some insurance policies have no grace periods at all. For example, health insurance policies typically have a 30-day grace period, while auto insurance policies may have a 15-day grace period. Grace periods are important because they give policyholders a little extra time to get their premium payments in order without having to worry about losing their coverage. This can be especially helpful for policyholders who experience unexpected financial difficulties. If a policyholder misses a premium payment, their coverage will not immediately lapse. Instead, the policy will enter into a grace period. During the grace period, the policyholder is still covered by their insurance policy, but they will need to pay the missed premium plus any applicable late fees in order to keep their coverage in force. If the policyholder does not pay the missed premium by the end of the grace period, their coverage will lapse. A lapsed policy means that the policyholder is no longer covered by their insurance policy and will be responsible for paying for any covered expenses out of pocket. You may have to pay a late fee if you make your payment during the grace period. If this happens more than once, your insurance company might charge you higher premiums when you renew. How to avoid missing premium payments -Set up automatic payments from your checking account or credit card. -This way, you will never have to worry about forgetting to make a payment. -Review your policy and make sure you know when your premium payments are due. -If you are experiencing financial difficulties, contact your insurance company to see if they offer any payment assistance programs. After an insurance grace period, a policy may be canceled due to non-payment, which will be detrimental to the policyholder. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful

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