Definition of "Grace Period"

The time between an insurance policy's premium due date and the date the policy will lapse if the premium remains unpaid. Typically, grace periods are 30 or 31 days, and no interest is charged on premiums paid during that time. A grace period protects insured's and their beneficiaries from having the policy terminate inadvertently.

The period of time, usually 30 or 31, days after the premium due date, where the premiums may still be paid with out interest charges and the policy will remain in force. If the insured dies during the grace period, the beneficiary will receive the death benefit less any premiums that are due.

A period (usually 31 days) after the premium due date, during which an overdue premium may be paid without penalty. The policy remains in force throughout this period.