A grace period is the contractually allowed time after a premium due date during which a life insurance policy remains in force despite nonpayment. If the premium is paid within the grace period, coverage continues without lapse; if not, the policy may lapse or enter a nonforfeiture option. Grace periods are set by state law and policy terms (commonly 31 days) and may differ for universal life, where sufficient cash value can cover monthly deductions. Grace-period notices and catch-up rights protect consumers against inadvertent loss of coverage.

Case managers track billing and send reminders before grace periods expire. For UL, they verify that monthly deductions are covered. If a lapse notice issues, advisors coordinate catch-up premiums or reinstatement requirements quickly.