State RegulationsMA specificDifficulty 1/5
Which premiums are covered by the grace-period protection of M.G.L. c. 175, § 132(1) in a Massachusetts life policy?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
M.G.L. c. 175, § 132(1) frames its grace requirement for premiums due after the first policy year. The first premium is governed by the law of contract formation — no policy issues until it is paid — so the statutory grace period exists to protect the continuing premiums that keep an established policy alive. From the second year onward, every premium due enjoys the 30-day grace with the optional interest charge of at most 6% per annum.
Why the other options are wrong
- A) The first premium is a condition of issuing the policy; the statutory grace period under M.G.L. c. 175, § 132(1) attaches only to later premiums.
- C) Single-premium contracts have no continuing premiums for the grace period to protect.
- D) The grace protection is not confined to the first two years; it covers premiums due after the first policy year for the life of the policy.
Memory hook
The first premium buys the policy; the grace period guards everything after.