A life insurance policy delivered in Charlotte is past due for a premium after the first. Under G.S. 58-58-22(1), what grace period applies, and what happens to coverage during that period?

Why A is correct

Under G.S. 58-58-22(1), individual life policies must provide a grace period of 31 days for any premium after the first. Death benefit coverage continues in force during grace, and the insurer may deduct the overdue premium from any claim arising during the grace period. North Carolina's life figure is 31 days, not a flat 30.

Why the other options are wrong

• B) A flat 30-day grace period is not the North Carolina life standard; the statute requires 31 days, and coverage is not suspended during grace.
• C) The 10-day figure belongs to free-look and monthly A&H grace contexts, not the life grace period, and coverage continues during grace.
• D) No 45-day grace with reduced benefits exists; the statute sets 31 days with continuation of death benefit coverage.

Memory hook

Life grace is 31 — one day more than the familiar 30.

Why B is correct

Under G.S. 58-58-22(1), an individual life policy must provide a grace period of 31 days for the payment of every premium after the first, during which the policy stays in force with full death-benefit coverage. If the insured dies within the grace period, the insurer may deduct the overdue premium from the claim. A flat 30-day period is the NAIC-model figure, not the North Carolina life figure.

Why the other options are wrong

• A) 10 days is the standard life/annuity free-look period under 11 NCAC 12 .0447, not the grace period.
• C) 30 days is the NAIC-model grace figure; the North Carolina life statute fixes the grace period at 31 days.
• D) 45 days is the outer mailing window in the notice-before-forfeiture rule (G.S. 58-58-120), not the grace period.

Memory hook

NC life grace = 31 days — one day more than the NAIC-style 30.

Why A is correct

Under G.S. 58-58-22(1), the uniform grace-period provision gives the insured not less than 31 days to pay any premium after the first, and the policy stays in force with full death-benefit coverage throughout the grace period. If the insured dies during grace, the insurer may deduct the overdue premium from the claim, but the claim itself is payable.

Why the other options are wrong

• B) A 10-day figure is wrong for life insurance; North Carolina's life grace period is 31 days, and a shorter uniform figure describes no North Carolina rule.
• C) The policy does not terminate retroactively to the due date; it remains in force through the grace period and lapses only if the premium is not paid by the end of it.
• D) Death-benefit coverage continues during grace, so a death claim arising in the period is payable, subject only to the insurer's right to deduct the overdue premium from the proceeds.

Memory hook

North Carolina life grace: 31 days of continued coverage - a full month plus one.

Why D is correct

Under G.S. 58-58-22(1), an individual life policy must allow a grace period of 31 days for payment of every premium after the first, and death-benefit coverage stays in force during the grace period. If a claim arises during grace, the insurer may deduct the overdue premium from the proceeds paid.

Why the other options are wrong

• A) Seven days is the weekly-premium A&H grace figure under G.S. 58-51-15(a)(3), not the life figure.
• B) Ten days is the monthly-premium A&H grace figure under G.S. 58-51-15(a)(3).
• C) Forty-five days is the outer mailing limit for premium-forfeiture notices under G.S. 58-58-120, not the grace period.

Memory hook

Life grace is a month and a day — thirty-one.

Why B is correct

Under G.S. 58-58-22(1), every individual life policy in North Carolina must contain a grace period of 31 days for payment of any premium after the first, and death-benefit coverage remains in force during that period. The insurer may also deduct the overdue premium from a claim arising during the grace period, so the beneficiary is protected while the payment is made up.

Why the other options are wrong

• A is wrong because 10 days is the standard free-look period for returning a policy, not the life insurance grace period.
• C is wrong because 7 days is the A&H grace period for weekly-premium policies under G.S. 58-51-15(a)(3), not the life figure.
• D is wrong because 45 days appears as an outer bound in the notice-before-forfeiture rule under G.S. 58-58-120, not as the grace period.

Memory hook

Life grace in NC: 31 days of continued coverage after the due date.