State RegulationsNC specificDifficulty 1/5
A policyholder in Greensboro pays premiums on an individual life insurance policy quarterly and misses a premium that comes due after the first policy year. During the grace period, what protection does North Carolina law provide?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
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.