State RegulationsNC specificDifficulty 1/5
A North Carolina resident's individual life policy has been in force for several years and the policyholder misses a premium due date. Under the standard grace period provision, how long does the policyholder have to pay the overdue premium while death benefit coverage remains in force?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under G.S. 58-58-22(1), the grace period for any premium after the first on a North Carolina life policy is 31 days, and the policy stays in force for death benefit purposes during the grace period. If the insured dies during grace, the insurer may deduct the overdue premium from the claim proceeds. This protects policyholders from immediate forfeiture over a late payment.
Why the other options are wrong
- A) 10 days is the standard free-look period for returning an individual life or annuity policy, not the grace period for paying overdue premiums.
- C) A flat 30-day grace period is the generic model-act figure; North Carolina's statute specifies 31 days for life policies.
- D) 45 days is the outer limit for mailing the notice before forfeiture for nonpayment under G.S. 58-58-120, not the grace period.
Memory hook
NC life grace: 3-1 = 31 days.