An industrial life insurance policy — with premiums payable more often than monthly — has a premium due that the policyowner has not paid. Under N.J.S.A. 17B:25-3, what grace period applies before the industrial policy may lapse for nonpayment?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
N.J.S.A. 17B:25-3 governs industrial life insurance — the small-face, frequently collected coverage whose premiums are payable more often than monthly — and grants a grace period of 30 days. The statute adds insurer options: instead of 30 days, the insurer may allow 1 month of at least 30 days, or 4 weeks. During the grace period the policy remains in force, and if a claim arises, the overdue premium plus grace-period interest may be deducted from the proceeds. Note that this industrial-life grace rule is specific to industrial policies and is not the measure used for ordinary individual life coverage.
Why the other options are wrong
- A) 7 days corresponds to weekly-premium grace concepts in health coverage, not the industrial life grace period of N.J.S.A. 17B:25-3.
- B) 10 days is far shorter than the statutory grace period for industrial life policies.
- C) 20 days does not match any industrial life grace formulation; the statute fixes the period at 30 days, 1 month, or 4 weeks.
Memory hook
Industrial grace: 30 days, or a month, or four weeks — the collector still has time to knock.