State RegulationsNY specificDifficulty 2/5
A New York life policy is issued with an annual premium payment mode; it is not a flexible premium policy. When drafting the policy's grace period clause, the longest period the insurer may set is:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under N.Y. Ins. Law §3203(a)(1), life policies other than flexible premium policies must grant a grace period of 31 days or one month, and 31 days is the maximum the policy may set. The 61-day grace belongs exclusively to flexible premium policies, so an ordinary annual-premium policy cannot carry a 61-day grace period.
Why the other options are wrong
- A) 61 days is reserved for flexible premium policies under §3203(a)(1) and exceeds the maximum allowed for other policies.
- C) 10 days is the monthly-mode health grace figure, not the maximum life-policy grace period.
- D) 45 days exceeds the 31-day maximum that a non-flexible-premium life policy may set.
Memory hook
Non-flexible grace: 31 days or a month — and never longer.