What happens if a policyholder fails to pay their premium during the grace period?

If a policyholder fails to pay their premium during the grace period, the policyholder may indeed lose coverage after the grace period ends. The grace period is designed to give policyholders a temporary extension to make their premium payment without losing coverage. However, if the premium remains unpaid by the end of this grace period, the insurance policy may lapse, resulting in a loss of coverage.

This is an important aspect of insurance policies, as it emphasizes the importance of timely payments and the consequences of not fulfilling that obligation. The grace period typically allows for a specific timeframe—often 30 days—during which the policy remains in force, allowing the policyholder to avoid penalties and maintain coverage, but once that period expires without payment, the policy is no longer active.