The Grace Period for Life Insurance Policies

Both policyholders and life insurance beneficiaries should know what the grace period is for making premium payments on a life insurance policy. Life insurance companies frequently make administrative mistakes and let policies lapse while still in the grace period. In these instances, coverage should remain in effect and the life insurance company should pay beneficiaries’ claims for the death benefit.

If your claim was denied due to policy lapse or termination, call us. Our life insurance lawyers investigate and find out whether the grace period was in effect and whether coverage remained in place at the policyholder’s death. Let us help you get paid.

What is the Grace Period on a Life Insurance Policy?

The life insurance “grace period” is the time following the premium due date that the policyholder has to pay the premium without negative consequences. Generally, the grace period will be 30 or 31 days following the premium due date, but this is specified in the policy documents for each life insurance policy.

Life insurance is highly regulated under state and federal ERISA law. Life insurance companies are required to provide a grace period for premium payments and to send notices regarding past-due premium payments to the policyholder. If the life insurance did not apply the grace period or cannot show that they sent the required notices to the policyholder, the lapse of the policy can be overturned.

What Happens When a Life Insurance Policy Lapses

If a life insurance policy lapses, life insurance coverage ends. This means that if a policyholder dies after their policy lapsed, the life insurance company will deny their beneficiaries’ claims because there is no coverage.

Life Insurance Denials Due to Lapse

Lapse is one of the most common reasons for life insurance claim denial. Unfortunately, life insurance companies often let policies lapse incorrectly, either by not applying the grace period for premium payments, not sending the required past-due notices or lapse notices, or not applying the disability waiver of premium. 

In the case of employer-provided group life insurance, often employers do not administer the policy correctly and fail to give employees the forms to convert group coverage to individual coverage, or fail to process those forms. 

Identifying Mistakes in a Lapsed Policy

Unfortunately, many life insurance policies lapse due to no fault of the policyholder. In cases where mistakes cause life insurance coverage lapse, we can often get our beneficiary clients paid when we appeal the life insurance claim denial.

If your claim was denied due to lapse, first, determine whether the life insurance policy was a group life insurance policy or an individual policy. Most individual policies are governed by state law, while group life insurance policies through an employer are governed by federal ERISA law.

In either case, a grace period applies to past-due premium payments. If the life insurance company allowed the policy to lapse during the grace period, the beneficiary on the lapsed policy can still get paid. Similarly, if the policyholder made a premium payment within the grace period but the life insurance company did not correctly apply that payment to their account, the beneficiary can still get paid. If the policyholder had flexible or vanishing premium payments and the life insurance company failed to administer that, the beneficiary can still get paid.

If the life insurance company cannot show that it sent the policyholder the required notices of past-due premium payments and notice of lapse, the beneficiary may still get paid. We had a case where the policyholder was in the hospital, not receiving their mail, the policy lapsed, and they died. We were able to get that beneficiary paid. 

If the policyholder was eligible for disability waiver of premium payments and the policy lapsed due to non-payment, their beneficiaries may still get paid. We have had many cases like this and have gotten our beneficiary clients paid.

If an employer failed to give a separating employer the forms to convert group life insurance coverage to an individual policy, or failed to correctly process those forms causing coverage to lapse, the beneficiaries may still get paid. Again, we have had many cases where employers improperly administer coverage conversion causing policy lapse, and we have gotten our beneficiary clients paid.

Talk with a Life Insurance Lawyer if Your Claim Was Denied Due to Lapse

Don’t take no for an answer if the life insurance company denied your claim due to lapse. Keep in mind that life insurance companies are for-profit companies, and they only make money when they collect premiums and deny or delay paying beneficiaries’ claims. For this reason they have little incentive to avoid making mistakes or to check for mistakes in denying beneficiaries’ claims.


Let us check for mistakes for you. We thoroughly investigate each claim, and if the lapse in coverage was not the policyholder’s fault, we can get you paid. We take cases on contingency only to minimize costs to you, and we only get paid if you do. Call us to discuss your case, free of charge.