Grace

Policy holders have a specific amount of time following a premium due date to pay the premium without penalty.  The length of the grace period is specified in a grace period provision that is found in a life insurance, health insurance, or annuity policy.

Grace letter is the correspondence sent to the policy owner notifying him/her of the non-receipt of the premium amount within the specified due date and the grace status of the policy.  The Grace letter is spawned from the Grace transaction.  

If the grace period end date is reached, the lapse activity will process and the policy will be cancelled.