What happens if an insured dies during the grace period?

When an insured dies during the grace period, the policy does not become void automatically. Instead, the insurer pays the death benefit to the beneficiary, but it is reduced by any unpaid premiums that were due before the insured's death. The grace period is a specified time frame after the premium due date during which the policyholder can still make the payment without losing coverage. Such a provision protects the policyholder and their beneficiaries, ensuring that accidental lapses in payment do not result in the loss of coverage.

This mechanism is designed to provide support and financial assurance during an often difficult time for the beneficiaries. They receive the death benefit to help cover expenses or debts, even if some premiums were not paid, thus ensuring continuity of protection.