State RegulationsNY specificDifficulty 2/5
A New York policyowner misses a scheduled payment on a flexible-premium life insurance policy. Under N.Y. Ins. Law §3203(a)(1), what is the length of the grace period?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under N.Y. Ins. Law §3203(a)(1), a flexible-premium life insurance policy must provide a grace period of 61 days, while all other life policies need provide only 31 days or one month. During the grace period the policy remains in force, and if the insured dies during grace, the insurer may deduct the overdue premium from the death proceeds. The extended window recognizes that flexible-premium payments rise and fall with the policyowner's funding choices.
Why the other options are wrong
- B) Thirty-one days (or one month) is the grace period for all other life policies; a flexible-premium policy must receive 61 days.
- C) Thirty days is the outside limit of the free-look period, not the grace period of a flexible-premium life policy.
- D) Ten days is the grace figure for a monthly-premium health policy, not for flexible-premium life insurance.
Memory hook
Flexible premium, flexible grace: 31 for most, 61 for flexible.