Definition of "Grace period"

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Tom & Robin Tyson (The Tyson Team), Real Estate Agent EXIT Real Estate Gallery

Period after the date the premium is due during which the premium can be paid with no interest charged, the policy remaining in force. This period is for 30 or 31 days. If the insured dies during this period, the beneficiary would receive the full face amount of the policy minus the premium owed. Thus the use of the grace period allows the financial technique of leveraging.

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