31A-22-402 - Grace period.
31A-22-402. Grace period.
(1) (a) Every life insurance policy other than a group policy shall contain a provisionentitling the policyholder to a grace period within which the payment of any premium may bemade after the first payment of any premium.
(b) During the grace period described in Subsection (1)(a), the policy continues in fullforce.
(2) The grace period required by Subsection (1) may not be less than:
(a) 31 days; or
(b) four weeks for policies whose premiums are payable more frequently than monthly.
(3) The insurer may impose an interest charge during the grace period not in excess of theinterest rate:
(a) set by the policy for policy loans; or
(b) in the absence of a provision described in Subsection (3)(a), a rate set by thecommissioner by rule.
(4) If a claim arises under the policy during the grace period, an insurer may deduct fromthe policy proceeds:
(a) the amount of any premium due or overdue;
(b) interest at the rate provided in this section; and
(c) any deferred installment of the annual premium.
(5) The insurer shall send written notice of termination of coverage:
(a) to the policyholder's last-known address; and
(b) at least 30 days before the date that the coverage is terminated.
Amended by Chapter 308, 2002 General Session