Grace Period

A time period after the due date that you may pay a premium without penalty. The policy remains in force during this time. Not all insurance companies allow grace periods and no Illinois insurance law requires companies to give you a grace period.

The time – usually 31 days – during which a policy remains in force after the premium is due but not paid. The policy lapses as of the day the premium was originally due unless the premium is paid before the end of the 31 days or the insured dies. This is not a “free-insurance” period.

A period (usually 31 days) following each premium due date, other than the first due date, during which an overdue premium may be paid. All provisions of the policy remain in force throughout this period.

A grace period is the number of days between the date a credit card issuer calculates your new balance and the date your payment is due.

In most cases, if you have paid the previous balance in full and on time, and you haven't taken any cash withdrawals, no finance charges are added to the amount of your purchases.

If you generally pay the entire balance due on time, you may want to choose a card with a longer rather than a shorter grace period, assuming the other terms are comparable. That gives you more time to be sure your payments arrive on time.

However, a minority of credit arrangements include a minimum finance charge, even if you do pay on time. Other lenders go back two billing cycles and will add finance charges if you have not paid the full amount due each time.

The grace period on a student loan allows you to defer repayment so that the first installment isn't due until six or nine months after you graduate or are no longer enrolled at least half time. The timing depends on the type of loan.

You also have a grace period in which to pay the premium on an insurance policy before the policy is cancelled. It's usually one month after the due date.

A grace period exists with respect to a specific balance when you do not have to pay interest on that specific balance. Your agreement will tell you which balances, if any, are subject to a grace period.

For balances that are subject to a grace period, as long as you continue to pay your full account balance every month by the due date listed on your bill, there will be a grace period and we will not charge interest on those balances.

However, if you do not pay by the due date the full balance owing as of the end of a given billing period, there will be no grace period and you will owe interest on the unpaid balance from the end of that billing period. After the end of that billing period, all charges will accrue interest from the date you make them. To take advantage of the grace period again, you must pay your full account balance on time for the number of billing periods stated in your agreement.

A specified period immediately following the premium due date during which a payment can be made to continue a policy in force without interruption. This applies only to Life and Health policies. Check your policy to be sure that a grace period is offered and how many days, if any, are allowed.