What happens if the policyholder does not pay their premium during the grace period?

If the policyholder does not pay their premium during the grace period, the policyholder loses their coverage. The grace period is a specified timeframe after the premium due date in which the policy remains in force even if payment has not been made. However, if payment is not received by the end of this grace period, the policy lapses, and the policyholder is no longer covered under the terms of that policy. This emphasizes the importance of timely premium payments to maintain insurance coverage. The lapse in coverage can lead to a loss of benefits and may necessitate the policyholder to go through the process of applying for a new policy, often at a higher premium or with potential exclusions based on changed circumstances.