SECTION 4.602. Grace Period

(a) The policy must provide for a grace period of at least one month for the payment of every premium after the first, during which period the policy must remain in full force and effect. If the grace period is expressed in days, at least 31 days of grace must be granted.

(b) The policy may provide for an interest charge on the unpaid premium during the grace period. If an interest charge is provided for, the interest rate must be specified.

(c) The policy may stipulate that if the insured should die during the grace period, the overdue premium or overdue installment will be deducted from any settlement under the policy. If an interest charge is provided against the overdue payment, the accrued interest may also be deducted.

(d) This section is not applicable to single premium policies.

Source Note: The provisions of this §4.602 adopted to be effective January 1, 1976; amended to be effective September 20, 1982, 7 TexReg 3244; transferred effective September 1, 2023, as published in the July 28, 2023, issue of the Texas Register, 48 TexReg 4127; amended to be effective January 24, 2024, 49 TexReg 250