What will a beneficiary receive if the insured dies during the Grace Period of a life insurance policy?

When a life insurance policyholder passes away during the Grace Period, the beneficiary is entitled to receive the full face amount of the policy, but this amount is reduced by any premiums that are past due at the time of the insured’s death. The Grace Period is the time frame after a premium payment is missed during which the policy remains in force; typical Grace Periods are often 30 days. If the policyholder dies during this period, the insurer will deduct the amount of any overdue premiums from the death benefit before it is paid out to the beneficiary. This approach ensures that the insurance company is compensated for the unpaid premium while still fulfilling its obligation to pay the beneficiary the majority of the coverage amount.

This is vital information because it highlights the importance of making timely premium payments while also explaining the structure of life insurance policies during periods of non-payment. The other options do not accurately reflect the policy conditions surrounding the Grace Period and the consequences of the insured's death within that timeframe.