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The frequency of premiums also affects what are quaintly known as the days of grace. These refer to the period during which the company will continue to maintain the policy in force without altering its terms if the premium due has not been received. In the case of annual premiums, there are 30 days of grace; if premiums are paid monthly there are fewer, often about 15. So long as the premium is received within this period (which is stated in the policy document) the terms of the contract remain unaltered. If a claim is made during this period, it will be met and the premium overdue deducted from the sum assured.
Policies which do not have a surrender value (term assurances, FIB) and policies which have not yet acquired a surrender value, automatically lapse, that is, the cover ceases. Companies may allow the policy to be revived on payment of the premiums omitted with interest and a revival fee; they may also require a declaration that the policyholder's health is unimpaired, and evidence of this from his doctor may also be required (such a declaration of health may also be required, incidentally, if there has been long interval between proposal and the completion of a policy).
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