Which action occurs during the grace period?

During the grace period, the policyholder is allowed an additional time frame to pay their premium without incurring any penalties or losing coverage. This period typically lasts for a specified duration, such as 30 days, depending on the terms of the policy. If the premium is paid during this time, the insurance coverage remains in effect, ensuring that the insured is not immediately penalized for being late.

The grace period is designed to offer flexibility and protect policyholders from unintentional lapses in coverage due to missed payments. Therefore, the key characteristic of this time is that it provides a buffer for the insured to fulfill their payment obligations without facing immediate consequences.