When a premium on a life assurance policy falls due, a certain time, known as the Days of Grace, is always allowed in which it may be paid without loss or fine. This period is usually 30 days, but a calendar month may be allowed and in one case 15 days only are given. During the days of grace the policy is fully in force and should a claim arise, it would be paid in the ordinary way, the premium that has fallen due merely being deducted.

If the premium is not paid within the days of grace, it is said to be overdue and if the policy has acquired a surrender value the non-forfeiture regulation then comes into operation. The regulations usually apply only to ordinary life business; for special policies special schemes are sometimes in force and in some cases, such as Sinking Fund Assurances, where the office is running no mortality risk, no regulation is called for. These remarks, throughout, will deal only with the ordinary non-forfeiture regulations as applied to Whole Life and Endowment Assurance Policies.