What will the insurer do if M dies shortly after a premium payment due date?

In the context of life insurance policies, if a policyholder passes away shortly after a premium payment due date, the insurer typically has provisions regarding death benefits in relation to premium payments. The correct answer reflects that the insurer will pay the face amount of the policy but will deduct any past due premium that was not paid prior to the insured's death.

This approach is standard practice with most life insurance policies, as it acknowledges the agreement between the insurer and the policyholder. On one hand, the policyholder has a contractual obligation to keep premium payments current to maintain coverage. On the other hand, if death occurs shortly after a premium is due, the insurer often allows the payment of the death benefit, less any amounts owed, to maintain fairness and meet the intent of providing coverage during the period in which the policy was active.

Choosing to cancel the policy due to non-payment immediately after the due date typically involves factors such as the grace period, which many policies allow before canceling coverage. Similarly, paying nothing would disregard the grace period or terms of coverage that may still apply. Lastly, fully covering the death benefit despite the missed payment would not align with the contractual obligations inherent in most life insurance agreements, as the policyholder has not upheld their end of the