The total cost of the insurance contract is paid in installments called premiums. Premiums must generally be paid when due. However, most policies have grace periods for making the premium payment so that they can be paid late without canceling the contract. Some state laws may establish grace periods. If the premium is paid before the end of the grace period, then the contract does not lapse and losses are covered.
Some states put limits on the use of particular factors in determining insurance rates.
For example, a few states prohibit the use of gender in determining the rate for medical or other insurance. A rider is an amendment to an insurance contract that restricts, expands, or specifies the coverage of the insurance. A rider may also be called an endorsement. The incontestability clause refers to innocent mistakes. This clause generally does not apply to fraud or to misrepresentations relied on by the insurance company.