Question: My uncle had a term life insurance policy with sum assured of Rs 5000000. He use to pay a premium of Rs 15000 every six months. The last premium was due on December 1, but he was unable to make the payment. Sadly he passed away on December 20, which was still within the policy's 30 day grace period. When we contacted to insurance company they informed us that the claim would be paid because the policy was still active during the grace period. However, the unpaid premium of Rs 15000 would be deducted from the claim amount. How much money will the family finally receive as the death claim payout?
Answer: Since your uncle passed away within the 30 day grace period after the premium due date, the life insurance policy remains active and the full death benefit is payable.
However, the premium that was due on December 1 and remained unpaid must be deducted from the claim amount before the payout is made.
Sum Assured = Rs 5000000
Unpaid Premium = Rs 15000
Net Claim Amount = Rs 5000000 - Rs 15000 = Rs 4985000
Therefore, the family receives a final death claim payout of Rs 4985000.

Supporting evidence:
title: old.irdai.gov.in/512N293V01.pdf
quote: If the death of the Life Assured occurs within the grace period but before the payment of the premium then due, the policy will still be valid and the benefits shall be paid after deductions of the said unpaid premium the benefits shall be paid after deductions of the said unpaid premium
context: - ii. Instalment premium for LIC's Accidental Death and Disability Benefit Rider, if Accidental Death and Disability Benefit Rider option has been exercised.
- iii. Instalment premium for LIC's New Term Assurance Rider, if New Term Assurance Rider option has been exercised.
4. (b). Grace period: A grace period of one month but not less than 30 days shall be allowed for payment of yearly or halfyearly or quarterly premiums and 15 days for monthly premiums. If the premium is not paid before the expiry of the days of grace, the Policy lapses.
If the death of the Life Assured occurs within the grace period but before the payment of the premium then due, the policy will still be valid and the benefits shall be paid after deductions of the said unpaid premium as also the unpaid premium/s falling due before the next anniversary of the policy.
- (c). If the policy has not lapsed and the claim is admitted in case of death of Life Assured under a Policy where the mode of payment of premium is other than yearly, unpaid premium(s), if any, falling due before the next policy anniversary shall be deducted from the claim amount.

PART - D: CONDITIONS RELATED TO SERVICING ASPECTS

1. Proof of Age: The premiums having been calculated on the age of the Life Assured as declared in the Proposal, in case the age is found higher than such age, without prejudice to the Corporation's other rights and remedies, including those under the Insurance Act, 1938, the premiums shall be payable in such case at the rate calculated on the Basic Sum Assured and Rider(s) Sum Assured, if opted for, for the correct age at entry, and the accumulated difference between the premiums for the correct age and the original premiums, from the commencement of the Policy upto the date of such payment shall be paid to the Corporation with interest at such rate as fixed by the Corporation from time to time. However, in case the Life Assured/Proposer continues to pay the premiums at the rates shown herein, and also does not pay the above mentioned accumulated debt, the accumulated difference between the premiums for the correct age and the original premiums from the commencement of this Policy up to the date on which the Policy becomes a claim, with interest on each instalment of such difference at such rate as may be fixed by the Corporation from time to time, shall accrue and be treated as a debt due by the Life Assured / Proposer against the said Policy and shall be deducted from the Policy moneys