What occurs if an insured dies in the grace period without paying the overdue premium?

When an insured dies during the grace period without paying the overdue premium, the policy retains its value but is subject to the outstanding premium amount. In this scenario, the beneficiary will receive the full face amount of the policy, but it is reduced by the amount of any overdue premiums that were not paid prior to the insured's death. This means that the full benefit is available to the beneficiary, reflecting the intention to provide coverage during the grace period, with the adjustment for the unpaid premium. The purpose of this provision is to protect the interests of the beneficiary while ensuring that premiums are collected.