What may happen on the 31st day after a missed premium payment?

When a premium payment is missed, most insurance policies include a grace period that allows for late payment without immediate consequences. However, if the premium remains unpaid by the end of the grace period—typically 30 days—the policy may lapse. On the 31st day after a missed premium payment, if the premium has not been received, the policy is effectively terminated, meaning any coverage provided under that policy is no longer in force. This is why the option stating that the insurance policy will lapse and coverage will terminate is the correct choice.

The other possibilities like automatic reinstatement, entering a renewed grace period, or charging only late fees do not commonly apply in this scenario after the grace period has expired. Most policies require payment by the end of the grace period to maintain coverage, thus reinforcing the importance of timely premium payments.