“Premiums paid within 20 days before a policy anniversary are assumed to be paid in the following year”

The statement "Premiums paid within 20 days before a policy anniversary are assumed to be paid in the following year" is a provision that is commonly found in life insurance policies. This provision is known as the "grace period," which is the period of time after a premium payment is due during which the policy remains in force. If a premium payment is made during the grace period, the policy will continue to be in force and the premium payment will be considered to have been paid on time. However, if the premium is paid within 20 days of the policy anniversary date, the premium is considered to be applied to the following policy year. For example, if a policy anniversary date is January 1st and the premium due date is December 15th, if the premium is paid between December 15th and January 1st, it will be applied to the following policy year. This provision is intended to prevent policyholders from gaining an unfair advantage by paying premiums right before the policy anniversary date in order to increase the policy's cash value or death benefit. By assuming that the premium is paid in the following year, the policyholder will not be able to artificially increase the policy's value by timing their payments in this way.