In an annuity or pure endowment contract, other than a reversionary, survivorship, or group annuity, there shall be a provision for a grace period of one month, but not less than 30 days, within which a stipulated payment other than the first one may be made, subject at the option of the insurer to make an interest charge on the late payment at a rate to be specified in the contract, but not exceeding six percent a year, for the number of days of grace elapsing before the payment, during which period of grace the contract shall continue in full force, but in case a claim arises under the contract on account of death before expiration of the period of grace before the overdue payment to the insurer or the deferred payments of the current contract year, if any, are made, the amount of the payments, with interest on any overdue payments, may be deducted from the amount payable under the contract in settlement.
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