When can an insurer terminate a policy for non-payment?

An insurer can terminate a policy for non-payment specifically after proper notification has been given, which typically involves mailing a notice to the policyholder. This allows the insured a chance to rectify the situation before termination occurs. The requirement for a notice is a key consumer protection measure, ensuring that policyholders are informed of the impending termination and have an opportunity to make the necessary payment to keep their coverage active.

The mention of "after three late payments," does not accurately reflect the standard procedure for policy termination, as each insurer's policy terms can vary significantly regarding late payments. The option regarding the grace period is also not entirely correct since the insurer can still proceed with termination during and after this time frame, provided notification is given. Lastly, terminating a policy solely at the end of the policy term does not account for the insurer's right to terminate the policy due to non-payment prior to that point, which can happen once the proper notice is issued.

Thus, the correct understanding revolves around the necessity of mailing a notice to properly terminate a policy for non-payment.