What is required for insurance benefits to be paid if the insured dies during the grace period?

For insurance benefits to be paid when the insured dies during the grace period, it is essential that the premium must have been paid before the insured's death. The grace period is a specified time after the premium due date during which the policyholder can make the payment without losing coverage. If the insured passes away during this grace period, the insurance company will pay out the benefits as long as the premium was paid prior to that death.

This is fundamental because it signifies that the coverage was in force at the time of death, even if the payment was just overdue. The grace period allows policyholders some flexibility to maintain their insurance coverage without penalties or loss of benefits, which aligns with the principle of ensuring that the insured's beneficiaries are protected.

Other options do not address the primary requirement for benefit payment related to the grace period specifically. For instance, the idea of the policy remaining active is indeed a consideration, but it hinges directly on the premium being paid; thus, the answer correctly focuses on the necessity of prior premium payment for coverage continuity.