diff --git a/src/Subscription.php b/src/Subscription.php
index 3447303..a24d68c 100644
--- a/src/Subscription.php
+++ b/src/Subscription.php
@@ -71,14 +71,14 @@ public function billable(): MorphTo
     }
 
     /**
-     * Determine if the subscription is active, on trial, paused for free, or within its grace period.
+     * Determine if the subscription is active, on trial, past due, paused for free, or within its grace period.
      */
     public function valid(): bool
     {
         return $this->active() ||
             $this->onTrial() ||
             $this->pastDue() ||
-            $this->cancelled() ||
+            $this->onGracePeriod() ||
             ($this->paused() && $this->pause_mode === 'free');
     }
 
diff --git a/tests/Feature/SubscriptionTest.php b/tests/Feature/SubscriptionTest.php
index a883c31..1fab106 100644
--- a/tests/Feature/SubscriptionTest.php
+++ b/tests/Feature/SubscriptionTest.php
@@ -23,3 +23,17 @@
 
     expect($subscription)->toMatchArray(['product_id' => '12345', 'variant_id' => '67890']);
 });
+
+it('can determine if the subscription is valid while on its grace period', function () {
+    $subscription = Subscription::factory()->cancelled()->create([
+        'ends_at' => now()->addDays(5),
+    ]);
+
+    expect($subscription->valid())->toBeTrue();
+
+    $subscription = Subscription::factory()->cancelled()->create([
+        'ends_at' => now()->subDays(5),
+    ]);
+
+    expect($subscription->valid())->toBeFalse();
+});