If you pay your premium regularly, your policy remains active. If something unfortunate happens to you during this period, the insurance company will honour the commitment and pay your nominees. If you don’t pay your premiums even after the grace period, the term insurance policy will be considered as lapsed and the insurance company will no longer be compelled to issue coverage.
When does a Policy Lapse?
Nowadays, even after you miss the policy premium due date, insurance companies offer a grace period during which you can pay the premiums. The grace period from the premium due date is 30 days for yearly, half-yearly and quarterly mode of premium. And it is 15 days if you are paying monthly premiums.
When you fail to pay the premium, even during the grace period, the term insurance policy lapses. Hence, your insurance contract lapses. In such a case, if something unfortunate were to happen to you, the insurer will not give death benefits to your nominees.
So, if you have let your policy lapse, here’s what you can still do to resuscitate it.
How to Restore a Lapsed Policy?
As long as the policy holder is paying the premiums before the premium due date or within the grace period, the policy will not lapse. The policy tends to lapse when the premiums are not paid even after the grace period is completed. Subsequently, the insurer gives an option to the policy holder in which the policy status can be made active by paying the premium within a specified period. This simple process is known as revival of the policy and the period is known as the revival period.
The revival period differs with the type of insurance product chosen and the same is mentioned clearly in the key feature document of your policy document. The policy holder may opt to revive the policy online from the options available on your insurance company’s website or you may directly walk-in to the nearest branch to complete the revival procedure.
Generally, if the policy is to be revived, the policy holder has to pay interest for the period of non-payment of premium amount. Also, a Declaration of Good health needs to be submitted at the time of premium payment. The declaration of Good Heath is given for the life assured. In some scenarios, depending on the policy holder’s age and sum at risk, the policy holder may have to go through some medical tests also. Once the insurance policy has been revived, the confirmation message of revival of the policy is sent to the registered address of the policy holder.
How Can You Buy a Term Insurance Online?
- Step 1: Choose the Life Cover you want, Benefit structure and Policy Term. Fill in the details on your Online Application Form – Personal Details, details of the Nominee, Health and other Details,
- Step 3: Make payment through your Debit card or Credit card or Internet Banking.
- Step 3: Attach your Signature in electronic mode.
- Step 4: Upload your self-attested documents needed for KYC
Reviving a term policy isn’t a big task but you shouldn’t wait to pay premiums until the last minute. Keep a check on the payment reminders to ensure that you pay the premiums regularly.