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Life insurance comes into play when the insured pays a specific amount of premium for a fixed period to ensure the financial security of the family post the insured’s death. A life insurance policy needs to be renewed or revived periodically, generally every year, to keep the coverage active. Imagine there is some dire financial situation in your life, and you are unable to pay your life insurance premium at the due date, then what? Did you know in this unfortunate situation, your life insurance policy lapses, despite you having paid all the earlier premiums regularly? All the policy benefits get nullified, be it the sum assured or the death benefit.
If your life insurance policy lapses, insurance companies offer the following assistance:
st and foremost, you should know that most insurance providers offer a grace period post your premium due date. Insurers understand that you may sometimes miss the deadline, and therefore, offer you a chance to pay your premium during this grace period to ensure your life insurance policy remains active. Further, if the insured dies during the grace period of the insurance policy, the nominees will still be eligible to claim the death benefit. Basically, the life insurance policy benefits remain active through the grace period.
If the nominee or the insured doesn’t pay the premium during the grace period, then the insurance policy lapses. However, some insurance companies offer you the chance to revive even a lapsed insurance policy, till a pre-determined period from the date of policy termination. This date is clearly specified by the life insurance company and is available only for certain types of policies.
The steps involved to revive a lapsed life insurance policy are stated as below:
The first step towards revival is to contact the insurance provider. Inform them of your decision to revive the life insurance policy and fill in the requisite documents to proceed further. During this step, you will be informed of the revival quote or amount that you would need to pay. The applicable amount will include all the premiums due on the insurance policy.
As a thumb rule, the grace period offered by life insurance companies is 30 days. If you pay the outstanding dues during this period, you are most likely not required to pay any penalties. If you make the payment later than the grace period, but lesser than six months, you have to pay the outstanding premiums, along with interest incurred on them, to revive your insurance policy lapse.
If the payment is made post six months, then along with the interest and premiums; you would most likely be liable to pay a late fee or penalty. This penalty is often termed as the revival penalty.
The life insurance policy premium is primarily determined by one’s health and age. Post an insurance policy lapse, you may have to provide a declaration of good health. If the insurance policy is revived within six months, you would most likely not be subjected to any medical tests. However, if the same occurs post six months, you may have to undergo a health check-up at your own expense.
At times, you may be mandated by the insurance provider to undergo a check-up if you have a medical history or a pre-existing condition.
There are many options available when you revive a lapsed insurance policy.
It is always preferable to pay your premiums on time and ensure your life insurance is valid throughout the term so you can avail all the benefits it has to offer. Browse the website to know more about Term Insurance and the various Term Plans offered by PNB MetLife.
The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.
PNB MetLife India Insurance Company Limited, Registered office address: Unit No. 701, 702 & 703, 7th Floor, West Wing, Raheja Towers, 26/27 M G Road, Bangalore -560001, Karnataka.
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As your trusted life insurance partner, PNB MetLife is with you amidst the current COVID-19 outbreak. Our policies also cover COVID-19 Claims. In case of a Death Claim, kindly submit the signed Claim Intimation Letter mentioning the policy number, brief of the insured event and other claim documents on the email mentioned herewith. Please write-in to us at firstname.lastname@example.org or email@example.com. You can also call us on 1800-425-6969 for death claims intimations and for any queries on Monday - Saturday between 10:00 am - 7:00 pm.
PNB MetLife Insurance, amongst the trusted Life Insurance companies in India, aims to provide a wide range of Life Insurance products that suits the needs of an individual at every stage of his life. Life Insurance Plans range from Term Life Insurance Plans, Term Plan, Protection Plans, Long Term Savings Plans , Retirement Plans & Child Education Plan.