How to Revive a Lapsed Life Insurance Policy?
Purchasing a life insurance policy is one of the finest ways to ensure the well-being of loved ones even in your absence. Apart from securing the future of your family, a life insurance policy can also prove to be a great long-term investment option. The maturity benefits of life insurance can help you plan your retirement, fund children’s education, etc. However, to reap all the benefits of life insurance, you must ensure that it remains in force by paying its timely premium.
What happens if you miss the premium due date?
If you fail to pay the premium before the due date, the insurance company provides a grace period of usually 30 days for the payment of premium. You can pay the premium in the grace period to keep your policy active. However, if the premium isn’t paid in the grace period, your life insurance policy may lapse. The coverage provided under life insurance won’t be available on a lapsed policy and hence, any claims made in such cases would be rejected by insurance providers. Therefore, if your life insurance policy lapses, your first and foremost priority should be to revive it at the earliest.
How to revive a lapsed life insurance policy?
Let’s have a look have at how you can revive your lapsed policy and enjoy the benefits of life insurance.
- You must note that a lapsed life insurance policy can be revived only if it has not crossed a certain time period from the date on which the policy lapsed. The insurer specifies this period and almost all insurers allow revival of lapsed policies within two years from the date of policy lapse. To revive the lapsed policy, policyholders would be required to pay the due amount along with interest or penalty.
- The eligibility to revive a lapsed policy also depends upon type of the life insurance policy. For pure risk covers like term plans, the lapsed policy can be revived within three months with a health declaration form. However, if you revive your term plan after six months, you may be asked to undertake a medical test all over again.
- In case of endowment policies and ULIPs, the policy can be revived by paying the balance premiums with interest. However, if the lapse is more than three years, a fresh medical examination is mandatory for the revival of the policy.
- If your life insurance policy has lapsed and you are looking to revive the same, you must also keep a tab on the schemes launched by insurance companies for the revival of lapsed policies. It is quite possible that you may be able to avail concessions on the penalty charged on policy revival.
Taking into consideration all the hassles related to reviving a lapsed policy, it is best to avoid such situation by making timely premium payment of your life insurance policy.
While purchasing life insurance policy, you must make sure that you calculate the premium beforehand by using a life insurance calculator. A life insurance premium calculator in an online tool that can help you get different life insurance quotes, thereby allowing you to settle for a policy that best suits your needs. You should always settle for a policy that has affordable premium. By doing so, paying timely premium won’t be financially burdensome and you will be able to prevent your life insurance policy from lapsing. Lastly, while purchasing life insurance, make sure that you read the terms and conditions of your policy carefully. In case of any query, do not hesitate to seek the help of a financial advisor. This will help you avoid any inconvenience later.