Avoid lapses, Stay Insured
GAURAV KANSAL
18:08
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Be alert. Your life insurance policy can lapse when the due premium is
not paid even within the grace period.
What is a lapsed policy?
·
Lapsation means that
an insurance policy ceases to exist.
·
A policy lapses if the
holder fails to pay premium after a stipulated grace period of 30 days for a
policy.
·
When policyholders
miss their premium payments, they are no longer protected under the insurance.
·
If the policyholder
dies, the nominee will not be able to avail the claim, as the policy had lapsed
and there was no risk cover.
Why do insurance policies lapse?
·
Mis-selling of the
product. This is like an agent trying to sell a life insurance policy to a
70-year-old with no immediate liabilities, he/she doesn't need it.
·
Insurance is a
long-term policy. Ensure that you will be able to continue the policy keeping
in mind your future obligations before signing up for an insurance policy of
any kind.
·
Sometimes, when your
agent leaves the industry, it leaves you hanging as well. Your agent knows your
financial history, needs and abilities.
How can you revive a lapsed policy?
·
The revival of a
policy varies from company to company. It also depends on the duration of its
lapse.
·
Your first attempt at
reviving a policy should be within the grace period.
·
Monthly premiums
usually have a grace period of 15 days, while yearly, half-yearly and quarterly
premium payment policies have a grace period of 30 days. If you ensure payment
within that period, all benefits remain intact.
·
If you miss the grace
period, then you can opt for revival within six months of the first unpaid
premium. This way, you need to pay only the premium due along with interest,
without having to make any declarations of your health.
·
If you miss the
six-month mark as well, your insurance company may ask you to provide medical
declarations.
What are the key points to remember?
·
Ensure that while
reviving your policy, your insurer draws up a fresh contract.
·
The more you delay
reviving your insurance policy, the process gets more cumbersome. Additionally,
your insurer may impose high penalty fees.
·
In case your policy is
not revived within the stipulated period, the company is bound to pay you the
surrender value.
How can you avoid Lapsation?
·
ECS-Electronic
Clearing Service is one of the best ways to ensure the premium money is
automatically deducted from your bank account.
·
Before you sign a life
insurance contract, make sure you're aware of your capabilities. Do not opt for
lump sum payment if you think it'll burn a hole in your pocket.
For Any Query Feel Free to Call our Most
Wanted Insurance Guru
Gaurav Kansal - 9313368533
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