Revive Your Life Insurance Policy
A life insurance policy is a contract between the insured and the life insurance company that ensures their family remains financially protected if any unfortunate event happens to them. In return, the policyholder must pay premiums regularly for the definite policy years per the premium payment frequency chosen at the time of policy purchase.
In any case, if the policyholder fails to pay the premium on time or before the end of the grace period, the life insurance policy lapses. Once the policy lapses, the policyholder cannot gain the benefits until it is revived. The revival of a life insurance policy is possible within a stipulated period. Let’s learn further in the article what, when, and how you should revive the life insurance policy.
What is the Lapsed Life Insurance Policy?
A life insurance policy lapses when the policyholder fails to pay the premium within the due date, as stated by the life insurance company. However, life insurance companies provide a relaxation of some days to make the premium payment after the due date passes. The extended period is called the grace period.
The grace period can be 15 to 30 days, depending on the policy terms and conditions. If the premium payment is not made within the grace period, the life insurance policy will lapse. Under a lapsed life insurance policy, the policyholder cannot avail of any benefits as stated under the policy.
What is the Revival of Lapsed Life Insurance Policy?
Revival of a life insurance policy means reactivating policy coverage and benefits by paying the outstanding premiums from the date of the first unpaid premium. Once you revive your life insurance policy, you can claim your benefits per the policy terms.
If you want to revive your lapsed life insurance policy, you need to pay all outstanding premiums with interest and may also be required to undergo a medical examination. Some insurers may ask for a penalty to pay at the time of revival. The earlier you opt to revive your life insurance policy, the lesser penalty you will have to pay.
When Can I Revive My Life Insurance Policy?
Life insurers offer different revival periods during which your life insurance policy can be reinstated. The revival period can be 2 to 5 years from the date of the first unpaid premium. We suggest you carefully read the policy terms and conditions to ensure the duration and process of revival of the life insurance policy.
You should revive the lapsed life insurance policy under the following circumstances:
Renew the contract during the campaign by the insurer is best
The insurer company organizes policy revival campaigns and revises your lapsed policy so that you can save on penalty charges or medical check-ups that may be applicable. If you decide to buy a new cover, you should weigh the difference in premium between the old and new policies. The new policy you will buy might cost you more because of the increase in age and change in health conditions. Revising a life insurance policy always works best at a lower premium.
Revive it if you have paid premiums for several years
When you have a long-term endowment policy, you would have paid the premiums for several years. In such a scenario, it is wise to revive a lapsed policy. Until the maturity period, you must pay regular premiums to keep the policy valid and active. By doing so, you will benefit as your overall investment return will increase. If you do not revive your policy on time, then only surrendered value is given to you.
Does your plan cover the pre-existing conditions?
If your insurance policy has lapsed, the sum assured is no longer available. It would help if you focused on restoring it immediately. So, check for available policies first and then browse at RenewBuy to get a cheaper policy covering all the pre-existing conditions. If you get a better option, go for it.
Learn more about the features of life insurance.
How to Revive Lapsed Life Insurance Policy?
Here’s the step-by-step process of reviving your lapsed life insurance policy:
Understand Reinstatement Conditions
The first thing you need to do is read the policy documents carefully, considering the stipulated revival period, the date your premium payment is due, and when you want to request the revival.
Contact the Life Insurer
Contact your life insurance company. The officials will guide you through the process and help you with the necessary documents and the amount you must pay.
Payment of the Outstanding Premium
Pay the outstanding premiums until the date, along with the interest conveyed by the insurer. Some policies may require you to pay a penalty.
Process of the Policy
You must submit the required documents, including a revival application, a health certificate, address proof, etc.
Policy Revival
Once the revival is reviewed and approved, the policy is reinstated, and the life insurance benefits and coverages are restored. Under this scenario, the insurer may impose new terms and conditions.
Explore the types of life insurance policies and their benefits.
Final Words
It is wise to revive your term life insurance to safeguard your family. You can regain the policy benefits and continue it instead of buying a new policy. Purchasing a new policy will be expensive and might not even cover pre-existing medical conditions.
We suggest you openly consult your life insurance agent to understand the terms before the revival period ends. If you need expert advice regarding a life insurance policy, connect with RenewBuy POSP Advisor for professional assistance.