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The Long Read
Everything you *need to know* is right above this. Scroll down, only if you'd still like to read more (honestly, why?)
When you buy a term insurance policy, you have to pay your insurance premiums regularly. When you buy a term plan, the premium payment frequency and premium payment terms are agreed upon between you and your insurer.
You need to pay your premiums on time to continue enjoying the policy cover. However, in case you miss paying it on time, you can take advantage of the grace period offered by insurers from the premium due date during which the policy remains active. (Don’t make a habit of this though!)
But if you fail to pay your premiums on time, even during the grace period, your policy lapses and becomes inactive and you lose all policy benefits and premiums paid so far.
First things first, know that you can revive your inactive term insurance policy if you want to. Here’s how to go about it-
Check the revival period with your insurer. Most insurers offer 2-3 years after the lapse.
Submit a revival application form to the insurer
Undergo additional medical tests, if the insurer so requires
Clear the premium dues, along with revival fees and penalty, if charged by the insurer
Read the terms and conditions of the revived policy carefully
Remember, you may now have to pay higher premiums going forward
Pro tip - Check for special spot revival schemes that offer a discount on penalty charges and revival fees
Last but not least, once your term policy is revived, do not fail to pay your premiums on time. Activate autopay with your bank/credit card so that you don’t miss out on paying premiums on time.
Typically, insurers will offer a revival period of 2-3 years, but it is best to always check with your insurer.
If the revival period passes, then there are high chances that you may not not be able to revive your policy again.
You may need to, it is best to check with your insurer. That is why, we advise you to always pay your premiums on time and not let your policy become inactive, because reviving it may come with more expensive premiums.
There could be a revival fee, penalty charges and expensive future premiums. It is best to check this with your insurer. Also check with your insurer if you can get any discounts on the revival fee and penalty charges.
It’s more like a reason and cause relation. Let us explain.
A policy lapse happens when you miss paying your premium. Once a policy lapses it goes into a mode called as inactive. When a policy is inactive, it won’t offer any benefits to its policyholder unless it reactivates again.