You were negligent, and forgot to pay the premiums for your life insurance policy. Now the policy has lapsed.
Can anything be done to start the policy again? Can it be revived? Do medical tests need to be done again? Read on to find out all the details.
How much ever systematic you try to be, there are times when you fall back. And you forget to pay the premiums of your life insurance policies. And one day, you realize that your insurance plan has lapsed, and you are without a cover.
Can this policy be reinstated again?
Or, say a year or two ago, you were taking stock of your policies and realized that one policy wasn’t good enough. So, you thought of not wasting any more money on it, and discontinued paying the premiums. And the policy lapsed.
Now, you suddenly realize that the policy wasn’t all that bad. Can it be revived?
When does a life insurance policy lapse?
Before that, let’s understand when a policy lapses.
All life insurance policies have some “grace period” after the premium due date. This is the time in which the premium should be paid in order to maintain the policy in force.
This grace period is usually one month in case of yearly, half yearly or quarterly premium payment modes, and is 15 days in case you have chosen to pay the premiums on a monthly basis.
(For example, if you pay your premiums yearly, and the due date is 14th September, you can pay the premium till 14th October without jeopardizing the policy)
Your life insurance policy lapses if the premium is not paid within this grace period.
How can a lapsed life insurance policy be revived?
Rest assured, the policy can be revived – although there are certain (liberal) conditions.
A lapsed policy can be revived upto 5 years from the due date of the last unpaid premium, and before its maturity date. This can be done by paying all the outstanding premiums, plus the interest on this amount.
If you reinstate a policy within 6 months of its lapse, the policy can be revived without any fresh medical checkups or reports. Again, this can be done by paying up all the outstanding premiums, plus the interest on this amount.
Important note about lapsed policies
Please remember – a lapsed policy means that you are not covered under that policy any more. The insurance company would not entertain any claims under a lapsed policy.
What if you do not want to revive the policy?
If you do not want to revive the policy, you can surrender it or make it paid up.
Please read “Want to discontinue a life insurance policy? Surrender vs Paid Up Comparison” for more on this.
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