Procedure for lapsed policy

02/01/2022 0 By indiafreenotes

Reinstatement is the primary phase where you will have to submit all your policy documents which are decided on the duration of your policy lapse and your revival application date. Later, you need to pay the delayed premium sum along with the interest to your insurer, sometimes with a penalty, where your interest and penalty will be decided by your insurer.

Now after submitting the necessary documents and paying unpaid premiums on time will let your request for insurance policy revival to process, which is the third stage. Now you may have to submit an insurance certificate or a health statement to your insurer by carefully filling the form.

Finally, your lapsed life insurance policy starts covering your life again, but we advise you to check your new insurance policy document for any new clauses as the insurers tend to add them sometimes. So, now you have known the process of revival of life insurance policy, then why wait to restore your lapsed insurance policies and restart your coverage.

A life insurance policy is an important tool in financial planning for many of us. There are different modes of Life insurance policy payments. One of the most favored modes by many is “Regular payment” in which the policyholder makes payment to the insurance company at regular intervals of time.

These regular intervals are Monthly, Quarterly, Half-yearly and Annual, out of which the Annual mode of payment is opted by many of us. The other payment types are “Time payment” or “Limited period payment”.

For restoring the lapsed policy, you need to visit the branch and submit an application for reinstatement. Then the insurance company decides on the premium to be paid to reinstate the policy along with the other requirements to be satisfied such as medical tests etc.

Insurance companies sometimes charge interest and even levy penalties to reinstate the lapsed life insurance policies. The greater the lapsed period of time the higher would be the penalty.

In case of death of the policyholder when a policy has lapsed, if the policy has achieved life insurance without surrender value, then claims will be settled to that extent by the insurer. Id not, the policy loses all its benefits and no claims would be settled.

It is very important to note that once the life insurance policy lapses, you no longer have coverage. This means that the life insurance company will not pay the claim in the event of death.  So sooner you reinstate the lapsed policy, the better it would be for you.

  • Right Premium Paying
  • Understand Reinstatement
  • Policy Processing
  • Terms and Conditions

Steps to Considered Before Policy Lapse

Pay through ATMs: Certain insurance companies have tie-ups with banks where the banks provide you the option to pay the premiums through their ATMs. Choose auto-pay service if you opt for this, your premiums will be paid automatically through your credit card and this will reflect in the billing cycle of your card.

Electronic Clearing Service(ECS): Here you can give a standing order to the bank to deduct a particular amount towards the life insurance plan.

Check your resources: Before you opt for a policy ensure that it does not burn a hole in your pocket.