Continuing an insurance policy may not be as easy as it sounds to be, especially if it’s long-term. You might have heard several individuals saying that their policy has lapsed. Insurance policies lapse due to various reasons like missing your premium amount, voluntarily discontinuing the policy or being short of money to continue with the coverage plans. Whatever may be the reason, you have the option to reinstate your lapsed insurance policy. Let’s know how.
How to revive your lapsed insurance policy?
An insurance policy lapses and the coverage plans are terminated when you do not pay the premium amount within the due date and even during the grace period. In most cases, policyholders surrender the policy and the policy paid so far goes in vain. But you have the option to reinstate your lapsed insurance policy instead.
In order to revive your policy, you, as a policyholder, are required to submit a revival application form to the insurance company. In case it is a lapsed health insurance policy, you will be asked by your insurance agent or company to submit a good declaration of your health to renew the policy.
You will also be required to pay the missed premium amount along with the penalty charges, which may be levied on you according to the terms and conditions of the insurance company.
Also, note that reinstating a lapsed insurance policy is a new agreement between the policyholder and the insurance company; hence other conditions can be imposed as decided by the company.
What other options are available?
Policyholders also have the option to convert their lapsed insurance policy to paid-up. In this case, you are not required to pay the remaining missed dues. You will get benefits for the coverage plan for the premium paid so far. If the policyholder expires, the death claim is given on the reduced sum.
You also have the chance to surrender or terminate the policy before its maturity period. If premiums are paid for a period of three years, you will get a surrender value. The amount is paid to the policyholder after deducting the surrender charges.
In order to surrender the policy, you need to submit the surrender application form to the insurance company and the application will be processed within a week.
A lapsed insurance policy does not give any benefit to the policyholder. To make an informed decision about your lapsed insurance policy, it is advisable to reach the subject matter experts and take their advice on the best solution in your case.