Now you can buy life insurance plans completely online right here.
Kotak e-Term Plan is a pure term plan that provides a high level of protection to your loved ones in your absence.
The Kotak Health Shield Plan helps secure your finances in times of sudden medical expenses related to illness such as Cardiac, Liver, Neuro and Cancer (all early and major stages of illness /conditions of Cancer); along with offering protection for Personal Accident - in case of accidental death or disability.
Kotak Lifetime Income Plan gives you the assurance of your income continuing throughout your life and in your absence throughout the lifetime of your spouse!
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Kahlil Gibran, a Lebanese writer, had once quoted, “Forgetfulness is a form of freedom”. While we believe this quote is a good fit in many scenarios in our lives, it may work the other way round when it comes to life insurance plans. When you purchase term insurance it is important that you pay the term policy premium on time. In this article, we will take a look at the various repercussions if you are not able to pay your term insurance premium.
What Happens if You Fail to Pay Your Insurance Premium?
In term insurance plans, if you fail to pay the term plan premium before the due date, then it might result in the policy lapsing, which will forfeit your insurance benefits and the premiums which you have paid so far.
However, in India, as per the rules and regulations set by the Insurance Regulatory and Development Authority of India (IRDAI), all life insurance policies are subjected to a grace period typical of 30 days from the due date of premium payment. It is understandable that the policyholder may not always be able to pay premiums on time. Hence, insurance companies offer a grace period on insurance policies.
The policy will still be in force during the grace period. If anything happens to the insured person during the grace period, the nominee would be eligible for death benefits. However, once the grace period ends, the policy lapses and the nominee shall not receive any death benefit.
Reinstating a Lapsed term insurance Policy
If your term insurance plan has lapsed due to some financial reason, insurance companies offer you an option to renew your policy. You may be needed to do a medical check-up again and/or pay a penalty amount.
It is advisable not to delay your policy reinstatement, as the more you delay, the more penalty interest would grow. If you revive your policy within six months, the restoration process is simple.
New v/s Old term insurance Plans
We must understand that the premiums for term plans increase with our age. It would be enticing to abandon your old policy and purchase a new one but consider the following example.
Ramesh has purchased a term insurance plan at age 28, for which he pays ₹8000/annum and has coverage till age 70. Due to a financial emergency, he could pay a premium for only two years. At age 30, he now buys a new term plan where the premium amount is ₹10,000/annum. In that case, Ramesh would have to pay ₹2000 extra for the new policy each year as he failed to pay the premium for his earlier policy, which would sum up to a huge amount in the long run.
Hence, it is advisable that you try your best to revive your old policy first, which would charge you less. If reinstating old policy is difficult, you can consider purchasing a new one.
Online term insurance Plan from Kotak Life
Few primary reasons for failure to pay premiums are that individuals find the premium charges too high and the insurance renewal process extremely complicated. You can consider online purchasing term insurance from Kotak Life – the Kotak e-Term Plan, which, apart from offering cost-efficient term plans, offers multiple other benefits such as:
- A Consumer Education Initiative series by Kotak Life
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