What Happens When You Forget to Pay term insurance Premium- Kotak Life

Buy a life insurance plan in a few clicks

Now you can buy life insurance plans completely online right here.

  • Icon for Kotak Preferred e-Term Plan

    Kotak e-Term Plan

    Kotak e-Term Plan is a pure term plan that provides a high level of protection to your loved ones in your absence.

  • Icon for Kotak Preferred e-Term Plan

    Kotak Health Shield

    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 E-Invest Plan

    Kotak e-Invest is a comprehensive Unit Linked Life Insurance Plan that can be customized as per your goals and needs - be it protection; investment; financial security for child or retirement planning.

  • Icon for Kotak Preferred e-Term Plan

    Kotak Lifetime Income Plan

    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!


Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.


Term Insurance: What Happens When You Don’t Pay Your Premiums?

Buy Term Plan Now
  • 10th Mar 2021
  • 955

Term Insurance: What Happens When You Don’t Pay Your Premiums?

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:

  • High-level protection at a nominal cost
  • Seamless policy purchase and renewal process
  • Flexible premium payment options
  • Flexibility to convert between plans
  • Enhance your protection with optional riders
  • Preferential rates for females


Without term insurance, your family becomes financially vulnerable in your absence. To ensure a stress-free life for yourself and your loved ones, invest in a term insurance plan today.

- A Consumer Education Initiative series by Kotak Life


Also read

    • 2nd Dec 2021
    • 98

    Can I Get Term Insurance on Behalf of My Spouse?

    If you have the benefits of a term plan with spouse cover, financial problems will be one less thing to worry. Therefore, an insurance plan for a hous...

    Read more
  • 8 Factors to consider before choosing a Critical Illness Insurance

    Critical illness insurance gives a lump sum payout if diagnosed with any covered illnesses. Here are eight factors you must consider before choosing a...

    Read more
  • Term Insurance With Riders In India

    Term insurance riders allows you to enjoy a customized cover at an additional premium. Click here to know the types of insurance riders for term insur...

    Read more

Related Plans

  • Kotak e-Term Plan

    Kotak e-Term Plan

    Kotak e-Term Plan is a pure term insurance plan that provides a holistic life protection at affordable prices. Find out the eligibility criteria, key ...

    Know more
  • Kotak Term Life Insurance Plan

    Kotak Term Life Insurance Plan

    The Kotak Term Plan is a pure risk cover plan and an economical way of providing an adequate level of financial protection.

    Know more
  • Kotak Sampoorn Bima Micro-Insurance Plan

    Kotak Sampoorn Bima Micro-Insurance Plan

    Kotak Sampoorn Bima Micro Insurance Plan is a single premium plan with fixed term of 5 years to cater to the needs of low-income customers.

    Know more
  • Kotak Health Shield

    Kotak Health Shield

    Health is the greatest blessing for all human beings. Today, every individual is aware that the number of illnesses are increasing day by day and so a...

    Know more