In life, there will always be important things that you might forget or that might slip your mind. Hence, having an active term insurance policy is extremely important, especially if you are the sole breadwinner of the family or have a lot of liabilities that need to be taken care of. If for any reason you forget to pay your premium on time, it would cause your coverage to end as dictated by the insurance terms. This lapsed term policy will be of no use if something were to happen to you, leaving your family with no means to replace your income and stabilize their finances.
Thus, it is of utmost importance that you take precaution and don’t allow your plan to lapse. While most policies provide a grace period of 15-30 days to pay a missed premium, it’s integral to stay on top of your payments. Here are a few ways to be on time and on top of things:
1) Set reminders
Most smart devices will allow you to set a reminder to send your premium installment to your provider. You can even make a note of the date in your planner or on your calendar as an extra measure.
2) Use automatic payments
If you still think you could miss a payment due to any reason, many insurance terms allow automatic payments to be debited from your account every month, quarter or year. But, make sure you maintain sufficient balance in your account to avoid missing a payment.
3) Update your details
Another reason that often becomes the cause of a lapsed term policy is outdated personal details. You could end up missing a reminder or similar communication from the company if you don’t update your provider of a changed mailing address, email id, phone number, etc.
4) Check your mail regularly
Keep a track of your mail as well as your email so that you don’t miss any communication regarding your term insurance policy. Look at each message carefully and don’t presume it’s advertising as your presumption could result in confusion.
In such cases, the policy provider will not be liable to anything as they would have communicated with you in a timely manner.
If you still let your policy lapse, be quick to reinstate it as you will incur more losses the longer you wait. These charges vary from company to company and will generally be in the form of reinstatement charges, penalties, the entire sum of missed premiums and whatever else is listed as per your provider's insurance terms. You may also have to undergo medical checks that might reveal something that causes your premium amount to increase. So, be wise and wary when it comes to protecting your family’s future and don’t let your term plan lapse!
Keywords: term insurance policy
By: Harish Kumar Sharma
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