What Happens When a Premium is not Paid for Term Insurance?

2022-10-03

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What Happens if the Premium For Term Insurance is not Paid?

Under a term insurance policy the policyholder is not under any obligation to pay the premium, unlike a credit card repayment or a bank loan.

If you do not pay a term insurance premium, there will be no legal action taken against you. However, the policy that you took will simply get lapsed. However, you do not need to fret if you unintentionally miss the payment day or if some inevitable reasons have prevented you from making the payment of premium because when requested upon, the insurer can provide you with some options.

As per the terms, conditions and features, benefits payable (if any) on non-payment of premiums or when policy lapses will vary.

What happens if you accidentally miss a payment?

If any person accidentally misses the payment date then, term insurance companies provide a grace period for remitting the premium payment. Usually, the duration of this grace period is 30 days. If you make payment within these 30 days, your policy will not get lapsed.

However, it is essential to note that every insurance company has distinct terms and conditions regarding the duration of the grace period. You must always keep in mind that the policy cover does not get stopped during the grace period. That means if any person departs during the grace period, the nominees of the demised person will receive the benefits.

Hence, it is advised that you make timely payment of your term insurance premiums.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.