Generally, every insurance company provides a grace period of 10-15 days to the insurance policyholders if they fail to pay the premium before the due date. However, if the policyholders don’t pay the premium even in the grace period, their policy will lapse. After that duration, if the policyholders want to revive their policy, they would have to pay the due premium and interest charged on the premium since the due date to revive the policy. Different insurance companies have different norms for reviving their lapse policies.
On the other hand, if the policyholder paid premium payments for a substantial duration, i.e., generally more than 2-3 years, and then they stop paying the premium, the insurance company will deduct the premium from the accumulated sum. It continues till there is an available fund. After that, the company terminates the policy. This is common practice with permanent life insurance policies.
Leave a Reply