Know How to Renew Your Life Insurance Policy

May 23, 2022 Mutual Fund

In today’s fast-paced lifestyle, securing yourself and your family with adequate Life Insurance is necessary. It is the ultimate solution that ensures your family is financially secured in case of an unfortunate demise of the insured. Life Insurance is a contract between an insurer and a policyholder. An insurer guarantees a sum assured to the beneficiary/nominee on the policyholder’s unfortunate demise in return for the premiums paid. In simple words, Life Insurance provides financial security to your family so that they continue living the same lifestyle without any compromises due to the financial instability caused due to the loss of an earning member. To ensure you continue enjoying your life cover without any interruption, it is necessary to renew the policy on time. If you already have a Life Insurance Policy due for renewal or you missed the policy renewal date, read this article to know how you can renew your Life Insurance Policy.

To keep the Life Insurance Policy active and continue enjoying the life cover and other benefits, you are required to renew the policy at the end of the term by paying the premium. Earlier, we had to contact our life insurance agent to renew the policy. But, nowadays, insurance companies offer several other convenient options to renew the Life Insurance Policy online as well as offline.

Here are different modes of premium payment and policy renewal you can choose from at your convenience:

1. Online Modes of Premium Payment:

Most insurers nowadays offer the facility to pay the premiums and renew the policy online from the comfort of your home. There are several ways to make an online premium payment. Here are some commonly used online modes of premium payment:

• Through Company's Website:

  You can pay the premium and renew your Life Insurance Policy within a few minutes by visiting the company's official website. It is the most popular mode of premium payment as you can simply login into your online account and choose the payment mode of your choice, such as internet banking, UPI, debit card, credit card, credit card EMIs, e-Wallets, etc. Many insurers let you pay the premium even without logging into your account. All you have to do is choose the 'Pay Premium Now' option from the website, enter your policy number, registered mobile number, and date of birth, and click on 'Submit'. Upon successful payment, your policy will get renewed.

• Through Internet Banking:

  If you have bought the policy from your bank that offers an internet banking facility, you will be able to check the status of your policy and make policy-related transactions in a few clicks. Click on the 'Insurance' tab on your internet banking and choose the 'Pay Premium' option. However, if your Life Insurance Policy is not linked to your bank, you can still pay the premium through RTGS or NEFT facility by entering the bank details of the insurer.

• Through Foreign Remittance:

  If you are an NRI or moved abroad temporarily, you can use the internet banking facility of your international bank to pay the premium of your policy. Otherwise, you can visit the branch of your international bank and request a forex payment or wire transfer. To make the premium payment offline, you will need a few details of the insurer's bank account, such as the Swift Code of the beneficiary bank, details of the intermediary bank, the beneficiary's bank branch address, insurer's address, etc. These details can be easily availed by visiting the insurer's website or calling their customer service.

• Through E-Wallets:

  Most recognised e-Wallets like GooglePay, PayTM, PhonePay, etc., allow you to pay the insurance policy premiums of recognised insurers. When making the payment, you need to mention your policy number and date of birth. The payment can be made through wallet balance or using the UPI facility.

2. Offline Modes of Premium Payment:

• Premium Payment through Phone:

  Many insurers allow their customers to pay the policy premium through their phones by calling the IVR number. You can find the insurer's IVR number on their website or on the policy document. Generally, the IVR number is available 24*7 in English, Hindi, and other regional languages.

• Auto-debit Facility:

  While purchasing the policy, insurers advise on registering for an auto-debit facility to ensure you do not miss the payment due date. The auto-debit facility allows you to register your bank account, credit card, or any other payment method to deduct the premium on the due date automatically. You can provide standing instruction to your credit card or ECS mandate to your bank account. However, if there is an insufficient balance in your registered account on the due date and the payment is unsuccessful, you will be charged for the same by your bank.

• Payment by Visiting the Nearest Branch:

  You can visit the nearest branch of the insurer to deposit cash, cheque, or demand draft. You can also make the payment through a debit or credit card. This option could be helpful if the branch is at a convenient location for you.

• Payment through Affiliated Bank:

  Insurance companies have tie-ups with several banks through which you can pay your Life Insurance Policy premium. You can choose from any of the available modes of payment, such as cash, cheque, cards, etc.

• Fund Transfer through Any Bank:

  If your preferred bank does not have a tie-up with the insurer, you can visit the bank where you have your Savings Bank Account or Current Account and pay the premium through RTGS or NEFT. For Fund Transfer through RTGS/NEFT, you will need certain bank details like bank account number, IFSC, insurer's bank branch, etc., which can be availed from the insurer's website or by contacting the customer service.

• Cheque Pick-up

  Many insurance companies provide the facility of doorstep cheque pick-up for policy renewal. You can place the request for cheque pick-up by contacting the insurer's customer service number and book a convenient slot at your convenience. The insurance company representative will visit you on your preferred day and time, and you can hand over the cheque to him/her. However, most insurers provide this facility to certain locations only. You can check whether the facility is available in your city by visiting the company's website.

What to do if you have missed the premium payment date?

Do not worry if the premium due date has recently passed. The insurance companies provide a grace period during which you can still make the payment and continue your life insurance coverage. Usually, life insurance companies provide 30 days grace period for the annual premium payment mode, and it can be up to 15 days for monthly, quarterly, and half-yearly premium payment modes. So, open your policy document and check the grace period offered by your insurer. If your policy is still within a grace period, then you can pay the premium and enjoy your life insurance coverage.

Here are a few important points you should know about the Grace Period:

• The policy does not get terminated if you fail to make the premium payment until the grace period ends.

• You should check the grace period of your life insurance policy as it may differ from insurer to insurer and the frequency of premium payment.

• If an unfortunate event takes place during the grace period when the premium is unpaid, the nominee can still file a claim. However, the insurance company will pay the sum assured after deducting the due premium for the current year.

• The grace period mentioned in your policy document includes both working and non-working days.

Lapsed Life Insurance Policy:

When the premium is not paid even during the grace period, the Life Insurance Policy lapses. The insurance companies generally terminate the lapsed policies. However, some insurers may allow reinstating the lapsed policies within a stipulated period.

Some life insurance companies offer a six months period to reinstate the lapsed policies. However, the insurer will charge you with late payment penalties and interest. Furthermore, the revival of lapsed life insurance policies can be done either on medical or non-medical grounds. Hence, it is advisable to take necessary precautions to avoid policy lapses. Enabling an auto-debit facility is a promising way to pay your Life Insurance Premiums on time.

This article first appeared on PersonalFN here