Has your insurance policy lapsed? Here are simple steps to revive it

FROM MONEYCONTROL.COM
Ketul Shah December 08, 2010
Vikram works with a shipping company and therefore spend time overseas for long periods. He stays in India only for a few weeks during year. Given the sparse time in his homeland, he find is difficult to manage his personal finances.
Vikram had bought an insurance policy a few years back. However, he was unable to pay his premium for last three years. Recently, he met his insurance agent who reminded him about his lapsed policy.
Life insurance is long term financial product which needs attention once in a year. It doesn’t bring any immediate benefit so people have the tendency to forget the insurance policy they bought in the past. If a life insurance policy has been taken in past and the premium is not paid the policy would lapse.
Is it possible to revive you insurance policy?
The answer is yes
However, here are points to be considered before policy revival process is started.
—    Decide whether you need that insurance policy or not. Your status, job or risk type might have changed since you took the policy, so you may look for other insurance policy.
—    Is it linked to investment? If yes then you should check how the fund is doing and see if it meets market expectations.
—    Compare the cost of reviving policy and buying new policy.
Once you have decided on reviving the policy; follow these some simple steps to revive that insurance policy.
—    Contact the concerned insurance company and check the current status of the policy.
—    If policy is within the grace period (which is normally 30 days), you can pay the premium and revive policy.
—    If policy has lapsed in the short time i.e. 6 month, you can pay the outstanding premium plus interest charges as decided by insurance company.
—    If the policy lapsed for a long term i.e. more than a year, then the insurance company decides its own process of revival. It may include paying premium, interest, health check as well as a recalculation of premium etc.
Rather than going through the hassle of revival, the insured should try to pay the premium regularly. To avoid missing the premium payment date, you can enable an ECS facility from your bank account. This will automatically avoid skipping payments. Also remember to stay in touch with the insurance company and update your address, mobile number and email in case of any changes.

Ketul H Shah is a Chartered Accountant, has an an MBA and has specialised in banking, finance and insurance. He is passionate about consumer rights and actively offers professional advice on consumer-related matters.
http://wealth.moneycontrol.com/columns/ulip/has-your-insurance-policy-lapsed-here-are-simple-steps-to-revive-it-/15842/0