Life is very important and everybody is just managing to save his life through earning livelihood, by taking food and water through the day and having proper sleep at the night. But these are the direct ways of saving the life which are irreversible. You cannot escape these direct methods of saving your life.

Another comes indirect means to secure yourself and your family financially and with the adversities comes into one’s life. There are number of ways to secure yourself means you can save money in a bank account, you can purchase a house to earn rent or other means of regular income in case of exigency with you.

Life Insurance is the perfect mode of securing your life with the unfortunate adversities and moreover   demise of the earning member of the Family.

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. Non-renewal of the policy in time will defunct the policy.  So you should keep the Life Insurance Policy active and continue   to enjoy 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.

Different modes of premium payment you can choose: 

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:

i. 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.

ii. 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.

iii. 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.

iv. Through E-Wallets:

Most recognized e-Wallets like Google Pay, Pay TM, Phone Pay, etc., allow you to pay the insurance policy premiums of recognized 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.

Different modes of payment of Life Insurance Policy

2. Offline Modes of Premium Payment:

i. 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.

ii. 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.

 You have missed the premium payment date- Do not worry

If the premium due date has recently passed, premium can be deposited during the grace period. 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
  • Up to 15 days for monthly, quarterly, and half-yearly premium payment modes.

 Few important points 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. 

Try to pay your Life Insurance Premiums on time to avoid the lapse of your policy.

Author Bio

Qualification: CA in Practice
Location: MUMBAI, Maharashtra, India
Member Since: 24 Apr 2022 | Total Posts: 28
IBBI Valuator for Financial Instruments Retired Banker having an experience of 30 years in advances, Recovery and compliance. Consultant to the Banking Matters Flair to the Audit, Assurance and compliance works worked with Asset Reconstruction Company as consultant Visiting Lecturer on Bankin View Full Profile

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March 2024