What occurs to the insurance coverage if one fails to pay the premium?

I’m 35 years outdated. Due to sure causes, I misplaced my job not too long ago. What will occur if I’m not capable of pay the premium due this yr?

—Name withheld on request

I’m assuming that your query is about life insurance coverage. When a premium stays unpaid, the coverage advantages stop to be in pressure. However, you’ll have a number of choices when you find yourself able to pay premiums once more. Your present insurer would provide you with an choice to revive the outdated coverage. To revive the coverage, you’ll need to pay all unpaid premiums together with curiosity and different administrative fees that the insurer might levy. The insurer might require an excellent well being declaration or a medical check-up primarily based on the sum assured. The principal benefit will probably be that the outdated premium charge will apply to the rest of the coverage time period.

If your present coverage lapses, you might additionally purchase a contemporary time period plan when you have got the funds. You should undergo the usual medical underwriting course of and pay the premium relevant for the present age. You will nevertheless don’t have any legal responsibility for the overdue premiums. Since time period plans would not have any ready interval besides suicide for the primary yr, your coverage profit will probably be comparable. So, you might select the choice that’s extra price environment friendly for you.

An insurance coverage agent is asking me to purchase a private accident cowl. Currently, I’ve medical health insurance and a time period insurance coverage coverage. So, my query is that’s there a necessity to purchase a private accident cowl? Will it not be coated beneath time period insurance coverage?

—Name withheld on request

A time period plan covers each unintended loss of life and pure loss of life. An accident plan covers solely accident-related loss of life and incapacity. Further, an accident plan additionally has sure exclusions equivalent to illegal actions and journey sports activities. So, a time period plan is actually the extra complete loss of life profit cowl. However, an accident plan additionally covers numerous forms of disabilities as a result of an accident. Disabilities might be everlasting or non permanent, and partial or complete. In case of such an unintended incapacity, the insurance coverage pays the mounted profit quantity linked to that incapacity. A sum assured of 10 instances of annual earnings is really useful for time period life. However, for an accident plan, you might think about a sum assured of 1 to 2 instances of annual earnings. The worth of an accident plan is cheaper.

Abhishek Bondia is principal officer and managing director, SafeNow.in.

Subscribe to Mint Newsletters * Enter a legitimate e mail * Thank you for subscribing to our publication.

Never miss a narrative! Stay linked and knowledgeable with Mint.
Download
our App Now!!

Topics