It is essential to buy a term insurance policy to cover the dependents’ financial needs in case the policyholder passes away too soon. Paying the renewal premiums on time is critical, so the policy does not expire.

One won’t just be unable to make any claims if a policy expires; after a set period, he/she won’t even be able to reinstate it. The goal of buying insurance can only be reached if the policy is renewed, even if it is still within the grace period.

One month before the expiration of a policy, insurers send letters and communications. The company may give you a grace period if you don’t pay your insurance premium by the due date. This grace period is 15 days if the compensation is paid in monthly instalments and 30 days if it is paid quarterly, half-yearly, or annually.

The grace period to lapse

Even during the grace period, the life insurance policy expires if the premium is not paid, and all benefits are no longer offered. While some businesses make specific efforts to renew expired insurance, policyholders must review the specifics of their policy and contact the insurer to do so.

During the grace period, the policyholder must note that the policy is still in force. So, if something happens to the policyholder during that time, the nominee could still get claims and any other term insurance tax benefit from the policy terms and conditions.

Retaining the cover

To revive a policy, insurers provide a two to five-year reinstatement term. In actuality, the Insurance Regulatory and Development Authority’s standards state that all life insurance policies issued before 2019 have a maximum revival length of two years, while plans issued after have a maximum revival period of five years before being terminated.

If the premium is not paid during the grace period and the policy lapses, the insured may lose coverage and be ineligible for any death benefits. However, if it is resurrected, the benefits can resume.

Once the firm accepts the lapsed policy for revival, the policyholder shall be asked to pay the premium for all years since the policy’s lapse, as well as interest on outstanding premiums, any taxes, and even a penalty sum for non-payment of premiums. The terms and conditions of the renewed policy may change.

While you may consider purchasing a new policy rather than renewing a lapsed one, keep in mind that the cost of a new policy may be substantially higher than the premium for the old one because of the change in the insured’s age and health conditions. Furthermore, the policyholder cannot get the bonus accrued under the lapsed policy.

The best thing for the insured to do to pay the renewal payment is to set up standing instructions at a bank for electronic clearing services. For financial planning, it’s advised to check the premiums with an online term insurance calculator and stay ahead of the premium amount.

  • This ensures that life insurance payments are paid on time and policies are not cancelled.
  • The grace period is the time after the premium due date when the premium can be paid before the policy expires.
  • Most insurers provide term policies that can be reactivated within a specific time frame.
  • The coverage can be maintained with small fees, and the old benefits will be restored.
  • The policy stays in effect if the insured keeps paying the agreed-upon premium.

What happens if the insured cannot make a payment for any reason?

Grace period before failure

Insurance companies understand that the insured may not be able to pay the premium on time every time. A grace period is provided by almost every insurance company. It is vital to note that the insurance coverage remains in effect during the grace period, and if the insured passes away, the nominee would still be eligible for the term insurance tax benefits.


There are two different income tax regimes. One may opt for the new tax regime or the old tax regime, depending on the benefits one chooses to receive.

A broken policy

The life insurance policy terminates if the insured does not pay the premium, even during the grace period. In this stage, the insured is no longer covered by the policy and is not entitled to death benefits.

Policy reintroduction/reinstatement

Most insurance policies include a resurrection clause. If the insured decides to renew their expired policy, they can revive it. A procedure must be followed to reactivate the life insurance policy. To begin, the insured must provide proof of continuous insurability; these documents differ from insurer to insurer and depend on the elapsed period.

Second, the policyholder must pay all past-due premiums and the revival charges specified at the time of payment. Finally, if the term insurance company deems it necessary, the insured may have to undergo a medical checkup.

After successfully completing these conditions, the life insurance policy can be activated with all its original benefits.

‘Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.‘