A Term Insurance Policy's main goal is to provide financial security to your family in the event of your death. If you don't renew your policy when it matures, your family will lose the protection you've been paying for, all this time. The aim of Term Insurance is effectively defeated by Non-Renewal of the policy.
Renewal does not require a medical exam which means that your medical history will have no bearing on the policy's renewal. When a policy has to be renewed, the Insurance Provider renews it without any additional conditions.
Term Insurance is a form of Life Insurance that provides comprehensive financial coverage to your family members against life uncertainties. Term Insurance pays the sum assured if the policyholder succumbs to death within the policy term. If you have dependents like parents, spouse and children, then Term Insurance becomes an integral aspect of your life.
When a person forgets/fails to pay the premium, the policy lapses. Normally, every policy has a grace period that varies from 15 to 30 days. However, if the premium is not paid within the grace period also, then the policy lapses automatically.
Whether to renew a lapsed Term Policy or get a new one depends on the circumstances & your needs at the moment. However, you should not make your decision just on the basis of the premium amount; instead, you must choose a policy that meets your current requirements.
The below-mentioned table represents a few differences between reviving a lapsed policy and buying a new policy, which shall help you make a calculated decision.
|Revived Policy||Buying New Policy|
|You will get cumulative benefits like No waiting period, etc.||You have to start from the scratch, & you would not be able to avail of the Cumulative Benefits.|
|Medical Examination is not required.||Medical Examination is mandatory.|
|You will get the benefit of full tenure of the Term Plan.||You will lose the benefits of full tenure of the Term Plan.|
Renewing the Term Insurance Policy is a must for every individual. However, if you do not pay your premiums timely, your Insurance policy will lapse, leaving your family with no financial security in your absence. Renewal of Term Insurance Plan provides an opportunity for the policyholder to extend the coverage as per your requirements and age.
Following are the reasons why Term Insurance Renewal is important:
Term insurance offers tax exemption of up to 150,000 INR under section 80C of the Income Tax Act. Additionally, add-on covers such as critical illness cover provide tax exemption up to 25,000 INR under section 80D of the Income Tax Act. Timely renewing your Health Insurance plan ensures that you can continue to avail of tax benefits.
The premium remains the same when you renew your policy on time. Not renewing your Term plan on time leads to a hike in the premium amount due to an increase in age, changes in medical history, etc.
If you renew your policy, then you don’t have to submit the KYC documents again. Also, there would be no need to undergo a medical examination all over again.
Know More About: Benefits of Term Insurance
Check and compare plans from 21 IRDAI-approved term insurance providers before purchasing a term plan.
The biggest drawback of not renewing the policy is that the policy coverage will lapse. If you do not renew your policy on time, then the beneficiary will not get any stipulated benefits of the policy.
If you fail to pay the premium on time, your family will not get any death or additional rider benefits and all the previous paid premiums will become meaningless.
If you do not renew your Term Insurance policy, you will not get any Tax Benefits under the Income Tax Act. Premiums of term plan are eligible to provide tax exemption of up to 150,000 INR under section 80C of Income Tax Act, 1961.
If you do not renew your policy on time and your policy lapses, it may not be possible for you to file a claim and the beneficiary will not get any sum assured in case of any mishap. Not renewing the policy defeats the entire purpose of buying Term Insurance.
People often get confused between Convertible Term Insurance and Renewable Term Insurance. Renewable Term Insurance allows you to simply extend your current coverage of the existing policy, while with Convertible Term insurance, you can convert your Term Life coverage into Whole Life coverage before your 70th birthday.
You can renew your policy from the official website of the company or through PolicyX.com by following the below given steps.
It is important to Renew your Term Insurance without any interruption. Insurers remind customers about the renewal dates of Term Insurance online as well as offline. The policyholder should stay up to date on renewal dates and make payments on time. Through the company’s official website, you can make the payments easily & in a hassle-free manner.
You must renew your Insurance Policy on time to get the maximum benefits and for the continued safety of your loved ones.