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Term Insurance Renewal
A Term Insurance policy's main goal is to provide financial security to your family in the event of your death. If you do not renew your policy when it matures, your family will lose the protection you have been paying for. Non-renewal of the policy effectively defeats its purpose.
Renewal does not require a medical exam, meaning your medical history will not affect the policy's renewal. The insurance provider renews it without additional conditions.
Why Is Term Insurance Renewal Important?
Renewing your Term Insurance policy is crucial. If you do not pay your premiums on time, your policy will lapse, leaving your family without financial security in your absence. Renewing your Term Insurance plan allows you to extend coverage based on your requirements and age.
Reasons Why Term Insurance Renewal Is Important
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Tax Benefits
Term insurance offers tax exemption of up to ₹1,50,000 under Section 80C of the Income Tax Act. Additionally, add-on covers like critical illness provide tax exemption up to ₹25,000 under Section 80D. Renewing your Term Insurance on time ensures that you can continue to avail of these tax benefits.
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Premium Amount
The premium remains the same when you renew your policy on time. Not renewing your Term plan on time can lead to a hike in the premium amount due to increased age, changes in medical history, etc.
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Medical Test and KYC
If you renew your policy, you do not have to resubmit KYC documents or undergo another medical examination.
Disadvantages of Not Renewing Term Insurance
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Defeats the Main Purpose of Insurance
The biggest drawback of not renewing your policy is that the coverage will lapse. If you do not renew on time, the beneficiary will not receive any stipulated policy benefits.
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Discontinuation of Term Plan Benefits
If you do not pay the premium on time, your family will not receive any death or additional rider benefits, rendering all previously paid premiums meaningless.
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No Tax Benefits
If you do not renew your Term Insurance policy, you will not receive any tax benefits under the Income Tax Act. Premiums for term plans are eligible for tax exemption of up to ₹1,50,000 under Section 80C of the Income Tax Act, 1961.
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Claim Filing
If your policy lapses due to non-renewal, it may not be possible to file a claim, and the beneficiary will not receive the sum assured in case of any mishap. Not renewing the policy defeats the entire purpose of buying Term Insurance.
Should You Revive a Lapsed Term Plan or Buy a New Policy?
When a policyholder forgets or fails to pay the premium, the policy lapses. Normally, every policy has a grace period of 15 to 30 days. However, if the premium is not paid within this grace period, the policy lapses automatically.
Whether to revive a lapsed Term Policy or buy a new one depends on your current circumstances and needs. However, do not make your decision solely based on the premium amount; instead, choose a policy that meets your current requirements.
The table below 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, such as no waiting period. | You have to start from scratch and will not be able to avail of cumulative benefits. |
| Medical examination is not required. | Medical examination is mandatory. |
| You will get the benefit of the full tenure of the Term Plan. | You will lose the benefits of the full tenure of the Term Plan. |
Benefits of Renewing Term Insurance Online
Term Insurance Renewal Process
You can renew your policy from the official website of the company or through PolicyX.com.
I. Through Company's Official Website
- Visit the insurance company's official website.
- Go to the 'Term Insurance Renewal' section.
- Enter correct information like your policy number and registered mobile number.
- Check the policy renewal premium and details.
- Make the payment using credit card, debit card, UPI, or Netbanking.
II. Via PolicyX.com
- Call our toll-free number: 1800-4200-269.
- Follow the instructions and submit the requested information.
- Our experts will then contact you within a few hours for policy renewal.
Conclusion
It is important to renew your Term Insurance without interruption. Insurers remind customers about the renewal dates of Term insurance, both online and offline. Policyholders should stay updated on renewal dates and make payments on time. You can make payments easily and in a hassle-free manner through the company's official website.
You must renew your insurance policy on time to get maximum benefits and ensure the continued safety of your loved ones.
