If you are scared about missing premiums, don’t worry! Term insurance offers two features that can help keep your policy active even if you miss a payment. Whether you have bought the lowest term insurance or an expensive one, you can experience a period when you’re unable to pay the premium. Read on to understand everything about these features.
Key Features To Keep Your Life Policy Active
Many people consider purchasing life insurance but hesitate due to concerns about keeping up with premium payments. Fortunately, features like the grace period and Premium Holiday Rider are designed to help you maintain your policy even if you miss a payment.
● Grace Period
Usually, a grace period in term insurance is a specific timeline starting from the due date of premium payment, within which you can make the payment without the policy lapse. The grace period in terms of payment is usually thirty-one days, but this could slightly differ depending on the insurance company and policy type.
Despite the failure to make premium payments, your policy is active throughout the grace period. If the premium is not paid within the grace period, the policy lapses and the insured person is not entitled to insurance coverage.
● Premium Holiday Rider
You must know that riders are add-ons that you can add alongside your term insurance policy. The purpose behind riders is to offer you extra protection against events. Even with the lowest term policy, you can customise your policy and equip these riders to boost your coverage.
Premium holiday riders are an optional add-on that policyholders can purchase when buying their term insurance. This rider will keep the policy active if they are unable to pay the premium.
- To prevent misuse, the Premium Holiday Rider is available only for a limited period; policyholders can typically miss only a couple of premiums in a given year.
- It also comes with an extra cost, known as a delay fee. This means policyholders who miss a premium would still need to pay the premium plus the delay fee.
Keep in mind that Premium Holiday Riders are not common and are mostly seen in permanent life insurance plans. Whether the rider is available for your selected policy or not, you are always advised to check with your insurance provider or refer to your policy documents and confirm.
Conclusion
If you’re concerned about missing premium payments on your life insurance policy, there are options available to help keep your coverage active. Understanding the grace period and the benefits of a Premium Holiday Rider can provide immense peace of mind.
While the grace period allows you to make late payments within a specified time frame, the premium holiday rider in your policy ensures your life insurance plan does not lapse even if you have failed to pay your premiums on time. It is also critical to remember that this rider generally comes with an additional cost and limits on how often it can be used.
This post was published on October 6, 2024 6:21 pm