Don’t Panic — Here’s What to Do (And What It Means)
Life can get hectic — birthdays, bills, EMIs, and everything in between. So it’s no surprise that sometimes a life insurance premium slips through the cracks.
But if you’ve missed your due date, don’t assume your policy is gone forever.
Most life insurance plans in India have built-in buffers to protect you — including something called a grace period.
Let’s walk through what really happens, step by step.
What Is a Grace Period?
The grace period is the bonus time your insurer gives after the premium due date — where you can still make the payment without losing your coverage.
Standard grace periods in India:
- 15 days for monthly premium plans
- 30 days for quarterly, half-yearly, or annual plans
If you pay within this window, your policy stays fully active. No late fees, no loss of benefits, no risk.
It’s like a safety net — especially useful if you’re paying manually or forget to update your bank auto-debit.
What If the Grace Period Also Passes?
This is where it gets serious.
If you still don’t pay even after the grace period ends, your policy will lapse — meaning:
- Your life cover stops
- If something happens to you during this gap, your family won’t receive any benefit
- In savings-linked plans, bonuses and guaranteed returns may be affected
In the case of term insurance, which is pure protection, the impact is even harsher — your entire premium is lost unless revived.
Can a Lapsed Policy Be Revived?
Yes — most insurers allow you to revive a lapsed policy, usually within 2 to 5 years of the lapse.
To do this, you’ll need to:
- Pay all missed premiums
- Pay interest or revival charges (if applicable)
- Submit a health declaration, and in some cases, fresh medical tests
The longer you wait, the stricter the checks — especially for older applicants or large covers.
If you revive within the first few months, the process is usually simple. After a year or more, insurers might re-underwrite you.
What About ULIPs and Endowment Policies?
These aren’t as straightforward as term insurance.
For ULIPs (Unit Linked Insurance Plans):
- If your policy is more than 5 years old, it may continue using your fund value
- If it’s within 5 years, the insurer may pause returns and move your money to a discontinuance fund
For Endowment Plans:
- If you’ve paid premiums for at least 2–3 years, your policy may turn into a “paid-up” plan — meaning a reduced sum assured, but no need to pay further
- Bonuses may stop accruing
- If you haven’t completed the minimum years, your plan may just lapse — with a small surrender value, if any
Always check your policy document for exact terms.
What Should You Do If You Miss a Premium?
Here’s your action plan:
- Check your policy status online or via your insurer’s mobile app
- If within grace period, pay immediately to avoid any lapse
- If outside grace, contact customer care and request revival instructions
- Be prepared to submit a health declaration or documents
- Once revived, set up auto-debit or payment reminders going forward
Pro Tip: Switch to monthly payments if annual feels too heavy. It’s easier on your budget and reduces the risk of forgetting.
Can You Lose All Your Money?
It depends on your policy type:
- Term insurance: Yes. It has no maturity value — so if it lapses and isn’t revived, all premiums paid are lost.
- Savings/Endowment plans: You may get reduced benefits or surrender value, but these are often much lower than expected.
- ULIPs: You might retain some fund value, but returns can get locked or paused.
That’s why consistent payment = long-term protection.
Lapse Isn’t the End — But Don’t Let It Happen
Missing a premium isn’t a disaster — as long as you act fast.
- Use the grace period wisely.
- If needed, revive — the sooner, the easier.
- If paying yearly is a struggle, switch to monthly mode or reduce your cover temporarily.
Because a life insurance policy only helps when it’s active. A lapse at the wrong time helps no one — especially not the people you’re trying to protect.
