REVIVE POLICY WITH MORE ADD-ONS
Alife insurance policy is not just a tool for securing your family against unexpected events, critical illnesses or sudden accidents, but is also useful in protecting you financially during your retirement through regular and systematic savings, along with being an instrument for tax saving.
Therefore, paying life insurance premium regularly should be made a priority. If there is a delay in premium payment, the policyholder is given a grace period. During this period, one can pay the premium without any extra charge and the policy will continue to be in force. Even after repeated reminders, if the premium is not paid, then the policy is discontinued by the insurer and the policy lapses. As the policy lapses, the policyholder loses its benefits too, including all previous premiums paid and the protection cover.
In order to encourage the policyholder to reinstate his policy, many life insurance companies run a revival campaign for such lapsed policies. The policy can be revived and brought to its full force by payment of overdue premiums with a late fee / interest as applicable. If the policy has been lapsed for more than six months, a declaration of good health of the policyholder also needs to be submitted.
Revival is a fresh contract between the life insurance company and the insured, and the former can impose fresh terms and conditions at this time.
Similarly, a policy can be customised at the time of revival, with the addition of various riders to suit the needs and requirements of the investor.
Let us discuss the top five riders that we can add to our lapsed policy before reviving it.
ACCIDENTAL DEATH BENEFIT
An accidental death benefit is one, where you could ensure that your family stands to get financial compensation, if death was by accident. It involves the payment of a small additional sum that lets you enjoy this benefit.
CRITICAL ILLNESS PROTECTION
This rider is an additional benefit in which the insurer is contracted to pay a lump sum amount if the policyholder is diagnosed with one of the critical illnesses mentioned in the insurance policy. This enables the insured to meet the substantial dayto-day medical costs. It is usually economical and flexible to buy a critical illness rider along with a life insurance policy.
Another advantage is that the premium remains the same for the entire duration of the base policy and therefore tends to be cheaper than an indemnity plan or comprehensive health plan.
FAMILY INCOME BENEFIT RIDER
We are, to a large extent, dependent on our income to financially secure our families. But, what if an unfortunate event like death, accidental disability or critical illness hampers our income flow? Family Income Benefit Rider guarantees security of income to your family in case of such unfortunate events, making sure your family is financially protected always for a worry free life.
TERM ASSURANCE RIDER
Equivalent to the basic sum assured under the main policy, this is payable on the death of the life assured during the term of the policy while the term rider benefit is in force.
WAIVER OF PREMIUM RIDER
If there are situations where you are not in a position to continue paying premiums owing to instances of untimely death, accidental permanent disability or critical illness, you could continue to enjoy life insurance coverage with this additional cost that you incur in paying your premiums.
It would be prudent to take steps to ensure that the policy does not lapse in the first place. This would achieve the purpose for which a life insurance policy is taken i.e. “protection” for the family.