What Happens When You Miss a Term Insurance

Missing a term insurance premium does not cancel your policy immediately. IRDAI regulations mandate a grace period during which full coverage remains in effect while you arrange payment.

The Statutory Grace Period

• Monthly Premium Mode: 15 calendar days from the due date.
• Quarterly, Half-Yearly, or Annual Mode: 30 calendar days from the due date.

If the policyholder passes away during the grace period, the insurer pays the complete death benefit after deducting the unpaid premium instalment.

What Happens After the Grace Period?

If payment is not made before the grace period ends, the policy enters a lapsed state. In a lapsed policy:

• Life insurance coverage ceases immediately.
• No death benefit is payable if demise occurs.
• Because pure term insurance carries no cash or surrender value, all previously paid premiums are forfeited.

How to Revive a Lapsed Policy

Most Indian insurers allow policy revival within 2 to 5 years from the date of the first unpaid premium:

• Pay Outstanding Premiums: All missed instalments must be settled along with late payment interest (usually 8% to 10% per annum).
• Declaration of Good Health (DGH): You must submit a fresh health statement verifying no medical deterioration occurred during the lapse.
• Fresh Medical Underwriting: If the policy has been lapsed for over six months or the sum assured is large, the insurer may require new medical tests.