What is Renewal in Term Insurance?

What is Renewable Term Insurance?

Renewable Term Insurance is a type of term insurance plan that allows policyholders to renew their policy at the end of its original tenure without undergoing fresh medical evaluations.

Benefits of Renewable Term Insurance

• No New Medical Tests
  You don't need to undergo new medical evaluations at the time of renewal, which is helpful if your health has declined over the years.

• Flexible Financial Planning
  Ideally if you're unsure about long-term coverage needs, with this term insurance, you can start with a shorter term and renew later based on your evolving responsibilities.

• Affordable Premiums
  The initial term insurance premiums are usually lower compared to long-term plans, making it affordable for individuals who don’t want to strain their budget.

• Option to Upgrade Coverage at Renewal
  Some insurers allow policyholders to increase their sum assured during renewal, giving them the flexibility to fit the plan per their changing needs.

• Peace of Mind
  Knowing that you can continue the term insurance policy without hassle offers financial security and peace of mind, especially in later years.

What is Term Insurance Renewal After Policy Lapse?

If you forget to pay your term insurance premium within the due date and grace period (usually 15–30 days), your policy lapses. However, most insurers allow you to renew (revive) a lapsed term insurance policy within a specified revival period.

1. Revival Period:

   • The term insurance renewal period or revival period typically ranges from 2 to 5 years from the date of the first unpaid premium.

2. Conditions for Revival:

   • The insurer may request updated medical information depending on how long the policy has been inactive.

   • Approval is subject to an underwriting assessment by the insurer.

What is the Importance of Term Insurance Renewal?

Renewing your term insurance policy on time ensures continued financial protection for your loved ones. A renewal lapse can lead to unnecessary complications, higher future premiums, and even loss of coverage.

1. Uninterrupted Protection

Timely renewal ensures that your family remains financially protected in case of an unfortunate event. A lapsed policy can leave your dependents vulnerable with no financial support.

2. Avoid Higher Premiums Later

If your policy lapses and you choose to buy a new one later, your premiums may be significantly higher due to increased age or medical conditions developed in the interim.

3. No Need for Fresh Medicals

Renewing on time typically doesn't require a new medical examination. However, if the policy lapses and you reapply later, the insurer may insist on fresh underwriting and health checks.

4. Revival May Not Always Be Guaranteed

While most insurers allow policy revival within a specific period after lapse, it's not guaranteed. Revival may also involve penalties, interest on missed premiums, and stricter health scrutiny.

5. Tax Benefits Continue

Renewing your policy helps you continue claiming deductions under Section 80C and Section 10(10D) of the Income Tax Act, subject to applicable laws.

How to Renew a Lapsed Term Insurance Policy?

Here is how you can renew your lapsed term insurance via Policybazaar to ensure continued financial protection for your family in the event of your unfortunate demise.

Step 1: Visit the life insurance renewal page of Policybazaar

Step 2: Fill in the required details like mobile number and date of birth. Alternatively, you can also login via application number or policy number

Step 3: Enter the verification number and follow the instructions on the screen

Step 4: Assess the accuracy of the details provided and proceed to renew term insurance policy

What are the Benefits of Renewing Lapsed Term Insurance?

What are Some Tips to Avoid Term Insurance Lapse?

Here is how you can avoid a term insurance policy lapse in India:

• Enable Auto-Debit Facility
  Link your policy with a bank account or card to ensure timely, hassle-free premium payments without missing due dates.

• Keep Your Contact Details Updated
  Ensure your mobile number and email ID are current so you don’t miss renewal alerts and payment reminders from the insurer.

• Pay Premiums in Advance
  Don't wait to make the premium payment till the last day, pay a few days early to avoid issues with delayed payments or technical glitches.

• Opt for Annual Premium Mode
  Choosing annual premium payments instead of monthly or quarterly reduces the frequency of due dates and helps prevent missed payments.

• Track Policy Online
  You can monitor your policy status online and receive alerts about upcoming due dates, helping you stay on top of renewals.

Wrapping it Up!

Whether considering a renewable term insurance policy or trying to revive a lapsed one, staying informed about renewal options helps protect your family's future. It ensures that you won't lose the coverage you planned for, even if your situation changes, financially or health-wise. If you're unsure about the revival process or want to explore renewable policy options, it’s always best to connect with your insurer or consult a trusted insurance advisor.