Life insurance plans are useful when it is about safeguarding our life, precious assets, and family members. However, various people sometimes forget one important aspect about keeping their insurance plans in force with regular payment of premiums. You can only get the insurance cover and benefits under a plan when you have paid the due premium amount on time.
In case of non-payment of premiums on time, ICICI Life term insurance plans offer you a second chance to pay the amount in form of a grace period. The grace period is clearly mentioned in the policy documents. Read on to know further about the ICICI Life Term Insurance Grace period in detail:
What is an ICICI Life Term Insurance Grace Period?
ICICI Life Term Insurance Grace Period is the maximum number of additional days allowed by the insurer to pay your term insurance renewal premium. It varies according to the premium payment method. There are 2 methods of paying premium amounts for life insurance plans:
Regular premium payment in which you can pay the premium amount annually, half-yearly, quarterly, and monthly installments
Single premium where you are required to make a 1-time lump-sum premium payment at the time of buying the policy
If you make yearly payments, the maximum allowed grace time available for renewal of policy is 30 days. However, in the case of monthly payments, you are entitled to a grace period of 15 days. This is applicable for life insurance plans and term plans. And, for ULIPs, the grace time is 75 days during the lock-in period of 5 years.
Some of the important points related to the ICICI Term insurance grace period:
The ICICI Term insurance death claims increased after the grace period can get disallowed by the insurance company if you forget to pay the premium amount within this time.
Other advantages of your insurance plans like waiting period and No Claim Bonus for pre-existing ailments become not applicable after the insurance grace time lapses
After the completion of the term insurance grace period, a plan may get canceled because of non-payment
All insurance companies want the term grace period to be as minimum as possible
How Does ICICI Life Term Insurance Grace Period Work?
Providing a grace period to the life assured is important for an insurer. It is because they may not always be in a good condition to pay term insurance premiums on time. It is a shield for the life assured that prevents instant loss of the term coverage. The grace period is generally 15 days for monthly premium payments and increases to 30 days for yearly and half-yearly payments. Most insurance providers remind you by mail or message about paying the premium amount before the premium due date. Companies also inform you if you have stepped into the grace period.
Let’s understand this with the help of an example:
Raj purchased a term insurance policy that expired on 20 Jan 2022, as he forgets or missed his premium due date. It happened because he lost his job and did not have sufficient funds to pay a premium as before. Keeping all the factors in mind, ICICI provided him a term insurance grace period of 15 days to make the premium payment. He paid the premium within the provided grace time to continue taking benefits of the term coverage.
What Happens After the ICICI Term Insurance Grace Period is Over?
If because for any reason, you forget or fail to pay the premium amount and renew your term life insurance plan within the grace time, the insurer will cancel your plan. This simply means that you and your loved ones will be left with no financial protection and benefit. A lapsed plan is an important loss for you as you lose the premium amount paid earlier and lose the insurance protection.
However, in case of an unforeseen demise when you are in between the grace time, your family members are entitled to receive the death payout as per the T&Cs of the policy. At the time of paying the death payout, the insurer will deduct the premium amount that is not paid.
Should You Buy a New Term Plan or Revive the Lapsed Policy?
Almost all the insurers in India allow the life assured to revive their lapsed plan within 2 years after the completion of a grace period. The revival condition may differ from company to company. You should also pay additional amounts as interest rates, revival fees, penalties, etc. to recover the plan. Some insurance companies may also require you to undergo a medical examination and you should bear all the charges.
So if you are not sure whether to invest in a new plan or revive the old plan, it is suggested to compare the premium rates and decide accordingly.
What are the Duties and Rights of the policyholder during the grace period?
Term insurance coverage continues even when the plan is in the grace period. The coverage scope, the sum assured and all the other features of the policy stay unaffected. The premium remains unchanged and no late fee is charged. Policyholders should pay the premium amount within grace time otherwise the plan will lapse and plan benefits and features will cease.
How to Claim During ICICI Life Term Insurance Grace period?
In case of the unforeseen demise of the life assured during the grace time, the claim registered by the nominee will be provided by the insurance provider. The claim settlement process will be normal as used for other products.
Let’s take an example:
Joy, whose premium due date is on 10th October each year. He misses or forgets to make a premium payment on 10th Oct. in the 5th year of the policy. From the very next day, his plan enters grace time. Then, after 4 days, i.e., on 9th October, an individual suffers a heart stroke. The nominee appointed by the policyholder files a claim on 14th October. As the plan is still in the 30 days grace period and the claim has been made within such time, the insurance company will settle the claim for SA as it would have been in an active plan. The claim amount will be settled as per the T&Cs of the plan.
Ans: The ICICI Life Term Insurance Grace period is of 30 days based on the insurance policy and the premium payment type you select.
Ans: A waiting period is a time for which one have to wait before filing any insurance claim under the plan whereas the grace period is the additional number of days given to the life assured to pay the premium amount after the due date.
Ans: When the grace period ends, the plan lapses. It is the beginning of the revival time, which varies from one company to other. If you could not pay the premium amount during the provided grace time, you can then revive the lapsed plan by paying accumulated premium amounts with penalties.
Ans: Yes. You can pay the term premium amount in advance. Contact your insurance company for the process
