Lapsed policy? Beware of hoax calls: Life insurance

It is smarter to resuscitate a passed strategy as opposed to purchasing another one

Lapsed policy? Beware of hoax calls: Life insurance
Lapsed policy? Beware of hoax calls: Life insurance

It is smarter to resuscitate a passed strategy as purchasing another one will expect you to go through the whole application system and the medical tests.

False calls to policyholders to assist in reviving lapsed life insurance policies are contributing to an increase in life insurance fraud.

While back up plans are setting up different measures to deal with grumblings in regards to such fake calls, people should guarantee that their life approaches stay dynamic and the charges are paid on time. If a policy lapses, the insurer must be contacted directly to be reinstated after all conditions have been met.

Fraudulent calls

Dubious agents may call and claim to be able to revive a lapsed policy if the policyholder pays a certain amount, or they may even claim that the insured will receive the amount of the lapsed policy if they purchase a new insurance policy.

The policyholder must call the insurer's customer service numbers and request an email with all of the information because it is difficult to tell if a call is genuine. The insurer's account must be used for all payments.

According to Rakesh Goyal, director of Probus Insurance, there have been a few instances of false calls regarding expired policies. As a result, policyholders must avoid making any payments or disclosing any personal or policy information during the call.

In such instances, policyholders should first inquire with the insurer. They wouldn't lose any money as a result of this. Customers should be aware that unscrupulous callers may also claim to be from the Insurance Regulatory and Development Authority of India (Irdai), so they can immediately file a police complaint, he says.

Never let your strategy pass

In the event that the expense isn't paid inside the due date, the insurance agency will allow a 15-day elegance period for charges paid in regularly scheduled payments and 30-day beauty period assuming the charge is paid on a quarterly, half-yearly or yearly premise.

The policy will expire and the insured's nominee will no longer be eligible for the term plan's benefits if the premium is not paid within the grace period. In the case of endowment and unit-linked insurance plans, if the policy expires during the lock-in period, the policyholder will lose all benefits, including any bonus accrued in the expired policy.

Purchasing a new policy or renewing an old one? It is preferable to renew an old policy because purchasing a new one will require you to go through the entire application process as well as medical tests.

Based on your age and current health, you will be required to pay a higher premium. However, there will be some costs associated with reviving an expired policy, provided that the company agrees to revive the policy.

You will be required to pay the premiums for all of the years since the policy expired, as well as any applicable taxes, interest on outstanding premiums, and even a penalty amount for not paying premiums.

Life policies issued prior to 2019 have a maximum revival period of two years, while policies issued after that have a maximum revival period of five years, according to Irdai guidelines. The policy is cancelled after the revival period has ended.

The majority of life insurance premiums are fixed throughout the policy's lifetime; the younger the policyholder, the lower the premium.

According to Nayan Goswami, head of general insurance at Sana Insurance Brokers, "when you revive or continue a policy, you have the advantage of paying a lower premium based on your younger "age at entry," and for life insurance policies with an investment-linked feature, the better the return, the longer you stay in the policy.

"You may only receive the surrender value if you cancel or let a policy lapse. If you opt out prior to the maturity date, the insurer will also impose a penalty, he says.


* To revive the policy, contact the insurance company directly. Be on the lookout for phony calls. * Life insurance policies issued prior to 2019 have a maximum revival period of two years.It is five years for policies issued after 2019. * Reviving a lapsed policy entails some costs, such as interest on outstanding balances, taxes, and even a penalty fee.