What happens if a policy lapses?
A life insurance company provides the insured with a grace period of 30 days,that is,a period of 30 days after the start date of the policy. The insured can pay premium on any day during this grace period. In case the insured dies during the grace period, the insurer is liable to pay the death benefit to the nominee less any amount outstanding (including the unpaid premium). This provision helps the insurer to minimise the risk of policy lapse unintentionally. In case the insured has not paid premiums after the grace period, the policy lapses. However, a lapsed policy can be reinstated within a certain period. The insured has to pay the insurer the accumulated due premium with interest, as well as provide a good health statement. Insurance companies offer many procedures for the insured to revive her/his policy. In the event the insured dies and the policy lapsed within three years from the date of commencement of the policy, then the insurance company is not liable to settle such clai
