Life Insurance Renew: What you need to know

‘Life Insurance Renew’ refers to extending a life insurance policy beyond its initial term or expiration date. Life insurance renewal is critical to ensure your coverage continues without any gaps and maintains financial security for your loved ones.  However, it's advisable to be proactive, stay informed about your policy terms, and make any necessary updates during renewal to meet your evolving needs. 
 

A non-renewal of policy results in the policy lapsing and losing all the benefits and protections it provides. This step-by-step guide will help you understand when and how to renew your life insurance policy, as well as the essential documents you'll need

Renewal Timing: To avoid coverage gaps, it's essential to renew your life insurance policy well before it expires. Policies typically have a renewal date, which is the date your coverage term ends. We recommend starting the renewal process at least a few months in advance to ensure a smooth transition.

Grace Period: Some policies offer a grace period after the expiration date, during which you can still renew without undergoing a new underwriting process. However, relying on the grace period is not advisable, as it can leave you temporarily unprotected.

Contact Your Insurance Advisor: Contact your dedicated insurance advisor or our customer service team. They will assist you in initiating the renewal process.

Policy Review: Take this opportunity to review your current coverage and assess whether it meets your current financial needs and goals. Your insurance advisor can help you evaluate your coverage options.

Premium Payment: Ensure that your premium payments are up to date. Prompt payment of premiums is crucial for maintaining continuous coverage.

Adjust Coverage: If you wish to make changes to your coverage, such as increasing or decreasing the death benefit or adding riders, discuss these adjustments with your insurance advisor. Keep in mind that making changes may affect your premium.

Policy Information: You'll need your policy number and details for identification purposes.

Premium Payment: Ensure you have the necessary funds to pay the renewal premium. Your insurance advisor will provide the exact amount and payment methods available.

Identification: Have a valid form of identification, such as a driver's license or passport, on hand.

Beneficiary Information: Confirm or update the details of your chosen beneficiaries, ensuring they remain accurate and up to date.

Medical Information (if required): In many cases, renewing your policy does not require a new medical examination. However, additional medical information may be necessary if you make significant changes or switch policy types.

Suppose you missed paying a premium on your life insurance policy. In that case, several potential consequences can occur, depending on the terms and conditions of your policy and the specific grace period provided by your insurance company. Here's what typically happens:

Grace Period: Most life insurance policies include a grace period, which is a specific timeframe (usually 30 days) after the premium due date, during which you can still make the payment without your policy lapsing. During this grace period, your coverage remains in force, and your beneficiaries would still be eligible for the death benefit if something were to happen to you.

Premium Payment During the Grace Period: If you make the missed premium payment within the grace period, your policy will be considered as if it were paid on time, and your coverage will continue without interruption.

Lapse in Coverage: If you fail to make the premium payment even within the grace period, your policy will lapse. This means your life insurance coverage will no longer be in effect, and your beneficiaries will not receive a death benefit if you pass away after the grace period expires.

Reinstatement: In some cases, insurance companies may offer a reinstatement option after a policy lapses. Reinstatement typically involves paying the missed premiums and any accrued interest and possibly undergoing a health assessment or providing updated medical information. Not all policies offer reinstatement, and the terms can vary, so it's essential to check with your insurer.

Loss of Benefits: You lose all its benefits if your policy lapses. You won't have access to the death benefit, cash value (if applicable), or any riders or additional coverage options.

Policy Termination: In some cases, if you don't reinstate the policy or take any action after the grace period, the insurance company may eventually terminate the policy altogether. This means you won't have the option to reactivate the policy.

Premium Payment Mode: Some policies allow for different premium payment modes, such as monthly, quarterly, semi-annually, or annually. Missing payments can have varying consequences depending on the chosen mode. For example, missing a monthly payment may result in a faster lapse than missing an annual payment.

Here are important things to keep in mind about the renewal of your life insurance policy:

Renewal Period: Understand your policy's renewal period. Most policies have a set term, such as 10, 20, or 30 years, after which they need to be renewed. Knowing when your policy is due for renewal is essential to avoid lapses in coverage.

Grace Period: Familiarise yourself with the grace period provided by your insurer. The grace period is the window of time after the premium due date, during which you can make late payments without a policy lapse. It typically ranges from 30 to 60 days.

Premium Amount: Be aware of the renewal premium amount. It may change over time based on factors such as your age and any changes to your coverage. Ensure that you can comfortably afford the premium payments.

Review Coverage Needs: During the renewal process, take the opportunity to review your coverage needs. Consider factors like changes in your financial situation, family size, debts, and income. Adjust your coverage as necessary to align with your current needs.

Beneficiary Information: Verify that the beneficiary information in your policy is accurate and up to date. Ensure that the individuals or entities you want to receive the death benefit are correctly designated.

Policy Riders: Review any riders or additional coverage options attached to your policy. Decide whether you want to maintain or modify these riders during renewal.

Payment Options: Confirm the payment methods available for premium payments. Ensure that you have a convenient and reliable method for making timely payments.

Policy Type: Determine whether your policy is term life, whole life, universal life, or another type. Different policy types have varying characteristics, and renewals may work differently for each type.

Policy Expiry: If you decide not to renew your policy, understand the consequences. When a policy expires or is not renewed, your coverage will cease, and your beneficiaries will not receive the death benefit.