If Policyholder Dies Within The Grace Period ?

What Happens If Insurance Policyholder Dies Within The Grace Period ?

Every life insurance company provide a grace period of 30 days for paying the premium after the due date is over. Companies send reminders on SMS & E- mails to make sure the customer pays their premiums on or / before the due date, but if they forget to pay the premiums on time, still they get 30 days of grace period.

If premium are not yet paid after the grace period, then the policy is considered to be LAPSED and no death benefits will be given if the death happens after the grace period.

Do you get sum assured if death happens during grace period ?

And the answer is Yes .

As per the Insurance rules, if the death of the policy holder occurs on the due date of the premium payment or / during the grace period, still the policy is valid & the beneficiaries will get the sum assured, but after deducting the the unpaid premiums.

So if a person has taken a Rs. 1 crore term plan for a 30 years period with premium Rs. 10,000 per year on 18th december 2009 and imagine the policy has run for 4 years , and now its the 5th premium is to be paid on 18th december 2014.

The grace period will be upto 18th January 2015. Now if the premium was not paid and the death happens on 19th December 2014, then its during the grace period.

How much will be the sum assured paid to the policy holder family ?

It would be Sum Assured – unpaid premiums

= Rs. 1 crore – (26 yrs * 10,000)
= Rs. 1 crore – 2.6 lacs
= Rs. 97.4 lacs

While its a good thing that the family will still get a big enough amount, you can see how a little delay still costed Rs. 2.6 Lacs to the family, because the person did pay his premium on time.

Payment of Sum Assured if death happens during grace period

There have been a lot of cases, where a person just discontinued his policy for some reason & they faced an accident and died. Internet is full of these kind of cases. A lot of times death happens during the grace period and because the family is not well educated on this aspect, they do not know that they are still liable for a claim.

So make sure you do not forget to pay your premiums & make sure you do not wait for the reminders from the insurance company. You can set up your own reminders and be more alert and proactive on this.

LIC of India Said in its web site ( https://www.licindia.in/policy_conditions.htm) ''A grace period of one month but not less than 30 days is allowed where the mode of payment is yearly, half-yearly or quarterly and 15 days for monthly payments. If death occurs within this period, the life assured is covered for full sum assured."




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