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Wondering What Term Insurance Policy Grace Period is?? Well, here is an explanation about all you need to know.
The beauty of having a family is that we start loving them more than ourselves, isn’t it? From cooking meals to planning the future, everything we do is for our family. This is one of the reasons why buying a term life insurance policy is so important. With one such policy, you can rest assured that even if you are not there anymore, your family will be financially secured and they do not have to compromise in their life.
A term life insurance is also called pure life insurance. It is a type of life insurance in which the policyholder keeps paying a certain amount of premium throughout the policy term. If the policyholder passes away within the policy tenure, the insurance company pays a death benefit to the nominee of the life insurance term plan. If the policyholder survives through the policy term, he/she can either renew the plan for another term or choose to convert the policy to permanent coverage. They can also choose to terminate the policy.
Mentioned herein below are some of the points to consider while buying a term insurance plan.
One of the most important things that you have to remember if you want your family to get death benefits is continuing to pay the premiums. If you stop paying premiums, you can stop expecting any death benefits. However, you do not need to worry if you could not pay the premium on the exact date of the premium payment. Many people fail to pay their term insurance premium by the payment date. To ease one such situation, the IRDAI came up with the concept of a grace period. A grace period in a term insurance policy is of 30 days. You can clear the premium in these 30 days and renew your plan. According to the guidelines of IRDAI, the term insurance grace period depends much on premium payment terms which include monthly, quarterly, half-yearly, or yearly.
Also Read: Joint Life Insurance Policy
Let us talk about the grace period in insurance in length.
In term insurance, the grace period means the number of days permitted by the insurance companies to clear the premium and renew the policy. However, the grace period varies depending upon the type of premium payment method that has been chosen by the policyholder.
There are basically two types of premium paying methods for term insurance policies in India. Here are they mentioned below:
On choosing annual payment of premiums, the maximum grace time that you will get for renewal of the policy is 30 days. However, if you choose a half-yearly premium payment, you will get a grace period of 15 days. Here is a table in which the grace period is mentioned based on the frequency of premium payment that you selected.
|Mode of premium payment||Grace period|
If for any reason, you cannot pay the premium within the grace period; the policy also does not get renewed, and the term insurance plan will be canceled by the insurance company. This also means that your loved ones, who are also the nominees of the plan, will not get any death benefit if you are not around anymore. As a matter of fact, some of the insurance companies do not even return the premiums that have been paid by you so far, at all.
Nevertheless, if you pass away in the middle of the grace time, your family will be able to get the death benefit, depending on the terms and conditions of the plan. You must know that while offering the death benefit to the nominee, the insurance provider will deduct the premium amount that was not paid by you.
Therefore, while you are planning to buy a term insurance plan, you need to make sure of going through the terms and conditions of the policy. You also need to know the number of days of the grace period that you will get. This will help you manage the premium payment accordingly to ensure successful continuation of the policy.
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