A lapsed insurance is one when the insured skips to make the due payment during the scheduled months as well as the grace period of the month offered by the insurance company. However, the good news is that the policy is not completely cancelled until a certain period of time and gives an opportunity to the policy holder to resume the existing policy by undertaking certain conditions set by the respective insurance company.
An old term policy can be revived after paying the lapsed premium along with interest charges and medical charges. The insurance company will ask for medical costs, by asking the insured to undergo a fresh medical check up.
It also depends on the age and the health conditions of the policyholder. The cost of the medical check up would be borne by the policy holder, depending on the company’s policy. The interest and penalty would range between 12-18%, but depends largely on the pending premium amount and the company’s policy.
It is always advisable to revive an old plan as an individual would have already paid for it in the past and if the policy gets lapsed then the policy holder will lose out on those benefits. Also, the new policy will require paperwork, registration, medical check-up, and other conditions will also come along. Apart from that, the increasing age and deteriorating health conditions will equally affect the premium of the new policy and thus it is beneficial to revive the existing policy.
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