Insurance is an important part of life—whether it is term, health, motor, home, or any other kind of insurance. The protection it offers is vital for the security and well-being of you and your family in case of an unfortunate event. Having insurance is essential, and the process of obtaining it is quite easy.
However, missing a premium could jeopardise your cover and hamper the protection you signed up for.
Repercussions of missing an insurance premium
There are different stages that follow after you miss your insurance premium.
Stage 1 – You get a grace period: Insurance companies don’t want to stop your coverage when you miss your payment. Most companies provide you with a grace period. Depending on the provider, it could be between 15 to 30 days. The insurance company allows you to pay your premium with penalties within this period. Importantly, coverage continues during the grace period, meaning your claims will be honoured if anything untoward happens during this time
Stage 2 – Your policy lapses: If you don’t renew your insurance within the grace period, your policy will lapse. Since your policy is inactive, you don’t get any coverage, and you could put your dependents in a precarious position, which could impact their financial future. At this point, if you choose to reinstate your cover, you may have to pay late fee along with your pending premiums. In many cases, a health check-up may also be necessary when reinstating your policy.
Stage 3 – Reinstatement: Most insurance companies allow you to reinstate a lapsed policy within two or three years, depending on the policy terms. During the reinstatement process, you may need to submit additional documentation, pay penalties, and undergo a health check-up.
What to do if you miss your insurance premium
Now that you know the repercussions, here’s what you should ideally do if you miss a payment:
- Contact your insurer immediately and explain the reason for the missed payment. Ask how many days of grace you have left.
- Make the payment as soon as possible, including any applicable late fees. Confirm that your policy is reinstated.
- If you can’t pay during the grace period, ask about reinstatement options. Check the penalty/late fees and whether you can switch to quarterly or monthly payments to ease the burden.
- Complete any required health check-ups and submit the necessary documentation.
- Set up auto-debit or reminders to avoid missing future payments.
- If reinstatement isn’t possible, explore new insurance options—but be aware that premiums may be higher due to age or health changes.
The goal is to ensure you are back on track and have financial cover for you and your family in case of any unfortunate occurrences.
In the hustle and bustle of life, it is easy to overlook insurance commitments. Don’t panic—contact your insurance provider, explain your situation, understand your options, and act quickly to restore your coverage.
As a best practice, review your policy periodically, set up auto-debits, and consider breaking annual premiums into smaller instalments. This ensures your loved ones and assets remain protected, helping you cushion the blow in case of any unfortunate event.
