What happens if you can’t pay insurance premium in life insurance? Under what circumstances is the insurance covered and in what circumstances is it repaid? When is the insurance policy eligible for surrender? And under what circumstances is the loan facility available in the insurance policy? Let us try to understand the situation and the facilities associated with it if the insurance fee is not paid today.
In life insurance, options are provided to pay insurance fees according to the insurance plan. At present, there are options to pay installments, especially on annual, half-yearly, quarterly and monthly basis. That is, in the option of paying the installment annually, the next installment has to be paid in exactly 1 year after the start of the insurance, in 6 months in the half-yearly, in the quarterly option in 3 months, and in the option of monthly payment, the next installment has to be paid exactly one month after the start of the insurance. Among these options, a grace period of 30 days is given in the option of paying insurance annually, half-yearly and quarterly and 15 days in the option of paying installments monthly.
ग्रेस period#
The grace period in life insurance is the period to be extended on the date of payment of insurance fee. That is, the policy remains in operation for an additional 30 days from the date of payment of the insurance fee and in the event of the death of the insured, the insured gets a claim equal to the full sum assured.
In the event of non-payment of insurance fee within the grace period, the insurance policy will lapse.
व्यतित Insurance##inline_tags_PLACEHOLDER_7#
Laps insurance is of two types. The first type is the case of payment of only one installment (in the case of options other than the year, not paying the entire two years). Which is also called pure lapse or lapse only. In such a situation, the insured does not get any benefit and the insurance company also does not bear any liability. In an earlier article, we have discussed why the insured does not get anything by paying only one installment of insurance fee.
Another situation is that the insurance policy will be converted into a paid-up policy. After the payment of the insurance fee for the entire two years or more, the insured is converted into a paid-up policy and the insured receives the paid-up value at the end of the insurance term or at the death. Prior to the issuance of the ‘Guidelines on Life Insurance, 2077 BS’, some of the insurance policies issued by the Nepal Insurance Authority had a provision to pay the full insurance fee of three years to be converted into a life insurance policy.
Insurance companies also provide a special facility in life insurance. Under this, in the case of an insurance policy that has been converted into a paid-up policy, in the event of the death of the insured for an additional one year after the expiry of the insurance, the full sum assured is provided by deducting the sum assured for one year. In the event of death after that period, the insured pays only the paid-up price.
###inline_tags_PLACEHOLDER_5#Paid-up Value of #चुक्ता Insurance##inline_tags_PLACEHOLDER_7
Before understanding the paid-up value, let’s understand the paid-up sum assured. A paid-up sum assured is an adjustment of the original sum assured according to the sum insured paid by it. Which is obtained by multiplying the original sum insured by dividing the total sum insured paid by the full sum insured. For example, if a person insures rs 1 million for 15 years and does not pay other insurance charges by paying only two installments, then his paid-up sum assured is 2/15 8 1000000 equals 133333.33.
A two-year bonus is also earned for paying two installments of insurance fee. In the previous example, if you calculate the two-year earned bonus at the rate of Rs 60 per thousand, then rs 60,000 a year in that policy earns Rs 120,000 bonus in two years. The paid-up sum assured is Rs 133333.33 and the bonus earned is Rs 12000. The paid-up value of the paid-up insurance policy is the amount that comes with this earned bonus and paid-up sum assured. which is obtained at the end of the expiration of the insurance or at the death of the insured.
#inline_tags_PLACEHOLDER_5#renaissance of #व्यतित insurance#
What can be done now that the insurance policy has passed? The insurance policy that has lapsed can be revived at any time. If there is no interest or penalty while paying the insurance premium within the grace period, then the insurance fee can be paid by paying interest or penalty for six months (from the date of payment of the insurance fee) after that. Insurance companies are also offering interest subvention offers for the revival of lapsed insurance.
In the event of failure to pay the insurance fee, the insured can also be surrendered.
#बीमालेखको dedication#inline_tags_PLACEHOLDER_7##
After paying the insurance fee for a full two years, the insurance policy is converted into a paid-up insurance policy, but surrender cannot be done. For surrendering the policy, it is possible to pay at least 3 years of insurance premium only after 3 years from the date of activation of the insurance. The amount received while surrendering the policy is the paid-up value of the policy which is provided during the insurance period. It is calculated at the price of today’s day. In an earlier article, we have presented a detailed calculation method on how the dedication value is calculated.
If the insurance policy is in operation, the insured can also take a loan under the policy without surrendering the insurance. The insured can get 90 percent of the surrender price as loan.
#inline_tags_PLACEHOLDER_5##सारांश#inline_tags_PLACEHOLDER_7#
If the insurance fee is not paid within the grace period, the insurance policy will pass. The insured does not get any benefit in the insurance policy that has been spent by paying only one year of insurance fee. In the event of payment of only 2 years of insurance premium, the policy is converted into a paid-up policy and the insured receives the paid-up price only on death or at the end of the insurance term but cannot receive the surrender price by surrendering in the middle of the insurance period. If the insurance has passed by paying at least 3 years of insurance, the insured can get the paid-up price at the end of the death or insurance period by keeping the policy paid- up, but can also get the surrender price by surrendering the policy in the meantime. After the completion of 3 years of the commencement of the insurance policy, the insurance can be surrendered in any case of insurance, whether the policy is in operation or in the past, and in the case of the policy, a loan equivalent to 90 percent of the surrender value can also be obtained. The insurance policy that has lapsed can be revived at any time.
