Your Questions Answered: Claiming insurance money after kin's death, reviving lapsed policy and term plans for NRIs

Q1. Can I revive my insurance policy after it lapses?

A life insurance policy lapses when a policyholder fails to pay the renewal premium within the due period. An insurance company offers a grace period to allow policyholders to pay the premium and renew their insurance plans. Typically, the grace period is 15 days from the due date of policy renewal (for policies purchased on a monthly premium payment mode) and 30 days from the due date of policy renewal (for policies purchased on a quarterly, half-yearly or annual premium payment mode).

In case a policyholder chooses to revive their policy within six months from the date of lapsation, they can pay the outstanding renewal premiums along with interest / late fee wherever applicable, as may be levied by the insurer subject to policy terms and conditions.

In case a policyholder chooses to revive their policy beyond six months, the insurer may ask for a Declaration of Good Health certificate as an additional requirement. In certain cases, the insurer may require the policyholder to undergo medical tests, based on underwriting requirements.

It is strongly advisable to renew one’s life insurance policy on time, to avoid lapsation, and loss of policy benefits.

Q2. I quit smoking last year and want to purchase a term policy. After how many years will I be considered a non-smoker for insurance purposes?

One qualifies as a smoker if they consume chewing tobacco, cigarettes, cigars, hookah, e-cigarettes or even nicotine gums. Since smokers are usually more prone to chronic, lifestyle diseases as compared to non-smokers, insurance companies levy a higher premium on policies purchased by a person who smokes. It is advisable to disclose about one’s smoking habits while applying for an insurance plan as any false or misleading information may lead to claim rejections in the future.

You may purchase a term plan at a standard, non-smoker premium amount, provided you have not consumed nicotine in any form in the past 12 months (may vary to 24 months based on the product and other conditions) as well as subject to Cotinine test results. Your insurance company will thoroughly analyse your medical tests for potential health risks due to smoking, before accepting the risk.

Q3. I will be relocating to Canada next year. Can non-resident Indians purchase a term plan in India? Will the cover be in force if I die while living abroad?

Non-Resident Indians (NRIs) are eligible to buy term insurance plans in India. You will be required to furnish additional documents pertaining to your occupation, earnings, residential proof, etc. while applying for an insurance policy.

In the unfortunate event of your death while you are living abroad, the claim will still be honoured, provided you have paid the premiums regularly and the policy is still in force.

Q4. My father-in-law passed away three years ago. My wife has just discovered that her father had a life insurance policy for which she is the nominee. What is the process of making a claim for such a case?

Yes, your wife can contact the insurance company and notify the claim. As long as the premiums have been paid regularly and the policy remains active as on the date of death, your wife is eligible for the claim amount subject to the policy’s terms and conditions.

It is advisable that the nominee notifies a claim as soon as the life assured passes away. It is also prudent for everyone to keep their nominees informed about their life insurance policies to avoid any inconvenience to the beneficiaries in case of an eventuality.

Rajesh Krishnan, Chief - Operations & Customer Experience, Bajaj Allianz Life

Note: This story is for informational purposes. Please speak to a financial advisor for detailed solutions to your questions.