A busy life means some months the premium simply gets forgotten. The good news is that a policy does not lapse the moment the due date passes. Here is what the safety mechanisms are, and how to restore cover if it has lapsed.

The grace period

A life insurance policy generally allows a grace period of around 30 days from the due date for paying the premium (according to each policy's conditions). During this window the cover remains fully in force. If an event covered by the contract occurs within the grace period, the company still pays the sum insured, deducting the outstanding premium.

If the grace period passes and it is still unpaid

What follows depends on whether the policy has accumulated a cash value.

  • No cash value yet (usually in the early years) — the policy lapses and cover ends.
  • Cash value accumulated — many plans have an automatic mechanism, such as an automatic premium loan (APL), which uses the value in the policy to pay the premium, with interest, in order to keep the cover in force. This depends on the conditions stated in the policy.

Already lapsed — can it be reinstated?

In most cases yes, within the period the policy specifies after lapse. Generally the outstanding premiums must be paid with interest, and a health declaration or a new medical examination may be required according to the company's criteria. One thing to know is that reinstatement can, in some cases, restart waiting periods or certain conditions. Ask the company clearly before proceeding.

Prevention beats repair

  • Set up automatic payment from an account or card to remove the possibility of forgetting.
  • Choose a payment frequency that matches the rhythm of your income — monthly or annually.
  • Keep your contact number and address up to date with the company so reminder letters don't go astray.

In short

Forgetting a premium is not the end of the policy — there is a grace period, automatic mechanisms, and reinstatement to fall back on. What matters is not letting it go quiet: contact the company or your agent as soon as you realise. The options for keeping your cover are far better than they are after a long delay.