India’s largest life insurer Life Insurance Corporation of India (LIC) is renowned for different types of policies suitable for people with different requirements. The terms offered by the company are quite flexible in order to take care of the specific needs of customers. A policy offered by LIC remains active as long as the premium amount is paid for a specific term. Failure to pay the premium on time will result in lapsation of the policy. When a policy lapses, policyholders or beneficiaries may not receive any benefits from the coverage.
In addition to the flexible premium payment terms, the company also offers a grace period as per the guidelines issued by the Insurance Regulatory and Development Authority of India (IRDAI). Policyholders can enjoy 30 days of grace period before their policy lapses. While the duration of this grace period cannot be changed, there is a way in which you can delay the premium payment by up to 70 days without risking policy lapsation. This can be done with the help of LIC credit cards. Before we take a look at this process, let’s find out the guidelines regarding grace period.
Grace period refers to the additional time period offered by insurers following the actual due date of premium payment. During this 30-day period, the policy will not lapse. The purpose of this period is to protect policyholders from losing their coverage in case they couldn’t pay their premiums on time. If a policyholder misses payment even during this grace period, getting the coverage back may attract huge penalties. In some cases, the policyholder may have to apply for a fresh coverage forgoing all their accumulated benefits.
One key thing to note here is that insurance companies do not provide any coverage during this grace period. In other words, this period can be used only to get back into the coverage without letting the policy lapse. For instance, if a policyholder dies during this grace period, there will not be any settlement paid to his/her dependents. People who wish to have continuous coverage must ensure premium payment within the due date set forth by the insurer.
If you wish to boost your grace period further, you must have the credit card issued by LIC. Applying for an LIC credit card is quite simple, and it can be done by visiting the LIC cards website. There are different types of LIC cards (Gold, Titanium, Platinum, and Signature) available and customers can choose any card according to their preference. While applying for LIC credit cards, customers can provide their policy details to enroll for automatic payment. Once you have received your LIC credit card, you can avail higher grace period through the following method.
Once you have linked your LIC policy with your LIC credit card, it will pay the outstanding premium amount automatically after 25 days of the due date (within the 30-day grace period). Through this way, the policyholder gets another 45 days time to pay the credit card bill. In total, policyholders can get 70 days of grace period from the due date of the policy. If you are really strapped for cash, this method could provide you the much needed relief to take care of your insurance payments.
As noted earlier, there will not be any coverage for the policyholder until the outstanding premium amount is paid. Even under this method, the policyholder will not get any coverage for the first 25 days. Hence, it is always better to pay the premium amount within the due date to enjoy continuous coverage. It is advisable to use this method only under dire circumstances where you need some extra time to get the money for your insurance premium.
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