Missed your premium payment over the festive season? Your insurer is legally bound to give you time to make up for this payment, but here is what you need to know to prevent your cover from being cancelled or left inactive.
What happens after my policy has lapsed?
Life cover is a contract between you and your insurer. Your insurer will make sure that your policy is kept active to create a financial safety net for you and your loved ones when you are no longer around, but it also requires that you keep your premiums up to date to keep this agreement active.
Your insurer will send out a notification that you have missed your payment via email and SMS. A grace period will be applied during this period to give you breathing room to make the payment. This means that you will have 15 days to plan to pay for the missed premium.
For example:
If your debit order for your policy goes off on the 25th of January, but you happened to miss your payment, you will be given until the 20th of February to make a payment. However, you will be debited again on the 25th of February to cover the following month.
It is possible to make arrangements to change your debit order date
Keeping your insurer up to date on changes will give you time to make arrangements to pay the premium. Whether you have switched your bank account or facing financial constraints that will make it hard for you to pay the premium, telling your insurer will give you the breathing room to make arrangements.
What happens if I do not make a payment in the grace period?
Your policy will be cancelled, which means that you will no longer be covered. Keep in mind that your policy is only active up until the grace period has ended.
Therefore, should you place a claim during the grace period it will be paid out. However, should an incident occur during the period where your policy is cancelled, your insurer will not process your claim since your policy will be inactive.
This can have far-stretching implications as it also means that your beneficiaries will not receive the claim. You do have the option of reinstating your policy to ensure that you and your loved ones still have a financial safety net.
