All desirable things take patience as well as constant effort to bear results. You need to invest in good and healthy lifestyle habits to have a good health, just like you need to nurture a tree for it to bear good fruit a few years later. The same could be applicable to our financial instruments as well. Be it investment or insurance, regular and timely interventions are essential to get the optimum benefit from financial instruments.
The role and importance of term insurance policies has increased manifold in these times when Covid-19 is running amok in the country.
To keep the benefits of term insurance active, a policy needs to be renewed as and when the due date arrives. Renewing a term insurance policy is important to keep the policy in an active state so that the purpose for which it has been purchased is suitably met.
Covid-19’s financial impact
The covid-19 pandemic has put pressure on the financial lives of many individuals. While lockdown restrictions are impacting the income of the self-employed, many salaried individuals are also feeling the heat because of pay cuts and job losses. In such circumstances, many individuals are facing cash crunch and are contemplating deferring some discretionary expenses for a later date.
But, if you are considering doing the same with your term insurance policy and give the premium a miss, think again! The premium towards a term insurance plan should be treated as an essential non-discretionary outgo. Under no circumstances, you should think of not paying the premium on time or letting the policy lapse, because if you do so, it could have an impact on your financial goal which is of securing your loved ones
Importance of premium payment
The premium in a term insurance plan needs to be paid till the chosen period. It can be paid on a monthly, quarterly, half-yearly or on annual basis the terms and conditions specified within the respective term plan. There is, however, a provision of the grace period if someone misses the due date. If you miss paying the premium even after the end of the grace period, the policy gets lapsed. As a last resort, you may convert the yearly payment to monthly premium, if hard-pressed for funds. However, such a conversion can be done only when the policy is in an active state and not in a lapsed state.
Fallouts of not paying premium on time
There are some crucial fallouts for your financial health if your term insurance policy lapses. Here are some of them.
Your life goals go unprotected – You would have paid the premium religiously for so long, but one year of non-payment will deprive you of the coverage, putting goals in jeopardy, and the family in a financially vulnerable position. To ensure that the purpose for which you had purchased a term insurance policy is not compromised, make sure you keep the policy active by paying the premium on time.
No refund of premium –In case you forget to pay on time and the policy lapses, the premium paid will not be refunded and no benefits will be payable.
Make sure to renew on time
In order to ensure you keep paying the premium on time, you may set reminders and alerts of the due date. Also, make sure your phone number and email are updated with the insurer. In addition, opting for standing instructions with your bank to debit the premium amount on the due date keeps it simple and easy with zero risk of missing the due date.
Stay adequately insured
If you already have a term plan, as highlighted above, it is crucial to keep the policy active. However, that is just the first step. You also need to ensure that you are adequately insured. If not, then you should opt for a higher coverage that is more in line with your lifestyle and family’s financial goals.
If you do not have a term insurance yet, choosing the right policy should be the first step in your financial planning.
Bajaj Allianz Life Smart Protect Goal – A Non-Linked, Non-Participating, Pure Life Term Insurance Plan, is one of the preferred options when it comes to protection of your and your family’s life goals. The plan is a comprehensive term plan with competitive premium and works as a shield against financial stress caused by adverse life events.
Choice of the right insurer is equally important and Bajaj Allianz Life Insurance with a claim settlement ratio of 98.48 per cent  and having covered over 2.36 crore  lives is the upright insurer to bank upon.
The purpose of buying a term insurance plan is to make sure your family doesn’t get stranded for funds in your absence. Bajaj Allianz Life Smart Protect Goal – A Non-Linked, Non-Participating, Pure Life Term Insurance Plan comes with a host of customizable features keeping it simple and easy for you to keep the life worries away and ensure the financial security of your loved ones.
 Individual Claims Settlement Ratio for FY 2020-2021
 Individual & Group
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