Term Insurance Grace Period

Q: What if I miss the term insurance premium?

If you miss a term insurance premium, your policy enters the grace period and continues to remain active for a limited time. You must pay the overdue premium within this period to prevent the policy from lapsing.

Q: Do all insurance policies have a 30 day grace period?

No. Policies with monthly premium payments usually have a 15-day grace period, while quarterly, half-yearly, or annual premium payment modes typically come with a 30-day grace period.

Q: What happens if the grace period expires?

Once the grace period expires, the policy lapses and coverage stops. In many cases, the policy can still be reinstated by paying the overdue premiums and completing the insurer’s reinstatement formalities.

Term Insurance Grace Period Explained

Written by Gargi Thakur

Insurance Writer

Reviewed by Gaurav Bhat

IRDAI-Certified Expert at Ditto

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Table of Contents

Quick Overview

The grace period in term insurance is the extra time given after your premium due date to make the payment without losing coverage. As per IRDAI norms, it is 15 days for monthly premiums and 30 days for quarterly, half-yearly, or annual premiums.

Missing a life insurance payment can leave you feeling uncertain and worried about your coverage. At Ditto, we’ve helped thousands of customers find the right coverage and keep it intact, ensuring they don’t lose the protection they’ve worked hard to secure.

In this blog, we’ll break down everything you need to know about the grace period in term insurance, how it works, and what steps you can take to ensure your policy stays active, even if you miss a payment.

How Does Term Insurance Grace Period Work?

Grace period in term insurance ensures coverage doesn’t end the moment a payment is late. It begins the day after your premium is due, and this buffer helps avoid unintentional lapses due to forgetfulness or temporary cash flow issues.

Will My Family Receive the Term Life Insurance Payout During the Grace Period?

Yes. If the insured person unfortunately passes away during the grace period, the nominee or beneficiary generally still receives the sum assured. However, insurers typically deduct any unpaid premiums from the claim payout before settlement.

Basically, the claim is still valid as long as it’s within the grace period.

What Happens if You Don’t Adhere to the Grace Period for a Term Insurance Policy?

If you fail to pay your premium within the grace period, your term insurance policy will lapse. Here’s what it means:

Your coverage ends: No death benefit will be paid if the policyholder dies after the grace period ends.
Policy becomes inactive: The premiums paid to date are forfeited.

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What Can You Do if the Insurance Policy Grace Period Expires?

Once your policy has lapsed, here are your options:

Reinstatement: Most insurers allow you to reinstate a lapsed policy within a specified period. While the IRDAI mentions a 5-year reinstatement window for term insurance, this may vary by insurer. Some companies may allow reinstatement for up to 2 years, while others may offer a longer or shorter window. If you’d like to learn more about how you can reinstate your lapsed policy, you can check out our detailed guide on the same.
Buy a New Plan: If your policy cannot be reinstated, you can purchase a new term plan. Keep in mind that premiums may be higher due to your age or any changes in your health, but this will restore your life cover and ensure that your family is still protected.

Why Choose Ditto for Term Insurance?

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Ditto’s Take

While the grace period exists as a backup, it should be treated as an emergency cushion, not a routine extension.

Our advice? Never miss a payment in the first place. The simplest and most effective way to ensure this is to set up automatic payments from your bank account or card. If auto-debit isn’t possible for any reason, setting multiple reminders such as calendar alerts, app notifications, or even a family reminder can go a long way in preventing an accidental lapse.