Prevent Insurance Policy Lapses | How to Prevent Insurance Lapses

Insurance

If you fail to pay your insurance premiums, your policy will lapse and you will lose any existing insurance coverage. Here’s what you can do and how to keep your policy from expiring. In this blog, we tell you how to prevent insurance policy lapses?

With so many different insurance policies available, it is possible to miss a payment or two. Missing an insurance premium payment has the same consequences as missing a credit card bill payment, which results in a late payment charge and interest fees.

How to Prevent Insurance Policy Lapses?

What causes an insurance policy to lapse?

When you, the policyholder, fail to pay your premium, your insurance policy will lapse. However, you usually have a 30-day grace period after the premium due date to make payment. If you miss that deadline, your insurance policy will expire.

A lapsed insurance policy is concerning for any policyholder because it means there is now a gap in your insurance coverage. Here are some practical steps you can take to keep your insurance policy from expiring.

How to Prevent Insurance Policy Lapses?

• Make recurring payments. Set up a GIRO payment with your bank account, preferably one that you frequently use, check, and keep enough money in.
• Reminders should not be ignored. You are usually reminded to pay your premiums via a letter, email, or an in-app reminder. If you have a responsible insurance agent (which you should), they may also send you a reminder to pay your premiums.
• Check that the GIRO bank account has sufficient funds. If the insurance company attempts to debit your bank account for payment and there is insufficient balance, you will be notified that the deduction was unsuccessful. Take this notice seriously and top up your account before the next deduction, or transfer the funds directly to the insurance company using a cheque or the AXS machine.
• Request auto-renewal. You can apply for auto-renewal of annual renewable plans. Otherwise, you can always expect to receive a renewal notice, either by mail or email, near the end of the coverage period, prompting you to renew your plan.
• Make calendar reminders. Setting reminders in your calendar to remind yourself to pay the premiums or to check if a specific policy needs to be renewed is a manual way to remind yourself.

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