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Is it Better to Revive Your Old Term Insurance or Buy a New Plan?

Term insurance is the most preferred choice nowadays amongst other insurance policies. Due to features such as flexible periods and add-on riders, policyholders prefer to buy term insurance. The term plan will financially secure the future of family members and loved ones in case the insured person passes away.

Along with the flexible and customisation options available with the term plan in India, one needs to take care of the regular premium payments as well. The policyholder should take note of the dates for paying the amount of the premium. The term plan can lapse if the regular premiums are not paid on time. Further, if this is the case, then the policyholder cannot claim the amount at the end.

What to do if the term plan with the return of premium lapses? Should policyholders buy the new term plan, or will reviving the current policy work? What are the formalities one needs to do in either of the cases? Get answers to all these questions here in this article.

In What Cases Does The Term Plan Lapse?

Everything depends on the term insurance policy. Premiums must be paid according to the contract signed between the insurer and the insured person or policyholder. The general procedure is quite simple. The insured party is required to pay the premium before the regular deadline. Following this, if the insured dies during the term period, then nominees will receive the death benefits.

Nevertheless, if some regular premiums are not paid, then the chances of term policy lapses are probably higher. The insurer or the insurance company allows a grace period of approximately 30 days to the insured party after the given deadline to settle the premium dues. However, if the insured does not renew the term insurance policy, then the insurance coverage will expire. Expired insurance cannot be used to make a claim.

Procedure to Renew Term Insurance Policy After it Lapses

The insurer allows the policyholder to renew the term insurance policy in two different ways. The details for renewal are given below:

Case 1: If the grace period is still left

If the regular premium is missed but the grace period is still left by the insurance company, then it is pretty straightforward. You can pay the premium during the grace period as well. It will not cost you any extra, and your policy will be revived per the contract.

Case 2: If the grace period is gone.

Insurance coverage will not be provided if the premium is not paid and the grace period is completed. However, the policyholder can still revive the insurance policy. He or she needs to pay the interest and non-paid left premiums. The insurance company can charge the late fee with an interest payment. It will happen what is written in the insurance contract.

There are different additional things you need to fulfil now. Initially, you may be asked to take a health test, and if health conditions don’t turn out well, premium rates will be increased. Here policyholders need to take care of the fees and premium amount as well.

Should a Person Buy a New Term Insurance Policy or Revive the Old One?

Apart from the fees charged and changes in premium, this decision depends on certain factors, which are mentioned below:

  • Age matters

You need to consider the age when it is about buying a new policy or reviving the old one. If you are comparatively young, then in your case, premiums will be pretty low. Hence you can stick to the old policy. However, if you are over 40, fees and premiums can be slightly higher. In this case, opting for the new policy is beneficial.

  • Charges

Check the insurance company’s charges while reviving the old policy. If they cost you higher, you can consider a new term plan from reputed insurers like a Tata AIA Life Insurance policy.

  • Discounts are given

Along with these factors, you must look for discounts if there are any from the insurer. If there is a heavy discount, stick to the old policy only.


These are the factors one can consider when deciding to stick to the old policy and revive it or buy the new term plan. Term insurance is affordable but can cost higher if the premiums are not paid regularly as scheduled. Hence, it is better to take care of the regular premiums and continue or revive the policy accordingly. Moreover, one can buy term insurance online as well and check the terms of the policy accordingly.

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