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Importance of paying premium on time

ULIPs combine protection with investments

October 23, 2012 12:52 IST | India Infoline News Service

If you don’t pay premium every year for five years, there will be a discontinuance charge


Below are some reasons why you need to pay your insurance policy premiums on time.


  1. If you don’t pay premiums on time, your policy is discontinued.
  2. You have an option of reviving the discontinued policy or completely withdrawing from it?
  3. If you don’t exercise the option in 30 days, it would be deemed that you are withdrawing from the policy.
  4. If you discontinue your ULIP (unit linked insurance policy), the proceeds of the discontinued policy will be given to you on completion of five policy years and you earn an interest rate of 3.5% p.a on the fund from the date of discontinuance.
  5. Have you ascertained the charges levied for discontinuance of your policy? Ask for details of the discontinuance charges with your insurance agent.
  6. In case of a ULIP, if you don’t pay premium every year for five years, there will be a discontinuance charge. Discontinuance charge will not apply to single premium policies.

Source: IRDA


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