What are the Conditions of Insurance Premiums?

Conditions of Insurance Premiums

Payment of Premiums :

The premium rate is calculated annually, but for the convenience of the assured, it can be paid half- yearly, quarterly or even monthly. It should be remembered that these premiums are not just the portion of yearly premium because the insurer losses interest on the unpaid premium of a year and expenses are involved for frequent calculation of premium.

When premiums are not annual but fractional and if death takes place before all the premiums have fallen due for the current policy year, the corporation deducts the unpaid installments from policy year, the corporation deducts the unpaid instilments from the assured sum at the time of settling the claim.

Days of Grace :

Premium is paid at or before the due date. But for convenience of the policyholders, certain additional period called days of grace, is allowed to pay, the premium.

The insured can pay the premium within the days of grace and the policy would not lapse up to the days of grace. However, the policy will lapse if the due premium is not paid even within the days of grace.

One calendar month but not less than 30 days of grace is allowed for payment of yearly, half- yearly and quarterly premiums, and fifteen days for payment of monthly premiums. The days of grace are to be counted excluding the due date of the premium.

When the days of grace expire on a Sunday or a holiday observed by the office of the insurer where premiums are payable, the premium must be paid on the following working day to keep the policy in force. The insurer is not responsible for any delay in remittance caused through the post office or otherwise.

Premium Notice :

In order that the policyholder may not forfeit the benefit of his policy, notice of premiums falling due will be regularly sent to him except in the case of policies under which the mode of payment of premium is monthly where no such notice is required, the insurer is not bound to give any such notice and the want of it cannot be admitted as an excuse for not paying the due premium in time.