Lapsed Your Insurance Policies? Reinstate it back!

Wed, Mar 26, 2014

Insurance

In my years working as a financial consultant, I have met a number of prospects who have previously lapsed their insurance policies.

It is a disadvantage to them if they lapsed their insurance policies, because typically the charges for life insurance policies in Singapore is on an upfront basis. If they lasped their policies for the first 2 years, for most insurance policies, they will not get any money back.

Thus, I share with many of them, ways on how they can revive back their lapsed insurance policies.

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There are 3 situations where you can revive back the insurance plans.

a) Normal revival

– Can be done for policies that have been lapsed/paid up for less than 3 years

– Submit Declaration of Continued Assurability (DCA) Form

– Policyholders are required to pay outstanding premiums with interest

 

b) Reinstatement of Surrendered Policies

– Can be done if policies are surrendered for not more than 6 months

– Submit DCA Form

– Policyholders are required to pay outstanding premiums and surrender value with interest

 

c) Reinstatement of Auto Surrendered Policies

– Policies are auto-surrendered when their cash values are lesser than policy loans

– Can be done for policies which are auto-surrendered for less than 3 years

– Submit DCA Form

– Policyholders are required to pay outstanding premiums with interest and at least 10% of the outstanding loan with interest
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insurances

For those who lapsed their insurance policies within 18 months, and want to revive their policies, but do not have money to pay the outstanding premiums, you can do a special revival.

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Special Revival Scheme is only available for participating life policies with no cash value. This scheme is not applicable for term policies, annuities, investment-linked policies and other life policies with cash value.

When you do a special revival on your lapsed insurance policy,  you only need to pay 1 month revised premium + $10 admin fee.

The outstanding premiums will be waived but the entry date of the policy and maturity date (if applicable) will be adjusted by the same number of months where the policy has lapsed. It means the maturity date for your life insurance or endowment policy will delay in accordance to the outstanding months of premium.

Please note that the monthly premium will be increased due to the change in policyholder’s entry age. Also, all reinstatement requests are subjected to health assessment.

An example, your plan lapsed for 6 months. Instead of paying the outstanding 6 months premium + interest, you do a special revival. You pay 1 month of revised premium in accordance to your age + $10 admin fee. Your policy will mature 6 months later.

If you wish to apply for SRS, it will be recommendable to check with the insurance company if the policy is eligible for the scheme first.

Share this blog post, if you find the information shared useful. 🙂

 

p.s. By the way, if you wish to discover a simple & halal way to create a positive monthly cashflow and calculate your net worth for FREE, then please click here…

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This post was written by:

- who has written 435 posts on The Official Helmi Hakim Website.

A certified financial consultant, Helmi Hakim has won praise for his patience, perseverance and practicality when solving his clients' financial concerns. For more information on how you can manage your finances better, contact Helmi Hakim at 96520134.

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2 Responses to “Lapsed Your Insurance Policies? Reinstate it back!”

  1. Darren Says:

    Hi Helmi,

    The information you have provided are certainly useful.

    Just to check, does the above information apply to NTUC Income only or to other insurance companies as well? Especially for Part b), Reinstatement of Surrendered Policies, which is something new to me.

    Thank you.

  2. Helmi Hakim Says:

    Hi Darren,

    It can be done for NTUC Income insurance policies. For surrendered policies belonging to other insurance companies, you might want to confirm with your financial consultant from that specific company itself.


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