WHAT do fast food, e-mail, instant coffee and 20/20 cricket matches have in common? They bear testimony to the fact that time is money. And both are in short supply!

No time to eat, write a letter, brew good coffee, play a game of 50 overs.

Now, what happened when 28-year old marketing manager Prakash Sahni had no time to pay his insurance premium? A missing a premium is not as simple as missing your cup of coffee; a lapsed policy means wasted money and no cover for your family.

Prakash went abroad on a work assignment for five years. He returned to discover that his policy had lapsed and it could not be revived. He lost the Rs 136,000 (Rs 1.36 lakh), which he had already paid up as premium.

Fortunately for Prakash, nothing untoward happened to him during those five years. But if something did, his dependents would not have got a single Rupee.

Now, the insurance company gave Prakash adequate opportunities to pay up. All insurance companies offer a grace period of about 30 days after the due date. If you don't pay up within this time frame, your policy will lapse.

If you skip the due date and the grace period, you can still revive your policy. The price you stand to pay: an interest on your premium that can go up to 9 per cent per annum.

This chance of revival can last up to five years with an interest payment, and may even require medical re-examination. If you go abroad, make sure you pay your premium in advance.

• Careful mistakes you make while buying insurance!
  

Illustration: Vaibav Shirke

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e-mail: Team Wealth

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