How pay-later feature keeps your life cover active even during financial stress
Skipping a premium can have serious consequences. A lapsed life insurance policy means loss of coverage, and reinstating it later may involve medical underwriting, revised premiums, or forfeiture of certain accumulated benefits.
- Feb 21, 2026,
- Updated Feb 21, 2026 5:58 PM IST
Income stability is often taken for granted — until it is disrupted. Sudden job loss, salary delays, business slowdowns, or even a planned career break can create temporary financial strain. During such periods, households tend to prioritise immediate living expenses, and insurance premiums risk being deferred or missed altogether.
However, skipping a premium can have serious consequences. A lapsed life insurance policy means loss of coverage, and reinstating it later may involve medical underwriting, revised premiums, or forfeiture of certain accumulated benefits. To address this vulnerability, insurers are offering structured flexibility through features such as the Pay-Later Option.
Sabyasachi Sarkar, MD & CEO of Go Digit Life Insurance, explained the intent behind the feature: "In simple words, Pay-Later lets you keep your life cover active while deferring your premium for a defined period. Keep in mind that it doesn’t waive your premium but only gives you time to manage your finances without risking your protection. This is especially helpful when you are between jobs, waiting for income to come in, or dealing with temporary financial stress. The Pay-Later Option is an inbuilt feature; so, you don’t pay anything extra to use it. Once eligible, you can defer the premiums for up to 12 months. This ensures your policy continues with all benefits, including inbuilt optional riders, if any. If a claim arises during this deferred period, the insurer will still pay the eligible amount after deducting the unpaid premiums for that policy year. This ensures your family stays protected throughout."
In practical terms, the feature is designed to ease short-term liquidity stress. Sarkar elaborated imagine your premium is due next week, but your next income may only come a month later. Without Pay-Later, you would have to pay immediately or risk a lapse. With Pay-Later, you can defer the payment, stay insured, and clear the pending amount once things settle. It removes one major stress during already uncertain times.
There are, however, defined eligibility criteria and usage rules. As Sarkar noted: "There are a few basic conditions that one should know and keep in mind. The feature is available on all premium payment option except Single pay and can be taken only for term plans. You can typically use it after completing timely premium payment of three full policy years. It can also be exercised multiple times during the policy as long as there is a gap of five years between each Pay-Later period or as per policy terms and conditions. To maintain clarity and avoid last-minute issues, insurers require the policyholder to inform them before exercising the option."
During the deferment window, the policy remains in force with all applicable benefits. By the end of the Pay-Later period, policyholders must pay the outstanding premiums along with the next due premium. If dues are not cleared within the stipulated grace period after the deferment ends, the policy may lapse or transition into reduced paid-up status, depending on the terms and the premiums paid so far.
One notable aspect is cost neutrality: no additional interest or premium is charged for the deferment. Policyholders may also settle outstanding amounts earlier than scheduled, in which case the policy reverts to its standard premium cycle.
As employment patterns evolve and income streams become less predictable, such embedded flexibility is gaining relevance. The Pay-Later Option does not eliminate financial obligations—but it provides breathing space, ensuring that temporary setbacks do not compromise long-term family protection.
Income stability is often taken for granted — until it is disrupted. Sudden job loss, salary delays, business slowdowns, or even a planned career break can create temporary financial strain. During such periods, households tend to prioritise immediate living expenses, and insurance premiums risk being deferred or missed altogether.
However, skipping a premium can have serious consequences. A lapsed life insurance policy means loss of coverage, and reinstating it later may involve medical underwriting, revised premiums, or forfeiture of certain accumulated benefits. To address this vulnerability, insurers are offering structured flexibility through features such as the Pay-Later Option.
Sabyasachi Sarkar, MD & CEO of Go Digit Life Insurance, explained the intent behind the feature: "In simple words, Pay-Later lets you keep your life cover active while deferring your premium for a defined period. Keep in mind that it doesn’t waive your premium but only gives you time to manage your finances without risking your protection. This is especially helpful when you are between jobs, waiting for income to come in, or dealing with temporary financial stress. The Pay-Later Option is an inbuilt feature; so, you don’t pay anything extra to use it. Once eligible, you can defer the premiums for up to 12 months. This ensures your policy continues with all benefits, including inbuilt optional riders, if any. If a claim arises during this deferred period, the insurer will still pay the eligible amount after deducting the unpaid premiums for that policy year. This ensures your family stays protected throughout."
In practical terms, the feature is designed to ease short-term liquidity stress. Sarkar elaborated imagine your premium is due next week, but your next income may only come a month later. Without Pay-Later, you would have to pay immediately or risk a lapse. With Pay-Later, you can defer the payment, stay insured, and clear the pending amount once things settle. It removes one major stress during already uncertain times.
There are, however, defined eligibility criteria and usage rules. As Sarkar noted: "There are a few basic conditions that one should know and keep in mind. The feature is available on all premium payment option except Single pay and can be taken only for term plans. You can typically use it after completing timely premium payment of three full policy years. It can also be exercised multiple times during the policy as long as there is a gap of five years between each Pay-Later period or as per policy terms and conditions. To maintain clarity and avoid last-minute issues, insurers require the policyholder to inform them before exercising the option."
During the deferment window, the policy remains in force with all applicable benefits. By the end of the Pay-Later period, policyholders must pay the outstanding premiums along with the next due premium. If dues are not cleared within the stipulated grace period after the deferment ends, the policy may lapse or transition into reduced paid-up status, depending on the terms and the premiums paid so far.
One notable aspect is cost neutrality: no additional interest or premium is charged for the deferment. Policyholders may also settle outstanding amounts earlier than scheduled, in which case the policy reverts to its standard premium cycle.
As employment patterns evolve and income streams become less predictable, such embedded flexibility is gaining relevance. The Pay-Later Option does not eliminate financial obligations—but it provides breathing space, ensuring that temporary setbacks do not compromise long-term family protection.