My father was working in the armed forces and recently met with an accident which he could not survive. I was told that there is an accidental death cover of ₹5 lakh in his debit card but the same was denied saying that there was no active transaction in the last 90 days. But my father was using the card for withdrawal of cash and I have shown them the records, but they are not ready to settle?
– Name withheld on request
While your father was actively using his debit card for ATM withdrawals, it’s important to know that most banks and insurers do not treat ATM withdrawals or UPI payments as valid transactions to keep the complimentary accidental death insurance active.
According to standard policy terms, this insurance cover remains valid only if the cardholder has made a purchase transaction—either by swiping the debit card at a physical store or making an online payment using the card—within 30 to 90 days prior to the incident.
This requirement is often missed, especially today when UPI is the most common mode of payment. Many people are unaware that despite regular use of the bank account and card, the lack of a qualifying purchase transaction can result in claim denial.
This is a widespread issue caused largely by insufficient communication. Banks typically do not issue a certificate of insurance (COI) or clearly explain the conditions for maintaining eligibility at the time the card is issued. As a result, many cardholders mistakenly assume all card activity qualifies.
Please check if your father made any eligible debit card purchase (at a store or online) within the 90 days before the incident. If he did, you can request a claim review, providing transaction records as proof.
If not, it’s likely that the claim unfortunately does not meet the insurer’s activation criteria.
Also read: India’s life insurance market to surge 10.5% in 10 years—Global market trails at 5%: Report
My life insurance policy has lapsed. Should I reinstate the old policy or is it better to purchase a new one?
– Name withheld on request
Reinstating a lapsed life insurance policy is often a more practical and financially beneficial decision than buying a new one, particularly if you’re still within the revival window, which typically extends up to five years from the date of lapse.
By reviving your old policy, you retain the original terms, including the sum assured, the premium amount, and the policy tenure. For participating policies, revival also means preserving any bonuses accumulated before the lapse—benefits that would otherwise be lost if you opted for a fresh policy.
Continuing with the same policy ensures that the progress you’ve made, especially if you’re well into the policy term or nearing key milestones, doesn’t go to waste. However, insurers generally require a health declaration at the time of revival and may also ask for medical tests, particularly if a considerable amount of time has passed since the lapse or if there have been significant changes in your health.
On the other hand, choosing to buy a new policy comes with certain drawbacks. You would lose all the premiums paid toward the lapsed policy and forfeit any bonuses it may have accrued. Additionally, because your age has increased and underwriting norms may have changed, the premiums for a new policy are likely to be higher. There may also be exclusions or loadings based on your current health profile, which could reduce the value of the coverage you receive.
Unless the existing policy no longer aligns with your financial goals or coverage needs, reinstating it is generally the more advantageous option. It allows you to maintain continuity and maximise the value of the investment you’ve already made.
(Shilpa Arora is co-founder & COO of Insurance Samadhan.)