In-Force Policy

What is an In-Force Policy?

An "in-force policy" is a term used in the insurance industry to describe a policy under which the policyholder continues to pay the premiums and hence the policy remains active or "in force". This term applies to various types of insurance policies including life insurance, health insurance, motor insurance, and others.

An in-force policy means that the contract between the insurer and the policyholder is active, and the insurance company is liable to pay the benefits as defined in the policy agreement if the insured event occurs.

Why is an In-Force Policy Important?

The significance of an in-force policy lies in its potential benefits and protection coverage. With an in-force policy:

• Security and Protection:
  The policyholder is assured of the benefits as per the policy agreement. This could be a death benefit in case of a life insurance policy, coverage for hospitalization in a health insurance policy, or damage repair in a motor insurance policy.


• Legal Obligation:
  The insurance company is legally bound to honor the policy agreement as long as the policy is in force. They cannot deny the claim on the basis of the policy being inactive.


• Financial Planning:
  Keeping policies in-force is a crucial part of financial planning. Depending on the type of policy, it could serve as a safety net, investment, or a combination of both.

When does a Policy Become In-Force?

A policy becomes "in-force" when the insurance company accepts the proposal from the prospective policyholder, the first premium is paid, and the policy document is issued. The policy will remain in force as long as the policyholder continues to pay the premiums on time and fulfills any other obligations outlined in the policy agreement.

In case of non-payment of the premiums within the grace period, the policy may lapse and cease to be in-force. However, most insurance companies provide options to revive a lapsed policy within a certain period.

How to Keep a Policy In-Force?

To keep a policy in-force:

• Timely Premium Payments:
  The policyholder should ensure that the premiums are paid on time. Many insurance companies offer various payment modes such as monthly, quarterly, half-yearly, or yearly.


• Policy Review:
  Regular review of the policy ensures that it is still suitable for the policyholder's current needs and circumstances. Changes in life stages or financial goals may require adjustments in the policy.


• Prompt Updates:
  Any changes in personal details or circumstances which might impact the policy should be promptly communicated to the insurance company.

To conclude, maintaining an in-force policy is an important aspect of insurance management and financial planning. It ensures that the policyholder gets the intended benefits from the insurance policy. Always make sure to understand the terms and conditions of your policy and keep up with your premium payments to keep your policy in-force.