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In Force

By: Jodie L Stauffer | Reviewed by Darrel PendryCheckmark | Last updated: December 7, 2020

What Does In Force Mean?

In force is an insurance term that means a policy is currently active and providing insurance coverage in return forpremiums paid as agreed. The phrase “in force” refers to the policy at the time it is evaluated.

This applies if a policyholder has been paying their insurance as per the payment agreement or has paid their premiums in full. When a policy is deemed in force the policyholder is entitled to the policy's benefits. Depending on the type of insurance and policy purchased, the in force time and date may vary. In addition, the conditions for when the policy will lapse due to missed payments or what causes the policy to be voided will also be set out.

In many cases, if a policy lapse occurs, the policy can be reinstated depending on the company's stipulations. If the lapse were due to non-payment, policyholders are required to bring the payments up to date within a predetermined time frame.

In Canada, some types of insurance are mandatory (for example, there are coverage minimums for car insurance,) and others are optional. It is important to read and understand your policy terms and options before purchase. In cases where this is not an option, there will be a grace period to review the policy details before final acceptance.

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Insuranceopedia Explains In Force

When purchasing an insurance policy, you agree to a contract between yourself and the insurance company. This legally binding contract will lay out what and when you are compensated. In return, you will pay the annual premium as per the agreed payment schedule. As part of the contract, you will agree on how the policy coverage will start and end. Once the payment terms are agreed, and payment is made, the policy is deemed in force, and coverage will begin.

If a person pays their premiums regularly or pays the policy in full, their insurance is in force. This then guarantees that they are covered for the risks they have insured. What this means in basic terms is that if you have an accident or loss, you are paid the amount of insurance you purchased.

Conversely, the contract will also have details about the reasons a policy would not be in force. This is also known as a policy lapse. When a policyholder is behind on payments, as an example, their insurance may lapse.

If your policy has a reinstatement option, then you will be able to restart the policy once you meet the reinstatement terms. This is often as simple as bringing the policy premiums up to date and current. It is important to note that most companies that allow policy reinstatement will have a time limit that this needs to happen before the policy is voided. Once this time has passed, the policy is voided or cancelled. After that point, a new application and contract will have to be started.

This could affect things such as rates, payment terms and options available to the purchaser. Reinstating a lapsed policy has both advantages and disadvantages that need to be considered. In life insurance, a change in age or health could drastically change the new policy. For this reason, it is generally advantageous to keep insurance policies in force if at all possible.

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