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With policies that have acquired a surrender value, the procedure is different. The normal practice is to use the surrender value of the critical illness insurance policy to pay the premiums as they fall due, thus maintaining the policy in force for the policyholder, for a period of 12 months, or more in some cases.
This is known as the non-forfeiture period. If the policyholder then wishes to revive the policy, the overdue premiums plus interest have to be paid and a declaration of health made.
If the option of reviving the policy is not taken up, then many companies will automatically make the policy paidup. The paid-up value is often proportionate: e.g. if five years' premiums have been paid on a 25-year policy, the paid-up sum assured is about one-fifth of the original sum assured.
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