Life Insurance corporation of India (LIC) has come up with a new Revival Campaign for revival of lapsed policies with concession in the late fee and relaxation of medical checkups. Lets look in detail about what is Lapsed Insurance Policy, What is Revival of Insurance Policy , How to revive lapsed Insurance Policy and about LIC Revival Camp.

Like past many occasions, Life Insurance corporation of India (LIC) has come up with a new Revival Campaign with the motive of reducing lapsation of policies and renewing the relation with old policyholders. This special campaign is from 16/Jan/2017 to 15/Mar/2017. During this campaign, policyholders can revive their lapsed policies with concession in the late fee and relaxation from some medical requirement.

Lapsed Policy

What is a lapsed insurance policy?

A life insurance policy lapses when a policy holder fails to pay his premiums even within the grace period. then that particular policy is termed as lapsed policy. Policy lapsation can be dangerous as you or your financial dependants may not get any benefit, which was the reason for buying the insurance cover.

When does a policy lapses?

An insurance policy is considered  lapsed if the premium is not paid within the grace period, which is 30 days in case of annual, half-yearly and quarterly renewals and 15 days for monthly renewals.

What happens if insurance policy lapses?

As long as you pay your premiums regularly, your policy will remain alive. If something happens to you during this period, the insurance company will honour its commitment and pay you or your beneficiaries, depending upon the type of policy you hold.

However, if you stop paying your premium, then the insurance company will no longer be obliged to continue providing an insurance cover on your life. In this situation, your policy is said to have lapsed. The insurer might not provide any monetary benefits, the sum assured under the policy, to you or your beneficiaries if something were to happen to you.

Can one still file a claim on a lapsed policy?

If a policy is less than three years old but lapses, and if something happens to you after the policy lapses, and a claim is filed, the insurer will not pay you anything. At best, the insurer might be willing to give you or your dependants the premium payments that you have made. But, this is also totally at the insurer’s discretion.

If a policy is more than three years old, but lapses, and if something were to happen to you, under the existing insurance rules, your dependants can still get some benefit. However, the insurer will pay only a reduced sum assured based on a pre-set formula (for those who are technically inclined, it’s the number of premiums paid to the total number of premiums payable).

How can you prevent the policy from getting lapsed? 

• Pay your premium regularly on the due dates/ within the grace period
• Do not wait for a premium notice. It is only a courtesy. It is your duty to pay the premium to avoid lapsation or other penalties
• Do not wait for your intermediary or anyone to pick your cheque up. Make your own arrangement for paying the premium on time
• If there is a change of address, please intimate the insurance company immediately.

For LIC policies you can register online,pay premium get details. Our article How to Register Online at LIC e-Services talks about it in detail.

What if I am facing a cash crunch and can’t pay my premium?

One choice you have is to review your insurance contract and change the terms. For example, you can reduce your sum assured and your premiums will go down accordingly, perhaps making it more affordable for you to keep the policy in force.

Revive Lapsed Insurance Policy

Revival means To bring back to life. So reviving a lapsed insurance policy means getting the insurance cover back. Most of the companies offer a grace period of one month from the premium due date of the policy. To revive a lapsed policy, you need to pay the accumulated unpaid premiums along with the interest. Depending on the policy and the insurer, you will be paying around 8-9% penalty on unpaid premiums. After which the policy lapses and can be revived by paying the premium along with the applicable interest charges. Should the policy have been lapsed for more than six months, the life assured would once again have to go through medical tests. Lets look at reviving a policy in detail.

Can an insurance policy be revived any time?

Revival can happen at any time, but the conditions for revival might depend upon how long the policy has been lapsed for. Under the insurance laws, if the policy has been in force for at least three years, the insured gets up to two years to revive the policy. Some insurers like LIC have special schemes under which policies can be revived for up to five years from being lapsed.

If you revive the policy within six months from the date of lapse, the process might be as simple as paying the overdue premium (and interest) to catch up on the delay on your part.

If you revive the policy after six months from the date of lapse, you might be required to pay the overdue premium, penalty fees, as well as interest payment that could be around 10% of the premium payment, depending upon the type of policy and the date of purchase.

After revival my insurance policy is same?

If you have purchased a policy before 2013 before the guidelines were issued,then the same will be renewed at the earlier terms and conditions. This is as per contractual guidelines governed by the regulator

For policy issued after 2013,the new premium and policy conditions will also depend on the period for which premiums have not been paid, age of the policyholder and the sum to be revived under the policy. So, in case your age band has changed from the last unpaid premium due date, the insurance company may increase your mortality rate.

At the time of revival, the insurer might impose a lot of conditions or even decline your request for a policy revival if the company is not convinced about the integrity of your application on grounds of suspected fraud or the like. It can be very likely that the insurer will ask you to appear for a medical test before the policy can be revived to ascertain whether you have developed a new medical condition during policy lapse that might expose the insurance company to a high risk in insuring your life.

At the time of revival, usually, full benefits that you or your beneficiaries are eligible for will be reinstated. However, if after revival, the insured commits suicide within one year, the insurer can deny the claim. Similarly, if the insured passes away within two years of the revival, the insurer has the option of conducting an inquiry before they decide to pay the claims to the beneficiaries.

What about bonus during the lapsed period?

The annual bonus declared by the insurer during the time the policy lapsed is not available even if you revive the plan.

Should one revive an old insurance policy or get a new one?

It depends. If the policy is more than three years old, check the surrender value. Reviving a policy would be a better choice than opting for a new one if  it costs lesser as compared to taking up the new one. There are situations where it might make sense to reinstate the plan. For  a relatively new policy where you have paid a couple of premiums and there are chances of money getting forfeited, a policyholder should revive the plan. Also, if you have developed serious health issues, it will be easier to negotiate the premium with your existing insurer rather than buying a fresh plan.  Read our articles Checklist for buying Life Insurance Policy and Insurance : Surrender or Make policy paid up or Continue for more details.

Revival of LIC Policy

Life Insurance corporation of India (LIC) has come up with a new Revival Campaign for revival of lapsed policies with concession in the late fee and relaxation of medical checkups. This campaign is from 15-Jun-2016 to 15-Sep-2016.

How to find if my LIC policy is lapsed?

To know the premium due for any particular policy, send the SMS ASKLIC <POLICY NO> PREM to 56767877  or  ASKLIC <POLICY NO> PREMIUM  to 9222492224

To know the revival amount of  any particular policy, send the SMS ASKLIC <POLICY NO> REV  to 56767877 or  ASKLIC <POLICY NO> Revival to 9222492224 .

Types of Revival Schemes in LIC

There are five types of  schemes are available in LIC of India. These are Ordinary Scheme, Special Scheme, SB cum Revival scheme, loan cum revival scheme and installment revival scheme.

• Ordinary Revival Scheme :You have  to visit your servicing branch, get the revive quotation from the branch and deposit all the due premiums in your policy with DGH (Declaration of Good Health) or special medical report wherever applicable as per age and sum to be revived.
• Special Revival Scheme Sometimes it is not possible to pay all the due premiums due to huge amount to revive policy, and policy holder do not want to loose the money he has already paid as premium in particular policy (Majority of the policies acquire paid up value after premium have been paid for full three years and 3 years completed in policy). For customer who’s policy have not acquired paid up value (Premium is not paid for 3 years) and policy is in lapsed condition for not less than 6 months and not more than 3 years (6 months < First Unpaid Premium(FUP) > 3 years), the policy can be revived under Special Scheme. As per the LIC of India circular CO/CRM/1012/23 dated 17/03/2016, Special Revival scheme is not available to new plans launched on or after 01/01/2014.
• Loan-cum-Revival Scheme : Under this scheme, the policyholder can take the loan in his/her policy and that loan amount is adjusted in premiums. It is not necessary that your policy has acquired paid up value, even policy where paid up value is not acquired can be revived. The loan amount is calculated as if the policy is in force condition till the date of revival. 
• Survival Benefit cum Revival Scheme :The revival of money back policies can be allowed under ordinary revival by taking into account the amount of survival benefit that had fallen due. The policyholder has to submit usual revival requirements, S.B. discharge form and policy document. 
• Revival By Instalment Method: Under this scheme, the amount is spread over the next two year. Revival under this scheme will be permitted for the policyholder who is not in a position to pay the arrears of premiums in one lump sum and policy cannot be revived under special scheme.where the arrears of premiums are for more than 1 year.

LIC Revival Camp

Like past many occasions, Life Insurance corporation of India (LIC) has come up with a new Revival Campaign with the motive of reducing lapsation of policies and renewing the relation with old policyholders. During this campaign, policyholders can revive their lapsed policies with concession in the late fee and relaxation from some medical requirement.

What is the time period of LIC revival campaign?

This special campaign is from 16/01/2017 to 15/03/2017.

The special LIC Revival campaign is from 15-Jun-2016 to 15-Sep-2016.

Which type of LIC Policies can be revived during this revival period?

Individual life insurance policies and Health insurance policies are eligible for revival under this campaign.

LIC Revival Camp: Revive Lapsed Insurance Policy

Concessions in Late fee during revival campaign period

Two types of concessions will be provided for lapsed policies based on the premium already paid in it.

• Category 1- Policies having the premium paid period more than three years (paid up policies) will be offered 15% concession in late fee subject to a maximum of Rs 2000.
• Category 2- Policies for which premium has not been paid for 3 years(Lapsed without surrender Value) will get 30% late fee concession subject to a maximum of Rs.3000.

1. Concession in late fee will be allowed only for policies where policyholder pays all arrears of premium with interest and revival requirements if any, up to the date of revival.
2. Concession in late fee will be allowed for all types of revival including SB-cum-Revival, Loan–cum-Revival, and Installment Revival.
3. Concession in late fee will also be allowed under policies where no evidence of health will be required i.e spot revival.
4. Late fee concession will also be allowed where the arrears of premium for revival is in policy deposit and adjustment of the same is done during the campaign period after receipt of revival requirements.
5. Under some plans like plan 87, 91, 128, 165, 174, 179, 184, 185 and 192 wherein the policyholder can pay one or two instalments of premium with interest instead of paying all arrears of premium, concession in late fee will not be allowed for such part payment.
6. For plan 903 and 904 : Waiver of interest of 20% subject to the maximum of Rs.1500 under LIC’s Jeevan Arogya plan 903 and 904.

Concession in Health Requirements during Revival Campaign period.

Medical requirements,medical reports and special medical reports, which are otherwise required while reviving a policy will be waived subject to following conditions.

• Premium under the policy has been paid for at least full 5 years and age of the life assured is less than 45 years  (nearer birthday) irrespective of sum assured.
• Premium under the policy has been paid for at least full 5 years and age of the life assured is between 46 and 50 years and total sum to be revived is up to 2 lakh.
• In Declaration of good health (DGH) submitted by the policyholder, there is no adverse information about health or personal history.

How to revive LIC insurance policy?

To know more contact your LIC agents or visit your nearest/servicing branch.

Related articles:

• How to Register Online at LIC e-Services
• What is Electronic Insurance Account or eIA
• LIC Jeevan Shikhar Insurance Policy
• Mixing Insurance with Investment
• Checklist for buying Life Insurance Policy
• Insurance : Surrender or Make policy paid up or Continue

Revival Campaign from Life Insurance Corporation of India is an opportunity to revive your valuable insurance policy, availing rebates and concessions. Life insurance is a necessary financial instrument that every person with financial dependants must have. Don’t let your policy lapse, otherwise your financial dependants might end up facing financial hardship when you are not around to provide for them. But it is better to exit a bad plan.