Life insurance is a necessity in today’s times as it helps protect our loved ones and dependents from any untoward mishap that may affect us. Under a life insurance policy, the insurer promises to pay a specific sum assured amount to the policyholder’s beneficiary in case the policyholder happens to pass away suddenly. This sum assured would help the family members of the insured to take care of their short and long term expenses. One of the most important steps to ensure that your policy continues to provide regular protection and cover, is to make sure that your policy never lapses. However, due to any unavoidable reason that your policy does lapse, you must make sure to revive it at the earliest to continue enjoying life cover uninterrupted.
Scheme to Revive Lapsed LIC Policy
For those who have an LIC policy which has lapsed due to any reason, there are multiple options for reviving the same. Read on to find out the various schemes with which you can revive your lapsed LIC policy.
- Ordinary Revival – Under the Ordinary revival scheme, policyholders can revive their lapsed LIC policy after making the payment, in lump sum, for all unpaid premiums, counting from the very first premium that was left unpaid. The payment of these unpaid premiums will also carry interest at the rate of 8% (current rate). Policyholders may also be asked to submit Form No.680 or Declaration of Good Health, and a medical report.
- Special Revival – In case the policyholder is not able to pay the unpaid premium in lump sum, they can make the payment for the same under the Special Revival scheme. Under this scheme, commencement date of payment is shifted and the policyholder makes the payment of one due premium based on their age. Policyholders may also be required to provide Form No.680 or Declaration of Good Health (DGH) and a medical exam report to support the same. To revive a lapsed LIC policy under the Special Revival scheme, the following conditions must be met:
- This type of policy revival can only be availed once during the complete term of the policy.
- This revival scheme will only be allowed to be availed within 3 years of the policy lapsing.
- The Special Revival scheme can only be used for policies which have not acquired any surrender value. This scheme has to be availed within 3 years from the policy commencement date.
- Instalment Revival – If the policyholder cannot pay all the due premiums in lump sum and is not eligible for the Special Revival scheme, they can opt for the Instalment Revival scheme. Payment of due premiums under this scheme can be made by paying, (i) half of the annual premium (for policies with yearly premium payment mode); (ii) one half-yearly premium amount (for policies with half yearly premium payment mode); (iii) Amount of 2 quarterly premiums (For policies with quarterly premium payment mode) and (iv) amount of 6 monthly premiums (for policies with monthly mode of premium payment). The remainder of the unpaid premium must be paid in instalments during a period of 2 years, in addition to the regular policy premium. Policyholders may also be required to provide Form No.680 or Declaration of Good Health (DGH) and a medical exam report to support the same.
- Survival Benefit-cum-Revival Scheme – This revival scheme has been introduced to be used with money-back policies. If the date on which the survival benefit is due comes before in-line policy renewal date, the policyholder has the option to use their policy survival benefit to revive the policy. However, in case the revival amount is higher than the amount received by way of the survival benefit, then the policyholder must cover the excess. Similarly, if the survival benefit amount is higher than the revival amount, the excess survival benefit will be returned to the policyholder.
- Revival on non-medical basis – If a policyholder wants to revive the policy on non-medical basis, they must ensure that the revival amount must not be more than the prescribed limit for the particular non-medical insurance that the policyholder has taken.
- Revival on medical basis– If a policy is not eligible for revival under the ordinary or non-medical basis, it will be eligible for revival with medical requirements which are decided based on the revival amount.
- Loan-cum-revival Scheme – If the policy has acquired a surrender value by the revival date, it can be revived with the help of a policy loan. This loan can be procured by the policyholder depending on the number of premiums paid till the revival date. If the revival amount falls short of the amount procured with the loan, the policyholder must pay the difference. However, if the loan amount exceeds the revival amount, the excess will be returned to the policyholder.