If you have a policy from the Life Insurance Corporation of India (LIC) that lapsed due to some reason,here is your chance to revive it. The insurance behemoth has started a special revival campaign that will inject life into lapsed policies even years after lapsation. LIC usually comes up with such a campaign every year. However,this year is a bit special. Unlike earlier revival campaigns,this time the insurance company will also accept policies that lapsed more than five years ago.
If the policyholder forgets to pay his premium on the due date,the insurance company usually offers a grace period of one month. However,if the premium is not paid by the end of this grace period,the policy lapses.
The current campaign,which began on January 19,will end on February 28. A policyholder can go to the nearest LIC office or consult his agent and get his policy revived. The only pre-condition for revival is that the policyholder should have paid the premium for at least the first three policy years.
Forms required. Policyholders will have to submit either a declaration of good health (form number 680) or a medical certificate (form number 700) to get the policy revived.
Policies can be revived at a discount during this campaign. Instead of paying the entire premium that is due,the policyholder will have to pay just 80 per cent of the unpaid premium. For instance,suppose that Policy A has remained lapsed for the last four years and had an annual premium of Rs 10,000. Instead of paying Rs 40,000 (10,000*4),the policyholder will have to pay only Rs 32,000 a discount of 20 per cent. However,this discount is subject to a maximum waiver of Rs 10,000.
This type of revival is allowed only two times during the lifetime of a policy.
LIC offers two options to policyholders who cannot pay the whole amount for policy revival. The first option is a loan-cum-revival option. Here,the policyholder can take a loan for repaying the premium due. The loan will carry an interest charge of 9 per cent compounded half-yearly. The second option is survival benefit-cum-revival. This option applies only to moneyback policies. In these policies,policyholders get a certain amount of money as payback at regular intervals during the tenure of the policy. If an insured goes for this option,then the amount he receives gets adjusted against the premium due.
However,note that NRIs,Ulip holders,high-risk plans,and guaranteed addition schemes are not included in this revival campaign.