Life Insurance Corporation of India (LIC) has launched a campaign to revive old insurance policies that were closed before maturity. Under this, LIC policyholders who shut their policies for any reason can start them again. The campaign will run till March 24, 2023. The insurance behemoth is also offering concessions in late fees during this tenure.
Also, a special offer late fee of Rs 5 (excluding GST) is being given to all the eligible National Automated Clearing House (NACH) and BILL Pay registered policies revived in this campaign, LIC mentioned in a tweet.
Here are the concessions offered by LIC on policy revival:
| Total receivable premium | % Late fee concession | Maximum concession limit |
| Up to Rs 1 lakh | 25% | Rs 2,500 |
| From Rs 1 to Rs 3 lakh | 25% | Rs 3,000 |
| From Rs 3 lakh and above | 30% | Rs 3,500 |
What is a lapsed policy?
Policy lapse is a situation where policyholders can no longer avail of the benefits and cover provided under the policy. A policy gets lapsed due to non-payment of premiums within the due date and the terms and conditions of the policy contract are rendered void, till the insured revives his/her policy.
Generally, insurers offer two years revival period for the insured to reinstate their policies. If premiums under the policy are not paid within these days of grace, the policy lapses.
How can one revive lapsed policy?
A lapsed policy has to be revived by payment of the accumulated premiums with interest as well as by giving the health requirements as required, according to LIC.
This can be done as per the plan conditions on submission of proof of continued insurability to the satisfaction of the corporation and payment of all arrears of premiums together with interest at such rate as fixed by the corporation from time to time.
"The revival of the discontinued policy takes effect only after the same is approved by the corporation," LIC said.
However, this comes at a cost. For the revival, the policyholder is bound to bear a renewal fee along with a late fee and additional interests/penalties on the last two years' due premiums. The insurance company may even ask for a medical examination again in case of the term insurance policy. However, some insurers may waive these conditions, especially during revival campaigns.
They may also waive the need for medical check-ups, and reduce the penalty charge or waive it completely.
In the case of LIC policy, customers have some relaxation as the company policyholders who bought their policies post-January 1, 2014, can revive their non-linked policies within five years and unit-linked policies within three years of the first unpaid premium.
During revival campaigns, customer can revive their policies even after two years with some conditions that vary from insurer to insurer and plan to plan.
