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Life insurance premiums need to be paid for the entire premium paying tenure. Only single premium plans are an exception. If you happen to miss any premium, you have a grace period for resuming the plan with continued benefits. However, if you don’t make a payment even within the grace period, the policy lapses. According to the latest industry figures, only 47% of the policyholders continue to pay premiums beyond five years.

Revival = Fresh contract

Life Insurance Corporation of India (LIC) offers several means to its policyholders to revive a lapsed policy. Lapsed policies can be revived within a gap of 5 years from the point of lapse.

According to LIC, a lapsed policy may be revived by payment of the accumulated premiums with interest as well as giving the health requirements as required.

Revival procedure:

Take a look at the revival procedure and the different types of revivals allowed by LIC.

1) Ordinary Revival:

LIC offers a very easy revival method to the investors to revive their policies. Under this scheme anyone can revive his or her lapsed policy within 6 months from the due of first unpaid premium.

In this case, no personal statement regarding health of the insured person is required and the policy is revived just paying a delayed premium with interest. The rate of interest to be charged for such a delayed premium will depend on the date of commencement of the policy.

2) Revival on non-medical basis:

Any customer can use this revival method once during the policy tenure. LIC decides the medical requirements under this revival plan to calculate the amount that needs to be revived.

3) Revival on medical basis:

If a policy cannot be revived under ordinary or non-medical revival basis it can be revived with medical requirements. The medical requirements will depend upon the amount to be revived.

4) Other schemes:

There are also other schemes of LIC for revival of a lapsed policy. Applicability of those revival schemes depends on respective plan conditions.

i) Special revival schemes

A lapsed policy can be revived under the Special Revival Scheme by shifting the original date of commencement by the period of maximum 2 years.

ii) Instalment revival scheme

If the arrears of premiums are for more than 1 year and the policyholder is not in a position to pay the arrears of premiums in one lump sum then the facility under this scheme will be permitted.

iii) Loan-cum-revival scheme

In this scheme, lapsed policy can be revived by recovering arrears of premium from the amount available as loan. In case if the loan amount is not sufficient to cover arrears of premium then the difference will be required to be paid by the policyholder in the servicing ranch.

iv) Survival benefit-cum-revival scheme

Revival of money back policies can be allowed under ordinary revival by taking into account the amount of survival benefit that is payable to the policyholder. Policyholders will have to submit a survival benefit discharge form to revive the policy under this scheme.