Sometime the policyholder finds the policy terms not suitable (eg. High Premium Amount, Change in Mode of Premium) to him and desires to change them. LIC India allows certain types of alterations during the lifetime of the policy.
What all alterations are allowed to your LIC Policy?
The following alterations are allowed:
1. Alteration in Term
2. Reduction in the Sum Assured
3. Alteration in the Mode of Payment of premiums
4. Removal of an Extra Premium
5. Alteration from Without Profit Plan to With Profit Plan
6. Alternation in Name
7. Correction in Policy
8. Settlement option of payment of sum assured by installments
9. Grant of Accident Benefit
10. Grant of premium waiver benefit under Childeren’s Deferred Endowment Assurance (CDA) policies
11. Alteration in currency and place of payment of policy money
Documents you need:
1. An application explaining & supporting the reason for alteration
2. Quotation Fee & Alteration Fee. If alteration in plan is with reduction in Sum Assured and Term then both will be required. The fee for alteration in the policy is called quotation fee.
3. Consideration Amount
4. Original LIC Policy Document
5. Health Declaration (if required)
Conditions to be met for Policy Alteration:
1. Policy should be in force and not fully paid up.
2. After alteration, if Tabular premium rate is lower than original one, then alteration is not allowed. But there are some exception.
Installment Premium is the amount payable by policyholder on each Premium Due Date in order to keep the insurance cover in force under the provisions of the policy.
Tabular Premium is the basis for calculating the installment premium payable under a policy. The tabular premium is assumed to be payable yearly and the unit sum assured is Rs 1000.
3. Alteration is not allowed if Life Assured’s age is 70 years or above.
4. Alteration is not allowed if there is increase in term of policy or premium paying term.
5. Alteration for increase in Sum Assured is not allowed.
6. Alteration from with profit plan to without profit plan is not allowed.
7. Alteration from policy with any mode of payment to a single premium policy is not allowed.
8. Alteration from single premium to any other mode is not allowed.
Reference – LIC – Policy Alterations Rules & Examples