LIC India provide you 30 days (30 days if mode of payment is Yearly/Half-yearly/Quarterly and 15 days if the mode is monthly) grace period to make policy premium payment without paying any additional charges. But if you have crossed 30 days you need to pay policy revival late fee.
For policy revival, LIC India considers delay of:
- 30 days to 1 month 14 days as one month.
- 1 month 15 days to 2 months 14 days as 2 months.
- 2 month 15 days to 3 months 14 days as 3 months. And so on.
For policies where mode of premium payment is monthly – a delay of just 15 days will considered as a delay of one month.
For the calculation of total no of days between two dates, use this website. Late premium payment fee at the rate of 9.5% will be charged, subject to minimum Rs. 5 .
How to Calculate the Late Payment Fee?
Example – A policyholder has not paid last annual premium (since 12/11/2015) of his LIC policy. Now he wants to revive it on 29/02/2016.
Revival Date : 29/02/2016
Premiums not paid since : 12/11/2015
No of Installment Due : 1
Unpaid Installment Premium : 4,000
Total Premium Due Amount : 4,000
In this example the delay is more than 3 months 14 days, so as per above the delay will be considered as a 3 months delay.
- LIC Policy Premium for 1 year (12 months) is Rs. 4,000
- The premium for 3 months will be (4000/12)*3 = 1,000
- The late premium fee will be charged: (9.5% of 1,000) = 95
- The total revival premium amount to be paid is (4,000 + 95) = 4,095