Revival of Lapsed LIC Policy
If the policyholder forgets to pay his premium on the due date, the LIC usually offers ‘days of grace’ (minimum 1 month – if mode of payment is Yearly/Half-yearly/Quaterly and 15days – if the mode is monthly). However, if the premium is not paid by the end of this grace period, the policy lapses. Revival of a lapsed policy is considered for either on non-medical or medical basis depending upon the age of the life assured at the time of revival and the sum to be revived. A lapsed policy has to be revived by payment of the accumulated premiums with interest as well as giving the health requirements as required.
Revival is a considered as fresh contract wherein the LIC can impose fresh terms and conditions. Revival of policies depends on the actual reasons behind a customer not paying his/her premiums and also on the Declaration of Good Health (DGH) and other Medical Reports (if any).
Why do I revive my Old LIC Policy?
If you have any lapsed policy, please revive it instead of taking the new policy. It cost lesser compare to taking the new policy.
Important Conditions for Revival of LIC Lapsed Policy
1- LIC policy revival will be done only in the branch, where the policy was issued or where you have taken this policy (check branch in your policy bond).
2- Policyholder needs to submit a revival request letter with Form No 680 or DGH (Declaration of Good Health) and Form No 700 / 720 or medical report (if necessary).
3- Policyholder’s physical presence is required for revival.
4- Policyholder has to pay the revival amount in cash or cheque.
5- Policyholder has to pay the balance premium + interest till date from the date of lapsation.
If a LIC policy gets lapsed, it can be revived any time within 5 years from the date of first unpaid premium (FUP) of the lapsed policy and can be revived under the following 5 different schemes.
1. Ordinary Revival
If a revival of the policy is effected within 6 months from the due of first unpaid premium no personal statement regarding health is required and the policy is revived on collection of delayed premium plus interest (Current rate of interest is 8% p.a.). The rate of interest to be charged for such delayed premium will depend on the date of commencement of the policy.
2. Revival on Non-medical Basis
For revival of the policy on non-medical basis the amount to be revived should not exceed the prescribed limit for non-medical assurance taken by the life assured. Policy holder needs to pay all unpaid premiums (from the date of 1st unpaid premium) in lump sum with interest (Current rate of interest is 8% p.a.)
3. Revival on Medical Basis
If a policy cannot be revived under ordinary revival or revival on non-medical basis it can be revived with medical requirements. The medical requirements will depend upon the amount to be revived. Policy holder needs to pay all unpaid premiums (from the date of 1st unpaid premium) in lump sum with interest (Current rate of interest is 8% p.a.) and Form No 680 or DGH (Declaration of Good Health) and Form No 700 / 720 or medical report (if necessary).
4. Special Revival
If a policy holder is unable to pay all the premiums in lump sum, he can also revive his policy under special revival scheme. In this scheme the date of commencement will be shifted and the policyholder has to pay only one premium according to his age (at the time of revival). Policy holder also need to submit – Form No 680 or DGH (Declaration of Good Health) and Form No 700 / 720 or medical report (if necessary). The following conditions are to be satisfied for the revival of LIC POLICY under Special Revival Scheme.
Conditions to special revival –
a). Special revival can be done only once in entire policy term.
b). Special revival is allowed only within 3 years of lapsation.
c). Policy should have not acquired any surrender value i.e. This option can be exercised within 3 yrs from the date of commencement of the policy.
However, please note that NRI Plans, ULIP Plans, high-risk plans, and guaranteed addition schemes are not included in Special Revival.
5. Instalment Revival
In case of the policyholder is unable to pay all the unpaid premiums in lump sum and special Revival scheme also doesn’t suit him. He can use instalment revival scheme to revive his policy. Under this scheme he can revive his policy by paying the following amount immediately –
a). In the yearly mode of payment, half of the yearly premium.
b). In the half yearly mode of payment, one half yearly premium
c). In quarterly mode of payment, 2 quarterly premiums.
d). In monthly mode of payment, 6 monthly premium
Rest of the unpaid premium is to be paid in instalments within two years along with the regular premium, Form No 680 or DGH (Declaration of Good Health) and Form No 700 / 720 or medical report (if necessary) are required according to the policy term.
6. Survival Benefit – cum- Revival
Money back type policy can be revived by using the survival benefit, which falls due in it, in case of the survival benefit due date is earlier than the date of revival. If the revival amount is more than the survival benefit amount, the excess amount will be demanded. If the revival amount is less than the survival benefit amount. The remaining amount will be given back to the policyholder. The additional requirements for revival and survival benefit settlement are to be satisfied.
A policy can be revived by taking a policy loan in case of the policy acquires the surrender value on the revival date. The policyholder can get the loan on the basis of premiums paid by him up to the revival date. If there is any shortfall in the revival amount, the policyholder will have to pay it. If the revival amount is less than the loan mount the remaining will be paid back to the policyholder.