Now, revive your lapsed LIC policy with late fee concession till March 24 — Here's how
CNBC 13/02/2023
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.
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.