LIC Policy Revival: How to Revive a Lapsed Policy?

Let’s understand in this article how you can revive your LIC policy and some important parameters to keep in mind when you revive your LIC policy.

What is LIC Policy Revival?

LIC policy revival is the process of restoring a lapsed LIC policy by paying the overdue premiums along with the applicable interest. When a policyholder fails to pay premiums within the due date and the grace period, the LIC policy automatically lapses, and the life cover stops. LIC policy revival allows the policyholder to renew the plan and regain all the benefits and coverage same as the original policy.  

LIC gives policyholders the flexibility to revive their lapsed policies within five years from the date of the first unpaid premium. With LIC premium payment online facility, this process is also made simpler and convenient for the policyholders.

What are the Types of LIC Policy Revival?

The LIC policy revival can be done under the following 5 different ways: -

1. Ordinary Revival

   Under this, the insurance holder can revive his/her lapsed life insurance policy by paying all the unpaid premiums including the interests in one go. However, the policyholder can be asked for the declaration of good health and medical report under form no-680. Moreover, the policy must be revived in the first 6 months of the due date of the first unpaid premium, and the payment will be inclusive of late payment charges as well as interest rate (which is determined by the start date of the policy).

2. Special Revival

   Under special revival the date of commencement of the insurance holder can be shifted and the insured person can pay only one due premium according to his/her age during revival. A special revival scheme can be availed if the insured person is unable to pay the premium in a lump sum. Under the special revival scheme, the insured can be asked for a medical report and declaration of good health under form no-680. There are certain conditions that need to be fulfilled if the insured wants to revive the policy under a special revival scheme. These conditions are as follows.

   • A special revival scheme can be used only in the entire tenure of the policy.

   • The insured person can do special revival only within 3 years of the policy lapse, and can be availed once throughout the whole policy term.

   • Any surrender value should not be acquired under the policy. Thus, the special revival option can be implemented within the 3 years of the commencement date of the policy.

   *Note: In case it is a Money Back plan, the stamp fees and insurance preparation fees will have to be paid by the customer.

3. Installment Revival

   In case if the insured person fails to pay the due premium in a lump sum and special revival, he/she can use an installment revival scheme to revive their policy. Under the installment revival scheme, the policy can be revived by paying the amount in the following ways.

   • In yearly premium mode, the policyholder needs to pay half of the yearly premium.

   • The policyholder must have at least paid premiums for over a year.

   • In the half-yearly mode of premium payment, the policyholder needs to pay one-half of the yearly premium.

   • In the quarterly premium payment mode, 2 quarterly payments are required to be paid by the insured person.

   • The insurance holder can pay a regular 6 monthly premium under the monthly mode of premium payment.

   *Note: Policies that are issued under Salary Savings Plan will not be eligible for the Installment Revival Scheme.

4. Survival Benefits Cum-Revival Scheme

   Survival benefit schemes can be used to revive the money-back policies. If the survival benefit due date comes earlier than the renewal date, then the insured person can avail survival benefit to revive the policy. However, the policyholder will have to pay the excess amount in case the revival amount is more than the survival benefit. In the same way, if the revival amount is less than the survival benefit then the rest of the remaining amount is paid back to the insured person.

5. Loan Cum Revival Scheme 

   The insured person can also revive the policy by taking the policy loan if, on the date of revival, the policy acquires a surrender value. The insured person will have to pay the additional amount in case there is any deficit in the revival amount. If the loan amount is more than the revival amount, then the extra amount will be paid to the insured person.

6. Revival on Medical and Non-medical Basis

   Medical basis revival is possible if the insurance policy can’t be revived under normal conditions or non-medical basis. And under non-medical basis, the amount that is required to be revived must not exceed the limit authorized for non-medical assurance.

How to Revive LIC Policy Online?

Policyholders can restore their lapsed LIC policy either offline by visiting the branch or through the LIC revival online process, which is quicker and more convenient.

Steps to LIC Policy Revival Online

Step 1: Visit the official website of LIC of India.

Step 2: Click on the “Pay Premium” option on the top right side of the homepage.

Step 3: Select “Renewal Premium/Revival” to start the LIC revival online payment process.

Step 4: Click “Proceed” and enter the required policy details.

Step 5: Review the pending premium and late fees displayed on the screen. Complete the LIC revival payment using your preferred online mode (net banking, UPI, or card).

After successful payment, your LIC online policy revival is complete, and all benefits under your original plan are restored. 

Note: Registered policyholders can also use LIC e-services to revive their lapsed policies as per their convenience. 

Steps to Revive LIC Policy Offline

Step 1: Visit the nearest LIC branch office or contact your LIC agent.

Step 2: Fill out the policy revival form (Form 680) and submit the required documents. The LIC representative will help calculate the due premiums and interest.

Step 3: Make the payment at the branch counter using your preferred mode.

Once payment is made, your LIC policy revival will be processed, and all policy benefits will resume.

What are the Benefits of LIC Policy Revival?

Reviving a lapsed LIC policy helps you restore your life insurance coverage and secure continued financial protection for your loved ones. By reviving the policy, you regain the policy’s benefits without having to buy a new plan. It also ensures that your family remains financially protected in case of any unforeseen event.

Reviving a lapsed Life Insurance Corporation (LIC) policy is also essential for the below mentioned reasons:

1. Continuation of Life Coverage

   The primary reason for reviving a lapsed LIC policy is to continue life coverage. If the policyholder dies during the policy lapse period, the nominee will not receive the sum assured, and the premiums paid will be accounted as canceled. Hence, reviving the policy ensures that the life cover continues, and the nominee will receive the death benefit in case of the policyholder's untimely demise.

2. Tax Benefits

   Life insurance policies offer several tax benefits, such as tax deductions on premiums paid under Section 80 C and 10(10D) of ITA. However, these benefits are only applicable if the policy is active. If the policy has lapsed, the tax benefits will also be lost. Hence, reviving the policy ensures that the policyholder can continue to avail of the tax benefits.

3. Cost-Effective

   Reviving a lapsed LIC policy is often more cost-effective than purchasing a new policy. The policyholder may have to pay a penalty and interest on the unpaid premiums, but it is still likely to be cheaper than buying a new policy, which may have higher premiums due to age and health factors.

What Are Some Important Parameters to Keep in Mind While Reviving LIC Policy?

When you are looking for how to revive lic policy online, take these important factors into consideration:

1. Medical Records 

   The insurer can ask for the medical/health reports based on the sum assured amount of the plan and the insured’s age. If the insured has a medical history or is undergoing treatment for a very long time, then he/she is required to submit the health reports. 

2. Tenure 

   A policy can only be revived if it has not exceeded a specific time duration from the lapse date of the policy. LIC determines the tenure as it depends on the type of policy. 

3. Availability of Concessions 

   LIC has introduced various campaigns with discounts and fee exemptions on the penalties for reviving the policy. It depends on the T&Cs issued by the insurance company. 

4. Substantial Penalties 

   The insurer can charge some fines or penalties for reviving the policy. It depends on the sum assured amount and the time after the policy has lapsed. 

Wrapping It Up!

Life Assured can revive the lapsed LIC policy within 5 years, directly by visiting the LIC’s official website or nearest branch. Once the policy is revived, the benefits offered by the policies are also reinstated. You can also contact LIC’s customer care to find more about its revival process.

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