As eventuality and mishap can occur to anyone at any point of life, having a life insurance plan is must to have to deal with the uncertainties of life. A life insurance policy is the best way to secure the financial future of your loved ones even in your absence. As purchasing a life insurance policy is very important similarly renewing your policy time to time and revival of lapsed policy is equally crucial. We can define revival as “to bring back to life”.
The revival of life insurance policy is required when the insured fails to pay the premium within the grace period and the coverage of the policy lapses. The inclusion of revival of policy is must to have as it provides on option to the insured person to renew the policy and continue with the coverage of the plan. The renewal of the lapsed policy can be done anytime within 5 years from the date of unpaid premium.
Revival of the LIC policy
The revival of the LIC policy can be done under the following 5 different schemes:-
1. Ordinary Revival- under this revival policy the insurance holder can revive his/her lapsed life insurance policy by paying all the unpaid premiums including the interests at one go. However, the policy holder can be asked for the declaration of good health and medical report under form no-680.
2. Special Revival- under this scheme 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. Special revival scheme can be availed if the insured person is unable to pay the premium in lump sum. Under special revival scheme the insured can be asked for 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 special revival scheme. These conditions are as followed.
- Special revival scheme can be used only on in the entire tenure of the policy.
- The insured person can do special revival only within 3 years of the policy lapsation.
- 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.
3. Instalment Revival- In case if the insured person fails to pay the due premium in lump sum and special revival, he/she can use instalment revival scheme to revive their policy. Under instalment revival scheme the policy can be revived by paying the amount in following ways.
- In yearly premium mode the policy holder needs to pay half of the yearly premium.
- In half-yearly mode of premium payment, the policyholder needs to pay one half of the yearly premium.
- In 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.
Rest of the due premium is to be paid by the insured in equal installments within 2 years along with the regular premium as per the tenure of the policy.
4. Survival Benefits Cum-Revival Scheme- Survival benefit scheme can be used to revive the money back policies. If, the survival benefit due date comes earlier than the in line for renewal date then the insured person can avail survival benefit to revive the policy. However, the policy holder will have to pay the excess amount in case the revival amount is more than 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 than the extra amount will be paid to the insured person.
Why Revival of Lapsed LIC Insurance Policy is Important?
Suppose if the policy holder who owns a life insurance policy suffers any critical illness just before the expiry of the policy. In cases like this, if the policy of the insured person is not revived then he/she may face a lot of difficulties to buy any new insurance policy. Moreover, they won’t be able to avail the benefits of the pre-existing policy as the benefits of the policy will lapse.
The revival of your life insurance policy provides an option to extend the coverage, as the insurers cannot decline the revival of your life insurance policy because the option of revival of lapsed policy is always present in the original policy document.
As revival of LIC insurance policy is not a prolonged process, one can easily revive the policy online in a quick, simple and hassle free-way.
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