• Ways To Revive Lapsed LIC Policies

    Life Insurance
    • Reduce taxable income by up to Rs. 1,50,000 deduction under section 80C**
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    The main purpose of a life insurance cover is to protect the dependents of an individual in case of his/her untimely demise. The Life Insurance Corporation of India (LIC) is the largest life insurer in India, and it offers an array of life insurance covers for people with different requirements. The protection offered by an LIC life insurance cover remains active only as long as the premiums are paid within the due date. If the policy lapses due to non-payment of premiums, the insured will no longer be protected by the life insurance cover. The ideal thing to do is to never let a policy lapse and enjoy the insurance protection continuously. However, if an LIC policy lapses due to some unavoidable circumstances, there are certain options offered by the company for revival.

    When it comes to policy revival, there are certain conditions set forth by LIC. These conditions must be satisfied by policyholders in order to effect a revival of their life insurance covers. Also, it must be noted that policy revival involves initiating a fresh contract between the insurer and the insured. In this situation, the insurer may come up with some new terms and conditions for the policyholder. Before we find out the different types of revival methods, let’s take a look at the grace period offered by LIC for policy renewal.

    Grace period

    Grace period refers to the additional time offered by LIC for renewing a policy. This grace period is available for almost all the policy covers available with LIC. A grace period of 30 days from the renewal deadline date is offered by LIC if the premiums are paid on a quarterly, half-yearly, or annual basis. For monthly premium payment mode, the company offers a grace period of 15 days. It must be noted that there will not be any coverage during this grace period. In other words, if the insured suffers an accidental death during this grace period, the company has no legal obligation to provide compensation to his/her dependents. If the premium amount is not paid even during this grace period, the policy will lapse. The policyholder can take any of the following choices for reviving a policy after its lapsation.

    Types of revival offered by LIC

    LIC policies that have lapsed can be revived through any of the following options:

    • Ordinary revival: As the name implies, ordinary revival is the most simple form of revival offered by LIC. Here, the revival is done simply by paying the delayed premium amount along with the interest charge. One crucial thing here is that this type of revival is valid only if the revival is initiated within 6 months from the date of lapsation. The company will not require any personal statement on the policyholder’s health in this case.
    • Revival on non-medical basis: Under this scheme, the sum assured amount to be revived must be within the limit of non-medical assurance taken by the insured person.
    • Revival on a medical basis: This type of revival can be applied if a policy cannot be revived under the ordinary revival or non-medical revival methods. The company will decide the medical requirements based on the amount to be revived.
    • Special revival scheme: In this method, a lapsed policy can be revived by shifting the original date on which the policy commenced. It is possible to shift the date by up to a maximum of 2 years under this scheme. This type of revival can be done only once during a policy term. Also, the lapsation time should not exceed a maximum of 3 years if this revival method is to be initiated.
    • Instalment revival scheme: This method is permitted in a situation where the policyholder is not able to pay the revival amount in one single instalment. Moreover, this scheme can be implemented if the policy cannot be revived through any of the above mentioned methods. This scheme can be initiated only if the outstanding premiums are for more than one year.
    • Loan cum revival scheme: In this method of revival, the policy is revived by using the amount available as loan under the policy. If the loan amount is not sufficient to cover the premium arrears, the remainder has to be paid by the policyholder. If there is a balance amount after the payment of premium arrears, it will be paid to the policyholder.
    • Survival benefit cum revival scheme: This type of revival is applicable to money-back policies. Here, the survival benefit payable to the beneficiary can be used to revive the policy. If the premium arrears are higher than the survival benefit payable, the policyholder has to pay the excess amount.


    The methods listed above are the ways outlined by LIC to revive a life insurance policy after lapsation. Reviving a policy has its own benefits. It could be a little bit expensive to revive a policy after its lapsation. However, it is certainly cost effective than purchasing a new policy, which might have much higher premiums. If a lapsed policy is still within the revival limit, it is definitely worthwhile to go ahead with the revival process.

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