expired license policy: how to revive an expired license policy

The Life Insurance Corporation of India (LIC) has launched a campaign to help policyholders revive expired insurance policies. Policies that have expired during the premium payment term but have not yet completed the policy term can be reactivated as part of this campaign, which will run from February 7 to March 25, 2022, according to a statement. release published by LIC.

“While the current scenario of the Covid-19 pandemic has underscored the need for mortality protection, this campaign is a good opportunity for LIC policyholders to relaunch their policies, reinstate life cover and ensure their family’s financial security,” the public insurer said in The Release.

Policyholders with an expired LIC policy can apply for shares in the LIC’s initial public offering (IPO) through the policyholder reservations section. According to the LIC DRHP, “I have a Company policy that is lapsed. Am I eligible for a reservation under the Policyholder Reservation section?

All policies that have not been removed from our records due to expiry, surrender or death of the policyholder are eligible for reservation under the policyholder reservation.”

Also Read: Can an LIC Policyholder with an Expired Policy Apply for Discounted IPO Shares?

According to the statement, policies for certain qualified plans can be reinstated under the campaign within five years of the original unpaid premium, subject to specific criteria and limitations.

Here is an overview of how outdated policies can be revived.

LIC policy stimulus programs

According to LIC’s website, “If a policy’s premium is not paid within the grace days, the policy lapses. A revival is a new contract in which the insurer can impose new terms. A policy can be rerolled under the following reroll types:

Ordinary alarm clock

If the policy is reinstated within 6 months of the due date of the first unpaid premium, no personal health statement is required and the policy is reinstated on the basis of recovery of the late payment plus interest. The interest rate that will be charged for such late premium will be determined by the policy start date.

Waking up on a non-medical basis

The amount to be raised for a non-medical contract must not exceed the ceiling authorized for the non-medical insurance taken out by the insured.

Wake up on medical base

If an insurance policy cannot be reinstated under normal circumstances or on a non-medical basis, it may be reinstated under medical conditions. The amount to be raised will determine the medical requirements.

The other recovery schemes are:

Special stimulus plan

B. Replenishment by installments

C. Trade-in loan

D. Survivor’s Allowance – with reinstatement

Special stimulus plan

Until the renewal date, the contract must not have expired for less than 6 months nor more than 3 years.

  • This program can only be used to renew a policy once during the life of the policy.
  • The maturity age must not exceed the period set by the initial plan.
  • Reinstatement requirements will be governed by the terms and conditions in effect at that time.
  • The difference between the old and the new premium, plus interest, will be recovered from the date of resurrection.
  • The policyholder must submit a written request for the policy to be reinstated under the above system.
  • In the case of a refund plan, the insurance preparation fee and the stamp fee must be paid by the customer.

Installment stimulus program

According to the LIC website, dunning under this program will be allowed:

  • If the policyholder is unable to pay the premium arrears in one installment and the policy cannot be revived under the special revitalization programme.
  • If premium arrears have been outstanding for more than a year.
  • At the time of reconstitution, the policy has no loans outstanding. During the staggered duration of the reconstitution, no survivor’s benefit is due.
  • The installment dunning mechanism will be used for children’s deferred insurance policies. After the adjournment period, it is permitted.
  • Policies issued under the employee savings plan are not eligible for the payment stimulus program.

Loan and recovery program

A lapsed policy can be reinstated under this plan by recovering premium arrears from the amount available as a loan under the policy, depending on the terms of the policy. Here are the other Revival requirements:

a) If the amount of the loan is insufficient to cover the arrears of premiums, the policyholder will be asked to settle the difference at the managing agency.

b) If a balance remains after premium and interest have been deducted, it is attributed to guaranteed life.

c) Reinstatement requirements will be in accordance with the usual terms and conditions as they apply from time to time, and the Policyholder will be required to submit the Loan Application and Policy Document.

Survivor’s allowance and recovery scheme

Reimbursement policies can be reinstated as part of a regular reinstatement if the amount of the insured’s survival benefit is taken into account.

Here are the policy renewal requirements:

a) The policyholder must submit an SB release form with the consent of the policyholder to reactivate the policy under this scheme, subject to the usual terms and conditions applicable from time to time with the loan application.

b) The policyholder must submit an SB release form with the consent of the policyholder to reactivate the policy under this scheme.

Policyholders can reactivate their policies directly with the insurer by paying default interest.


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