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Here is nice information for the insured people for reviving their lapsed life insurance policies. Because of the current economic crisis, leading to idleness, a lot of policyholders have failed to make payment of their renewal premiums, as a result of which, their insurance policies have lapsed.
Policy Revival schemes:
LIC and other private insurance companies as well have started revival schemes, in which a lapsed insurance policy could be revived in five years of the last premium paid. Though, this scheme need the policy holder to pay the whole pending premium at one go together with interest.
A great number of policies are lapsing because of the lack of ability of policy holders to pay the due premium in a lump sum. This kind of revival scheme is a excellent idea, while it will let all customers to renew their policies on trouble-free terms.
Normally, if the customer stops paying policy premiums for five consecutive years, he loses the whole sum paid up to that point. The revival scheme will help these investors for the most part. Similar to the usual revival scheme of LIC, the installment revival scheme, as well, would be applicable on each and every LIC policy in five years of the very last outstanding amount.
What is revival?
If the policyholder unable to pay the premium under a policy is within the days of grace the policy lapses. Revival is a new or fresh contract in which the insurance company from whom the policy is taken can inflict new terms & conditions. There are different types of revival under which a policy can be revived:
Ordinary or normal revival: If a revival of the insurance policy is effected in six months from the due date of the first unpaid premium, personal statement regarding health is not needed and the policy is revived on payment of overdue premium along with interest. The interest rate to be paid for such overdue premium will depend on the date of commencement of the insurance policy.
Revival on non-medical basis: - The insurance policy can be revived on non medical basis, for this kind of revival the amount to be paid should not go beyond the prescribed maximum value for
non-medical assurance taken by the life assured.
Revival on medical basis: When the policy cannot be revived under ordinary revival or revival on non-medical basis it can be revived with medical tests. The tests are depend upon the sum assured to be revived.
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