Non-payment of the premium before the due date, results in lapse of policy. The cover ceases to exist when it lapses once. A policy can be revived if conditions are fulfilled. Often the insurers offer concessions and waivers on penalty to have you revive your lapsed policy.

Time:

It can be revived only till it has not crossed the grace period, typically specified by insurer. It’s also affected by the type of policy.

Visit insurer branch:

In order to get a revival quote (i.e. sum of all premiums due) and to pay it, one needs to visit the insurer branch.

Medical Report:

A declaration of good health needs to be signed and submitted to the insurer depending upon the age and policy amount of the policy holder.

Unpaid Premium:

Principal amount (sum of unpaid premiums) due plus interest must be paid on same date in due time.

Penalty:

A particular amount as quoted by the insurer in revival quote must be paid along with the principal amount and interest as penalty in order to revive your policy.

·        Company may or may not give you waivers on penalty, it’s entirely up-to them.

·        Companies can change terms & conditions once the policy is revived and once revived, it shall remain unchanged until re-lapse.

Types of revival scheme

Ordinary Revival Scheme:

If the policy you possess has been issued by local branch, all you need to do is visit them, submit your Principal Amount + Interest + Penalty along with declaration of good health (depending upon your age and type of policy), you are good to go again.

Loan-Cum-Revival:

A loan can be taken by the policy holder in his/her name and the loan amount can be adjusted with premiums. Even if paid up value of the policy isn’t acquired, the policy can be revived. Until the revival date, the amount of loan in calculated as if the policy is within a forced condition. This is most helpful when the policy holder finds himself/herself unable to pay the revival amount in lump-sum.

Special Revival Scheme:

Finding oneself unable to pay the entire amount of due premiums, the already paid up value takes about 3 years to mature, this money can be used to pay up the old dues, penalties, interests etc. along with the difference between old premium and new premium. Rest of the procedures are same as ordinary revival scheme. The consent of policy holder is taken as the maturity date changes in this type of revival.

Revival by Installment:

If the arrears aren’t more than a year old and the policy holder finds himself/herself unable to pay the amount in lump-sum, he/she can choose to pay the due in monthly installments over a period of six months or quarterly installments i.e. 2 times in over 6 months.

Losses by lapsed policy:

·         The accidental/death benefits cannot be availed.

·        The already paid premiums may be forfeited.

·        Surplus from shares, bonus cannot be obtained.

·        No income tax rebate if the policy lapses within 2 years of conventional life insurance policy.

·        The Income Tax becomes payable as the deduction gets added to the relevant year.

Special Points:

The requirements for the revival of the life insurance policies mainly depend on the factors like the occupation and the health of the insured, age of the life assured, coverage amount, policy period already running etc. If the assured wants an automatic revival method, he can opt for it by paying the arrears with the interest of the premium. A proof of good health should be presented with an authorized medical report or the declaration of good health.