Got your LIC policy lapsed? Here is your one time chance to revive your policies using the Special Revival Scheme that ends on February 28, 2010.
Earlier, to revive a lapsed policy one had to pay all the dues at a single time with interest rate prevailing at that time and produce health certificate. With this Special Revival scheme in existence, you needn’t pay your dues at one time but still (or only) have to produce a health certificate.
How it works?
Say a policy is lapsed for a period of maximum 2 years. In order to revive such a policy under the Special Revival Scheme, you will have to pay only your current year’s premium and produce a valid health certificate. This means that you are NOT paying last years’ (one year) premium at this time (see example below).
In order for this to work, the ‘date of policy taken’ is moved ahead by one year. To make it easy to understand, say if a policy was taken in 2008, the new change makes that the policy was taken in the year 2009. Since the term of the policy remains the same, you’ll be paying the lapsed premium as the extra premium at the end of the actual policy term.
As an example, if 2009 was the year when you didn’t pay your premium and the policy got lapsed, according to the new change the policy was started from the year 2009. So effectively, the premium paid in the first year of the policy existence ie, 2008 is adjusted as the premium for 2009, and now you’ll only have to pay the premium of 2010 to stay under cover.
The above example applies to those policies that were lapsed for a maximum period of 3 years.
In case a policy is lapsed for 5 years or more, you can revive your policy (let’s say it’s an annual premium policy) by paying your current year’s premium amount plus half of your annual premium amount as this year’s premium amount. The rest of the lapsed premium’s can be paid with in two years.
Update: Special revival scheme was a special, temporary program introduced by LIC in 2010. This program no longer exists today. Revival of lapsed policies is different for different policies so please see your policy’s bond for more details.