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Aditya Birla Sun Life Insurance Company Limited

Revival of a Lapsed Life Insurance Policy in India

December 1, 2023

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Life insurance is a crucial investment to safeguard the financial security of your loved ones. However, maintaining a life insurance policy requires regular premium payments. If these payments are missed, the policy may lapse, thereby nullifying its benefits. Therefore, understanding the process of policy revival is crucial.

What is a Lapsed Life Insurance Policy?

A life insurance policy is considered lapsed when the premium is not paid within the grace period, which typically extends 15 to 30 days from the due date. When a policy lapses, the policyholder loses all benefits and coverage provided by the policy. The policy can no longer be claimed, and no payouts will be made to the beneficiaries in case of the insured's demise.

Revival of Life Insurance Policy

The revival of a life insurance policy refers to the process of reactivating a lapsed policy. Reviving a policy reinstates the insurance coverage, allowing the policyholder to avail of the policy benefits again. The policyholder is required to pay all outstanding premiums, along with interest, and possibly undergo a fresh medical examination.

The revival period in life insurance is the timeframe during which a lapsed policy can be reinstated. This period generally extends up to 2-5 years from the date of the first unpaid premium, but the exact duration may vary depending on the terms and conditions of the specific insurance provider. Be sure to read the documents carefully to know how you can ensure the revival of policy life insurance.

Steps to Revive a Lapsed Life Insurance Policy

Contact Your Insurance Provider: The first step in the revival process is to contact your insurance provider. They can guide you through the necessary steps and inform you about any specific requirements.
Pay Outstanding Premiums: You will need to pay all the outstanding premiums that have accrued since the policy lapsed. This also includes any interest charged by the insurer.
Undergo a Medical Examination: Depending on the duration of the lapse and the policyholder's age, a fresh medical examination may be required. This is to assess the policyholder's current health status.
Submit a Revival Application: An application for revival, stating the reasons for the non-payment of premiums, must be submitted to the insurer. The insurer will review the application and decide on the revival.
Policy Revival: If the application is approved, the policy is revived and comes back into force, restoring the insurance coverage.

While the process of reviving a lapsed life insurance policy may seem daunting, it is crucial to ensure that the financial safety net for your loved ones remains in place. Always remember to pay your insurance premiums on time to avoid the hassles associated with policy revival.

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FAQs on Revival of Lapsed Life Insurance Policy

What is a lapsed life insurance policy?

If the policyholder does not pay the payment within the grace period, the life insurance policy is said to have expired. The grace period normally lasts 30 days after the premium is due. All advantages and protection provided by a policy expire for the policyholder.

How can I renew a life insurance policy that has expired?

By paying the past-due premium and any applicable interest, as assessed by the insurance provider, you can reinstate a lapsed life insurance policy. If the insurer so requests, you might additionally need to submit a renewal application, supply health declarations, or go through a medical exam.

What time frame is there in India for renewing a lapsed life insurance policy?

A lapsed life insurance policy in India can normally be reinstated between two and five years after the first unpaid premium was due. However, the precise time range may change based on the insurance company's terms and conditions.

Are there any repercussions if an expired life insurance coverage is reinstated?

It's possible that the policyholder will have to pay a higher premium or forgo some policy benefits if they decide to renew a lapsed life insurance policy. In some circumstances, the insurer might additionally impose additional terms and conditions or demand a medical exam.

What is the procedure in India for renewing a lapsed life insurance policy?

You must first send a written request to the insurance provider in order to reinstate a lapsed life insurance policy. After that, pay the late premium and interest. You can also be required to submit a declaration of good health or get checked out by a doctor. Your coverage will be reinstated as soon as the insurer accepts your request and gets paid.

Can you resurrect any kind of life insurance policy?

Yes, generally all types of life insurance policies, including term, whole, endowment, and unit-linked insurance plans (ULIPs), can be resurrected. However, depending on the type of policy and the insurance provider, the terms and conditions for revival may change.

Exist any unique programmes for restoring expired life insurance policies?

Insurance firms periodically run special campaigns to entice clients to renew their expired coverage by waiving late fees or the requirement for a medical checkup. However, the insurance provider has the option to offer these programmes.

Can the amounts I paid to renew a lapsed life insurance policy qualify for tax benefits*?

Yes, much as premiums paid for an active policy, premiums paid for the renewal of a lapsed life insurance coverage are qualified for tax deductions under Section 80C of the Income Tax Act.

If I don't renew my expired life insurance coverage, what happens?

You will lose the insurance protection and any added benefits if you don't renew your expired life insurance policy. No death benefit will be given to the nominee in the event of the policyholder's passing. However, the insurer may pay the policyholder or nominee the amount of the surrender value if it has accrued.

Is there a grace period for renewing a life insurance policy that has expired?

The grace period, which is normally 30 days, refers to the additional time allowed to pay the premium after the due date. The policy expires if the premium is not paid during the grace period. However, there is no grace period for resurrection once the policy has expired. The policyholder must adhere to the revival procedure established by the insurance provider within the allotted window of time.

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