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Policy Revival

 Policy Revivals:

If the premium under a policy is not paid within the days of grace the policy lapses. Revival is a fresh contract wherein the insurer can impose fresh terms and conditions. A policy can be revived under the following types of revival:

 "Revival" means "To bring back to life". In case of LIC 'Revival' is required when a policy gets lapsed if the premium is not paid within the grace period (minimum 1 month if mode of payment is Yearly/Half-yearly/Qly and 15days if the mode is monthly). If a policy gets lapsed, it can be revived any time within 5 years from the date of first unpaid premium (FUP) the lapsed policy can be revived under the following 5 different schemes.

1. Ordinary Revival
If a revival of the policy is effected within 6 months from the due of first unpaid premium no personal statement regarding health is required and the policy is revived on collection of delayed premium plus interest. The rate of interest to be charged for such delayed premium will depend on the date of commencement of the policy.

2. Revival on non-medical basis
For revival of the policy on non-medical basis the amount to be revived should not exceed the prescribed limit for non-medical assurance taken by the life assured.

3. Revival on medical basis
If a policy cannot be revived under ordinary revival or revival on non-medical basis it can be revived with medical requirements. The medical requirements will depend upon the amount to be revived.

4. The other schemes for revival are

A. Special Revival Scheme
B. Revival by installment
C. Instalment Revival
D. Survival Benefit- cum- revival
E. Loan- cum- revival

A).Ordinary Revival: Under ordinary revival scheme a lapsed policy can be revived by paying all unpaid premiums (from the date of 1st unpaid premium) in lump sum with interest @existing rate. (Current rate of interest is 8% p.a.). Form no 680 also called DGH (declaration of good health) and medical report is required if necessary.

B).Special Revival: If a policy holder is unable to pay all the premiums in lump sum, he can also revive his policy under special revival scheme. In this scheme the date of commencement will be shifted and the policyholder has to pay only one premium according to his age( on the time of revival). Form no 680 also called DGH (declaration of good health) and medical report is required if necessary. The following conditions are to be satisfied for the revival of LIC POLICY under Special Revival Scheme.

    Special revival can be done only once in entire policy term.
    Special revival is allowed only within 3 years of lapsation.
    Policy should have not acquired any surrender value i.e. This option can be exercised within 3 yrs from the date of commencement of the policy.

C).Instalment Revival: In case of the policyholder is unable to pay all the unpaid premiums in lump sum and special Revival scheme also doesn't suit him. He can use this scheme to revive his policy. Under this scheme he can revive his policy by paying the following amount immediately:

    In the yearly mode of payment, half of the yearly premium.
    In the half yearly mode of payment, one half yearly premium
    In quarterly mode of payment, 2 quarterly premiums.
    In monthly mode of payment, 6 monthly premium

Rest of the unpaid premium is to be paid in instalments within two years along with the regular premium DGH and medical reports (if necessary) are required according to the policy term.

D).Survival Benefit cum- Revival Scheme : Money back type policy can be revived by using the survival benefit ( S. B. ) which falls due in it, in case of the S.B. due date is earlier than the date of revival. If the revival amount is more than the S.B. amount, the excess amount will be demanded. If the revival amount is less than the S.B. amount. The remaining amount will be given back to the policyholder. The additional requirements for revival and S.B. settlement are to be satisfied.

E).Loan-Cum-revival Scheme: A policy can be revived by taking a policy loan in case of the policy acquires the surrender value on the revival date. The policyholder can get the loan on the basis of premiums paid by him up to the revival date. If there is any shortfall in the revival amount, the policyholder will have to pay it. If the revival amount is less than the loan mount the remaining will be paid back to the policyholder.