How to revive lapsed life insurance policy

Failure to pay the premium of a life insurance policy before the due date results in the policy lapsing. The cover ceases to be available once the policy lapses. It is possible to revive a lapsed life insurance policy subject to fulfillment of conditions. Life insurers also come up with special campaigns for revival of lapsed policies with concession or waiver of penalties.

Time
A lapsed policy can be revived only if it has not crossed a certain period from the date on which the policy lapsed. This period is typically specifi ed by the insurance company. Eligibility to revive a policy also depends upon type of policy.


Visit insurer branch
The policy holder should visit the insurance company’s branch and get a revival quote. The revival quote will be typically a sum of all premiums due on the policy. This amount needs to be paid to the insurance company to revive the policy.

Medical report
Depending on age of policyholder and policy amount, a declaration of good health needs to be submitted. In case the policyholder has a medical history or is mandated to do a checkup, a medical report will have to be submitted.

Unpaid premium
To revive the lapsed policy, all unpaid premium on the policy must be paid along with interest due on the same.

Penalty
A revival penalty may be applicable on the amount to be revived or on the period since the policy lapsed.

Points to note
1. During schemes launched by the insurance company for revival of lapsed policies, there can be some concessions on the penalty charged on revival.
2. Terms and conditions of the new contract can be different.

(The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)