Want to revive your LIC policy? Here are steps you can take if you haven't paid policy premiums for up to 5 years

Life Insurance Corporation (LIC) policies provide guaranteed returns, making them the best investment option for low-risk investors. This is one of the oldest methods of investing money for financial stability in the future. When you purchase a life insurance policy, you must make regular payments to keep the coverage alive. What happens if you stop paying? This is determined by the type of insurance and the time you cease making payments. The repercussions of missing payments vary depending on whether you have term or whole life insurance, but in general, they can result in lapses, loss of benefits, and difficulty in claim settlement.

LIC policy surrender value

The LIC surrender value is the amount policyholders receive when they stop paying the premiums and cancel the policy before its maturity date. The amount you receive when you surrender an LIC policy depends on the number of premiums you've paid and the term of the policy. 

Know what you can receive after 3 years

If you surrender your LIC policy after three years, you will get around 30 per cent of the total premiums paid. This excludes the first-year premium and any premiums for accidental benefits coverage riders.

After 10 years or more

If you have paid premiums for at least 10 years or more, LIC will announce a guaranteed surrender value factor. The guaranteed surrender value will be calculated by multiplying the entire premium paid by the guaranteed surrender value factor, as well as multiplying the bonus by the surrender value factor.

Tax benefits of a LIC policy after surrendering

If you surrender your LIC policy, you will not be able to take tax benefits under the Income Tax Act of 1961. 

What is the maximum time limit to pay the premium?

According to the Insurance Regulatory and Development Authority of India (IRDAI), you must pay the premium within a grace period of about 30 days of the specified date. The 30-day period applies to all insurance plans. As a result, even if you make your insurance payment within 30 days, the insurance companies will accept it.

Payment delays might occur for a variety of reasons. This grace period is beneficial to policyholders since it allows them to remain with their coverage and get the advantages promised by the insurer. If something bad happens to the policyholder during the grace period, the nominees can receive the full benefits. 

How to revive lapsed LIC policy

LIC policy revival is a service offered by LIC of India to enable consumers to renew their expired LIC policies. Customers who have not paid their LIC premiums for a maximum of 5 years from the last premium payment date are only eligible for LIC policy revival. They can reinstate their expired LIC policies by paying the remaining premium plus the relevant late charge.

However, all LIC policies are not necessarily eligible for revival, and the terms and circumstances of revival are set by the LIC of India.