Page 25 - Life Insurance Today December 2017

policyholder would get no benefits in
Reviving life the case of death. For investment poli-
cies, the surrender value (if the policy
has acquired one) would be paid back.
insurance In most cases, the insured must have
paid the premium for a minimum 2-3
years for the policy to acquire surren-
policies der value.
“It is better to pay the premium regu-
larly to renew the policy than reviving
it later on. At renewal stage, the cus-
A life insurance cover yields the charges interest of 9.5 per cent per mium and no further underwriting is
tomer is required to pay the same pre-
intended benefits only when
annum. The maximum time limit al-
done. But at the time of revival, com-
the premium is paid regu-
larly. If the premium dues are lowed for reviving a policy is two years pany may levy an interest for the late
(previously it varied between three
left unpaid over a long period of time, and five years) and it is common to all payment. More importantly, once the
the policy may lapse and lose all or insurance companies. customer fails to renew the policy on
part of its benefits. Thus it helps to time and till the date he/she revives
revive a policy even though you may Risky process the policy, there is no insurance cover
have forgotten to pay the premiums Thus, if you want to revive your policy, on the life of the customer,” says
on or before the due date. Here’s you have to pay all your dues within a Subhrajit Mukhopadhyay, Chief and
what you should know about revival. appointed actuary, Edelweiss Tokio Life.
period of two years. According to V
Viswanand, Senior Director & COO at Special assistance
Grace period Max Life Insurance, “People who revive
The premium for a life insurance policy after six months and within the Insurance companies will help you in
reviving your policies. Usually, a pre-
policy is to be paid on a monthly, quar- period of two years might have to un- mium reminder is sent through mail or
terly, half-yearly or yearly basis regu- dergo medical examination due to the messages or both. You can also find
larly each year. However, if an indi- policyholder’s age or development of out about your revival premium
vidual defaults on premium payment, any illness. Accordingly the premium amount by sending a text message to
a grace period is allowed without any amount could change. However, the the number provided by the insurance
penalty or additional charges. same policy benefits will continue.”
company or call its customer care or
mail them.
The grace period would be 15 days if It is hence at the discretion of the in-
your premium payment schedule is on surer to revive the policy or reject it Sometimes, insurers also provide a
a monthly basis and in other cases (although the rejection is rare). Once special window to policy holder for
(quarterly, half-yearly and annual) the the policy is revived, the benefits from revival. For instance, LIC conducts re-
grace period is 30 days. This is com- the policies are also reinstated. vival campaigns where the penalty for
mon to all the insurance companies. late premium payments will be dis-
If the revival doesn’t happen within counted.
Beyond the grace period, if your pre- two years, the policy either lapses or
mium is unpaid, interest (penalty) is benefits get reduced. It would con- Similarly, Max Life conducts auto rein-
chargeable as a late fee (from the due tinue in this status until maturity or statement for select policyholders
date) along with the amount due. This death of the policyholder. based on their profile (creditworthi-
interest usually varies with insurance ness, timely payment of premiums,
players. For instance, Max Life charges Santosh Agarwal, Head of Life Insur- etc), provided the person is less than
8 per cent per annum interest for 60- ance, Policybazaar, notes that if it’s a 45 years of age, the policy is for a sum
180 days of delay and 9.9 per cent per term insurance policy, the contract is less than Rs. 50 lakh and the revival is
annum beyond six months. LIC not valid beyond the grace period. A within one year. (Source : Buisness Line)

Life Insurance Today December 2017 25

Sashi Publications Pvt Ltd Call 8443808873/ 8232083010