Life Insurance Corporation of India (LIC) recently launched a special policy revival campaign that began on August 18, 2025, and will run until October 17, 2025. During this period, policyholders can revive their individual, non-linked insurance policies by enjoying a concession of up to 30 per cent on the late fee.
"These campaigns allow customers to revive their policies even if they couldn't renew their policy on time due to financial reasons, non-availability, etc," says Jitin Jain, BU head- health renewals, Policybazaar.
The primary purpose of buying a life insurance policy is to always have an active life cover along with other benefits derived from time to time, like cash backs, regular investment in chosen funds, etc., as applicable from product to product.
What Is A Lapsed Life Insurance Policy?
A life insurance policy is a long-term contract that requires regular premium payments to keep the policy active. A policy lapses when the renewal premiums are not paid on time. Customers get a grace period of 15 to 30 days from the due date to renew the policy, within which the policy remains active with all the policy benefits intact. However, once the customer fails to make the payment in full during the grace period, the policy lapses, and the benefits cease to exist.
"While the insurer tries to take all possible measures to reach out to customers through various modes of communication to make them aware about the renewal & its importance, there are close to approximately 20 per cent dropouts that happen post completion of the first policy year," says Atri Chakraborty, Chief Operating Officer, IndiaFirst Life Insurance.
How Can You Revive A Lapsed Policy?
Post the policy gets lapsed, there are ways the policy can be revived depending on the time elapsed & the opted product, which usually ranges between two to five years. Customers can make the payment of the premium along with the applicable late fee to revive the policy if the payments are made within six months of the due date. The customer should promptly revive the policy, if lapsed, as the late fee increases as the time progresses with no active life cover. The payments can be made through all the applicable renewal collection modes.
"In case the customer is not able to make the payment along with the late fee within six months from the due date, the customer must undergo additional scrutiny checks, as the process involves mandatory declaration of good health to be submitted for the life assured, along with the premium and late fee. The declaration of good health comprises questions related to the health condition of the life assured," says Chakraborty.
The reinstatement process could involve medical tests based on the life assured's previous history and the recent declaration of good health submitted. Post evaluation of declaration of good health (DoGH) and medical test results, the underwriting of the policy is redone, and a decision is taken. This is like evaluating a new policy.
What Are Special Revival Campaigns?
Quite a few Insurers also run special lapse revival campaigns to support customers who inadvertently miss payment of their due premium within the grace period by offering some discounts on the late fee. Though this is done as a customer-centric initiative, one should not wait for the same considering factors involved, like this is occasional, an increase in late fee with time, no active life cover, and other policy benefits till the policy is lapsed. In addition to this, medical underwriting may also be required if it is overdue for more than six months.
"A new policy after a lapse will require full underwriting, come with higher premiums due to increased age and health risks, and require documentation. In a special revival method, insurers reduce the interest on overdue premiums. This can lead to savings for the policyholders and encourage them to revive lapsed policies," says Casparus J.H. Kromhout, MD and CEO, Shriram Life Insurance.
