Lapsed policy: How to revive it…?

Lapsed policy...How will you revive your lapsed policy…?

Oh, my God…

Did you miss the date…?

I request you not to panic, as it is nothing to worry about. Just simply read ahead.

Whenever you forget to pay premium on time then almost every insurance company provides you with a grace period. The period normally ranges from 15 to 30 days from the due date and totally depends on the company. There is nothing standard about it. You can pay your premium in this grace period.


If you miss your grace period as well then your policy is normally considered to be lapsed.

Lapsed policy: What it is…?

It simply means that you are no longer eligible to avail insurance benefits. Since you were unable to pay your premium thus your life cover has been taken away from you and you are no longer insured.

Is there any way I can make up for my mistake…?

You can make for this mistake

Well the answer is…

Yes, you can…

If you are willing to pay “the premium due” and “the interest” that company levies as penalty, then your lapsed policy can come to life.

The penalty is usually decided on the period for which you didn’t pay your premium otherwise it is usually 8% p.a. But again this is entirely on the company of how much interest they want to charge.

Is there any time limit for revival…?

You are time bound


As per Indian insurance company LIC you won’t be able to revive your plan after 5 years from the date of your first unpaid premium. Though it’s a pretty good time frame but still you would need to act fast. This is because the interest charged on the total unpaid premium can shake up your entire budget.

Schemes under which you can revive your plan

You can avail many possibilities

1. Ordinary scheme:

Under such a scheme you pay the entire premium along with the corresponding interest all at once. Along with this you also give a declaration of your good and sound help.

2. Special Scheme:

This is kind of bonus that an insured receives. You can avail this special scheme if you are unable to pay the amount due in lumpsum. For this you would need to submit a request with you insurer.

The company will then initiate the special scheme on the basis of your request. This will be done only after checking your creditability. And you would then have to pay only one premium as per your age.

To avail such a scheme you would need to satisfy following two conditions:

  1. This should be your first time availing special revival scheme, and
  2. You must be under 3 years of your lapsation. If it’s been more than 3 years since you last paid your premium then you won’t get any benefits.

3. Installment scheme:

If you are not eligible under special scheme and have crossed a 3 year mark then you can check out installment scheme. Under such a platform you pay in installments which work on easing up your financial burden. This is how you pay:

  1. If you pay premium yearly then you would pay half of your annual premium.
  2. Under half yearly, you would be required to pay one half of the annual premium.
  3. If your premium payment mode is quarterly then you would make two quarterly premiums.
  4. If you pay monthly then you would be asked to pay half yearly premium.
  5. Rest of the money you would pay in installments in 2 years time frame. Please not that this money should go along with your regular premium otherwise again you would be penalized.

To revive your policy you would need to make a written request to your insurer. Though normally it is accepted but usually the insurance company reserves the right to either accept or reject your application.

When accepted, you just pay the premium due along with the interest and your policy is revived. And you again become eligible to avail all insurance related benefits.

What you need to keep in mind…!

Here is the warning sign

When you revive the policy then it may not be the same. Your insurer holds complete right to alter the agreement. You may be even imposed to sign an agreement with different set of conditions. And in some cases the cover value may also go down.


Make sure what you are entering into and make a complete check as if you are buying a new policy all together.