New Delhi: Life Insurance Corporation of India (LIC), the state-owned insurer, on Monday in a latest ruling has eased policyholders who have failed to revive their lapsed policies of over two years.
Previously, policies sought after January 1, 2014 could not be revived if they remained in lapsed condition for a period exceeding two years.
The insurer in its latest ruling has allowed such policyholders to revive policies that were lapsed over 2 years. A statement said that the new move will help improve persistency ratio. Policies that lapsed for beyond two years were also not allowed to be revived. Even those can be revived now, the agency said in a statement.
The move is in line with IRDAI (Insurance Regulatory and Development Authority of India), the insurance regulator, in a ruling dated Jan 1, 2014 said that the revival period was restricted to two consecutive years from the date of first unpaid premium. The regulator also said that the policyholder is entitled to revive policy which was discontinued due to non-payment of premium.
Now, even those LIC policyholders who bought their policies post January 1, 2014 can revive their non-linked policies within 5 years and unit linked policies within 3 years of first unpaid premium, LIC added.
LIC's managing director Vipin Anand wsas quoted as saying that it made sense to revive an old policy rather than discontinuing it. "Buying life insurance is one of the most prudent decisions a person takes in life...we value each of our policyholders and value their desire to continue their life insurance cover with us," he was quoted as saying.