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LIC of India

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LIC of India - Overview

LIC or Life Insurance Corporation of India is a state-owned insurance group and investment Corporation which is further owned by the Government of India. It has its headquarters in Mumbai. LIC mainly deals with the products of life insurance and plans for investment. It firmly believes in the motto 'Yogakshemam Vahamyaham,' which means that 'your welfare is our responsibility.'

Life insurance is a contract between the policyholder and the insurance company that the insurance company undertakes to pay an amount to the person who is either a nominee or a beneficiary as an assurance.

The validity of the contract for paying the sum assured depends on the following:

  • The date of maturity or
  • Certain specific dates at periodic intervals or
  • In case of early unfortunate death

The contract underlines the periodic payment of premium by the policyholder to the Corporation. Life Insurance is now a universally accepted institution that is known to eliminate the factor of risk through the substitution of certainty for uncertainty. It comes to help and support the family at a time during which there is an unfortunate event of the death of the policyholder.

Life insurance stands as a support for the two of the life's perils that come across every person's journey of life:

  • The early death of the head of the family leaving the dependent family behind to look after themselves
  • Living up to incredibly old age without any viable means of support

Features and Benefits of a Life Insurance Policy

Life Insurance policies offer a variety of benefits to individuals. Here is a list of those benefits:

Coverage of Risk

Life is highly unpredictable and may impose problems for the individual as well as his family. Thus, buying a Life Insurance Policy ensures that the family or dependents of the insured continue to enjoy the same lifestyle even in case of an untimely demise of the insured.

An All-comprehensive Plan for the Various Stages of Life

A Life Insurance Policy does not just offer financial support to the policyholder's family after his or her death but also looks after the impending life events like children's education, the marriage of the children, having a dream home, or to plan a peaceful retirement. The planning of the Life Insurance Policy is done by the policyholder's risk-taking capacity and his/her stage of life. One can choose from various typical Life Insurance Plans from LIC of India, which provide specific maturity benefits, in-built guarantees through several options of the products like guaranteed cash values, money back, etc.

Coverage for Increasing Expenses towards Health

Health expenses are escalating every day, posing a need for health insurance policies. Nowadays, almost all the stand-alone life insurance policies or policies offering riders/add-ons offer financial coverage towards critical illnesses and hospitalization expenses. Thus, it ensures that the insured will be paying a minimum of the medical costs incurred.

Encourages Savings in the Long-run

All life insurance policies are long-term investment agreements wherein the insured makes a regular fixed payment at regular intervals. It induces a habit of savings in the insured. This saving of money at regular intervals over a long period of time will help the insured in building a good corpus to fulfil his or her financial obligations at various stages of life.

A Long-term Investment that is Profitable and Secure

IRDAI has implemented numerous regulations to keep the money of the policyholder safe with the stakeholders, in turn making the insurance a highly regulated industry. It means that the money which the insured invests in the policy becomes the responsibility of the insurance company. As life insurance is a savings product for the long-term, it makes sure that the policyholder focuses on it rather than taking risky investment decisions for short term gains.

Income Guaranteed through Annuities

There are many financial instruments in the market which helps an individual towards the planning for retirement. These instruments are as effective as life insurance policies by way of paying returns. Since in the Life Insurance Policy, an individual will be saving money for a long period, it will provide a stable source of income even after the policyholder has retired from his professional life.

Growth through Dividend Payouts

Many of the conventional life insurance policies have a provision for gaining economic growth without taking any risk over investment. The policyholder can split his or her income, which he has earned through the yearly announcements of bonuses or dividends. They can contribute to economic growth while earning maturity benefits additionally.

The Facility of taking a Loan

Life insurance policies have a provision of giving out loans to the policyholders to meet their unplanned financial requirements at any point in time in their life. These loans do not hamper the benefits which are anyways provided by the policy they have purchased.

Mortgage Redemption

Life insurance policies are the best financial tools available to the policyholder for the coverage of any loans or mortgages availed during his or her lifetime. In case of unforeseen death of the policyholder, if the policyholder has not been able to repay the loan or mortgage availed by him or her, then the dependant family members will not have to bear the burden of repayment. The policy can be used to repay such a loan or mortgage.

The Benefit of Tax

With life insurance policies, one can avail attractive tax benefits and save a significant amount of money instead of spending it on taxes.

Types of Life Insurance Policies and Plans

Life insurance can either be a pure risk coverage plan or just pure insurance. There can also be a combination of insurance cum investment elements. It depends upon the insured or the policyholder as to which plan, he or she wants to opt for depending upon his or her financial obligations as well as the study of a wide choice of life insurance policies available in the market.

Here is a list of the different types of life insurance policies in India:

  • A Term Plan – This is pure risk coverage
  • A unit-linked insurance plan (ULIP) – This is a combination of insurance plus investment opportunity
  • An Endowment Plan – This is a combination of insurance plus savings
  • A Money-Back Plan – This comes with periodic returns with insurance cover
  • A Whole Life Insurance Plan – This provides coverage to the life assured for whole life
  • A Child's Plan – For fulfilling the child's impending life goals like higher education, marriage, and so on
  • A Retirement Plan – This helps in planning the retirement of the insured thus retiring gracefully

Let us now go through the details of each plan:

A Term Life Insurance

A term life insurance is one of the simplest, easy to understand, and affordable to purchase plan of the LIC.

Features of the plan

  • A term insurance plan of the LIC provides coverage of risk for death within the stipulated time period of the policy. This death benefit will be paid to the nominee
  • It is a pure risk coverage plan that offers low premiums with high coverage
  • If one wants to expand the coverage, then add-ons or rider options are available here
  • The death benefit can be payable either as a lump sum or a monthly payout or a combination of both
  • In case if the policyholder lives beyond the term of the policy, then there will be no payout. However, some insurance companies are nowadays offering Term Plans with Return of Premiums (TROPS). With TROPS the insurance companies' payback all the premiums paid by the insured in case if he or she lives beyond the term duration though such plans prove to be costly

Benefits of the Term Plan

  • In case of an untimely death of the policyholder, the sum assured will be payable to the dependent family or the nominee to provide for the income lost due to the death of the sole earner of the family
  • Also, the sum assured can help to pay off any unpaid loans or mortgages, monthly household expenses, children's higher education, children's marriages, and so on

Plan Type

Basic Sum Assured

Term

LIC Jeevan Anmol II

Rs 24 Lakh

25 years

LIC Jeevan Amulya II

Rs 25 Lakh

35 years

LIC e-Term:

Rs 25 Lakh (Rs 50 Lakh for non-smokers)

35 years

A Unit Linked Plan (ULIP)

A unit-linked plan ULIP from LIC is an all-inclusive combination of insurance cum investment.

Features of the ULIP

  • The premium payable is used partly as risk coverage (insurance) and partly as an investment in various funds
  • A policyholder can invest in the various fund options offered by the insurance company depending upon his or her risk-taking capacity
  • The insurance company, on permission from the insured, can further invest the accumulated fund in the capital market in various instruments like - bonds, debts, equities, market funds, or hybrid funds, and so on

Benefit of ULIP

A policyholder should first of all evaluate his or her risk-taking capacity and then select an appropriate investment option from equity, debts, or hybrid funds. The policyholder should invest only through the LIC, which ensures complete transparency in the transactions.

Plan Type

Basic Sum Assured

Term

LIC New Endowment Plus

10 x Annualized Premium

N.A.

Endowment Plans

An endowment plan from LIC is a plan, which is a combination of insurance and savings.

Features of the Endowment Plan

  • From the sum assured, a specific amount is set aside towards life coverage or insurance. In contrast, the remaining amount is invested by the LIC
  • In case if the policyholder lives beyond the tenure of the policy even then the insurance company offers him or her maturity benefit
  • These plans may offer bonuses at regular intervals, which are payable either on the maturity of the policy on to the nominee on the claim of death
  • Upon the death of the policyholder, the death benefit is payable to the nominee
  • They are also popularly known as 'Traditional life insurance' although it consists of an element of investment. However, the risk factor is lower in this case than in the other investment products, and the same goes for the returns

The benefit of Endowment Plan

The endowment plan proves beneficial when there is financial planning for the long term involved. Also, it allows for gaining profits on the majority of the plan.

Plan Type

Basic Sum Assured

Term

LIC Endowment Plan with Single Premium

Rs 50,000

25 years

LIC New Endowment Plan

Rs 1 Lakh

35 years

LIC New Jeevan Rakshak

Rs 75,000 (per life)

20 years

LIC Endowment Plan with Limited Premium

Rs 3 Lakh

12 16, and 21 years

New Anand Jeevan

Rs 1 Lakh

35 years

LIC Labh Jeevan

Rs 2 Lakh

16, 21, and 25 years

LIC Pragati Jeevan

Rs 1.50 Lakh

12 to 20 years

New Lakshya Jeevan

Rs 1 Lakh

25 years

Money-Back Life Insurance Plan

Money-back plans are one of the unique plans from LIC. In this plan, the insured receives a specific percentage of the sum assured at regular intervals known as survival benefit.

Features of Money Back Life Insurance Plan

  • These plans are also entitled to receive bonuses that are declared by the insurance company at different time intervals
  • These bonuses help the policyholder to achieve his or her short-term financial goals

The benefit of Money Back Plan

The money-back plan is highly beneficial for any individual who wants to plan a short-term financial obligation. Also, it allows him or her to earn an income on the maturity of the policy.

Plan Type

Basic Sum Assured

Term

LIC New Money Back Plan - 20 Years

Rs 1 Lakh

20 years

LIC New Money Back Plan - 25 Years

Rs 1 Lakh

25 years

LIC New Bima Bachat Plan

Rs 1 Lakh

· For 9-year policy term: Rs 35,000

· For 12-year policy term: Rs 50,000

· For 15-year policy term: Rs 70,000

LIC Bima Diamond

10 x annualized premium

12, 16 or 20 years

LIC Tarun Jeevan

Rs 75,000

25 – (minus) Entry age of the policyholder

LIC New Children's Money Back Plan

Rs 1 Lakh

25 – (minus) Entry age of the policyholder

A Whole Life Insurance Plan

A Whole life insurance plan from LIC provides lifelong or whole life coverage to the policyholder up to 100 years of age, as against term plans, which are for a stipulated period.

Features of a Whole Life Insurance Plan

  • The coverage or the sum assured along with accumulated bonuses, which is payable to the nominee on the death claim of the insured, is decided at the time of the purchase of the policy
  • In case if the policyholder lives beyond 100 years of age, then the insurance company is responsible for paying the matured endowment coverage to the policyholder
  • The premiums in this plan are costlier in comparison to the term plans
  • These plans have a provision of partial withdrawal on completion of the payment of the premium

The benefit of Whole Life Plan

This plan provides the insured with not only lifelong protection but also an opportunity to leave behind an inheritance for his or her successors.

Child Plan

A Child plan from LIC is an immensely helpful plan to create a corpus for the future growth of the child. This plan enables the accumulation of funds towards a child's education and marriage. Most of the Child plans have a provision for either an annual payout or payout once after 18 years of age.

Features of a Child Plan

  • In case of an untimely death of the insured parent during the stipulated term of the policy, then the death benefit payment is made on an immediate basis
  • There are certain child plans which waive off the premiums payable in future on the death of the insured while continuing the policy till the time of its maturity

The benefit of Child Plan

The Child plan is advantageous by way of the fulfilment of the policyholder's child's dream.

Retirement Plan

The Retirement plan from LIC helps the policyholder to plan and create a corpus for his or her retirement. This planning helps a retired policyholder to live without any worries as he or she is financially independent. Most of the retirement plans have a provision of annual installments or payout once after 60 years of age.

Features of a Retirement Plan

  • In case of an untimely death of the insured within the duration of the policy, the death benefit is made payable immediately to the nominee by the insurance company
  • The value of the death benefit will be higher than the coverage or the sum assured or 105% of the payable premiums
  • An additional vesting benefit will be payable to the policyholder if he or she survives the maturity age of the policy
  • In such a case, the final payout will be in accordance with the fund value, which will be utilized for buying an annuity

The benefit of the Retirement Plan

The retirement plan is really beneficial for planning long-term investments as well as building a corpus for one's retirement.

Plan Type

Basic Sum Assured

Term

LIC New Jeevan Nidhi

Rs 1 Lakh to 50 Lakh

N.A.

Akshay Jeevan -VI

Rs 1 Lakh

N.A.

Some additional LIC plans for a quick review

Here is a quick review of some additional LIC plans:

LIC Micro Insurance Plans

Plan Type

Basic Sum Assured

Term

LIC New Mangal Jeevan Plan

Rs 50,000

· For regular premiums: 10 years to 15 years.

· For single premiums: 5 years to 10 years

LIC Bhagya Lakshmi

Rs 50,000

2 years + premium paying term (PPT)

LIC Group Plans

Plan Type

Basic Sum Assured

Term

LIC Group Credit Life Insurance

Rs 4 Lakh

5 to 35 years

LIC SINGLE PREMIUM GROUP INSURANCE

Rs 10 Lakh

2 years to 7 years

LIC New Group Leave Encashment Plan

Rs. 1000 (minimum)

Yearly renewable

LIC NEW ONE YEAR RENEWABLE GROUP TERM ASSURANCE PLAN I

Rs. 1000 (minimum)

Yearly renewable

LIC NEW ONE YEAR RENEWABLE GROUP TERM ASSURANCE PLAN II

Rs. 1000 (minimum)

Yearly renewable

LIC New Group Gratuity Cash Accumulation Plan

Rs. 1000 (minimum)

Yearly renewable

LIC New Group Superannuation Cash Accumulation Plan

N.A

Yearly renewable

LIC Social Security Scheme

Plan Type

Basic Sum Assured

Term

Aam Aadmi Bima Yojana

Rs. 30,000

N.A.

Inclusions and Exclusions of LIC Policies

Life cannot be predicted. A person who wants to secure his family's future as well as provide for a proper financial backup will strive to choose the best plan of LIC. The policyholder will lookout for an affordable premium, a good amount of sum assured as well as proper terms and conditions of Life Insurance Plans from LIC of India.

In case of any unforeseen circumstances like the death of the sole earner of the family, a lump-sum amount called the death benefit is paid to the beneficiary if the death has occurred during the policy tenure.

Even though LIC plans are designed to provide insurance coverage to the beneficiary of the insured person, there are certain inclusions and exclusions of the death events. Let us have a brief look at them:

Death Caused Naturally or Due to Health Issues

The death of a policyholder caused by natural reasons or health-related issues, then it is covered or included in the Life Insurance Plans from LIC of India. In case if the policyholder dies due to any kind of critical illness or a severe medical condition, then the death benefit or the sum assured will be payable to the beneficiary.

Death Caused by Accident

In case if the policyholder dies in an accident, then the accidental death is included or covered in the life insurance plan. However, it must be a natural accident and not an accident caused under the influence of alcohol or use of any type of drug while driving or any involvement of any type of criminal activity or adventure sports. If the insurer finds that the accident was natural, then the insurance company will pay the death benefit to the beneficiary.

Death Due to Suicide

In case if the policyholder commits suicide during the first 12 months of the commencement of the policy, then the beneficiary is eligible to receive 80% of the premium paid only if the policy is non-linked. In case of a linked policy, the beneficiary will receive 100% of the total premium paid.

However, if the policyholder commits suicide after the completion of one year from the commencement of the policy, then there will be no death benefit payout to the beneficiary, and the policy will stand terminated.

Certain life insurance companies may or may not cover or include suicidal death in the policy terminology. Moreover, the policyholder or the insurance buyer needs to go through the terms and conditions of the policy for understanding the inclusions and exclusions of the policy before its purchase.  

Death Due to Self-inflicted Injuries

In case if the policyholder happens to die due to any self-imposed injuries or any hazardous activity, then the claim for death made by the beneficiary is bound to be rejected by the insurance company. This type of death is excluded from the Life Insurance Plans from LIC of India.

Death Due to HIV/AIDS

The insurance company will reject the claim to death in case if the insured dies due to any type of sexually transmitted diseases like AIDS or HIV. This is an exclusion to the policy.

Death Due to Intoxication

In case if the policyholder dies due to an overdose of drugs or alcohol, then the beneficiary may not receive the death benefit from the insurance company as a part of the exclusion of the policy.

Death Due to Homicide

In case if the policyholder dies due to murder by the beneficiary and the investigation seems to reveal the involvement of a beneficiary or nominee in the crime, then the insurance company will not accept the claim an exclusion to the policy. Furthermore, the claim request may be put on hold and accepted by the insurer only after a clearance certificate is provided by the beneficiary regarding a non-involvement in the murder or any crime related to it.

Death Due to Natural Calamity

Generally, a life insurance plan includes the death of the insured due to tsunami or any other natural calamity like earthquake, lightning, terrible weather conditions, and so on. In such a case, the beneficiary or the nominee of the policy will receive the sum assured as a death benefit from the insurance company.

Claiming Benefit from More than Two Policies

As per the guidelines of IRDAI, the beneficiary will have to follow certain steps in case of a claim from two or more insurance policies. The nominee has to submit the details regarding the existing life insurance plan before purchasing a new policy to the new insurance company. All the information regarding the old policy has to be provided in the proposals form. The nominee or beneficiary will also provide the death certificate of the insured to the new insurance company. The new insurance company will then verify the information provided with the existing insurance provider, and after successful verification, the claim will be received by the beneficiary.

Thus, the insurance buyers need to read the insurance documentation prior to purchasing a Life Insurance Plans from LIC of India. One should have proper knowledge of both inclusions as well as exclusions of the policy which an individual wants to opt and the coverage provided. An individual should try to prevent any type of discrepancy during the process of claim.

Eligibility Criteria

As there are many policies of life insurance In India, there are different eligibility criteria for different types of plans. Let us get a brief idea about each of them through their tabular presentation:

Criteria

Term Plan

Pension Plan

Whole Life Plan

Money-Back Plan

Endowment Plan

Child Plan

Minimum age of entry

18 to 60 years

20 to 60 years/

30 to 85 years

90 days to 55 years

13 to 65 years/ 90 days to 12 years

90 days to 22 years

0 to 12 years

Maximum entry age

 

 

 

 

 

 

Age at Maturity

65 to 70 years

 

Max. 100 years

25 to 66 years

47 to 75 years

25 years

Policy term

5 to 35 years

 

100 years of age

16 to 25 years

10 to 35 years

25 years minus age of entry

Sum assured

6 Lakh to 25 Lakh

1 Lakh

2 Lakh

20,000 to 1 Lakh

50,000 to 3 Lakh

1 Lakh

Note: The above criteria are an average representation of all the plans combined. Each plan has a separate set of criteria that an individual should go through before purchasing the policy.

The Claim Process for Life Insurance Plans from LIC of India

A beneficiary or a nominee can file a claim for Life Insurance Plans from LIC of India both online as well as offline:

Step 1 - It is particularly important for a beneficiary or a nominee to immediately inform the life insurance company LIC regarding the death of the insured. The death of the insured can be categorized into an 'early death' or a 'non-early death' as the case may be.

Step 2 - To file a claim, the policyholder needs to fill up a claim intimation form providing each and every detail.

Step 3 - The claim information form has to be submitted along with all the necessary documents such as –

  • The related policy document of the Life Insurance Plans from LIC of India
  • The death certificate of the insured stating the cause of the death
  • A mandate regarding the transfer of claim amount to the account of the nominee or the beneficiary either through online banking or offline process

As soon as the beneficiary or the nominee of the Life Insurance Plans from LIC of India submits the claim form along with the other important documents, the insurance company goes through the process of the verification of the claim form. After verifying the form thoroughly, the claim process begins, and the transfer of the sum assured takes place in the beneficiary account.

Therefore, it becomes imperative for an individual to go through the claim settlement process of the company in case of a sudden unwanted event, and if he or she finds it favourable then only they should proceed to purchase the Life Insurance Plans from LIC of India.

Documents required to claim under a Life Insurance Plans from LIC of India

Usually, one requires the following documents to process a death claim:

  • Certificate of death
  • Policy documents – original copy
  • Beneficiary's proof of identity
  • Policyholder's proof of age
  • Form of Discharge (executed and witnessed)
  • Health certificate (as a proof for the reason of death)
  • FIR of Police (in case of death which is not natural)
  • Post mortem Report (in case of unnatural death)
  • Hospital records or certificates (in case if the diseased has died due to illness)
  • Cremation certificate and the certificate from the employer (in case of early death)

In case if a beneficiary is planning to claim the death of the insured, then it is advisable not to wait for too long. Also, make sure that all the above mention documents are attached with the claim form, and one can also contact the insurance company for an updated list of the about mentioned documents.

How to buy the Life Insurance Plans from LIC of India?

An individual can buy a Life Insurance Plans from LIC of India both online as well as offline. Buying a policy online requires an individual to visit the official website of the insurance company or comparing plans through any online financial websites. There are various parameters on which an individual can compare the Life Insurance Plans from LIC of India. This will help the individual to decide which policy he or she wants to opt for considering the pros and cons of a policy as well as the fulfilment of the individual's insurance needs.

The following are the steps required to buy a Life Insurance Plans from LIC of India online:

Apply Providing Basic Details

An individual who wants to purchase Life Insurance Plans from LIC of India has to fill up an application form with his or her basic details such as name, date of birth, contact number, and lifestyle habits such as smoking, present income, and expected life cover. Once this information is furnished, a list of suitable plans with benefits and features will Be shown on the screen. An individual needs to thoroughly check each and every plan before selecting the right plan for securing the future of the family. After that, he or she needs to click on the selected plan and wait for the next steps.

Payment of the Premium

The next step is to pay the premium online using the online payment mode. Once the payment is successful, the individual concerned will get a confirmation message through the registered contact number or the email ID, which is provided by him or her to the insurance company.  

Filling up the Related Insurance Policy Form

Once an individual has paid the premium, the insurance company will furnish a life insurance proposal form that needs to be filled up by the insurance seeker. The individual has to pay the form only after the insurance premium is paid. This form consists of the details of an individual regarding his or her details, existing life cover (if there is any), health details, and finally, any lifestyle and nominee details. An individual must take care to provide all the authentic information.

Provide Necessary Documents

The next step for the insurance seeker is to provide all the necessary documents which are required by the insurance company, such as the address proof, identity proof, and related health certificates.

Required documents to apply for the Life Insurance Plans from LIC of India

Documentation for any procedure is a must. This official procedure contains all the related official information regarding the insurance contract, which takes place between the insurer and the insured. Also, the documentation stands as written proof of evidence of information.

While buying an online policy, the applicant can either upload these documents directly by visiting the official website of the insurer or email it to the insurer's customer service email id.

In case if the policy is being purchased offline, then the applicant can courier it to the official address of the insurance company. These documents must be self-attested by the insured or the policyholder.

The following is the list of required documents to apply for the Life Insurance Plans from LIC of India:

  • The income tax certificate for the last two or three years
  • The present salary slip
  • Any address proof like voter id, Aadhar card, Pan card, Passport, electricity bill, telephone bill, bank statement, and so on
  • Age proof like voter id, Aadhar card, Pan Card, Passport, and so on.
  • Residence proof like voter id, Aadhar card, Pan Card, Passport, electricity bill, telephone bill, bank statement, and so on

Renewal Process of the Life Insurance Plans from LIC of India

Renewal of a Life Insurance plan from LIC of India is usually allowed to the policyholder after he reaches a specific age. Certain specific life insurance policies do not take into consideration the renewal if the policyholder reaches the age of 80 years. Also, numerous insurers have specified varying maximum ages for different Life Insurance Plans from LIC of India.

The insurance company can terminate the LIC insurance policy in case of non-payment of premiums within the due date or a breach of any terms and conditions of the policy contract.

The revival of a LIC policy means a new contract between the insured and the insurer with fresh terms and conditions. The revival of a lapsed LIC Insurance Policy online can be revived using the following types of revival:

Ordinary Revival

For reviving a  lapsed Life Insurance Plans from LIC of India online within the first six months of its purchase for the non-payment of the first premium, then the revival of such a lapsed Life Insurance Plans from LIC of India online can be processed by the collection of outstanding premium plus the interest. The interest rate will be much higher for such an outstanding premium and will depend on the exact date of the Life Insurance Policy's commencement.

Revival on the Basis on Non-medical

For reviving the lapsed Life Insurance Plans from LIC of India online on a non-medical basis, the amount should not exceed the stipulated limit provided for the non-medical coverage, which is to be received by the policyholder.

Revival based on Medical

For reviving the lapsed Life Insurance Plans from LIC of India online on a medical basis, one can process it with medical requirements depending upon the amount of revival.   

Special Revival Scheme

To revive the lapsed Life Insurance Plans from LIC of India online, a special revival scheme, a policyholder can change the date of commencement of the payment and then make the due date based on the age. This kind of lapse is a case where a policyholder has not been able to pay the premium as a lump sum and thus opt for a revival of the lapsed Life Insurance Policy from LIC of India online under the special revival scheme. However, the insured is required to fill-up the form no. 680, which is a declaration of good health and a medical exam for the same. For the revival of a lapsed LIC Insurance Policy online under the special revival scheme, adhere to the following conditions:

  • A policyholder can avail of this type of policy revival only once during the policy's complete tenure
  • In case of a lapse of the policy within three years of its commencement, one can avail of the special revival scheme
  • Only those policies, which have not been able to acquire any surrender value, can use this scheme. Again, the scheme has to be opted for within three years from the date of commencement of the policy

Revival by Installment

If a policyholder is not able to pay all the outstanding premiums as a lump sum and cannot avail of the special revival scheme he/she can opt for revival by installment. For the revival of the lapsed Life Insurance Plans from LIC of India online, a policyholder has an option of revival by installment. Under this scheme, a person can pay overdue premiums through various modes of payment:

  • Half of the yearly premium - yearly premium policies
  • One half-yearly premium amount - half-yearly paid policies
  • Amount of 2 quarterly premiums - quarterly paid policies
  • Amount of 6 monthly premiums - monthly paid policies
  • If any outstanding premium, then it shall be paid by installments over two years, in addition to the regular policy premium

 Policyholders may also be asked for Form No.680 or Declaration of Good Health (DGH) and a medical exam report to support the same.

Loan- cum- Revival

The revival of a lapsed Life Insurance Plans from LIC of India online has acquired a surrender value by the date of revival. Then it can be revived through a policy loan. The policyholder can procure this loan depending upon the number of premiums paid till the date of revival. If the revival amount is lower than the loan amount, then the policyholder must pay the difference. However, if the loan amount is more than the revival amount, the policyholder will receive the access amount.

Survival Benefit- cum- Revival

For the revival of the lapsed Life Insurance Plans from LIC of India online, one can use the survival benefit cum revival scheme along with money back policy. In case the policy renewal date falls after the survival benefit is due. The policyholder has an option to use the policy survival benefit for the revival of the policy. However, if the revival amount is more than the amount receivable as a survival benefit, then the policyholder has to cover up the excess. In contrast, if the survival benefit amount is more than the revival amount, then the policyholder will receive the excess of the benefit.

FAQs

  • Q1. Why is a Life Insurance Policy useful?

    A1. A Life Insurance Policy is useful to ensure the financial stability of the policyholder's family in case he or she is unable to earn due to an accident or illness. The policy reimburses the benefits of death to the nominees or beneficiaries in case of an unforeseen event. To ensure that the dependent family can meet their expenses and sustain their lifestyles even in the absence of the policyholder, such coverage is purchased.

  • Q2. How much does a person calculate the cost of life insurance?

    A2. The calculation of the cost of life insurance depends upon the type of policy that a person opts for. Also, many factors like the amount of premium, the amount of sum assured the insurance seeker's age, as well as the amount of coverage required influence the cost of the insurance. There are other charges like fees on investment, charges of administration, and charges on mortality, which add up to the total cost of life insurance. One must read the policy document to know about the various costs included in the life insurance.

  • Q3. What are the consequences if one does not pay the premium on time?

    A3. To pay the premium, which is due, a grace period of up to 30 days is available from the due date of the premium to be paid. If you do not pay the same within this period, the policy lapses and all its benefits are lost. An insured must pay the revival premium when he or she wants to restart the coverage.

  • Q4. How is a term life insurance different from a regular Life Insurance Policy?

    A4. The term life insurance is a pure life cover and offers only death benefits to its nominees. If the insured lives beyond the policy duration, then there are no maturity benefits available. It is an affordable and convenient way to get higher coverage.

  • Q5. How does a person decide on the amount of life insurance he or she needs?

    A5. The amount that one receives on maturity depends on the amount of premium one pays. The maturity benefit that a person requires depends on one's standard of living, present income, spending habits, etc. One should consider getting a maturity amount, which is around 8 to 10 times his or her annual income.

  • Q6. Can one claim tax benefits if he or she discontinues the ULIP policy?

    A6. In the case of a ULIP, a policyholder is not entitled to receive any tax benefits if he or she stops paying premiums earlier than 5 years from the commencement of the policy.

  • Q7. What are the Tax Benefits in case one opts for a Pension Plan?

    A7. One can claim tax benefits under Section 80CCC for a Pension Plan if he or she has paid premiums. Section 10(23AAB) has referred a fund from which the pension will be given to the insured. Also, the insured will be able to get a deduction of up to Rs. 100,000 on his or her total annual income.

  • Q8. Does one have to pay tax on the maturity benefit?

    A8.  No, the insured will not have to pay tax on receiving the maturity benefits of a Life Insurance Plan. The insured is eligible to withdraw an amount of around one-third of the total maturity amount under a pension plan. Again, that will be free from tax. It is possible only if one has paid all the premiums and has not let the policy lapse.

Written By: Paisawiki - Updated: 12 April 2021