State-owned Life Insurance Corporation (LIC) on Monday permitted its policyholders to revive their lapsed policies of over 2 years, a move that will help improve persistency ratio. The policies that have lapsed for more than two years and were not allowed to be revived earlier can also be revived now, LIC said in a statement.
After the IRDAI Product Regulation 2013, which came into effect from January 1, 2014, revival period was restricted to two consecutive years from the date of first unpaid premium, during which the policyholder is entitled to revive policy which was discontinued due to non-payment of premium, it said.
Earlier, all policies taken after January 1, 2014 could not be revived if they remained in lapsed condition for a period exceeding two years.
With a view to extend the benefit of continued life cover, LIC approached IRDAI and extended the benefit of longer revival period to even those policyholders who bought policies post January 1, 2014, LIC said.
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, it added.
LIC managing director Vipin Anand said unfortunately, there are circumstances when one is unable to continue paying premiums and the policy lapses and it always makes a better sense to revive an old policy rather than discontinuing it and buying a new policy to restore insurance cover.
"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 said.
This is a unique opportunity for LIC's policyholders to revive the policies that could not be revived in the past and restore life cover to ensure financial security, he added.
The persistency ratio broadly measures the quantum of the customer retention by the life insurance companies, while determining the percentage of policyholders paying renewal premiums at the end of one year, or more years depending on the tenure of the policy.