NEW DELHI: State-owned Life Insurance coverage Company (LIC) on Monday permitted its policyholders to revive their lapsed insurance policies of over 2 years, a transfer that may assist enhance persistency ratio. The insurance policies which have lapsed for greater than two years and weren’t allowed to be revived earlier will also be revived now, LIC mentioned in a press release.
After the Irdai Product Regulation 2013, which got here into impact from January 1, 2014, revival interval was restricted to 2 consecutive years from the date of first unpaid premium, throughout which the policyholder is entitled to revive coverage which was discontinued attributable to non-payment of premium, it mentioned.
Earlier, all insurance policies taken after January 1, 2014 couldn’t be revived in the event that they remained in lapsed situation for a interval exceeding two years.
With a view to increase the advantage of continued life cowl, LIC approached Irdai and prolonged the advantage of longer revival interval to even these policyholders who purchased insurance policies publish January 1, 2014, LIC mentioned.
Now, even these LIC policyholders who purchased their insurance policies publish January 1, 2014 can revive their non-linked insurance policies inside 5 years and unit linked insurance policies inside three years of first unpaid premium, it added.
LIC managing director Vipin Anand mentioned sadly, there are circumstances when one is unable to proceed paying premiums and the coverage lapses and it at all times makes a greater sense to revive an previous coverage quite than discontinuing it and shopping for a brand new coverage to revive insurance coverage cowl.
“Shopping for life insurance coverage is without doubt one of the most prudent selections an individual takes in life…we worth every of our policyholders and worth their need to proceed their life insurance coverage cowl with us,” he mentioned.
This can be a distinctive alternative for LIC’s policyholders to revive the insurance policies that might not be revived up to now and restore life cowl to make sure monetary safety, he added.
The persistency ratio broadly measures the quantum of the client retention by the life insurance coverage corporations, whereas figuring out the proportion of policyholders paying renewal premiums on the finish of 1 12 months, or extra years relying on the tenure of the coverage.