LIC relaunched its special revival campaign

LIC relaunched its special revival campaign

LIC, Life Insurance

After getting the huge response to its earlier launched Special Revival Campaign from 01/09/2015 to 31/10/2015 which was later extended up to 30/11/2015, LIC of India the state owned insurer again launched it’s Revival campaign from 01/01/2016 to 29/02/2016. In this revival campaign Life Insurance Corporation of India provided some concession in late fee and evidence of health while reviving the policy within this period. It is a very good initiative by Life Insurance corporation of India (LIC).

Policies which are eligible for revival in Revival Campaign

Individual life insurance policies and Health insurance policies are eligible for revival under this campaign.

Individual Policies and Health Policies which are eligible for revival in this revival campaign
  1. Lapsed policies under all type of plans are eligible except Micro insurance Plans. ULIP policies under Plan 802,803,804,811 which are discontinued as per policy conditions are eligible for revival.
  2. Policies which are in lapsed condition for more than 6 months from FUP as on date of revival.
  3. Policies issued through all distribution channels.
  4. Policies which are in lapsed condition during the premium paying term and not completed policy term as on the date of revival.
  5. Policies under Plan 805 and 806 can be revived within 1 year from FUP.
  6. Revival of policies with FUP more than 5 years as on the date of revival will be done as per the rules. However such policies will be eligible for late fee concession.
  7. Policies under all types of Health plans are allowed.
  8. Policies which are in lapsed condition for more than 15 days for Monthly mode/ECS mode and One month for policies with other than monthly mode, but less than 2 years from FUP as on 01.09.2015 will be eligible.

Concession in late fee during revival campaign

The basis for allowing concession in late fee will be the total receivable premium under the policy, as indicated below during this revival campaign.

Total Receivable premium
amount under policy
% of concession
allowed in late fee
Maximum amount of
concession allowed
Upto Rs. 1,00,00020%Rs. 1,500
From 1,00,001 to 3,00,00025%Rs. 2,000
From 3,00,001 and above30%Rs. 2,500
  1. Concession in late fee will be allowed only for policies where policyholder pays all arrears of premium with interest and revival requirements if any, up to the date of revival.
  2. Concession in late fee will be allowed for all types of revival including SB-cum-Revival,¬†Loan‚Äďcum-Revival, and Instalment Revival.
  3. Concession in late fee will not be allowed to policies which were revived during the campaigns for revival of lapsed policy in 2013 and two campaigns in 2014, where concession in late fee was granted.
  4. Concession in late fee will also be allowed under policies where no evidence of health will be required i.e spot revival.
  5. Late fee concession will also be allowed where the arrears of premium for revival is in policy deposit and adjustment of the same is done during the campaign period after receipt of revival requirements.
  6. Under some plans like plan 91, 128, 174, 179 wherein the policyholder can pay one or two instalments of premium with interest instead of paying all arrears of premium, concession in late fee will not be allowed for such part payment. Needless to add that if all arrears of premiums with interest are paid during campaign period, then concession in late fee will be allowed as per rule.
  7. For plan 903 and 904 : Waiver of interest of 20% subject to maximum of Rs.1500 under LIC’s Jeevan Arogya plan 903 and 904.
  8. Medical Reports are to be submitted as per existing underwriting rules.
  9. No concession in waiting period for health policies during this revival campaign.

To know more about other details you can read my earlier post: Special campaign for revival of lapsed policies of LIC of India

Refund of Service tax in Varishtha pension Bima yojana

Refund of Service tax in Varishtha pension Bima yojana

Life Insurance

Varishtha Pension Bima Yojana (Plan 828) was launched by Government of India on 15/08/2014 for person aged more than 60 years to provide a social security through lifetime pension to senior citizens. Varishtha Pension Bima Yojana was sold and administered by Life Insurance Corporation of India. From 15/08/2014 to 31/03/2015 service tax at the rate of 3.5% was collected from the customers on premium, which ranged from Rs. 2333 to Rs. 23333. In the Budget 2015 finance minister provided relaxation of service tax on Varishtha Pension Beema Yojana with effect from 01/04/2015.

Image Source: apartmentadda.com

Recently government of India issued a notification for the refund of service tax collected on Varishtha Pension Beema Yojana. And following the government’s directive LIC of India has issued the circular regarding the refund of service tax on varishtha pension bima¬†yojana.

How the customer will get the service tax back in Varishtha Pension Bima Yojana

LIC of India has made the provision for ONE TIME Refund of Service Tax under Varishtha Pension Bima Yojana (Plan 828) policies, issued from 14/8/2014 to 31/03/2015 as follows :

  1. IPP Cells of LIC of India: Will refund Service tax for policies surrendered and also policies where annuity is being paid
  2. Branch Offices of LIC of India: will refund Service tax for policies where Death Claim have been paid under Varishtha Pension Bima Yojana Policies, the payment of which will be in favour of Nominee.

Policy holders of varishtha pension bima yojana (Plan 828) will get  the intimation related to refund of service tax. Refund will be made through NEFT to the account registered with LIC of India.

What is Open title and its effect on claim payment time?

What is Open title and its effect on claim payment time?

Life Insurance

Sometimes when a legal heir of a diseased life assured approaches the life insurer for payment of death claim in a particular policy, they are asked to bring the succession certificate to make the payment due to open title in policy.

What is Open title in life Insurance policy?

Open title is absence of valid nomination or assignment in life insurance policy. Open title in a life insurance policy may arrise due:

  • Not affecting nomination in a policy: At the time of taking the policy a policy holder may not have chosen the nominee and in this case if life assured died in between the policy term, life insurance company is unable to make the claim until succession certificate is received from claimant.
  • Not adding a nominee in child policy when he/she become adult: Policy taken on a name of minor do not have a nomination. But when he/she become adult they must register the nomination in policy.
  • Reassignment of policy: When a policy holder assign (Absolute assignment) a policy to someone or institution (Bank/other financial institution other than the insurer) then nomination under policy cancels automatically, and when policy holder repays the loan then person/institution reassign the policy to life assured. At this time policy do not have nominee and ¬†life assured/policy holder have to register a nominee again in policy.
  • Death of Nominee before life assured: If a policy have single nominee and nominee dies before the life assured, then life assured/policy holder have to register a new nominee. If he/she fails to do so, then in event of death of life assured policy claims leads to open title.

How open title delays claim payment?

Open title majority of time delays the payment of death claim to legal heirs. Due to absence of valid nomination and assignment, insurer is unable to make claim payment. And merely by  making claim in policy does not make someone actual beneficiary in the policy. To make payment to actual legal heir of life assured, a insurer require a valid document of succession or will made by the life assured mentioning policy details. In absence of any will, succession certificate is issued by court mentioning legal heir of life assured, issuance of succession certificate is a time taking process. So until a succession certificate is issued and submitted to insurer, insurer do not make payment in policy having open title thus delays the payment. In case of absence of Class I legal heir (As per The Hindu Succession Act, 1956) or dispute among the legal heir may further delays the payment of death claim.

Things to remember related to nomination:

As I have discussed above how a policy may result into open title and its effects on claim payment, a policy holder must remember following things during policy term or while taking policy:

  1. Always make a valid nominee while taking a life insurance policy, try to keep a Class I legal heir (As per The Hindu Succession Act, 1956) as your nominee to avoid any problem later on.
  2. If a assigned policy is reassigned to you, then register a nominee again.
  3. As I have mentioned that policy taken on name of minor do not have nominee, but policy holder/life assured must register a valid nominee when the minor become adult.
  4. If nominee registered in a policy dies before the life assured then life assured/policy holder must register a new nominee in policy.
  5. Avoid making nomination of a distant relative.

Keeping these things in mind will help your rightful nominee to get the claim payment on time. To know more about Nomination please Click Here

Anywhere revival of your lapsed LIC policy

Anywhere revival of your lapsed LIC policy

LIC, Life Insurance

Revival in very important process by which one can restart the risk cover in his/her lapsed policy by paying all the arrears of premium up to the date. But some times people are unable to revive their policy because, they are away from their servicing branch. This problem is mainly faced by service class people who have transferable jobs. To over come the problem faced by the policy holders, LIC of India in Feb, 2009 allowed the anywhere revival facility of some lapsed policies in any other branch through its circular CO/CRM/729/23 dated Feb 10, 2009. Policy coming under criteria mentioned below can be revived in any LIC branch in India.

Image Source: thehindubusinessline.com

Anywhere revival of lapsed policy without evidence of health with arrears of premium with interest

LIC policy holder can revive his/her policy in any branch of LIC if their policy fulfill any of these below mentioned criteria:

  • If premium in a policy have been paid for at least 5 years or more and revival is being done by paying arrears of premium with interest within 12 months from First unpaid premium(FUP) except few high risk plans like 94, 111, 150, 153, 164, 177 and 190. Policy holder must be 18 years or above on the date of revival.
  • Revival under pure endowment plan (21) and annuity plans like 96, 45, 116 and Jeevan Suraksha Plan 122 (without life cover)
  • Revival of policies during last 12 months before the date of maturity in endowment types of policies, except under money back policies
  • Revival of policy under free cover period under plans 87, 91, 128,192 if without Critical Illness (CI) rider.
  • Revival under auto cover period in plans 165, 17, 179, 184 and 185

Anywhere Revival of policies up to age 60 years on date of revival on basis of Declaration of Good Health (DGH) alone with arrears of premiums with interest

  • Anywhere revival of policies is allowed if done within 7th month of FUP and DGH received with 2 weeks after its called for(provided policy is issued on ordinary terms). If policy was earlier issued/revived with health/build extra then revival in other branch is not allowed.
  • Revival of polices between 12 months to 18 months from date of FUP provided premium have bee paid for 10 years or half of the term(whichever is more)
  • Revival of policies in last 12 months prior to the date of maturity in case of all type of money back plans.
  • Revival of endowment type of policies, if arrears of premium and interest is received with 12 to 24 months prior to date of maturity with satisfactory DGH.
  • Anywhere revival in these plans are not allowed: 88, 89, 94, 104, 105, 106, 107, 108, 109, 110, 111, 121, 129, 131, 133, 153, 160, 164, 177, 190 and plans with riders other than DAB.

Anywhere revival if policy docket images are available and can be seen in other branch

Revival of lapsed policy is allowed on the basis of full medical report (FMR) + DGH where other branch office are able to view images of policy docket. When other branch are able to see the original policy documents, then they can compare the measurements mentioned in proposal form with details in DGH and FMR submitted at the time of revival, thus able to revive the policy accurately with proper requirements and medical reports.

Anywhere Revival is not allowed under following cases

  • Anywhere revival is not available under term assurance plans like 94, 111, 150, 153, 164, 177, 190 and all the ULIP plans like 140, 172, 173, 180, 181, 187, 188, 191, 193 and 901.
  • Revival under any other scheme of revival like special revival, loan-cum-revival, SB-cum-revival, installment revival is not allowed.

What is claim settlement option in LIC of India

What is claim settlement option in LIC of India

LIC, Life Insurance

Settlement Option! have you wondered what is this? Lump sum amount in LIC of India is payable when policy exit by way of maturity claim or death claim (or as per the policy conditions). But, if claimant (Policy holder/nominee) want this amount to be payable in installment over a period of time, then this amount is payable to claimant in installment for a period of minimum 2 year to 10 years as opted by the claimant.

What is settlement option?

Claim settlement option is nothing but the payment of lump sum claim amount payable in a policy in installment. There are two types of settlement option, one is advance ie first installment is paid on the due date of the claim, and second is arrears ie first installment is paid after 6 month or 1 years (as opted by policy holder). Following are the other important points:

  1. Claimant has to exercise the option 6 months before the claim become due for payment or later but claim should not have been paid.
  2. In settlement option claim is paid in yearly or half yearly installments only, and not paid in quarterly or monthly installments.
  3. Option can be exercised for minimum period of 2 years to maximum period of 10 years only.
  4. If option is taken minimum amount per installment should not be less than Rs. 2000.
  5. Claimant who decides to take maturity claim/death claim in installment can take the payment in arrears or advance.
  6. If the advance installment option is selected then first installment is paid on date of maturity of the claim or date of payment of death claim. Next installment will be paid after 6 months or 1 years (as per the option chosen by the claimant)
  7. If the arrears option is exercised then first installment is paid after 6 months or 1 years (as per the option chosen by the claimant)

This is good option in hand of policy holder who want a regular payment on maturity instead of lump sum payment. To know more about settlement option, visit this link to read the related circular issued by LIC of India.