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LIC offers products and services that provide adequate financial coverage no matter what our economic status is. While purchasing an insurance policy from LIC is highly recommended, we also need to be aware of the various terms and conditions that apply to the policies. An important aspect of it is the timely payment of our premiums. Why do we say so?

Timely payment of premiums ensures that the financial protection you have availed remains in force. While we all know the importance of purchasing an insurance policy, we need to stay up-to-date in terms of paying our premiums to keep our policy in force and to avoid paying late payment fees and penalties. 

The late fee on your premium is calculated based on the number of months you have delayed. For calculation purposes, each month is taken to be 45 days. The following table will help you understand the charges you will have to pay for every 1 Rupee of your premium:

Late Fee Charge (Per Rupee)

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

6%

0.005

0.01

0.015

0.02

0.025

0.03

7.50%

0.00625

0.0125

0.01875

0.025

0.03125

0.0375

9.50%

0.00792

0.01583

0.02375

0.03167

0.03958

0.0475

Other terms and conditions regarding LIC premium payment

The LIC usually sends premium notices one month in advance to the due date of the premium payment. When you receive your policy bond or document, the months in which the premiums are due are specifically mentioned. This will help you to keep track of the payment due dates. In many cases, postal delays may mean late receipt of the premium notice. However, it is important to pay the premium on time even if the notice reaches late. 

However, due to some reasons, if you fail to pay the premium on time, a grace period of 15 days is allowed for those policies who have a monthly premium mode, and a grace period of 30 days for policies with quarterly, half-yearly, and yearly premium payment mode.

Relaxations allowed during COVID-19

The COVID-19 pandemic has wreaked havoc on the masses in unimaginable ways. Many have lost their loved ones, their jobs, and their only source of livelihood. Many people have gone into an economic downfall that has made it difficult for them to pay their premiums on time. Due to these reasons, LIC has given certain relaxations to help these individuals. 

At the beginning of the year, LIC announced month-long extensions for all policyholders whose premiums were due in March and April. At the same time, people could seamlessly make use of digital mode to make their payments without incurring any additional service charge. 

Additionally, on 10th August, LIC announced its Special Revival Campaign under which each policyholder will get a maximum concession of up to Rs. 2,500 in late fees. This initiative was announced to help policyholders revive their economic conditions due to the prevailing COVID-19 pandemic and the provision would continue till 9th October. For policies with up to 1 Lakh premium, the concession will be 20%, while for 1 Lakh – 3 Lakh it will be 25%.

How To Revive a Lapsed Policy?

If you haven’t made your premium payment in time, LIC offers the following schemes to help you revive your lapsed policy. These schemes are explained in detail in this article. A brief explanation of the same is given below. 

Special Revival Scheme: Under this scheme, the intimation date of the policyholder can be changed and you will be required to pay a single premium at the time of revival. 

Revival Scheme: If you are unable to pay the premium in a single-mode, then this scheme can be opted, subject to certain terms and conditions.

Survival Benefit cum Revival Scheme: You can renew the money-back policies by utilizing the survival benefit cum revival scheme.

Loan cum Revival Scheme: If you have accumulated arrears of unpaid premium, then you can use this scheme to revive your lapsed policy by recovering arrears of premium from the amount available as a loan.

How to pay your LIC premium on time?

If you need to pay the premium for your LIC policies, you can use the offline and online methods of payments. These options are explained in this article in detail.

OFFLINE METHOD:


NACH: Under this payment system, the premium is deducted by the bank at a pre-decided date and is remitted to LIC.

BILL PAY: This system, also known as EBPP, is a process whereby the statement is electronically presented to the customer, who can then pay through various electronic systems at his disposal.

ATM: Under this system, LIC customers can make their payments through the ATMs of Axis Bank and Corporation Bank.

ONLINE METHOD:


LIC Website: Payment can be made through the LIC website using your debit card, credit card, UPI, or any other wallets you may be using.

Authorized Banks: Banks such as Axis Banks, City Union Bank, and IDBI Bank are authorized to accept premium payment on behalf of LIC. 

Franchisees: Payments can also be made through franchisees such as AP Online, MP Online, Suvidhaa Infoserve, CSC, Paytm, and InstaPay. 

Merchant: Premium can also be made through merchant modes such as Premium Point (Empowered Agents), Life-Plus (SBA), Retired LIC Employee Collection Points, LIC Associates, and Chief Organizers.

Conclusion

Alertness and diligence will help us keep our premium payment dates on the check. One can avoid many hassles and difficulties if payments are made on time. Even if you miss your payments due to unexpected circumstances, you can still use the above information to keep your policy from getting lapsed.

Naval Goel is the founder of PolicyX.com. He is an Associate Member of the Indian Institute of Insurance`, Pune. He has been authorized by IRDA to act as a Principal Officer of PolicyX.com Insurance Web Aggregator.
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