Private insurer Reliance Life Insurance said on Wednesday it will revive lapsed policies with only the due premium, without any penalty or medical tests.
"Life insurance is a long-term protection instrument and its benefits are visible over a longer period of time provided the policyholders continue to maintain their policies in force by regularly paying due premiums.
“With this initiative, we are offering our valued customers an opportunity to renew their lapsed policies and help them avail all policy advantages," RLIC CEO Anup Rau said.
The revival initiative allows RLIC policyholders to renew their lapsed policies by simply paying their due premium -- without any penalty or medical tests.
Generally, a lapsed policy can only be revived by payment of due premiums along with applicable interest and declaration of good health by the policyholder.
RLIC is offering this across all its insurance products till November 30.
"We have waived the interest charge on due premium, medical tests and documents for our customers to bring our customers back into the life insurance fold with all protection and other benefits," Rau added.
As per the Insurance Regulatory and Development Authority recommendations, a uniform grace period of 30 days is extended by the insurer for annual, half yearly and quarterly renewals, and 15 days for monthly renewals.
A policy should be considered lapsed if the premium is not paid within the grace period.
"The domestic life insurance industry is battling with increasing rate of policy lapsations.
The lapsation percentage varies from about 20-50 per cent for various reasons.
This is despite the fact that the industry is investing heavily in educating the consumers about insurance and its long-term benefits," Rau said.
RLIC, part of Reliance Capital, is one of the leading private sector life insurance companies with business premium, including renewal premium, of over Rs 4,015 crore (Rs 40.15 billion) for the year ended March 31, 2013.