Policies lapses due to non payment of premium after due date / grace period.
Life insurance policies are long term policies and payment of premium has to be made regularly.
LIC offers one months grace period after due date for Quarterly, Half -yearly and Yearly premium payment modes.
Even after the due date if the premium is not paid within the grace period, insurance co. accepts the premium with interest at nominal rates. But even after failure of premium payment for more than 6/12 months depending upon each case the policy is treated as lapsed policy.
Now regarding ur 2nd query:
The policy can be revived by the insured on payment of premium + interest and meeting the requirements of the insurers like submission of General Medical, Good Health Declaration etc. depending upon each cases.
Normally the policy which are lapsed less than 5 years can be revived
Luckily, LIC has launched a special revival campaign were revival for policies lapsed for more than 5 years* (but not more than 7 years) is allowed for the first time, and that too on attractive concessional rates (reducing the interest)
This Campaign will last till 28.02.2009.
IBS
