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The Life Insurance Corp. of India (LIC) on Monday rolled out a campaign to encourage policyholders to revive their lapsed policies. In a press release, LIC said it’s encouraging the continuation of risk covers given the current high-risk circumstances.

The revival campaign for LIC customers will continue till 9 October 2020. Policies of eligible products can be revived within five years from the date of the first unpaid premium. The insurer is also offering a concession in the late fee for a few policies, except term assurance, health insurance, multiple risk policies and those that are high-risk in nature.

This, however, is not the first time an insurance company is provisioning for the revival of lapsed policies. In the past, private insurers such as Tata AIA Life Insurance Co. Ltd and Bajaj Allianz Life Insurance Co. Ltd launched similar initiatives.

How to revive lapsed policies
An insurance policy lapses when you stop paying the premiums on the due date and during the 30 days of grace period. Depending on the nature of the policy, it could either lapse automatically or allow a window for revival. Typically, insurers are required to offer a revival period of two years for policyholders to reinstate their policies. “Almost all life insurance companies allow the revival of lapsed policies within two years from the date of the lapse. For the same, policyholders have to pay the due amount with interest or penalty," said Naval Goel, founder and CEO, PolicyX, an online insurance aggregator.

Pure risk covers:
  In case of pure risk covers like term plans, the policy lapses if you don’t pay the premium even during the grace period. You may have to let go of the premiums as well as the assured benefit. “For term plans, revival means that within three months the policy is reinstated with a health declaration form but beyond six months, the proposer will be asked to take the medical tests all over again. The need for medical tests may also change based on underwriting rules for specific products," said Manu Lavanya, director and chief operations officer, Max Life Insurance Co. Ltd.

Unit-linked insurance plans (Ulips):
  In the case of Ulips, you can revive the policy up to two years from the date you first missed paying the premium, said Lavanya. If you skip paying the premium in the first five years or during the lock-in period, the policy is considered lapsed after a 90-day period and the insurer moves the fund value to the discontinuance fund and levies a discontinuance charge (a maximum of ₹6,000 if discontinued in the first year). If you skip paying the premiums after the lock-in period, the insurer will give you an option to revive the policy.

Traditional plans: 
If you don’t pay the premium for traditional plans before they acquire a surrender value (paid-up), then you may lose all the premiums paid. But if the policy becomes paid-up, it doesn’t lapse and continues with a reduced sum assured. Traditional policies acquire surrender value after two to three annual premiums are paid. If it’s been more than two to three years since your policy lapsed, the only time you can revive it is if your insurance company comes up with special campaigns like the one LIC has launched currently. “Insurance companies do launch revival campaigns that allow the customer to revive their policies even after two years with some conditions that vary from insurer to insurer and plan to plan," said Goel. So, don’t let that policy lapse if you really need it in your insurance bouquet.
Most insurance companies have started offering the regulator-mandated standard indemnity health policy, Corona Kavach, for covid-19, but only a few have launched the standard benefit-based policy, Corona Rakshak. Though both these products target claims for covid-19, Rakshak has not been made mandatory by the Insurance Regulatory and Development Authority of India (Irdai), which means insurers can decide whether they want to offer the product or not. With two standard policies for covid-19, you may find it difficult to pick the one that suits your needs. Read on to know if you must go for the Corona Rakshak policy

What does Corona Rakshak offer?.
Like Corona Kavach, Corona Rakshak too offers three policy tenures—105, 195 and 285 days. The minimum entry age is 18 and the maximum 65 years and there’s a 15-day waiting period. You can opt for a sum insured between ₹50,000 and ₹2.5 lakh in multiples of ₹50,000. The policy will pay 100% of the sum insured if the policyholder is hospitalized for 72 hours on positive diagnosis for covid-19 from a government-authorized diagnostic center. For instance, if you opt for a ₹2.5 lakh sum insured, on hospitalization for covid-19 for three days, you will get a lump sum of ₹2.5 lakh. Once 100% of the sum insured is the paid, the policy will terminate. The policy is available on an individual basis only and does not have the floater option. Unlike regular health insurance plans, the Corona Rakshak policy cannot be renewed. You also don't have the option to migrate or port the policy from one insurer to another.

You already have less choice here as only a few insurers are offering Corona Rakshak.

Should you buy?
Understand that it may not be right to compare the Corona Kavach with the Corona Rakshak policy because both the products have different purposes. While the Kavach policy (indemnity) will pay for your hospitalization expenses, the Rakshak policy (defined benefit) is a means for income replacement.

A policy with a lower sum insured or with any room rent limits could consider the Corona Kavach policy. Sub-limits could result in proportionate deductions whereas the Kavach policy does not have any sub-limits. “If you have pre-existing diseases and are lucky to get a policy then it could work in your favour as you will be covered after only a 15-day waiting period.

Corona Rakshak could suit you if you already have a health insurance policy but feel that a positive diagnosis for covid-19 could result in loss of income. “It works for people looking at income replacement due to hospitalization. Also, any deduction that happens on the health insurance claim can be supplemented with this benefit-based policy. In regular health policies, sometimes PPEs (personal protection equipment) and other consumables may not be covered. This is where Rakshak could help.

If you already have adequate health insurance, going for Corona Rakshak makes sense for replacement of income because premiums are only around 1-2% of the sum insured in the case of most insurers. But it’s important to note that one must get hospitalized for 72 hours to be eligible for a claim.

The only thing that one must compare is the premiums because the product is standard across insurers but the cost could vary largely. Also, keep in mind that in case of individuals with underlying conditions, buying these policies may not be easy but if you're already covered under a health insurance plan, there isn't too much to worry about because all regular health insurance plans cover covid-19.

Several myths regarding the coronavirus are floating amongst people. It is crucial to not fall prey for such myths or spread them to others. To clear the air, here are the few myths on COVID-19 you should stop believing.

1.Coronavirus will not survive in Hot Weather:
COVID-19 has spread across the world even in countries with hot and humid climate, such as the UAE and Qatar. This proves that the coronavirus can spread in a hot and humid climate and people in such areas also need to take precautions to stay safe from COVID-19.

2.Consuming Garlic, Pepper or Sesame seeds will protect you from COIVD-19:
Foods like garlic, pepper and sesame seeds are known to have several health benefits. However, such foods only boost your immunity and keep you healthy cannot save you from coronavirus.

3.Only Old people and not young ones can get Coronavirus:
COVID-19 can be contracted by young and elderly people alike. People of all ages including children have been tested COVID positive. Nevertheless, the elderly and young people with comorbidities are more vulnerable to get very ill due to coronavirus. Thus they should be covered under corona insurance.

4.Consuming meat can lead to COVID-19
There is no evidence showing that eating meat or non-vegetarian food can infect you with coronavirus. You just need to ensure that the meat you consume is properly cleaned and cooked completely.

5.COVID-19 infects you for Life
Most people diagnosed with COVID-19 have been cured completely and have freed their bodies of the virus. Hence, you should not believe that if you contract coronavirus, it will stay in your body all your life.

The world is already facing tough times all because of COVID-19 pandemic. In such times, the least you can do is take precautionary measures and get covered under corona insurance. It is our responsibility to protect ourselves from wrong information and not spread these myths about coronavirus.

If you have ever read the brochure of a life insurance product till the end, you must have noticed the last section of the brochure always describes Section 45 of the Insurance Act 1938. What is it, why is it one of the most important information for the policyholders or new policy buyers to be aware of. Well, According to Section 45, a life insurance company cannot reject an insurer's claim after three years. Read on for the details.

What is Section 45 of the Insurance Act?
According to Section 45 of the Insurance Act, an insurer cannot question any life insurance policy on any grounds after three years from :

a. the date of issuance of Policy, or
b. the date of commencement of risk or
c. the date of revival of Policy, in case the policy had lapsed due to non payment of premium, or
d. the date of rider to the Policy, whichever is later.

Life insurance company can question the policy on grounds of fraud

The life insurance company can question the policyholder on grounds of fraud within three years. The insurer can do so in writing to the insured or the legal representatives or nominees or assignees of the insured the grounds and materials on which such decision is based. Three years here mean the same as described above. If the policyholder or his beneficiaries (in case the policyholder is not alive) can prove that there was no deliberate intention to suppress the fact or that the policyholder was unaware of the information, the insurance company cannot cancel the policy and claims. The life insurer can also question a policy within three years on the ground that any statement or suppression of a fact material to the life expectancy of the insured was incorrectly made on the basis of which the policy was issued or revived or rider issued.

What happens if the life insurance policy is repudiated by the insurance company?
In case of repudiation of the policy on the ground of misstatement or suppression of a material fact, and not on the ground of fraud, the insurance company will return the premiums collected till date to the insured or the legal representatives or nominees or assignees of the insured. The premiums have to be returned within a period of ninety days from the date of such repudiation.
Please mark all your queries / responses to
Information provided on this newsletter has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. and its affiliates, information providers or content providers, shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this newsletter, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. , its affiliates, information providers and content providers shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this newsletter.