LIC Lapsed Policy Revival: How to Restart a Lapsed Policy and What It Costs

LIC lapsed policy revival lets you restart a policy that stopped because a premium was missed. For most traditional LIC plans you have 5 years from the first unpaid premium to revive it by paying the arrears with interest and meeting LIC’s health requirements. This guide explains when a policy lapses, what revival costs, how special campaigns help, and when a new policy is the better choice.

When does an LIC policy lapse?

Every premium has a due date and a grace period after it. During the grace period your cover continues as normal. For LIC’s traditional plans, the grace period is:

• 30 days for yearly, half-yearly and quarterly premiums
• 15 days for monthly premiums

If the premium is still unpaid when the grace period ends, the policy lapses. What happens next depends on how long you have paid:

• Not enough premiums for a paid-up value (usually less than two full years on policies issued before 1 October 2024): the cover stops and nothing is payable unless you revive.
• Enough premiums paid: the policy does not die completely. It continues as a paid-up policy with a reduced sum assured. Our guide to LIC paid-up value explains how that amount is worked out.

Either way, riders stop, new bonuses stop, and the full sum assured is no longer payable on death. Revival is how you get all of that back.

How long do you have to revive?

Policy type	Revival window
Traditional (non-linked) plans: endowment, money back, whole life, term	5 consecutive years from the first unpaid premium, and before the maturity date
Unit-linked plans (ULIPs)	3 years from the first unpaid premium
Policies bought between 2014 and 2019 under the older product rules	Originally 2 years; in November 2019 LIC extended this to 5 years (3 years for ULIPs)

The 5-year limit is counted from the first premium you missed, not the latest one. A policy whose first unpaid premium fell due on 10 March 2025 can be revived until 9 March 2030, provided the policy has not reached maturity by then. LIC’s revival campaigns also require the policy to have lapsed during its premium paying term.

What revival costs: arrears plus interest

To revive, you pay:

1. All premiums missed since the first unpaid premium, and
2. Interest on each overdue premium, compounded half-yearly, at a rate LIC fixes from time to time.

LIC does not publish this rate as a fixed figure in its brochures. News reports in August 2025 put it at about 9.5% a year, compounded half-yearly. Treat that as indicative and check the current rate in your revival quote, where the interest is usually shown as the late fee.

Because the interest compounds, every extra month of delay raises the bill. Reviving within a few months of the lapse is much cheaper than waiting several years.

If you also need cash, LIC has offered combined options such as a loan-cum-revival (a policy loan used to pay the arrears, for policies that have a surrender value) and instalment revival. Availability depends on the plan, so ask your branch. Our guide to the LIC loan against policy explains how much you can borrow.

Worked example: reviving a Jeevan Labh policy

A 30-year-old bought Jeevan Labh 936 on 10 March 2020 with a ₹5 lakh sum assured, a 21-year term and a 15-year premium paying term. Our Jeevan Labh 936 calculator puts the yearly premium at ₹26,250.

They paid five premiums (2020 to 2024), then missed the premiums due on 10 March 2025 and 10 March 2026. On 10 September 2026 they decide to revive. Assuming interest at 9.5% a year, compounded half-yearly (4.75% per half-year):

Premium due	Amount	Overdue by	Interest
10 Mar 2025	₹26,250	18 months (3 half-years)	₹3,921
10 Mar 2026	₹26,250	6 months (1 half-year)	₹1,247
Total	₹52,500		₹5,168

The revival amount comes to about ₹57,668. In a special revival campaign with a 30% late-fee concession, the ₹5,168 of interest would drop by about ₹1,550, well within the ₹3,000 cap for dues up to ₹1 lakh, bringing the total to roughly ₹56,118.

What does the money buy back? While lapsed, the policy sat as a paid-up policy worth only ₹1,66,667 of sum assured (₹5 lakh × 5/15) plus bonuses already vested. After revival, the full ₹5 lakh cover returns and the policy earns bonuses again. LIC’s exact calculation of part-periods and its current rate may differ, so use these figures as an estimate only.

Tip: Ask for the revival quote before you go to the branch. If the interest looks large, check whether a revival campaign is running or due soon.

Health declaration or medical tests?

Revival is not automatic. LIC revives a policy only if it is satisfied about your continued insurability:

• Short lapse, younger age, moderate cover: a Declaration of Good Health (LIC’s DGH form) is often enough.
• Longer lapse, higher sum assured or older age: LIC may ask for medical reports, as its underwriting policy requires at that time.

Based on what you disclose, LIC can revive the policy on the original terms, revive it on modified terms (for example with an extra premium), or decline. Answer every health question truthfully. The statements you make at revival can be examined if a claim arises in the following years, and a suicide within 12 months of revival is excluded from the full death benefit under LIC’s standard policy terms.

Special revival campaigns

LIC runs special revival campaigns a few times a year, usually for about two months. The recent ones (18 August to 17 October 2025, and 1 January to 2 March 2026) followed a similar pattern:

• Who qualifies: individual policies that lapsed during the premium paying term, have not completed the policy term, and are within 5 years of the first unpaid premium.
• Late-fee concession on non-linked plans: 30% of the late fee, capped at ₹3,000 when the total premium due is up to ₹1 lakh, ₹4,000 for ₹1–3 lakh, and ₹5,000 above ₹3 lakh.
• Micro insurance plans: the late fee was waived in full.
• Medical requirements: no concession. You still need the same health proof.

The concession applies to the late fee only. The premium arrears are always payable in full. Campaign terms change each time, so check LIC’s announcement for the current dates and caps.

Revive the old policy or buy a new one?

Continuing the example, compare reviving the 2020 policy with buying a fresh Jeevan Labh 736 for the same ₹5 lakh at age 36. Our Jeevan Labh 736 calculator puts its yearly premium at ₹28,782.

	Revive Jeevan Labh 936	Buy new Jeevan Labh 736
Paid now	₹57,668 (arrears and interest)	₹28,782 (first premium)
Premium from then on	₹26,250 for 8 more years	₹28,782 for 14 more years
Total still to pay	₹2,67,668	₹4,31,730
Matures	2041, at age 51	2047, at age 57
Estimated maturity (₹45 bonus per ₹1,000)	₹10,47,500	₹10,69,750
Health check	DGH or medicals, as LIC asks	Full underwriting at age 36

Revival wins clearly here: less money out, six years earlier, and a premium locked at the younger age. The old policy’s early years, when costs are highest and surrender values lowest, are already behind you. The maturity figures come from our maturity calculator assumptions and are not guaranteed.

A new policy can still be the better move when:

• The old plan never fitted your goals, and you would not buy it again today.
• You mainly need life cover. A pure term plan gives far more cover per rupee; compare with our term plan calculator.
• The lapse is close to the 5-year limit and the interest bill is large, or LIC declines the revival on health grounds.

If you decide not to revive, check what the policy is worth with the surrender value calculator and read our guide to LIC surrender value rules before you give it up.

Practical points before you revive

• GST: premiums on individual life policies have been GST-exempt since 22 September 2025. If your arrears include premiums that fell due before that date, check how the revival quote treats them.
• Tax deduction: premiums paid at revival generally count for the year you pay them under Section 123 of the Income-tax Act, 2025 (earlier Section 80C), within its limits. Confirm the treatment of the interest with a tax adviser.
• Riders: riders are revived only together with the base policy, not on their own.
• Records: keep the revival receipt. The revival takes effect only after LIC approves it and issues that receipt.

Key takeaways

• A policy lapses when a premium stays unpaid after the 30-day (or 15-day monthly) grace period.
• Most traditional LIC plans can be revived within 5 years of the first unpaid premium, before maturity; ULIPs within 3 years.
• You pay all arrears plus interest compounded half-yearly; recent reports put the rate at about 9.5% a year.
• LIC may ask for a health declaration or medicals and can decline revival.
• Special campaigns cut the late fee by up to 30%, but never the premiums or medical requirements.
• Reviving an older policy is usually cheaper than starting a new one at an older age.

This is an independent guide, not advice from LIC. The figures are estimates from our calculators. For your exact revival amount and requirements, ask your LIC branch or check your policy on LIC’s customer portal.