Definition
Policy Revival
Revival is the process of restoring a lapsed or paid-up life policy to full in-force status by paying overdue premiums with interest and satisfying any underwriting requirements.
Insurers offer a revival period (commonly up to five years from the first unpaid premium under current IRDAI norms) during which a lapsed policy can be reinstated. Revival usually requires paying all arrears plus a late-payment interest charge, and sometimes a fresh declaration of good health or medical tests.
Reviving keeps the original premium rate, locked at the younger entry age, and preserves accrued bonuses, making it far cheaper than buying a new policy later. Insurers periodically run special revival campaigns waiving part of the interest or late fees to encourage reinstatement.
Related terms
- Policy LapseA policy lapses when the holder fails to pay a due premium within the grace period before the policy has acquired any surrender value, terminating the cover.
- Grace PeriodThe grace period is the extra time after a premium due date during which the policyholder can pay without the policy lapsing and while cover continues.
- UnderwritingUnderwriting is the process by which an insurer evaluates a risk, decides whether to accept it, and on what terms and premium.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.