Rules for LIC Policy lapse
In general the lapse is defined as the steady fall from a place. When it comes to the LIC lapse, then it means that there is a fall in the company’s performance or something in connection with the performance. It may be either a financial lapse or the performance lapse.
It is also said in the LIC that there may be many lapses in the future which means there may be an increased ratio in the policy lapse of the company.
When there is a possibility of a lapse in your policy? The policy will be active till we pay the premiums properly during the payment period. You can pay premiums thirty to thirty one days after the end of the payment date and this is called as grace period. Suppose if you fail to pay your premium even during this period (grace period), then it is said that your policy is lapsed. This means the policy is canceled by itself. The simple concept behind this is if you don’t pay then you don’t use. Suppose if there is cash value, then till the account becomes empty the premium is paid from the cash value. So you have to pay attention to the grace period.
If you have not noticed the end of the grace period then you will lose the insurance policy that you have taken up. There is a slight consideration; the LIC checks on your previous policies and if there are too many lapses then your policy is canceled automatically.
Thus to prevent this situation it is important to pay the premium of the correct date or at least before the grace period ends else the lapse period will begin and you will lose the policy. This will help the people to pay the premiums properly!