Life insurance: Lapsed policy? Beware of hoax calls

Frauds related to lapsed life insurance policies are on the rise with spurious calls being made to policyholders to help revive such policies. While insurers are putting in place various measures to handle complaints regarding such spurious calls, individuals must ensure that their life policies remain active and the premiums are paid on time. In case the policy lapses, one must approach the insurer directly to revive the policy after fulfilling all the conditions.

Fraudulent calls
Dubious agents make calls promising to revive a lapsed policy if the policyholder pays a certain amount or even claim that the insured will receive the amount of the lapsed policy if they buy a new insurance policy. As it is difficult to ascertain whether a call is authentic or not, the policyholder must call the customer care numbers of the insurer and seek an email from them with all details. All the payment must be done to the insurer’s account.

Rakesh Goyal, director, Probus Insurance, says there have been several cases of spurious calls related to lapsed policies. Thus, policyholders must be vigilant against revealing any personal or policy information on the call or making any payments. “In such situations, the policyholders should first check with the insurance company. This would save them from losing any money. Unscrupulous callers might also claim to be from the Insurance Regulatory and Development Authority of India (Irdai) and hence awareness is necessary to ensure that customers lodge a complaint with the police instantly,” he says.

Never let your policy lapse
If the premium is not paid within the due date, the insurance company will give a 15-day grace period for premiums paid in monthly instalments and 30-day grace period if the premium is paid on a quarterly, half-yearly or yearly basis. If the premium is not paid within the grace period, the policy will lapse and the insured’s nominee will no longer be able to get any benefits of the term plan. In case of endowment and unit-linked insurance plans if the policy lapses in the lock-in period, then all the premium paid will get forfeited and the policyholder will not get any benefits, not even the bonus accumulated in the lapsed policy.

Reviving lapsed policy or buying a new policy
It is better to revive a lapsed policy as buying a new one will require you to undergo the entire application procedure and the medical tests. You will have to pay a higher premium which will be based on your current age and health conditions. However, reviving a lapsed policy, provided the company accepts the lapsed policy for revival, will entail certain costs.

You will have to pay the premium for all the years since the lapse of policy along with interest on outstanding premiums, applicable taxes and even penalty amount for non-payment of premiums. As per Irdai norms, life covers issued before 2019 have a maximum revival period of two years and policies issued after that have a maximum revival period of five years. Once the revival period expires, the policy is terminated.

Most life insurance premiums are a level premium for the policy’s lifetime and younger the age, lower is the premium. Nayan Goswami, head, General Insurance, Sana Insurance Brokers, says when you revive or continue a policy, you have the advantage of paying a lower premium based on your younger ‘age at entry’ and for life insurance policies with an investment-linked feature, the longer you stay in the policy, the better the return. “If you let a policy lapse or discontinue it, you may only get the surrender value. The insurer will also levy a penalty as you opt out earlier than the maturity date,” he says.


  • Approach the insurance company directly to revive the policy. Be vigilant against spurious calls
  • Life covers issued before 2019 have a maximum revival period of two years. For those issued after 2019, it is five years
  • Reviving a lapsed policy entails certain costs, including interest on outstandings, taxes and even a penalty fee