If you have a Unit-linked Insurance Plan (ULIP) which got discontinued due to non-payment of premium, you can now revive the cover within two years of the date of discontinuation irrespective of the lock-in period.
The Insurance Regulatory and Development Authority (IRDA) has recently issued a circular making amendments to its earlier order which required the revival process to be within the lock-in period.
“The policyholder shall have the right to revival of such (ULIP) policy within two years from the date of discontinuance irrespective of the lock in period,” the insurance regulator has said.
The earlier provision had stipulated that the revival of policy can be done within two years from the date of discontinuance and not later than the expiry of lock-in period. According to the IRDA norms, ULIPs have a lock-in period of 5 years.
“The change has been done at the behest of insurance companies who would be able to garner better support from customers as it can now be revived within two years from discontinuance irrespective of the end of lock in period which was earlier not later than expiry of lock in period,”Saroj Satapathy, CEO, Ideal Insurance Brokers said.
According to IRDA’s earlier circular in case the insured opts to revive the policy within two years, the insurer shall add back the discontinuance charges deducted from the fund to the fund value and allot units of the segregated fund chosen by the policyholder at the net asest value (NAV) as on the date of such revival.