Understanding the Implications of Ceasing Premium Payments on LIC Jeevan Umang Policy
Life insurance policies, such as LIC's Jeevan Umang, are designed to provide financial protection for a defined period. While these policies offer valuable risk coverage, they come with specific terms and conditions regarding premium payments and policy maintenance. This article aims to clarify what happens if you decide to stop paying the premium on your Jeevan Umang policy, especially after making payments for 2.5 years, and the available options for policy renewal or refund.
Grace Period and Policy Revival
Insurance policies, including Jeevan Umang under LIC, offer a grace period after which the policy can still be revived or renewed. The policy allows for premium exemption within the first three years, and it can be revived within the next five years at the Divisional Office level. It's important to note that if you cease paying premiums, the policy may lapse, but you still have the option to revive or renew it within the specified period.
Negative Implications of Stopping Premium Payments
If you decide to stop paying the premium on your Jeevan Umang policy, the insurance company will not refund the amount you have already paid. The policy is designed to provide risk cover and the sum assured for a specific period, typically 2.5 years in your case. Therefore, the amount you have paid will not be refunded in full.
Reinstatement and Revival Options
To reactivate your Jeevan Umang policy, you must ensure that it has acquired a paid-up value. This means you might need to pay one or more additional installments. Upon paying these installments, you can apply for the policy's revival or renewal, provided that you are in good health. The revival of the policy is only valid if you have not missed premium payments for more than five years from the last date of the unpaid premium.
Refund Policies and Proportionate Returns
In a typical life insurance policy, there is no provision for a full refund of the premium if the policy is terminated. Instead, a part of the premium is returned as surrender value. However, the Jeevan Umang policy offers a unique featurea proportionate cash back amount that is provided until the insured reaches 100 years old. This feature is particularly beneficial if you choose to leave the policy after paying for 2.5 years from the 15th year of the policy term.
To maximize your returns, it is essential that you continue to pay the premium for a total of five years. This ensures that you can enjoy both proportionate returns and maturity benefits. Once you have paid for five years, you will be entitled to a higher proportionate cash back and could potentially receive maturity benefits.
Conclusion
While ending the premium payments on your Jeevan Umang policy means you cannot get a full refund, there are still options to secure your policy if you are in good health. By maintaining the policy and paying for a minimum of five years, you can benefit from the proportionate returns and maturity benefits that the Jeevan Umang policy offers. If you need assistance with your policy or have any questions, it is wise to consult with your insurance advisor or visit your local LIC branch.