What is reduced paid up in LIC policy?

What does reduced paid up mean in LIC?

Reduced Paid-Up Insurance — a life insurance nonforfeiture benefit that provides paid-up insurance for a lesser amount than the cash value of a policy that has lapsed because of premium nonpayment.

What does reduced paid up mean?

Reduced paid-up insurance is a nonforfeiture option that allows the policy owner to receive a lower amount of fully paid whole life insurance, excluding commissions and expenses. The attained age of the insured will determine the face value of the new policy.

How can I revive my reduced paid up policy in LIC?

In order to revive the policy, you will need to pay all the due premiums, along with penalty interest. But insurers sometimes waive these conditions, especially during revival campaigns. They may also waive the need for medical check-ups, and reduce the penalty charge or waive it completely.

How is reduced paid up insurance calculated?

This reduced sum assured is called paid-up value or paid-up sum assured. Paid-up value is calculated by multiplying the original sum assured and the ratio of the number of premiums paid to the number of premiums payable.

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Is reduced premium a dividend option?

Dividend Option: Reduce/Pay Premium. Choosing to reduce or pay the premium with the dividend means the policyholder chooses to pay a part or all of the premium due with the dividend. … It’s much more common for the policyholder to pay with out-of-pocket money.

How can I continue reduced paid-up policy online?

Policyholders can quickly revive the policy online by visiting the official website of LIC or visit the nearest branch of the company. Naval Goel is the CEO & founder of PolicyX.com.

What is paid up option in LIC?

A life insurance policy in which if all the premium payments are complete and the insured is free of all payment obligations, the policy stays intact until insured’s death or termination of the policy is called paid-up policy.

How is LIC paid up calculated?

Paid-up value is usually calculated as number of paid premiums X sum assured /total number of premiums.

What happens to a paid up policy?

Paid-up life insurance pertains to a life insurance policy that is paid in full, remains in force, and you no longer have to pay any premiums. … The cash value continues to grow in time with the premiums that you pay. If you surrender the policy earlier, you are then entitled to some of the cash value.

Can I surrender LIC policy after 2 years?

This is the value which is the amount payable to you should you decide to discontinue the policy and encash the same from LIC. Surrender value is payable only after three full years premiums are paid to LIC. … Surrender of policy is not recommended since the surrender value would always be proportionately low.

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What happens if I stop paying LIC premium after 3 years?

However, there are certain rules surrounding this concept. A policyholder will only be able to surrender his/her policy after having paid the premiums diligently for 3 years. Upon surrendering the policy, LIC provides a certain portion of money to the policyholder. This amount of money is known as surrender value.