My Dad Passed, LIC Policies Missing, Agent Says Transfer Funds: What Should I Do?

Ans: Hi Sharad, unfortunately when you stop paying your premiums, the policy lapses. If your policy has lapsed owing to non-payment of premiums on time, the terms and conditions of the policy contract are null and void until you reinstate it. A lapsed coverage must be reinstated by paying the accumulated premiums with interest and providing the necessary health information.You will have to pay the premiums of the years missed and then the policy will get revived.

Ans: You have a superannuation policy completing 20 years in June 2025. If LIC is not responding, follow these steps.

Gather Information
Policy Documents: Keep all policy documents handy. This includes the original policy, premium receipts, and correspondence.

Details: Note down policy number, premium paid, and maturity details.

Visit the LIC Branch
In-Person Visit: Visit the nearest LIC branch. Carry your policy documents and ID proof.

Branch Manager: Ask to speak to the Branch Manager. Explain your situation and request assistance.

Send Registered Letters
Registered Post: Send a registered letter to the LIC branch and head office. Include policy details and your request to close the policy.

Proof of Delivery: Keep the receipt and delivery proof. This ensures you have evidence of communication.

Online Grievance Portal
LIC Portal: Log in to the LIC grievance portal. Submit your complaint with all necessary details.

Reference Number: Note the reference number. This helps track your complaint.

Contacting the Insurance Ombudsman
Ombudsman: If LIC does not respond within 30 days, contact the Insurance Ombudsman.

Complaint: File a complaint with the Ombudsman. Include all correspondence and proof of delivery.

Escalate to IRDAI
IRDAI: If the Ombudsman does not resolve the issue, escalate it to the Insurance Regulatory and Development Authority of India (IRDAI).

Complaint Registration: Use the IGMS (Integrated Grievance Management System) on the IRDAI website.

Steps for Filing Complaints
Drafting: Draft your complaint clearly. Mention all details and attach relevant documents.

Follow-Up: Follow up regularly. Keep records of all communications.

Seeking Legal Help
Legal Advisor: If all else fails, consult a legal advisor. They can guide you on filing a consumer court case.

Court Case: As a last resort, file a case in consumer court. Provide all evidence and documentation.

Final Insights
Persistence is key. Follow these steps diligently to ensure your policy is closed successfully.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

Ans: Assessing Your LIC Policy
You have a LIC policy where you pay Rs. 2,220 monthly for 10 years. The policy matures in 15 years, with an expected maturity amount of Rs. 5 lakhs. Let's explore if it is wise to continue or discontinue this policy, considering your financial goals.

Evaluating the Policy’s Return
To begin, let's examine the return you are likely to get:

Premium Paid: Over 10 years, you will pay Rs. 2,220 monthly, totaling Rs. 2,66,400.
Maturity Amount: You will receive Rs. 5 lakhs after 15 years.
At first glance, it seems like you are getting back more than you paid. However, when you account for inflation and other factors, the return is modest.

Considering the Inflation Impact
Inflation reduces the purchasing power of your money over time. The Rs. 5 lakhs you expect to receive after 15 years will not have the same value as it does today.

Key Points to Note:

Inflation can erode the real value of your maturity amount.
The return you get may not match your financial needs in 15 years.
Analyzing Alternative Investment Options
There are other investment avenues that might offer better returns with the same or even lower risk. These include mutual funds, especially actively managed ones, where a Certified Financial Planner can help you pick funds that align with your risk profile and goals.

Advantages of Actively Managed Funds:

Potential for higher returns compared to traditional insurance policies.
Professional management and regular adjustments to maximize gains.
Assessing the Disadvantages of Continuing with the Policy
By continuing with the policy, you might miss out on higher returns offered by alternative investments.

Points to Consider:

Traditional insurance policies often provide lower returns.
Opportunity cost of not investing in higher-return options like mutual funds.
Should You Discontinue the Policy?
If your primary goal is wealth creation, this policy might not be the best option. Discontinuing and reallocating your funds could be a better strategy.

What You Should Do:

Consult with a Certified Financial Planner: They can guide you on the best mutual funds to switch to.
Consider Surrendering the Policy: If it aligns with your financial goals, you could surrender the policy and reinvest the proceeds in a better-performing investment.
Assessing the Insurance Aspect
It’s important to consider that this policy may also provide life coverage. However, the coverage offered by such policies is often inadequate compared to term insurance plans.

Key Insights:

Term insurance offers higher coverage at a lower premium.
You could get better protection by opting for a term insurance plan and investing the remaining funds elsewhere.
Understanding the Cost of Surrendering the Policy
If you decide to discontinue the policy, you might incur some costs. It's important to weigh these costs against the benefits of reinvesting your funds.

Key Considerations:

Check the surrender value and any penalties involved.
Calculate the potential gains from alternative investments after accounting for these costs.
Exploring a Balanced Approach
If you're unsure whether to continue or discontinue, a balanced approach could involve maintaining the policy while diversifying your investments.

Points to Think About:

Continue with the policy for its insurance cover while also starting a mutual fund SIP.
Reassess your investment strategy periodically with the help of a Certified Financial Planner.
Final Insights
Continuing with your LIC policy might not be the best decision if wealth creation is your main goal. There are other investment avenues like mutual funds that offer potentially higher returns. You might consider surrendering the policy and reinvesting the funds into mutual funds while ensuring you have adequate life insurance coverage through a term plan.

Steps You Should Take:

Review your financial goals with a Certified Financial Planner.
Consider the benefits of alternative investments like mutual funds.
Ensure you have sufficient life coverage through term insurance.
This way, you can make informed decisions that align with your long-term financial objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Hello;

You should check with LIC branch office through which the policies were issued to you however it is unlikely that you can revive them now.

The policies might have lapsed and converted into paid-up policy.

You are entitled to receive maturity proceeds of such paid up policies after tenure.

Best wishes;