Late Fee Calculator for LIC Premium Payments

For many, maintaining their LIC policy is crucial for ensuring financial protection and meeting long-term goals. However, missing a premium payment deadline can lead to unnecessary penalties and additional fees. This late fee, along with the regular premium, becomes due once the grace period expires and the policy lapses. 

To revive a lapsed policy, you'll need to pay both the overdue premium and the accumulated late fees. To find out the total amount required for policy revival, you can use the LIC late fee calculator. 

This calculator can help you understand the financial impact of missed payments. It can accurately compute the late fees based on the policy's terms and the duration of the delay.

What are LIC Premium Payments?

LIC offers a variety of premium payment options to fit different financial schedules, including monthly, quarterly, half-yearly, and annual plans. Each of these plans comes with a specified due date for payments, along with a grace period — typically 15 to 30 days — during which you can make payments without incurring late fees.

Benefits of Using the LIC Late Fee Charges Calculator

• Accurate Calculation
• Saves Time 
• Prevents Overpayment 
• Easy Access 
• Financial Planning 
• Avoids Penalties 
• Supports Decision Making
• Clear Breakdown 

What is the Grace Period for LIC Plans?

The grace period is a window for you to make overdue premium payments (within a specific time) without incurring additional charges. 

Here's how it works —

• Standard Grace Period: LIC offers a grace period of 30 days from the due date of the first unpaid premium. You can settle the overdue amount in this period without facing any late fees or policy penalties.
• Monthly Premium Payments: For policies with monthly premium payments, the grace period is shorter, limited to 15 days.
• No Extra Fees Within Grace Period: If you make the payment within the grace period, you avoid any additional LIC late fee charges. 
• Late Fees After Grace Period: If the premium is not paid within the grace period, the policy will lapse. A late fee will be charged when you seek to revive it.
• Policy Revival: To revive a lapsed policy, you'll need to pay the missed premiums along with any applicable late fees. 

How to Use the LIC Premium Payment Late Fee Calculator?

To help you find out the late fees for missed premium payments, this LIC late fee calculator considers several key factors. 

Here’s the information that you may need to provide for the calculation —

• Date of the First Unpaid Premium: It’s the date of the premium that was missed. This is the starting point for calculating the LIC late fee charges.
• Date of Revival: The date when you plan to make the payment to revive your lapsed policy. This will help you calculate the number of days for which the payment is overdue.
• Note the Premium Amount: The exact amount of the premium you decided to pay when the policy started. This is the base amount on which the LIC penalty for late payment will be calculated.
• Mode of Premium Payment: Different payment modes (e.g., annual, semi-annual, quarterly, monthly) may have different late fee structures. Make sure you apply the correct fee rate based on your payment frequency.
• Total Premium Due: It includes both the overdue premium and any additional fees that remain unpaid at the time of revival. 
• Current Interest Rate: LIC uses a specific interest rate to calculate late fees. Make sure you apply the current interest rate applicable to your policy to determine the exact amount of the late fee.

Example: Suppose your LIC policy premium is Rs. 10,000, due on June 1st. You make the payment on June 16th. Based on the calculator, you might find that a late fee applies for this 1-day delay after the grace period of 15 days.

How Does the LIC Revival Period Affect Late Fee Calculation?

The LIC Premium payment late fee calculator helps you figure out how much late fee you'll need to pay based on how long your payment has been overdue.

It does this by dividing the delay into specific periods. 

Here’s a general overview of how it works —

The LIC late fee calculator follows this pattern for each additional month of delay. By breaking down the overdue period into these specific time brackets, the calculator makes it simple and clear to understand how late fees are calculated.

Example of LIC Premium Payment Late Fee Calculator

Let's walk through an example of calculating late fees for an LIC policy to help you understand the process clearly —

Here’s the breakdown:

• Date Premiums Stopped: 1st August 2023
• Date of Revival: 1st August 2024
• Payment Mode: Monthly
• Monthly Premium Amount: ₹20,000
• Lapse Period: 1 year
• Interest Rate: 8.5%

Calculation Details

1. Pending Instalments
   • Number of months pending: 13 (from August 2023 to August 2024)
   • Total premiums due: 13 × ₹20,000 = ₹2,60,000
2. Calculation of LIC Late Payment Charges
   • Interest on pending amount @8.5%: ₹2,60,000 × 8.5% = ₹22,100
3. Total Revival Amount
   • Total amount due + late fee: ₹2,60,000 + ₹22,100 = ₹2,82,100

Frequently Asked Questions