So how the delayed payment interest is calculated?
LIC considers the delay of 1 month 14 days as one month. 1 month 15 days to 2 months 14 days as 2 months and like that. A delay of just 15 days will also be considered as a delay of one month. And the fine will be charged at the rate of 8%.
For example a person has to pay a premium of Rs. 2000/- bu he makes a delay of more than 2 months 14 days in paying the premium then the delay will be considered as a 3 months delay. The late fee rate for Rs. 1% premium for 3 months at the rate of 8% is 0.01999 Therefore the late fee he has to pay is 2000 x 0.01999 = Rs. 39.98/-. The total amount he has to pay is 2039.98.