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If Your Policy Is Lost
Kindly make a thorough search before concluding that you have lost the policy bond. Look for the same within your residence, among your investment papers, at your office and even with your agent to whom you might have entrusted the document for some reason.
It could have been even pledged with LIC/any other financial institution for availing a loan by you. LIC retains the policy bond when you go in for a loan against the policy. Make sure that the document you are searching is not one that has already been assigned to LIC, or to another financial institution.

If the policy bond is partially destroyed due to natural causes like, fire, flood, etc, the remaining portion may be returned as evidence of loss of policy to LIC, while applying for a duplicate policy.

In case you are sure that the policy bond is untraceable due to unknown causes, there is a simple procedure to comply with while applying for the duplicate policy at the branch that services your policy (Click here [ http://www.licindia.in/policy_conditions.htm#8 ] to know about obtaining duplicate policies).

From : http://lic-premium.blogspot.com/

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If the policy lapsed -- meaning the insured stopped making premium payments before he died -- there's a chance you might get nothing. When a permanent life insurance policy lapses, most insurance companies switch its status from permanent insurance to one of two options:

* "Extended term": The insurance company uses the cash value of the policy to buy a term life insurance policy for the same death benefit using the cash value of the policy. The death benefit will continue for the longest period the cash value will purchase.

* "Reduced paid up": The insurance company will keep the policy in force permanently, but will reduce the death benefit.

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