LIC Monthly deduction plans -Terms & conditions
Life Insurance Corporation of India had taken various steps for the smooth working of Monthly Premium collection through Banks. Nach had been introduced and recently eNach had been introduced which is a great success.
Term and conditions for the smooth working of NACH – Monthly premium payment.
- NACH facility can be availed for a new policy as well as for existing policy for all modes (yearly, half-yearly, quarterly and monthly).
- For a new policy with monthly mode, initial two monthly premiums shall be paid, other than premiums, if any, required due to back-dating of policy.
- Extra 5% premium charged for monthly mode is waived under NACH (monthly) mode. If the mandate of the monthly mode policy is rejected by customer’s bank, the premium can be paid at the cash counter only once along with fresh mandate form. If fresh mandate too is rejected or is not submitted, mode shall be changed to other frequency or to monthly with 5% extra.
- At the time of opting for NACH for the existing policy, all the premiums due till 15 days from the current date in case of monthly mode and 30 days in case of other modes must have been paid.
- Arrears of premium cannot be collected through NACH.
- NACH facility can be opted only if bank from which premium is to be paid is on NACH board and bank account is CBS (core banking solutions) compatible.
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- Customer is not required to get the mandate attested or validated from his bank. Scanned copy of mandate will be sent to customer’s bank for validation. Bank may charge some amount for validation/registration. The applicable charges may be enquired from the bank.
- Policyholder is advised to keep a Xerox copy of the mandate form, get a letter of NACH registration from LIC branch and verify the correctness of details entered. If any discrepancy is found, it should be immediately informed to the branch.
- In case the mandate is rejected by the customer’s bank for anyone of the reasons enlisted in Annexure “A”, a fresh mandate should be submitted to LIC servicing branch.
- NACH deduction can commence only after the mandate is accepted by the customer’s Bank and acceptance is updated in LIC’s database. If any premium falls due in the meanwhile, the same shall be paid at the cash counter or through an alternate channel by the customer.
- Debit dates for deduction of the premium will be fixed on the basis of date of commencement of the policy, as follows:
- Payment of premium for NACH mode policies is restricted at cash counter as well as through alternate channels. It is allowed only till NACH is pending for acceptance from bank or NACH deduction dishonours or grace period is over without receiving a premium in NACH.
- If the NACH deduction is dishonoured, the premium is to be paid at any LIC branch’s cash counter in cash or by DD or through an alternate channel with dishonour charges (levied by LIC only when the reason of dishonour is “insufficient funds” or “account closed”) and late fee, if any. For dishonours, banks too may charge some amount as per their rules.
- While making the payment for dishonoured instalment premium, all the premiums due till the date of payment as well as within next 15 days shall be paid.
- LIC will not be responsible for any dishonour raised by the Bank. Any dispute regarding dishonour should be taken up with the bank.
- Fresh NACH mandate form is to be submitted to LIC in case of a change in policy conditions which leads to an increase in premium and in case of a change in Bank A/C.
- For NACH (monthly) mode no receipt or notices will be dispatched. Premium payment certificate can be obtained through LIC website www.licindia.in after enrolling the policy. For other modes receipts will be sent by ordinary post to the address mentioned in the branch policy master. If a receipt is not received due to any reason, the premium payment certificate can be obtained from any LIC Branch office or from LIC website.
- Sometimes due to some technical or other reason premium NACH processing may be delayed by a few days. Kindly ensure the availability of funds for at least 3 days after the debit date to avoid dishonours.
- If any “Ban Orders” are issued by RBI to the bank from where the premium is to be debited or the bank is not participating in NACH due to any reason, NACH demand will not be raised by LIC. Customer may have to change bank in such circumstances.
- If a policyholder desires to discontinue the NACH facility, the request should be given to the servicing branch at least 20 days in advance of the debit date for MLY mode policies and 30 days in advance for other modes.