FAQS
Life insurance in India made its debut well over 100 years ago.
Life insurance in India made its debut well over 100 years ago.
In our country, which is one of the most populated in the world, the prominence of insurance is not as widely understood, as it ought to be. What follows is an attempt to acquaint readers with some of the concepts of life insurance, with special reference to LIC.
In our country, which is one of the most populated in the world, the prominence of insurance is not as widely understood, as it ought to be. What follows is an attempt to acquaint readers with some of the concepts of life insurance, with special reference to LIC.
It should, however, be clearly understood that the following content is by no means an exhaustive description of the terms and conditions of an LIC policy or its benefits or privileges.
It should, however, be clearly understood that the following content is by no means an exhaustive description of the terms and conditions of an LIC policy or its benefits or privileges.
For more details: Please feel free to Contact LIC DIRECT:9008010161
For more details: Please feel free to Contact LIC DIRECT:9008010161
What Is Life Insurance?
What Is Life Insurance?
Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against.
Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against.
The contract is valid for payment of the insured amount during:
The contract is valid for payment of the insured amount during:
» The date of maturity, or
» The date of maturity, or
» Specified dates at periodic intervals, or
» Specified dates at periodic intervals, or
» Unfortunate death, if it occurs earlier.
» Unfortunate death, if it occurs earlier.
Among other things, the contract also provides for the payment of premium periodically to the Corporation by the policyholder. Life insurance is universally acknowledged to be an institution, which eliminates 'risk', substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of death of the breadwinner.
Among other things, the contract also provides for the payment of premium periodically to the Corporation by the policyholder. Life insurance is universally acknowledged to be an institution, which eliminates 'risk', substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of death of the breadwinner.
By and large, life insurance is civilization's partial solution to the problems caused by death. Life insurance, in short, is concerned with two hazards that stand across the life-path of every person:
By and large, life insurance is civilization's partial solution to the problems caused by death. Life insurance, in short, is concerned with two hazards that stand across the life-path of every person:
1.That of dying prematurely leaving a dependent family to fend for itself.
1.That of dying prematurely leaving a dependent family to fend for itself.
2.That of living till old age without visible means of support.
2.That of living till old age without visible means of support.
Life Insurance Vs. Other Savings
Life Insurance Vs. Other Savings
Contract Of Insurance:
Contract Of Insurance:
A contract of insurance is a contract of utmost good faith technically known as uberrima fides. The doctrine of disclosing all material facts is embodied in this important principle, which applies to all forms of insurance.
A contract of insurance is a contract of utmost good faith technically known as uberrima fides. The doctrine of disclosing all material facts is embodied in this important principle, which applies to all forms of insurance.
At the time of taking a policy, policyholder should ensure that all questions in the proposal form are correctly answered. Any misrepresentation, non-disclosure or fraud in any document leading to the acceptance of the risk would render the insurance contract null and void.
At the time of taking a policy, policyholder should ensure that all questions in the proposal form are correctly answered. Any misrepresentation, non-disclosure or fraud in any document leading to the acceptance of the risk would render the insurance contract null and void.
Protection:
Protection:
Savings through life insurance guarantee full protection against risk of death of the saver. Also, in case of demise, life insurance assures payment of the entire amount assured (with bonuses wherever applicable) whereas in other savings schemes, only the amount saved (with interest) is payable.
Savings through life insurance guarantee full protection against risk of death of the saver. Also, in case of demise, life insurance assures payment of the entire amount assured (with bonuses wherever applicable) whereas in other savings schemes, only the amount saved (with interest) is payable.
Aid To Thrift:
Aid To Thrift:
Life insurance encourages 'thrift'. It allows long-term savings since payments can be made effortlessly because of the 'easy instalment' facility built into the scheme. (Premium payment for insurance is either monthly, quarterly, half yearly or yearly).
Life insurance encourages 'thrift'. It allows long-term savings since payments can be made effortlessly because of the 'easy instalment' facility built into the scheme. (Premium payment for insurance is either monthly, quarterly, half yearly or yearly).
For example: The Salary Saving Scheme popularly known as SSS, provides a convenient method of paying premium each month by deduction from one's salary.
For example: The Salary Saving Scheme popularly known as SSS, provides a convenient method of paying premium each month by deduction from one's salary.
In this case the employer directly pays the deducted premium to LIC. The Salary Saving Scheme is ideal for any institution or establishment subject to specified terms and conditions.
In this case the employer directly pays the deducted premium to LIC. The Salary Saving Scheme is ideal for any institution or establishment subject to specified terms and conditions.
Liquidity:
Liquidity:
In case of insurance, it is easy to acquire loans on the sole security of any policy that has acquired loan value. Besides, a life insurance policy is also generally accepted as security, even for a commercial loan.
In case of insurance, it is easy to acquire loans on the sole security of any policy that has acquired loan value. Besides, a life insurance policy is also generally accepted as security, even for a commercial loan.
Tax Relief:
Tax Relief:
Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax. This is available for amounts paid by way of premium for life insurance subject to income tax rates in force.
Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax. This is available for amounts paid by way of premium for life insurance subject to income tax rates in force.
Assessees can also avail of provisions in the law for tax relief. In such cases the assured in effect pays a lower premium for insurance than otherwise.
Assessees can also avail of provisions in the law for tax relief. In such cases the assured in effect pays a lower premium for insurance than otherwise.
Money When You Need It:
Money When You Need It:
A policy that has a suitable insurance plan or a combination of different plans can be effectively used to meet certain monetary needs that may arise from time-to-time.
A policy that has a suitable insurance plan or a combination of different plans can be effectively used to meet certain monetary needs that may arise from time-to-time.
Children's education, start-in-life or marriage provision or even periodical needs for cash over a stretch of time can be less stressful with the help of these policies.
Children's education, start-in-life or marriage provision or even periodical needs for cash over a stretch of time can be less stressful with the help of these policies.
Alternatively, policy money can be made available at the time of one's retirement from service and used for any specific purpose, such as, purchase of a house or for other investments. Also, loans are granted to policyholders for house building or for purchase of flats (subject to certain conditions).
Alternatively, policy money can be made available at the time of one's retirement from service and used for any specific purpose, such as, purchase of a house or for other investments. Also, loans are granted to policyholders for house building or for purchase of flats (subject to certain conditions).
Who Can Buy A Policy?
Who Can Buy A Policy?
Any person who has attained majority and is eligible to enter into a valid contract can insure himself/herself and those in whom he/she has insurable interest.
Any person who has attained majority and is eligible to enter into a valid contract can insure himself/herself and those in whom he/she has insurable interest.
Policies can also be taken, subject to certain conditions, on the life of one's spouse or children. While underwriting proposals, certain factors such as the policyholder’s state of health, the proponent's income and other relevant factors are considered by the Corporation.
Policies can also be taken, subject to certain conditions, on the life of one's spouse or children. While underwriting proposals, certain factors such as the policyholder’s state of health, the proponent's income and other relevant factors are considered by the Corporation.
Insurance For Women
Insurance For Women
Prior to nationalisation (1956), many private insurance companies would offer insurance to female lives with some extra premium or on restrictive conditions. However, after nationalisation of life insurance, the terms under which life insurance is granted to female lives have been reviewed from time-to-time.
Prior to nationalisation (1956), many private insurance companies would offer insurance to female lives with some extra premium or on restrictive conditions. However, after nationalisation of life insurance, the terms under which life insurance is granted to female lives have been reviewed from time-to-time.
At present, women who work and earn an income are treated at par with men. In other cases, a restrictive clause is imposed, only if the age of the female is up to 30 years and if she does not have an income attracting Income Tax.
At present, women who work and earn an income are treated at par with men. In other cases, a restrictive clause is imposed, only if the age of the female is up to 30 years and if she does not have an income attracting Income Tax.
Medical And Non-Medical Schemes
Medical And Non-Medical Schemes
Life insurance is normally offered after a medical examination of the life to be assured. However, to facilitate greater spread of insurance and also to avoid inconvenience, LIC has been extending insurance cover without any medical examination, subject to certain conditions.
Life insurance is normally offered after a medical examination of the life to be assured. However, to facilitate greater spread of insurance and also to avoid inconvenience, LIC has been extending insurance cover without any medical examination, subject to certain conditions.
With Profit And Without Profit Plans
With Profit And Without Profit Plans
An insurance policy can be 'with' or 'without' profit. In the former, bonuses disclosed, if any, after periodical valuations are allotted to the policy and are payable along with the contracted amount.
An insurance policy can be 'with' or 'without' profit. In the former, bonuses disclosed, if any, after periodical valuations are allotted to the policy and are payable along with the contracted amount.
In 'without' profit plan the contracted amount is paid without any addition. The premium rate charged for a 'with' profit policy is therefore higher than for a 'without' profit policy.
In 'without' profit plan the contracted amount is paid without any addition. The premium rate charged for a 'with' profit policy is therefore higher than for a 'without' profit policy.
Keyman Insurance
Keyman Insurance
Keyman insurance is taken by a business firm on the life of key employee(s) to protect the firm against financial losses, which may occur due to the premature demise of the Keyman.
Keyman insurance is taken by a business firm on the life of key employee(s) to protect the firm against financial losses, which may occur due to the premature demise of the Keyman.
FAQs:
FAQs:
Frequently Asked Questions:
Frequently Asked Questions:
FAQs About Premium Collections Received Through Net-Banking.
FAQs About Premium Collections Received Through Net-Banking.
What are the benefits of paying your LIC premiums through net-banking/phone-banking?
What are the benefits of paying your LIC premiums through net-banking/phone-banking?
Which policies are eligible for payment of premiums through this facility?
Which policies are eligible for payment of premiums through this facility?
What are the charges to be paid for availing this facility?
What are the charges to be paid for availing this facility?
Which organisations are authorised to collect LIC premiums through their net-banking/phone-banking facility?
Which organisations are authorised to collect LIC premiums through their net-banking/phone-banking facility?
Who can register with the authorised banks?
Who can register with the authorised banks?
Who can register with the authorised service providers?
Who can register with the authorised service providers?
In which cities do the authorised service providers operate from?
In which cities do the authorised service providers operate from?
How to add the policy details at the authorised bank/service provider’s web-site?
How to add the policy details at the authorised bank/service provider’s web-site?
How does LIC acknowledge the registered policy details?
How does LIC acknowledge the registered policy details?
When can I pay the insurance premiums?
When can I pay the insurance premiums?
How to pay the insurance premiums through the banks/service providers?
How to pay the insurance premiums through the banks/service providers?
What are the important points to be noted for availing this payment facility?
What are the important points to be noted for availing this payment facility?
FAQs About Premium Collections Received Through Net-Banking.
FAQs About Premium Collections Received Through Net-Banking.
What are the benefits of paying your LIC premiums through net-banking/phone-banking?
What are the benefits of paying your LIC premiums through net-banking/phone-banking?
You as our policyholder:-
You as our policyholder:-
Can decide and authorize payments 24hrs a day * 7days a week because of anywhere & anytime access to internet.
Can decide and authorize payments 24hrs a day * 7days a week because of anywhere & anytime access to internet.
Can issue payment instruction within the comforts of your home or office, and avoid personal visit to LIC branch.
Can issue payment instruction within the comforts of your home or office, and avoid personal visit to LIC branch.
Will save time by not waiting in queues for making the payment.
Will save time by not waiting in queues for making the payment.
Can avail the free service from LIC, as you don’t have to pay any charges to LIC or its authorized agencies for this additional benefit.
Can avail the free service from LIC, as you don’t have to pay any charges to LIC or its authorized agencies for this additional benefit.
Can choose the bank account you want to pay from, any or all of your bank accounts can be registered with the service provider.
Can choose the bank account you want to pay from, any or all of your bank accounts can be registered with the service provider.
Can decide in advance the date on which you want your account to be debited.
Can decide in advance the date on which you want your account to be debited.
Can choose to modify your instructions during the intervening time.
Can choose to modify your instructions during the intervening time.
Will get reminders and alerts by email from the banks and service providers about the premium dues.
Will get reminders and alerts by email from the banks and service providers about the premium dues.
Can avoid expenses of postage/courier in sending the remittance to LIC.
Can avoid expenses of postage/courier in sending the remittance to LIC.
Can avoid demand draft/pay order charges for outstation policy premiums.
Can avoid demand draft/pay order charges for outstation policy premiums.
Can also view your premium dues and other policy details.
Can also view your premium dues and other policy details.
Which policies are eligible for payment of premiums through this facility?
Which policies are eligible for payment of premiums through this facility?
Policies which are being serviced in networked branches, or those policies which can be accessed through our MAN (Metro Area Network) or WAN (Wide Area Network).
Policies which are being serviced in networked branches, or those policies which can be accessed through our MAN (Metro Area Network) or WAN (Wide Area Network).
Policies which are of ordinary mode of payment ie. Yearly (Yly), Half-yearly (Yly) or Quarterly (Qly).
Policies which are of ordinary mode of payment ie. Yearly (Yly), Half-yearly (Yly) or Quarterly (Qly).
Policies with mode of payments such as single premium, ordinary monthly (Mly) and Salary savings scheme (SSS) are not available for this facility.
Policies with mode of payments such as single premium, ordinary monthly (Mly) and Salary savings scheme (SSS) are not available for this facility.
Policies should reflect in-force policy status. Lapsed policies or policies due for revival are not valid.
Policies should reflect in-force policy status. Lapsed policies or policies due for revival are not valid.
What are the charges to be paid for availing this facility?
What are the charges to be paid for availing this facility?
This facility is absolutely free for the policyholders of LIC.
This facility is absolutely free for the policyholders of LIC.
LIC has agreements with the authorized banks/service providers wherein LIC will pay a mutually agreed charge per transaction on monthly basis. Customer will not be charged for availing this payment facility
LIC has agreements with the authorized banks/service providers wherein LIC will pay a mutually agreed charge per transaction on monthly basis. Customer will not be charged for availing this payment facility
Which organisations are authorised to collect LIC premiums through their net-banking/phone-banking facility?
Which organisations are authorised to collect LIC premiums through their net-banking/phone-banking facility?
Authorised Banks:
Authorised Banks:
HDFC Bank, ICICI Bank, Bank of Punjab, UTI Bank, Federal Bank, Corporation Bank, and Citibank.
HDFC Bank, ICICI Bank, Bank of Punjab, UTI Bank, Federal Bank, Corporation Bank, and Citibank.
Authorised Service Providers (available only in select cities):
Authorised Service Providers (available only in select cities):
BillJunction.com, Timesofmoney.com, and BillDesk.com.
BillJunction.com, Timesofmoney.com, and BillDesk.com.
Who can register with the authorised banks?
Who can register with the authorised banks?
You as our policyholder having a bank account with any of the above-mentioned authorized banks in any of its branches in India.
You as our policyholder having a bank account with any of the above-mentioned authorized banks in any of its branches in India.
You should have opted for the net-banking facility with the respective bank. Details of the same can be obtained from the respective bank through its web-site. Downloadable forms are also available for new customers.
You should have opted for the net-banking facility with the respective bank. Details of the same can be obtained from the respective bank through its web-site. Downloadable forms are also available for new customers.
You should be able to access the net-banking account with the login & password provided by the bank.
You should be able to access the net-banking account with the login & password provided by the bank.
For more details about net-banking, you may log on to the respective bank’s website.
For more details about net-banking, you may log on to the respective bank’s website.
Who can register with the authorised service providers?
Who can register with the authorised service providers?
You as our policyholder having a bank account in any bank in the select cities where the above-mentioned service providers have their operations.
You as our policyholder having a bank account in any bank in the select cities where the above-mentioned service providers have their operations.
On being approached, the service provider obtains a written mandate from you, authorising him to realise the billed amount directly from your bank account. You may have to give the bank account details and other requisite details as required by the service provider.
On being approached, the service provider obtains a written mandate from you, authorising him to realise the billed amount directly from your bank account. You may have to give the bank account details and other requisite details as required by the service provider.
In which cities do the authorised service providers operate from?
In which cities do the authorised service providers operate from?
BillJunction[dot]com has its operations in Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad & Pune.
BillJunction[dot]com has its operations in Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad & Pune.
TimesofMoney[dot]com has its operations in Mumbai, Delhi, & Bangalore.
TimesofMoney[dot]com has its operations in Mumbai, Delhi, & Bangalore.
BillDesk[dot]com has its operations in Mumbai, Delhi, Kolkata, Chennai, Bangalore, Ahmedabad, Pune, Baroda & Surat. They also have tie-ups with their partner banks viz. Bank of Baroda, IDBI Bank, ABN-AMRO Bank.
BillDesk[dot]com has its operations in Mumbai, Delhi, Kolkata, Chennai, Bangalore, Ahmedabad, Pune, Baroda & Surat. They also have tie-ups with their partner banks viz. Bank of Baroda, IDBI Bank, ABN-AMRO Bank.
How to add the policy details at the authorised bank/service provider’s web-site?
How to add the policy details at the authorised bank/service provider’s web-site?
Using the login & password provided by the bank/service provider, you can log on to your account page at the bank/service provider’s website.
Using the login & password provided by the bank/service provider, you can log on to your account page at the bank/service provider’s website.
You have to add LIC as biller with the policy details and other requisite information. In general, you would have to enter the policy number, the instalment premium, email-id and any other information. This is a one-time process for each policy.
You have to add LIC as biller with the policy details and other requisite information. In general, you would have to enter the policy number, the instalment premium, email-id and any other information. This is a one-time process for each policy.
Some of the service providers/banks’ web-sites have a demo page showing the process of adding the billers.
Some of the service providers/banks’ web-sites have a demo page showing the process of adding the billers.
How does LIC acknowledge the registered policy details?
How does LIC acknowledge the registered policy details?
The bank/service provider sends these details to LIC for validation & confirmation of the registration data at pre-determined intervals.
The bank/service provider sends these details to LIC for validation & confirmation of the registration data at pre-determined intervals.
LIC validates the registration data and informs the bank/service provider about the registration status. Since LIC’s database is de-centralized, generally it takes a week’s time for confirmation of registration data.
LIC validates the registration data and informs the bank/service provider about the registration status. Since LIC’s database is de-centralized, generally it takes a week’s time for confirmation of registration data.
A consolidated database of registered policies is maintained by LIC. This database is updated at regular intervals on the basis of changes received from the original servicing branches.
A consolidated database of registered policies is maintained by LIC. This database is updated at regular intervals on the basis of changes received from the original servicing branches.
LIC also sends auto-mailers to the registered policyholders informing the registration status.
LIC also sends auto-mailers to the registered policyholders informing the registration status.
When can I pay the insurance premiums?
When can I pay the insurance premiums?
On confirmation of the registration, LIC will regularly send the bills/invoices mentioning the due dates, premium amount, late fees, validity date, etc to the service provider/bank.
On confirmation of the registration, LIC will regularly send the bills/invoices mentioning the due dates, premium amount, late fees, validity date, etc to the service provider/bank.
As and when premium becomes payable under the registered policy, LIC sends the bills to the bank/service provider, and the information will be displayed by the bank/service provider in your net-banking account page.
As and when premium becomes payable under the registered policy, LIC sends the bills to the bank/service provider, and the information will be displayed by the bank/service provider in your net-banking account page.
How to pay the insurance premiums through the banks/service providers?
How to pay the insurance premiums through the banks/service providers?
You have to log on to the bank/service provider’s website.
You have to log on to the bank/service provider’s website.
On the web page, you have to signify the date on which you want your account to be debited and click the consent for the payment. You may even specify a particular account in case of multiple bank accounts.
On the web page, you have to signify the date on which you want your account to be debited and click the consent for the payment. You may even specify a particular account in case of multiple bank accounts.
The authorized Bank will debit your bank account, consolidate the payments and send the consolidated amount to LIC in form of bankers’ cheque / payorder.
The authorized Bank will debit your bank account, consolidate the payments and send the consolidated amount to LIC in form of bankers’ cheque / payorder.
The authorized service provider will send the instructions to the bank branch (as mentioned in your mandate form) through the RBI’s Electronic Clearance System and the bank will debit your account and credit the same to the service provider’s bank account, who’ll then remit the amount to LIC.
The authorized service provider will send the instructions to the bank branch (as mentioned in your mandate form) through the RBI’s Electronic Clearance System and the bank will debit your account and credit the same to the service provider’s bank account, who’ll then remit the amount to LIC.
Some service providers have autopay facility (where you can issue standing instructions to the service provider to debit your account as when the bill becomes payable), or phone-banking facility (where the you can issue telephonic payment instructions)
Some service providers have autopay facility (where you can issue standing instructions to the service provider to debit your account as when the bill becomes payable), or phone-banking facility (where the you can issue telephonic payment instructions)
How will the payment get accounted under the policy?
How will the payment get accounted under the policy?
All consolidated payments from the Banks/Service providers are received at LIC, Branch 883 (under Mumbai Divisional Office – I), Yogakshema (West Wing), Ground Floor, Nariman Point, Mumbai-400 021.
All consolidated payments from the Banks/Service providers are received at LIC, Branch 883 (under Mumbai Divisional Office – I), Yogakshema (West Wing), Ground Floor, Nariman Point, Mumbai-400 021.
Through batch processing in Internet module, premium transactions & renewal premium receipts are generated for each policy number.
Through batch processing in Internet module, premium transactions & renewal premium receipts are generated for each policy number.
Renewal premium receipts for the same are printed and dispatched by ordinary post.
Renewal premium receipts for the same are printed and dispatched by ordinary post.
Premium transactions pertaining to branches other than Branch 883 are sent to the respective servicing branch through the present network programs.
Premium transactions pertaining to branches other than Branch 883 are sent to the respective servicing branch through the present network programs.
All unadjusted premium collections are refunded to the Service provider/bank. Emails will be sent to the registered policyholders’ email-ids informing the status of the registrations/payments.
All unadjusted premium collections are refunded to the Service provider/bank. Emails will be sent to the registered policyholders’ email-ids informing the status of the registrations/payments.
What are the important points to be noted for availing this payment facility?
What are the important points to be noted for availing this payment facility?
Once registered for Premiums payments through Net-Banking/Phone-Banking, you should avoid paying at cash counters, because there are many instances where payment for the same due-month is received twice.
Once registered for Premiums payments through Net-Banking/Phone-Banking, you should avoid paying at cash counters, because there are many instances where payment for the same due-month is received twice.
Since renewal premium receipts are dispatched to the postal address as per your policy records, please ensure that your policy records are updated with your current address.
Since renewal premium receipts are dispatched to the postal address as per your policy records, please ensure that your policy records are updated with your current address.
In case you have not received the renewal premium receipt, you may collect the premium paid certificate from the servicing branch of your policy. Duplicate receipts cannot be printed in any case.
In case you have not received the renewal premium receipt, you may collect the premium paid certificate from the servicing branch of your policy. Duplicate receipts cannot be printed in any case.
Since we have de-centralized database structure, the collections are not adjusted online, the transaction has to reach the destination servicing branch of your policy for updation of the policy status. Hence there is short time-lag between the date of debit in your bank account and the date when the policy reflects the updated status.
Since we have de-centralized database structure, the collections are not adjusted online, the transaction has to reach the destination servicing branch of your policy for updation of the policy status. Hence there is short time-lag between the date of debit in your bank account and the date when the policy reflects the updated status.