LIC Nomura MF launches 'Auto Premium Payment System'

According to the company this will ensure timely payment of premium with minimum chances of lapse of LIC policies

LIC Nomura Mutual Fund today launched a new system to facilitate timely payment of premiums by customers of Life Insurance Corporation (LIC).

The MF player has launched 'Auto Premium Payment System' in collaboration with the state-run insurance major.

Under the system, a policy-holder has to invest in any of the three schemes of LIC Nomura, namely Liquid Fund, Savings Fund and Income Plus Fund, from which premium on due date will be paid to the insurance company.

"Once the investor issues mandate and ensures sufficient funds in his cash schemes with LIC Nomura Mutual Fund, premium payments will be remitted to LIC out of these funds," Chief Executive Officer of LIC Nomura Mutual Fund Nilesh Sathe told reporters here.

This will ensure timely payment of premium with minimum chances of lapse of LIC policies, the company said.

"The initiative will ensure that LIC policy doesn't lapse due to non-payment of premium on time," LIC Executive Director (Customer Relationship Management) K Ganesh said.

The payment mode, which will kick in after customers of LIC discontinue advance payment facility, would be helpful in reducing the percentage of lapses (currently at 1 per cent) due to non-payment, he said.

The LIC Nomura CEO said they have already received around 2,000 customer mandates and aim to take these to one lakh in one year.

Ganesh, however, maintained that despite launching this new system, all older forms of premium payment would continue to remain in force.

Replying to a query, the Executive Director said LIC settled around 1.83 crore claims last fiscal and the company has one of the highest claim settlement ratios in the industry, which has nearly two dozen players.

The insurance giant till now had settled around Rs 3 crore towards claims arising out of the natural disaster that struck Uttarakhand in mid-June, he said.