LIC issues advisory on third-party offers to buy policies

LIC issues advisory on third-party offers to buy policies | Insurance Business Asia

Life & Health

Customers urged to exercise caution before making decisions

Life & Health

By
Roxanne Libatique

The Life Insurance Corporation of India (LIC) has released an advisory in response to reports about businesses seeking to buy policies from current LIC policyholders.

The corporation urged policyholders to exercise caution before making decisions that could compromise their financial security and insurance coverage.

“Any sale/transfer or assignment of LIC policies need to be undertaken in accordance with Insurance Act, 1938, including Section 38 thereof. Under applicable laws, LIC may decline to act upon any sale/transfer or assignment of policies, where LIC has sufficient reason to believe that such sale/transfer or assignment is not bona fide or is not in the interest of the policyholder OR in public interest or is for the purpose of trading of insurance policy,” it said.

Notice to LIC of India Policyholders#LIC pic.twitter.com/DxZkRv4W1r

— LIC India Forever (@LICIndiaForever) June 24, 2024

The insurer also advised policyholders to consult with its officials before acting on any such offers.

“We urge all policyholders to exercise complete caution before making any decision on their policy which may jeopardise their financial security and the risk cover for their family. Before responding to any offers, kindly consult with any of our LIC officials in our branches,” it said.

Policy bond and its security: The policy bond is crucial for service interactions and claim settlements. It should be stored safely, and family members should know its location.
Policy number: This unique nine-digit number is essential for all correspondence with LIC.
Policy conditions: Policy schedules include critical information such as nominee details, address, policy start date, and premium due dates. Understanding these conditions and benefits is important.
Policy alterations: Requests for changes like premium payment mode should be made in writing to the servicing branch.
Lost policy: If a policy bond is lost, a thorough search should be conducted. If untraceable, a duplicate policy can be requested from LIC.
Contact address: Keeping LIC updated with current address details is vital for timely communication and benefit distribution.
Admission of age: The date of birth on the policy bond must be accurate as it affects premium calculations and future policies.
Nomination: Ensure the nominee’s details are correct. Nominations can be updated anytime during the policy’s term.
Policy assignment: Policies can be assigned to financial institutions for loans and should be reassigned once the loan is repaid.
Premium payments: Timely premium payments are crucial, even if notices are delayed. LIC offers multiple payment methods, including online options.
Policy status: Policy status, including force or lapse status, can be checked at the servicing branch or through LIC’s online services.
Reviving lapsed policies: Lapsed policies can be reinstated by paying accumulated premiums with interest and fulfilling health requirements.
Policy loans: Loans against many endowment policies are available, with various repayment options.
Surrender value: Policies can be surrendered after three full years of premiums, though this is generally not recommended due to low surrender values.
Maturity and claims: LIC sends advance notices for maturity and survival benefits. If not received, policyholders should inform LIC promptly.
Salary savings scheme: Policies under this scheme require premium deductions by the employer and have specific procedures for service and benefits.

LIC said that the information serves as a guideline and is not legally binding. Contractual obligations are subject to the terms of the policy document and applicable laws.

Policyholders are encouraged to carefully read LIC’s guidelines and keep important documents and information up-to-date to ensure smooth service and benefit claims.

“Our branches are our operating units. Hence, for any servicing matter, contact the servicing brand of your policy. However, for obtaining general information, you can contact any of the branches of LIC,” the insurer said.