When it comes to managing insurance premiums, the Life Insurance Corporation of India (LIC) offers various payment options to ensure convenience for policyholders. One such payment method is the National Automated Clearing House (NACH) mandate, which allows LIC to automatically deduct premiums from the policyholder’s bank account on the specified due date.
However, there are instances when NACH transactions may be dishonored. In such cases, LIC promptly notifies the policyholder through a letter, providing details about the dishonour and the reason behind it. One of the common reasons for dishonour is “Insufficient funds/Account Closed”.
When a NACH transaction is dishonored due to insufficient funds or a closed account, LIC imposes certain charges and requires the policyholder to take appropriate action. In addition to the outstanding premiums and any applicable late fees, a dishonour charge of Rs. 125/- is levied, along with the applicable Goods and Services Tax (GST).
If the dishonour occurs twice consecutively due to reasons like “Account Closed” or “No Such Account”, LIC will not attempt any further debits from the policyholder’s bank account. In such cases, it becomes necessary for the policyholder to submit a fresh NACH mandate to their LIC servicing branch to resume the automatic premium deduction process.
It is important for policyholders to understand the implications of NACH dishonour and take appropriate measures to rectify the situation. Here are a few key points to keep in mind:
1. Prompt Communication:
Upon receiving the dishonour letter from LIC, policyholders should take immediate action. It is advisable to contact LIC’s customer service helpline or visit the nearest LIC branch to seek guidance on the necessary steps to be taken.
2. Addressing Insufficient Funds:
If the dishonour is due to insufficient funds in the bank account, policyholders must ensure that there are sufficient funds available on the next debit date. This will help avoid any further dishonours and additional charges.
3. Resubmitting NACH Mandate:
In cases where the dishonour occurs twice due to account-related issues, policyholders must submit a fresh NACH mandate to their LIC servicing branch. This will enable LIC to resume the automatic premium deduction process.
4. Reviewing Bank Account Status:
Policyholders should regularly monitor their bank account to ensure it remains active and has sufficient funds. In case of any changes to the bank account, such as closure or transfer, it is crucial to update the information with LIC to avoid dishonours.
5. Timely Premium Payments:
Policyholders are reminded of the importance of timely premium payments. Dishonoured NACH transactions can lead to policy lapses and the loss of insurance coverage. It is advisable to maintain a sufficient balance in the bank account and ensure that premiums are paid before the due date.
By understanding the implications of NACH dishonour and taking proactive measures, policyholders can ensure a seamless premium payment experience with LIC. It is essential to stay informed, communicate promptly, and adhere to the necessary guidelines provided by LIC to avoid any disruptions in insurance coverage.
Disclaimer: The information provided in this article is for informational purposes only and should not be considered as financial or legal advice. Policyholders are advised to consult with LIC or a professional advisor for specific guidance related to their individual circumstances.