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  • LIC Claim Settlement Through Neft

    Life Insurance
    • Premiums as low as Rs.17/day for sum assured of Rs.1 crore*
    • Claim up to Rs. 1,50,000 deduction under section 80C**
    • Choose between annual and monthly premium payment options

    India’s largest life insurer LIC offers many flexible plans that meet the requirements of its policyholders. The sum assured amount offered under a life insurance cover protects the family members of an individual from financial uncertainties following his/her unexpected death. When it comes to claim settlement, LIC leads the life insurance industry with a claim settlement ratio of 98.31% during the fiscal year 2016-17. The company ensures a hassle-free claim settlement process that provides instant relief to beneficiaries.

    Until 2011, LIC was offering claim settlement through other modes of payment including cheques. However, the present mode of claim settlement is only through electronic mode of payment credited directly in one’s bank account. Customers cannot opt for any other mode of receiving payment as per LIC’s current guidelines. The electronic payment is settled through the National Electronic Fund Transfer (NEFT) method that allows payment towards any bank account in India.

    National Electronic Fund Transfer

    The National Electronic Fund Transfer is a system that allows seamless transfer of funds from one account to another in any banks located across the country. In order to make the NEFT transfer, the participating banks must have enabled it in the accounts of their customers. As of now, more than 74,000 branches of various banks participate in the process. This system is being operated by the Reserve Bank of India (RBI).

    Advantages of NEFT

    In the past, customers had to visit their home branches and request for the payment cheque from the company. Once the settlement amount was paid through cheque, customers had to visit their banks and deposit it in their account to get the credit. This is a time=consuming process that need not be followed due to the advancement in fund transfer facilities. In addition to the time-saving benefit, NEFT offers the following advantages for customers:

    • There will be no extra charges for policyholders to get their settlement amount through NEFT.
    • Branches located in any part of the country can receive the money from LIC.
    • Customers can get SMS or email notifications whenever the settlement amount is deposited in their accounts.
    • If there are any issues in the transfer, customers can simply quote their Unique Transaction Reference number to the bank and get the issue resolved.

    NEFT Mandate Form

    In order to enable NEFT for settlement transfer, customers have to fill up the NEFT mandate form and submit it to the company. The NEFT mandate form can be downloaded from the LIC website. People who are enrolled under a pension scheme or a group policy have to submit a different NEFT mandate form in order to activate the system in their accounts. A simple search on google with the query ‘LIC NEFT mandate form’ can fetch you the form. You need to download this form, fill it up, and submit it to your home branch. The following details may be requested by the company in the NEFT form:

    • Policy number
    • Name and address
    • Bank name
    • Bank address
    • Account type (savings/current/NRI)
    • Bank account number
    • IFSC code
    • Phone number
    • Email ID

    How to activate this system

    Once you have downloaded your NEFT form and filled up the required details, you need to visit the home branch where you have purchased the policy and submit the form. The following additional documents must be submitted to the company while you submit your NEFT form:

    • A cancelled cheque leaf of your bank account
    • A copy of PAN card
    • Policy document (in case of a claim)
    • Medical/death certificate (in case of a claim)
    • A copy of the passbook with the account holder's name (if the cheque does not have the name of the policyholder)

    All these documents must be submitted along with the signed NEFT mandate form. The company will then process the request and activate your request. You will get an SMS confirmation in your registered mobile number after the activation of the request.

    Things to note

    While activating NEFT for your claims, you must consider the following factors:

    • NEFT is the only form of claim settlement mode currently offered by LIC.
    • Currently, there is no provision to enroll in this system online.
    • Currently, there is no provision offered by LIC to check the NEFT transfer status.
    • There will not be any update from LIC while the settlement amount is transferred.

    Conclusion

    LIC introduced the NEFT method for claim settlement in 2011 to simplify the payment system. Once it is activated, customers don’t have to worry about getting their claim amount from the company. If there is a delay in getting the settlement amount, customers can visit the home branch office and enquire about it. Since this process concerns fund transfer, customers must take care to fill in their account details. Any errors in the details provided will create problems in getting the settlement amount on time.

    *The customer reviews/feedback/opinions expressed on this website are solely of their authors and do not reflect, in any way, the view of BankBazaar Insurance.

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