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Must Know: 9 Life Insurance Premium Payment Options

22 June 2022, 6:04 PM

Always busy? Not being able to find time to queue up for paying the life insurance premium before the fast-approaching due date? Here is the checklist for the top 9 life insurance premium payment options. These are easy and can be accessed from anywhere and anytime as per the convenience of the user. Moreover, amidst the new normal lifestyle of social distancing, these methods are safe too.

Top 9 Life Insurance Premium Payment Options

1. E-wallet or Mobile Wallet 

In today’s world, mobile wallets are one of the most convenient payment options. Once the user registers his/her name with any specific e-wallet like Airtel money or M-Pesa, paying premium is just one phone call or a single SMS away.

2. IVR or Interactive Voice Response

The user can arrange with the insurer with the IVR payment method while buying the insurance, maintaining the security and privacy of the debit card or credit card. Once the premium payment becomes successful, it is advisable to save the unique transaction identity code. This needs to be done with your telephone banking PIN or an OTP validation for security protocol.

3. Automated Teller Machines or ATMs

This is one of the handiest and easy ways to punctually submit the insurance premium. For the better convenience of policy buyers, several insurance companies are establishing tie-ups with banks. This helps in improved and enhanced facilities. The premium payment can be done with the ATMs of the particular bank the insurance company has tie-up with. 
How is It Done through ATMs?
The policyholder is required to register with that particular bank with the necessary policy details and personal details along with the card number. While logging in, the ATM screen will showcase the necessary details and options for proceeding with the premium payment. This system also encourages payment for multiple premium policies during a single operation.

4. Franchisee

If any user is uncomfortable with online transactions, then there are several franchises like APOnline, Suvidhaa and MP Online. These franchises accept only cash transactions and issue a receipt once the transaction is complete. 
You need to check which franchise is used by your insurance company and then pay accordingly.

5. Payment through Agents

The policyholder also possesses the authority to make premium payment through trustworthy and authorized insurance agents. It depends on the policyholder if the payment should be done in cash or cheque. Every authorized collection agent is supposed to issue a valid receipt, bearing proper seal/stamp and his/her signature.
Every agent authorized to accept payments on behalf of the insurance company can set up his own “Premium Point” as well. This is an SOP (Standard operating Procedure) for LIC of India and also applies to some other insurance companies as well.
However, agents can surely collect cheques and submit the same on your behalf, irrespective of whether they are a premium point or not. 

6. Online Payment through the Insurer’s Website/Mobile Application

The easiest, fastest and the most convenient method for paying insurance premium is to go to the insurer’s official website and select the online premium payment option. Using either debit card, credit card, mobile banking or internet banking, the premium can be paid securely without any hassle.

7. Auto-debit through Credit Card

For better convenience and avoiding missing out the due date of premium payment, the policyholder can opt for the auto-debit transaction. This means that the insurance holder must have a standing instruction with the bank to automatically debit a particular account with the necessary premium amount every year on a particular date. 
How to Set up Auto-debit?
The user needs to register with the bank for this particular service by fulfiling the required paperwork and maintain a liaison with the insurer regarding the instruction ith the bank.

8. ECS or Electronic Clearing System from the Bank Account

This is an automated facility is also like the credit card standing instruction method. Here also the insurance premium amount is automatically debited on or before the premium due date directly from a particular bank account. 
How to Set up ECS?
To access this facility, the user must fulfil the necessary mandate and paperwork by filling the ECS or the NACH( National Automated Clearing House)form attached with a cancelled cheque. This entire procedure needs to be completed at least one month before the due date of premium payment for seamless operation. 

9. PDCs or Post Dated Cheques

This method allows the policyholder to submit at least 6 post-dated cheques in favour of the insurer or the insurance company. Post-dated cheques signify cheques dated on a later date. The insurer will subsequently deposit these cheques for clearance as per the dates mentioned respectively.  

From the above discussion, it is clear that paying the insurance premium on or before the due date is no more a matter of tension or concern. Following certain simple steps, this is just a fingertip away. Once paid, the policyholder can relax up until the next due date. But, one thing must be ensured that all these methods apply to the insurance policies that are live and in force. These are inapplicable for the insurance policies that have lapsed. So what’s the holdup for? Just go ahead and try out any one of the above-discussed methods and relax comfortably by clearing all your insurance premium dues on time.

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