Don’t wait for the agent to pay your insurance premium

Mumbai: Gone are the days when you had to wait for your insurance agent to collect cash or cheques in favour of your insurance company. Tired of matching the agent’s time with their own, some people investing on a monthly basis were forced to hand over the agent the premiums for a few months at one go.

Needless to say, such investors lost the opportunity to gain appreciation on the advance premium they paid. They could have earned a minimum of 3.5 per cent interest on an annual basis even if the money was left in their savings bank accounts.



Today, most insurance companies have introduced facilities to help investors pay insurance premium as per their convenience and by themselves well after the business hours. Besides saving on transportation costs, electronic payments make sure that the premium is paid the same day and not with the time lag associated with cheque payments.

One could choose from among facilities like electronic clearing service (ECS), auto debit, Netbanking, credit cards, ATM centres and e-pay sites like Bill Desk and Bill Junction. Here are some points to keep in mind:

The customer needs to give a mandate to the insurance company in case of an ECS and to the bank for an auto debit from his/her account.

One could pay through ATMs of banks that an insurance firm has a tie-up with. For instance, SBI Life has one with parent State Bank of India.

Some insurance firms offer the facility of paying through Netbanking. LIC, though, currently offers the facility only for non-ULIP products. However, you would be disappointed if you are looking to pay LIC premium through credit cards.

Other firms have also started offering payment facilities on cell phones. ING Vysya Life, for one, has launched a facility wherein one can pay premium via short message service. With mobile penetration deeper than that of internet, such facilities could be of help to more customers. Currently, however, only account holders of Corporation Bank and Citibank can pay their premium for ING Vysya Life through this route.

Yet other insurance firms have installed electronic data capture machines at their branch locations.

All the same, like in the case of other services provided by banks and insurance companies, these new premium-paying facilities can be availed only after registering. In most cases, the registration has to be done only once. Also, facilities such as ECS and payment through pay sites are available only in select cities, while auto debit is available on select banks.

Source: DNA Money