[Resolved]  Lic Of India — LIC policy premium payment using credit cards.

Address:Mumbai City, Maharashtra

I have following policies of LIC of India in my name

:

[protected]: Rs. 29630 : Annual premium

[protected]: Rs. 14462 : Annual premium

[protected]: Rs. 15311 : Annual premium



Following policy in my wife’s (Swati S. Chitnis) name:



[protected] : Jeevan Saral : Rs. 108090 : Annual premium



When I went to LIC branches for payment of annual premium through credit card, I was told that LIC branches do not have swiping machines for credit card payment. When I visited LIC of India website, I came to know about purposefully created tedious procedure of registering myself for credit card payment (EBPP payment) which takes a time of around 1 to 2 months. Since my premium was due & policy would have lapsed if I had decided to register for purposefully created long & tedious route of credit card payment, I had to make cheque payment as the grace period for annual premium payment is only 1 month & there was no guarantee that this credit card registration process would be completed in 1 month’s time.

I decided to register for it so that at least next year I would be able to pay the premium on credit card. However to my surprise I came to know that there are only 6 banks with whose credit cards I can make LIC premium payment. These banks include HDFC, ICICI, Axis, Citibank, Federal & corporation bank. In other words, it meant that if I have any other bank’s credit card other than these 6 banks, I would not be able to make LIC premium payment using that particular bank’s card. Since I had Kotak Mahindra bank’s credit which does not include in the list of 6 banks mentioned above, I contacted Kotak Mahindra bank to find out if there is any way to pay LIC policy premium using Kotak credit card. I was told that all the banks have tie-up with visabillpay website for payment o[censored]tility bills & insurance premium payments & check the list of billers available amongst the list of insurance companies. I was told that if the list of billers contains name of LIC of India in insurance companies’ list, then you would be able to pay premium of LIC policies using Kotak credit card. I was advised to visit the Billpay section on the Kotak credit card’s website which re-directed me to www.visabillpay.in Unfortunately as expected the list of insurance companies did have all the insurance companies on the list except LIC of India.

The list has following insurance companies:

ICICI Prudential Life Insurance Company Limited
Kotak Mahindra Old Mutual Life Insurance Limited
Aviva Life Insurance Company India Private Limited
Birla Sun Life Insurance Company Limited
SBI Life Insurance Company Limited
Max New York Life Company Limited
Tata AIG Life Insurance Company Limited
Bharti AXA Life Insurance Company Limited
MetLife India Insurance Company Limited
Reliance Life Insurance Company Ltd





From the above list, it was clear that I would not be able to pay LIC policy premium using Kotak credit card. When I contacted Kotak bank’s credit card division regarding my inability to pay LIC policy premium using Kotak credit card, I was told that the bank does not prevent you from making any spends / purchases or investments anywhere. You can use your credit card where ever you want to. We do not put any restrictions on its use anywhere provided you have adequate credit limit & your previous dues are clear & you are paying your credit card bills on time. It’s the merchant establishment / POS / Biller who puts the restrictions. Why would we not allow you to do any financial transaction on the credit card? What is our benefit in preventing you from doing it? We would be at a loss if we don’t allow you to do it. If LIC is not allowing you to pay policy premium on Kotak Card, we do not have any say. If LIC of India does not have any credit card swiping machines in their branches or their website does not have any credit card payment gateway, it is the LIC who is at fault & Kotak bank can not be blamed for it. In that case you will need to ask the clarification from LIC of India as to why Kotak credit card cannot be used to pay premium.

This makes it clear that the bank does not have any objection on my LIC premium payment using its credit card. It is the LIC of India who wants me to use particular banks’ credit card for the reason best known to its officials.



I would now like to tell you why I prefer Kotak credit card to pay LIC policy premium over any other bank’s credit card:



1. 3 months Interest free zero processing fees EMI:

Kotak credit card offers 3 month’s zero interest & zero processing free EMI for any spends above Rs 5000. This is over and above the normal 48-50 days credit free period offered on credit card. So I get a total period of almost 4 months to repay my LIC premium amount to Kotak bank without paying a penny extra. So when I am paying you a premium of Rs 108090 on Kotak bank’s credit card, after the credit free period of 50 days is over, I would be paying Rs 36030 per month to the bank for three months. It reduces financial burden on me drastically as I get time to repay my premium to the bank in installments without paying a Rupee extra.

2. Auto encashment of reward points:

I earn 1 reward point per Rs 100 which is equivalent to 1 Re. So for a investment of Rs 108090, I earn 1080 reward points which are equal to Rs. 1080. Unlike other banks like ICICI & Citibank where you cannot redeem these reward points for cash & you have to purchase something to utilize these reward points, Kotak bank gives a facility of Auto encashment of these reward points. So Rs.1080 would get automatically credited to my Kotak credit card without even giving any request to them (which can be utilized for even petrol purchase) when I pay LIC policy premium on Kotak credit card.



But this was not possible due to LIC corporate office policies & the hidden interests behind this decision.



I was, therefore, forced to procure a credit card from the list of these 6 banks. I decided to get Citibank’s credit card & procured Citibank platinum credit Card No. [protected] & went through the purposefully created long & tedious procedure of registering these policies on my credit card. I then started paying my premiums on my Citibank credit card.



But the issue remains: I do not want to pay my LIC policy premium through Citibank credit card. I want to pay it thru Kotak credit card.

This is the first time where I am encountering such a problem where I am being forced to use a particular bank’s credit card. It is up to me what credit card I want to use & LIC can not force me to utilize a particular bank/s credit card. It’s a question of personal choice. I do not need to give any explanation as to why I prefer any particular bank’s credit card to pay LIC premium. LIC should not be concerned about the bank whose credit card I am using as long as LIC is getting its full premium amount on time as finally its VISA / MASTERCARD or AMERICAN EXPRESS are the companies who are going to pay the premium to LIC & not the bank whose credit card I hold. It can be clearly understood that LIC management is trying to save that 2% commission which needs to be paid to credit card companies. But this could have been very well understood if LIC would not have allowed credit card premium at all. But the whole issue is credit card payment of premium is allowed thru the 6 bank’s credit cards. So, LIC has to anyways pay commission for effecting the transaction on credit card to the bank, so how does it matter to LIC whether I use Citibank, ICICI, HDFC or Kotak credit card? So instead of paying commission to Citibank, ICICI, HDFC; LIC of India will have to pay commission to Kotak bank credit card. In my case, premium payment is anyways being done through Citibank credit card. So LIC is paying commission to Citibank. So if I want to use Kotak credit card, instead of paying commission to Citibank, LIC will have to pay commission to Kotak bank. What is the problem?

I have registered myself & all my policies on LIC of India website with User Id: samchitnis. However after logging in, when one enters the “Pay premium online” section: it provides facility of paying premium by way of netbanking through bank accounts. It does not allow me to pay premium on my credit card. I would like to know the reason. You can have direct gateway of any bank for completing credit card payment for a particular policy premium payment.

All other insurance companies except LIC of India have got facility of online premium payment using credit cards (of any bank’s) on their websites by way of credit card payment gateway. Why can t LIC of India have this facility?

In short LIC of India has practically, consciously & purposefully blocked most of the ways to pay policy premiums using credit cards. One has to make planned, extra & tedious efforts to pay LIC premium using credit cards of only 6 banks which are specified above. LIC does not want people to use credit cards to make policy premium payments. Its top management has tried hard to devise policies that would prevent people from using credit cards for policy premium payment. Other insurance companies who are offering this facility are fools.



Conclusion :



1.You can not swipe credit card in LIC branches

2.You can not make online credit card premium payment on LIC of India ‘s website.

3. You can not make online credit card premium payment using bank’s website as it re-directs you to www.visabillpay.in website which has all insurance companies on its list except LIC of India.

4.You can not make online credit card premium payment on www.visabillpay.in with whom all banks have tied up for payment of insurance premiums of all insurance companies except LIC of India.

5. You can not register for EBPP credit card payment of policy premium if you have credit card of any other bank (apart from the 6 banks mentioned above)



I would like to know :



1. why LIC has made it so difficult to pay policy premiums using credit cards ?

2. why is it not possible to pay LIC policy premium using credit card of bank other than HDFC, ICICI, Axis, Citibank, Federal & corporation bank ?

3. if other insurance companies allow policy premium payment using any bank’s credit card very easily why LIC of India should be a exception ?

4. why LIC of India has made “ payment of policy premium through credit card” such a long, tedious & difficult procedure (registration of LIC policy for credit card payment takes avg 2 months time) when it can be done online at a click of button ?

5. whether IRDA rules are different for other insurance companies & LIC of India ?



LIC of India must allow :



1. policy premium payment through any bank’s credit card & not force the customers to pay it through only the 6 banks mentioned above.

2. online payment of policy premium using any bank’s credit card on www.licindia.in



I would take up this issue to IRDA if I do not get satisfactory reply to this mail.





Thank you



Dr. Sameer Chitnis

[protected]

[protected].
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Aug 13, 2020
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