These days ECS ( Electronic cheque clearing system) is becoming more and more popular in LIC OF INDIA. People are preferring paying the premium of their LIC POLICIES under monthly mode via ECS. There are many advantages as well as disadvantages of taking LIC POLICIES under ECS mode.
1. The LIC policy holder needs to pay only one month premium and next month onwards it keeps on deducting direct from their bank.
2. No need to stand in ques in LIC OFFICES to pay their premium as it keeps on deducting direct from bank.
3. LIC does not charge 5% extra for policies done under monthly mode (ECS) while it charges 5% extra in cases of without ECS monthly mode.
4. Easy small payment option and it is difficult to spare yearly payment.
PRECAUTIONS or DISADVANTAGES for policies under MONTHLY ECS mode:
1. Make sure that your bank account details are entered correctly in ECS form other wise ECS will not work properly and you have to pay next installment in cash at LIC OFFICE COUNTER and CDA ( Cheque dishonor charges) will be levied on you by LIC as well as by your bank. Double CDA charges
2. LIC takes payments from banks on 3 different dates in a month. For policy done from 1st to 7th ECS will hit on 7th and for policy done from 8th to 14th ECS will hit on 14th and for policy done from 15th to 30th ECS will hit on 28th date of that month. But still it is advisable to keep sufficient funds in your bank to avoid CDA charges.
3. Need to pay in cash at the counter whenever ECS will bounce along with the penalty.
4. The policyholder will not get any renewal receipt for subsequent months, entries only in bank statement or passbook will be the proof of premium paid in LIC.
5. For Tax certificate for the payment made in entire financial year, you need to depend on your LIC ADVISOR. There is no alternative to it.
Download ECS MANDATE FORM.