Understanding Bank Cheques Issued by Life Insurance Corporation (LIC)
Life Insurance Corporation (LIC) is one of the largest life insurance companies in India, and it often provides its policyholders with a variety of financial instruments and services. Among these, bank cheques are occasionally used for various transactions. However, with the advancement in digital payment systems, such as NEFT (National Electronic Fund Transfer), many transactions through bank cheques have become less common. This article aims to clarify which types of bank cheques are still issued by LIC, as well as the alternatives to these traditional methods of payment.
The Traditional Use of Bank Cheques by LIC
Historically, some policyholders of LIC utilized bank cheques as a primary mode for making payments or settling claims, especially prior to the widespread adoption of digital payment methods. Bank cheques were often issued to cover surrender values, maturity benefits, and claims based on individual policy agreements. While the use of these cheques was predominant in the past, the modern banking landscape has seen a significant shift towards digital and online transactions.
Modern Alternatives: NEFT and Online Payments
With the increasing need for speed, efficiency, and convenience, many policyholders now prefer the use of NEFT and online banking facilities for their financial transactions. NEFT allows for direct electronic transfer of funds from one bank account to another, making it a preferred method for payments related to insurance claims and policy surrenders. This system is quick, secure, and often preferred by individuals who prefer not to deal with physical cheques.
Overview of NEFT
NEFT is a nationwide fund transfer facility run by the Reserve Bank of India (RBI). It enables the transfer of funds from one bank account to another, irrespective of the banks involved, thus providing a robust solution for various financial transactions. Policyholders of LIC can secure their payouts, withdrawals, and claims through NEFT transfers directly to their bank accounts. This method is particularly beneficial as it minimizes the risk associated with physical cheques, such as loss or theft, and ensures quick fund availability.
How to Use NEFT for LIC Transactions
To ensure smooth and secure transactions using NEFT, policyholders should follow these steps:
Locate the NEFT online system provided by your preferred bank through their official website or mobile app.
Enter the NEFT reference number or the MID (Message Identification) which can be obtained from LIC.
Enter the beneficiary details, such as the bank account number and IFSC (Indian Financial System Code).
Confirm and submit the transaction, ensuring that the required details are correct.
Receive the payment confirmation within a few hours, as most NEFT transactions are processed quickly.
Conclusion
While traditional bank cheques issued by LIC still hold relevance in certain contexts, the shift towards digital and online payment systems has made NEFT and online transactions more prevalent and convenient. Policyholders should consider these modern alternatives to avoid the inconveniences associated with physical cheques. Nonetheless, understanding the scenarios where bank cheques are still issued can be useful for those who prefer or need to use this method.