LIC cautions policyholders against offers to purchase existing insurance policies

In a press release, LIC clarified its stance on the matter of insurance policies stating it is not associated with any entities or services where businesses are buying policies from the holders instead of selling them back to LIC. The corporation disclaimed any responsibility for statements made by former employees regarding such transactions, asserting that any sale, transfer, or assignment of LIC policies must comply with the Insurance Act, 1938, specifically Section 38.

Notice to LIC of India Policyholders#LIC pic.twitter.com/DxZkRv4W1r

— LIC India Forever (@LICIndiaForever) June 24, 2024

Under the provisions of the Insurance Act, LIC retains the right to reject any policy sale, transfer, or assignment if it suspects the transaction lacks authenticity, is not in the policyholder's best interest, or contravenes public interest, or if it involves the trading of insurance policies.

LIC urged policyholders to approach its officials before considering any offers related to their policies. This precaution is crucial to safeguarding policyholders' financial stability and ensuring the continuity of risk coverage for their families. 

As per the LIC website, here are some essential guidelines to follow if you hold a LIC policy:

•  Safeguard your policy bond, as it will be necessary for maturity or Survival Benefits, obtaining loans, or assigning your policy.
• Inform your spouse, parents, or children about the whereabouts of the policy document.
•  Update LIC with your new address whenever you relocate.
•  Ensure the correct inclusion of nominees' names in the policy bond.
•  Timely payment of premiums is crucial; the policy bond specifies the due months.
•  Verify your date of birth on the policy document for accuracy.
•  Obtain a written acknowledgment when handing over the policy bond to any individual or LIC office.
•  For money-back policies, LIC sends notifications three months before the due date of Survival Benefits or maturity benefits. If you do not receive such notifications within one month of the due date, inform LIC promptly.
• Contact your agent or the branch from where you purchased the policy if you have any doubts or queries. 
• These guidelines are designed to ensure policyholders manage their LIC policies effectively, safeguarding their financial interests and ensuring seamless communication with LIC.