LIC switches to SMS alerts for policy premium and maturity reminders
Crores of customers of Life Insurance Corporation of India should now start checking their mobiles more frequently.
In a surprise move, LIC switched over to sending alerts on mobiles from paper-based communication.
“Starting from March 1, LIC will send all maturity and premium due reminders through SMS only,’’ the corporation said in a notification.
Every year, LIC adds more than two crore policies under new business premium and for 2018-19, it has a target of 2.50 crore policies in new business segment involving a total premium of ₹43,000 crore.
Implications & issues
While the decision to send alerts only through SMS is seemingly innocuous, it has greater ramifications.
Firstly, it is based on the assumption that all of its policyholders do have mobiles and could understand the text messages that may not be true entirely.
“I don’t think this is a good idea as there are older people as well as illiterates who many not be able to comprehend text messages fully. My mother gets worried whenever there is a text from her bank to her mobile and calls me,’’ A Sarangapani, a customer, told Business Line at LIC’s Basheer Bagh branch here.
According to Koutike Vittal, a top LIC agent, shifting to electronic or digital has to be gradual and it should have been an addition to existing paper.
“But many policy holders will generally forget to pay attention in time. Whereas if the remainder is in physical form, they keep it in an eye-catching place in homes or give to family members to remind,’’ he said, adding that text messages will have no such advantages.
When asked, a city branch manager who did not want to be identified defended the move by saying agents will regularly alert policyholders in addition to texts but also agreed that some agents do not regularly service policyholders after expiry of five years or so.
The financial transactions of LIC in the form of maturity payments are huge.