Mode of Payment of Premium (Insurance Law)

What is Premium - 

 It is the sum Payable (usually annually)  by the insured to the insurer under a contract of insurance.

 Meaning and Definition of the Premium -

     According to the Macmillan dictionary, " regular payment made to an insurance company so that you are protected by the insurance."

      National Insurance Company Limited defines premium as, "premium is fixed amount of sum paid over the period by ensured to the insurer in order to secure an insurance policy and to complete the  contract of insurance

 Mode of Payment of Premium -

1. Payment at the branch office - 

       This is one of the most popular and easiest methods of payment of premium. In this method, the policyholder can directly pay LIC premium amount through cash or cheque

2. Payment through banks or agent -

     Another option payment of premium available which is payment through banks or agent,  for smooth functioning some insurance companies have tie-up with specific Bank where a policyholder can pay the premium.

3.  Payment through the website - 

          online payment is one of the best and easiest way to payment of insurance premium. In modern days payment as online through the insurance companies website is one of the popular method of premium payment. almost all Insurance companies have their own websites and offer their customers online payment premium service.  A policyholder can pay his premium amount easily by internet banking account or by credit card. 

4. Payment of insurance premium through the electronic clearing system - 

      It is an automated method, it is very easy to use and one of the most common and isolated for premium payment which debits premium from specified bank account of the insured to the insurer's specified account on the due date of the payment of premium.

5. Billdesk -

   Billdesk is an online method of insurance premium payment.  It is very easy and simple to use. For using this facility one has to register with bill desk and choose its biller insurance company.

6. Credit card standing instruction - 

                In modern days credit card/ debit card is another mode of insurance premium payment.  Enable the auto-debit of the premium from the credit card on the due date.

7. Easy bill outlet - 

          Using this system the insured can pay his insurance premium at any specific designated outlet for the premium collection called 'easy bill outlet'.

8.  Dropbox - 

         dropbox is the box specially designed by the insurance company for the convenience of its customers.  Dropbox is a system by which the customer can drop his cheque of amount of his insurance premium at any dropbox of his Insurance Company

See also...

Functions Of Insurance | Insurance Law

Primary Functions of Insurance | Insurance Law

Secondary Functions of Insurance | Insurance Law

Types and Evolution of insurance in India

Assignment of Marine Insurance Policy | Insurance Law

Duties and functions of insurance regulatory and Development Authority of India (IRDA)