The Telegraph
Since 1st March, 1999
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Insurance daddy set for plastic plunge

Calcutta, May 14: Life Insurance Corporation of India (LIC) is drawing up plans to launch a credit-cum-debit card in a move that heralds the company’s incursion into new areas and another initiative to offer its customers more.

The corporation is also working out policies for celebrities.

Sources said talks with Mastercard and Capital One of the US to provide credit card facilities to LIC customers are underway.

“We are currently negotiating the processing fee and interest rates,” a senior official said.

The corporation is already in talks with Citibank, Bank of Punjab and Corporation Bank to introduce a debit card.

A debit card allows the customer to spend only what is in his bank account whereas through credit card money is made available to the customer by a bank or other financial institutions like a loan.

Refusing to give a time-frame for the launch, the official said the talks were at an early stage and it was difficult to comment on the nitty-gritty.

LIC is negotiating with the companies to charge a maximum 12 per cent interest from card users as against 34 to 36 per cent charged by other companies in the business, the official added.

On whether companies would agree to the 12 per cent interest rate, the official said any credit card company joining hands with LIC would get a huge data base from the corporation, which in itself was a big benefit.

The card facility would be offered to a select group of policyholders and would make collection of premium much more easy, he said.

LIC cardholders would also be able to use ATMs of other banks without extra cost. Talks are in such a direction that a person’s deposit against a policy would be treated as a guarantee.

Meanwhile, LIC (eastern zone) plans to recruit 60,000 agents and issue licences to 100 corporate agents this fiscal to sell one crore policies and achieve Rs 3,777 crore as first premium income target.

“We want to make a paradigm shift in agency business and want an insurance agency to be treated with respect,” LIC zonal manager R. K. Misra said.

He said the corporation was working towards such a situation where at least 50 per cent of its 2.50-lakh agents would earn a monthly income of Rs 5000-6000.

LIC (eastern zone) sold 62.47 lakh policies for a sum assured of Rs 37,247 crore with the first premium-income of Rs 1,976 crore.

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