Mumbai, April 14: The Life Insurance Corporation (LIC) is readying to offer credit cards — but they won’t be offered free of cost to its policyholders.

The state-owned insurer has formed a three-way joint venture with GE Money and Corporation Bank for its credit card venture.

LIC sources said the card, which can be used to pay policy premia, might carry a charge that will be linked to the premium.

The non-banking finance company (NBFC) has still to work out the fee structure and other features of the credit card. They said it could take another six to eight months before they would be ready to offer the credit cards.

“We are launching the credit card for the benefit of our policyholders. The card will enable an easier mode of premium payment. Since a considerable investment has been made in forming the NBFC, we may levy a nominal charge for the cards. The charge might be a fixed amount, based on the premium or other benefits. We are working on these details,” Hemant Bhargava, CEO of the LIC’s credit card venture, told The Telegraph.

The LIC will be the first insurance company in India to offer a premium payment facility through its own credit cards.

The insurer will hold a 40 per cent stake in the venture, which has been formed with an initial investment of Rs 150 crore. GE Money will have 30 per cent. Corporation Bank and two other subsidiaries of the LIC — LIC Housing Finance Company and LIC Mutual Fund — will hold 5 per cent each.

The management is yet to decide who will hold the remaining 15 per cent. Sources said the joint venture would be named LIC Card Services.

Bhargava said the credit card would only carry the LIC logo and would not be co-branded with GE Money and Corporation Bank.

LIC managing director D.K. Mehrotra said, “We have tied up with a number of online payment service providers and kiosks to enhance the reach and flexibility of the card.”

At present, the corporation has tieups with several banks in the country to allow LIC policyholders to pay their premia online.

The company said that since credit card payments were processed electronically, the initiative would not only save time for the insured but also bring down the LIC’s transaction costs. Hassle free premium-payment through credit cards would also bring down the chances of policy lapses.

“The LIC offers a grace period of 180 days for the policyholders to pay their premia. The credit card facility cannot be used to revive lapsed policies,” Bhargava added.