If you are taking a LIC policy in monthly mode then you have to submit NACH form along with LIC proposal. NACH is a replacement of ECS (electric clearance service) form. As you must know ECS was giving authority to your bank for monthly deduction from your account, same thing NACH will do .
But one basic difference is that you have to pay two month’s premium to start the policy ,whereas, through ECS only one month premium was needed to log in your policy in LIC .
One benefit is there ,Now you don’t need to go to concern BANK to get stamp on this NACH ,like it was in practice in ECS form.
Difference between ECS and NACH
NACH
- Administered by NPCI
- Bank if LIVE on NPCI all its branches participate in NACH
- Creation of NACH master on the basis of creating branch
- Customer need not visit Bank-Branch for validation of mandate form
- Cheque leaf type mandate form
- NACH processing starts only when mandate is validated and accepted by destination bank
- Only CBS account number allowed ( 9 digit or more )
ECS
- Administered by RBI
- Participation of Bank branch if authorised by RBI
- Creation of ECS master on the basis of MICR
- Customer needs to visit Bank-Branch for validation of mandate form
- A4 type ECS mandate form
- ECS processing starts immediately on registration
- No restriction on account number
- Under ECS-Mly, one premium at NB stage
