Mumbai: Life Insurance Corporation of India has targeted new business premium from alternate channels to the tune of Rs1,000 crore by the end of the fiscal and has tied up with two banks, IndusInd Bank and Bank of Rajasthan, towards his end.

LIC's tie up with IndusInd Bank involves a group insurance scheme for the account holders of the bank, for both savings and current accounts. The scheme is open to all individual account holders aged between 18 and 54 years maintaining current and saving accounts with IndusInd Bank.

LIC also seeks to tap the NRI customer base of IndusInd Bank by offering a cover of Rs3 lakh. The premium for this product will range between Rs172 and Rs888 depending on the age of the customer.

In the current fiscal, LIC has garnered Rs55 crore from alternate channels.

In 2004-05, the PSU life insurer earned Rs200 crore from alternate channels. Of this, Rs140 crore came from its tie-ups with banks. However, bancassurance accounted only about 1.6 per cent of the total new business during this period.

LIC has so far insured 5.5 lakh lives through similar group insurance tie-ups with nine other banks. Of these, Andhra Bank has topped with a figure of four lakh.

The insurer has also developed a product especially for bancassurance, which is awaiting approval from IRDA. This will be modelled like an over-the-counter product and have features that will require less of explaining.

According to IndusInd Bank officials, the bank had set a target of covering five lakh lives in the first year. The bank was also finalising plans to bring out a GDR by December-end.

In yet another tie-up, the Bank of Rajasthan has moved from its earlier bancassurance partner, Birla SunLife to LIC. According to the bank, the size of LIC, its popularity in rural areas, as well as the wide range of products had prompted the move.