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LIC kicks off scheme for confirmed agents

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BS Reporter Chennai
The Life Insurance Corporation of India (LIC) will launch an exclusive group insurance scheme for its confirmed agent base, effective September 1. This is the first time an insurance company is launching a scheme to provide insurance at lower premiums to its agents, under the label 'one-year renewable group term assurance'.
 
 
Confirmed agents are those who have completed a year of service at LIC. Rough estimates put the number of agents who fall under this slab at around 9 to 10 lakh. LIC has a total agent base of around 11 lakh countrywide.
 
 
"We are launching this scheme to provide additional benefit for our agents. There are many cases where agents who market insurance are not insured at all or are inadequately insured. Though this is not compulsory, we expect a good response from our agents, considering the low premium rates fixed for this scheme," LIC officials said. Premiums towards the scheme will be deducted from the agent's commission on an annual basis.
 
 
Premium rates and life cover of the scheme will vary with the number of years of service that an agent has put in. For those who have served for one to three years at LIC, the premium rate will be Rs 120 per annum and will be provided with a life cover of Rs 50,000. Agents who have been with LIC for three to five years will be required to pay Rs 240 per annum for life cover of Rs 1 lakh.
 
 
Agents who have served five to 10 years, are required to pay premiums of Rs 720 per annum for life cover of Rs 3 lakh. Agents falling in the last category should have served the organisation for over 10 years and will be entitled to insurance cover of Rs 5 lakh at premiums of Rs 1,200 per annum.
 
 
According to an LIC official, around 30 per cent of confirmed agents fall under the first category, while roughly about 25 per cent, 25 per cent and 20 per cent each of confirmed agents fall under the last three categories. For all categories, the policy term will extend till as such time the agent ceases to hold LIC's licence or up to 65 years of age.
 
 
Under the new scheme, premium rates have been devised based on the claims ratio experienced in various small group schemes that the LIC agents had voluntarily opted for in their respective branches. Officials said premium rates would be revised every year depending on the claims ratio experienced the previous year under the group insurance scheme.
 
 
A few LIC agents believe that most would take up the scheme as premiums are on the lower side and the offer is quite attractive. Agents who do not wish to invest in the scheme could avail of the 'negative option', but will not be allowed to join the scheme at a later date.

 

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First Published: Sep 02 2007 | 12:00 AM IST

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