LIC update: With the introduction of its most recent policy, Jeevan Azad, Life Insurance Corporation of India (LIC) has made tremendous advancements in the non-participating insurance sector. The state-owned insurer sold 50,000 plans in the first 10 to 15 days after going live in January 2023, according to LIC Chairman M R Kumar.
Jeevan Azad is a savings-based life insurance policy that provides policyholders with a guaranteed lump sum payment upon maturity. The policy’s premium payment period is equal to the policy term minus 8 years, therefore someone choosing an 18-year insurance will only be required to make premium payments for 10 years. The policy has durations ranging from 15 to 20 years, a minimum sum assured of Rs 2 lakh, and a maximum sum assured of Rs 5 lakh.
The maturity value of the policy for a 30-year-old paying Rs 12,083 for 10 years will be Rs 2 lakh after 18 years, providing a net interest of 4-5 percent. The death benefit will be the basic sum assured or seven times the annualised premium, provided that it does not fall below 105 percent of all premiums paid, in the event that the policyholder dies.
LIC places a lot of emphasis on non-participating plans, including Jeevan Azad, since they can provide their investors better margins. The company is still committed to increase the amount of non-participating business in a steady and profitable way while maintaining a portfolio mix that maximises value for all stakeholders.
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For the quarter ending December 31, 2022, LIC recorded a significant increase in net profit, hitting Rs 6,334 crore as opposed to Rs 235 crore the previous year. The majority of this increase can be attributed to a transfer of Rs 5,670 crore from its non-participating fund to the shareholder’s fund. In fact, the company’s net premium income increased by 15 per cent, rising to Rs. 1.1 lakh crore in Q3FY23 from Rs. 97,620 crore in Q3FY22.
