Substantial Increase in Gratuity Limits
India’s largest life insurance company, Life Insurance Corporation (LIC), has received a considerable boost from the government. A recent announcement stated that various financial benefits, including an increase in the gratuity limit, agent renewal commission, term insurance coverage, and a uniform family pension scheme, will now extend to both LIC employees and agents.
Aim to Improve Working Conditions
According to a statement from the Finance Ministry, the benefits are related to amendments in the LIC (Agent) Rules 2017 and aim to significantly improve the working conditions and benefits for agents. The ministry has approved an increase in the gratuity limit from INR 300,000 to INR 500,000, emphasizing that the move aims to create more robust work environments and provide adequate benefits to agents.
Renewal Commission to Bolster Financial Stability
Agents will now also be eligible under the renewal commission, which aims to improve their financial stability. Previously, LIC agents were not entitled to renewal commissions based on any work completed under an old agency.
Significant Hike in Term Insurance Coverage
The statement also announced that the existing limit on term insurance coverage for agents has been increased from INR 3,000-10,000 to INR 25,000-1,50,000. This increase will offer agents more significant safety nets, also benefiting the families of those who are no longer in this world.
Uniform Family Pension Scheme Approved
The ministry has approved a uniform family pension at a rate of 30% for the betterment of the families of LIC employees. With this step, over 1.3 million agents and more than 100,000 regular employees will benefit from these welfare measures.
Importance for LIC’s Growth and India’s Insurance Sector
The steps are seen as crucial in LIC’s growth and fortifying India’s insurance landscape. Founded in 1956 with an initial capital of INR 50 million, LIC had assets of INR 45.50 trillion and a life fund of INR 40.81 trillion as of March 31, 2023.
|Benefit Type||Previous Limit||New Limit||Applicability|
|Gratuity Limit||INR 300,000||INR 500,000||LIC Agents and Employees|
|Term Insurance Cover||INR 3,000-10,000||INR 25,000-1,50,000||LIC Agents|
|Family Pension Rate||N/A||30%||LIC Employees|
|Renewal Commission||Not Applicable||Now Applicable||LIC Agents|