Centre enhances LIC agents, employees’ gratuity limit to ₹5 lakh; ups term insurance cover, family pension rate

The finance ministry today approved a series of welfare measures for the benefit of Life Insurance Corporation of India (LIC) agents and employees. The first measure announced includes the enhancement of the gratuity limit from ₹3 lakh to ₹5 lakh for LIC agents, which the ministry says will bring “substantial improvements” to the working conditions and benefits of LIC agents.

The Centre has also enabled reappointed agents to be eligible for “renewal commission” in order to provide them with increased financial stability. Currently, LIC agents are not eligible for renewal commission on any business completed under the old agency.

The term insurance cover for the agents has also been expanded from the existing range of ₹3,000-₹10,000 to ₹25,000-₹1,50,000.

“This enhancement in term insurance will significantly benefit the families of deceased agents, offering them a more substantial welfare benefit. Family pension at a uniform rate of 30% for the welfare of the families of LIC employees,” the Ministry of Finance says. 

The welfare measures are related to the amendments to LIC (Agents) Regulations, 2017, the enhancement of gratuity limit, and uniform rate of family pension, among others. Over 13 lakh agents and over 1 lakh regular employees, who play a pivotal role in the growth of LIC and the deepening of insurance penetration in India will benefit from these welfare measures.

Notably, the government currently owns a 96.5% stake in LIC, while 3.5% shares are held by the public. 

LIC's net profit surged fourteen times to ₹9,544 crore for the quarter ended June compared with ₹683 crore in the year-ago period, aided by strong growth in net investment income. NII rose 29.8% year-on-year to ₹90,309 crore in Q1 2023-24 from ₹69,571 crore in the corresponding quarter last year.

For the quarter ended June 30, 2023, LIC registered total premium income of ₹98,363 crore as compared to ₹98,352 crore in the year-ago period. The assets under management (AUM) increased by ₹5.09 lakh crore to ₹46.11 lakh crore as of June 30, 2023, as compared to ₹41.02 lakh crore on June 30, 2022, registering an increase of 12.41%.

For the year ended March 31, 2023, LIC had registered an increase of 10.9% in the total premium income at ₹4,74,005 crore as compared to ₹4,27,419 crore for the previous year ended March 31, 2022. 

In terms of market share measured by first-year premium income (FYPI), LIC has maintained its leadership in the Indian life insurance business, with a market share of 62.58% for FY 2022-23. Its profit in FY23 was ₹36,397.40  crore as compared to ₹4,043.12 crore for the previous year ended March 31st, 2022. 

The LIC stock is trading down 0.13% at ₹665.9 on the BSE today.