LIC distributes bonus for Policy holders

Sep 15: The Life Insurance Corporation of India, LIC has declared to distribute bonus to its policy holders from Rs. 34 to 70 per thousand sum assured depending upon the policy terms and conditions from its surplus money worth Rs. 15127.21 crore that LIC has gained this fiscal year.

LIC has declared 22 percent net growth after paying all expenses and taxes for year 2006-2007. It has decided to distribute 95 percent of profit portion to its valued policy holders in terms of annual bonus according to their policy terms and rest 5 percent of profit will be gifted to Central Government.

LIC has declared to provide a higher bonus of Rs 70 per thousand sum assured as against Rs 66 given in the previous year to its whole life type plans. Jeevan Tarang and Jeevan Anurag plans get Rs 48 and Rs 44 per thousand sum assured while endowment type of plans would get a bonus ranging from Rs 48-34 depending on the term of the policy. On the other hand anticipated endowment and money back plans get Rs 44-32 and Jeevan Surabhi policy holders would get bonus at Rs 50 for a 25- year term policy and Rs 34 for a 15 year term policy.

LIC has earned 80 percent of the new premium from its Unit Linked Plans in the comparison of traditional plans. "Business composition is changing significantly from non-linked products to linked products", T S Vijayan, the Chairman of LIC in a press conference.

The first premium income has grown up 31 per cent to Rs 15,126 crore at the end of August 2007 in the total asset of Rs 1,17,000 crore in which 52,000 crore has been already invested, said Vijayan. Last year LIC had invested Rs 90,000 crore of investments by the year end.

LIC has gained a phenomenal growth of 118 per cent for the first premium income of Rs 39,541 crore that has ranked LIC no 1. It has issued 1.40 crore policies, 80 per cent higher than last year. LIC is now planning to launch two new health insurance schemes includes senior citizen’s health scheme. It is the first time that LIC will launch health insurance scheme.

The company is also planning to introduce several customer-friendly technologies from this forthcoming year in which paying premium through mobile phones would be interesting.

The next plan of LIC is to expand its wing to the overseas. The corporate is going to set up representative office first time in abroad. It will open its office in US, Australia and Singapore while LIC already has branch offices in Mauritius, Fiji and the United Kingdom and has joint ventures in Bahrain, Nepal, Sri Lanka and Saudi Arabia.

“The Insurance Regulatory and Development Authority has now given insurers permission to set up representative offices. So, with the requisite permission from the regulator and the government, we hope to set up representative offices in the US, Australia and Singapore, and target the non resident Indian population there,” said Mr Vijayan.

LIC is also planning to launch such products that have no chances to lapse as its lapse ratio is 3.5 per cent.