The state-owned Life Insurance Corporation of India (LIC) will draw curtains on 45 of its 52 policies from September 30, following IRDA’s (Insurance Regulatory and Development Authority) mandate that all policies with investment as core must be shut in a month’s time.
“From October 1, LIC’s portfolio will reduce from 52 products to 7. The company is planning to launch 4-5 new products in the near future. We will thus have portfolio of about 10 products from next month,” said Ajay Kumar, senior divisional manager, LIC. The term assurance, pension schemes and the unit-linked insurance plans (ULIP) are those that will continue.
The existing users can avail the to-be-discontinued services post September 30, which will continue for only renewal premiums, but these won’t be offered to fresh applicants.
According to IRDA’s mandate, two basic conditions need to be fulfilled in the new policies from next month. “One, a customer will need to pay service tax (3.09%) on every policy he avails of. Two, all products should focus on risk coverage, rather than investment, which is reason why we had to discontinue 45 policies,” said Kumar.
These new regulations do not bode well for the Amdavadi, for his three favourite policies are set to face the axe. “Bima Bachat, which accounts for 33% of total premium collected from city this year, will no longer exist,” said Kumar.
“Jeevan Saral, Jeevan Anand, Jeevan Tarang, Jeevan Shree and Bima Nivesh will also cease to exist, as will conventional policies of moneyback and endowment plans.
These will begin again, but in a new format set by IRDA,” he added.
LIC last year collected Rs523 crore in first premium from its Ahmedabad division. “We have set target of Rs600 crore this year. As on August 15, we have collected Rs215 crore,” said Kumar, exuding confidence that LIC will post 15% growth in Ahmedabad this year.
“We are optimistic about achieving the target, as the new policies focus more on risk coverage.”