Page 85 - Life Insurance Today January-June 2020
P. 85

no such initiative came from your  Additionally Loyalty Addition will also  Vipin Anand, MD at LIC, speaking to
         side," the Unions said.            be considered in Special Surrender  media stated that RBI has given them

         According to them, LIC today is man-  Value calculation on surrender of policy  12 years to bring down its stake in IDBI
                                            during the policy term, provided the  Bank, but they have no intention of
         aging assets in excess of Rs 32 lakh
         crore.                             policy has completed five policy years  staying so long. "We are essentially
                                            and atleast 5 full years.          looking at midterm horizon, where we
         "Since this expansion has taken place                                 would be able to make some good
         through funds collected from the poli-  Eligibility: This plan is only available for  profit and then exit," said Anand.
                                            standard healthy lives without under-
         cyholders, LIC has functioned more like
                                            going any medical examination.     In the current fiscal, growth of first
         a mutual benefit society. This is an
                                                                               year premiums for the life insurance
         important fact that has been over-  Minimum Basic Sum Assured per life:
                                                                               industry has been down by 28% due to
         looked while deciding to sell a portion  Rs 75,000
                                                                               the novel coronavirus. The data from
         of the stake in LIC," they said.   Maximum Basic Sum Assured per life :  Insurance Regulatory and Develop-
                                            Rs. 300,000                        ment Authority of India (Irdai) shows
         Life Insurance Corporation
                                            The Basic Sum Assured shall be in mul-  that LIC saw first year premiums at Rs
         of India's Aadhaar Shila           tiples of Rs 5,000 from Basic Sum As-  13,793.18 crore in this fiscal as against

         Plan                               sured Rs 75,000 to Rs 1,50,000 and Rs  Rs 18,764.63 crore in previous year, a
                                            10,000 for Basic Sum Assured above Rs  fall of 26.5%. LIC believes that there
         LIC's Aadhaar Shila is a plan designed
                                            1,50,000                           is going to be paradigm shift in the In-
         exclusively for female lives, which of-                               dian insurance industry in the current
         fers a combination of protection and  Minimum Age at entry : 8 years (com-  year and move will be more towards
         savings. This plan provides financial  pleted)                        health products and term products.
         support for the family in case of unfor-  Maximum Age at entry : 55 years
         tunate death of the policyholder any  (nearest birthday)              "I don't expect any large-scale shift to
                                                                               term products, but what I do expect
         time before maturity and a lump sum
                                            Policy Term : 10 to 20 years       is that people will supplement their
         amount at the time of maturity for the                                traditional buying with additional term
         surviving policyholder. In addition, this  Premium Paying Term : Same as Policy  cover to have a higher level of cover.
         plan also takes care of liquidity needs  Term                         What I am suggesting is people could
         through its Auto Cover as well as loan  Maximum Age at Maturity : 70 years  be buying what there are buying ear-
         facility.                          (nearest birthday)                 lier, but they could also additionally
         Death benefit: On death of the policy  LIC says that the total Basic Sum As-  buy term policies to increase the risk
         holders, if death occurs during first five  sured under all policies issued to an  cover," added Anand.
         years then the Sum Assured on Death  individual under this plan shall not ex-  LIC, which is also one of the important
         shall be payable.                  ceed Rs 3 lakh.                    players in domestic equity markets, is
         On death after completion of five                                     currently looking to invest in blue-chips
         years of policy but before the date of LIC likely to bring down its   and large-caps. "We are traditionally
         maturity, Sum Assured on Death and  stake in IDBI Bank                contrarian investors, at the time when
         Loyalty Addition shall be payable.                                    valuation was available, we picked up
                                            LIC, which currently has 51% stake in  good stocks initially. Now the market
         Maturity Benefit: On maturity of the  IDBI Bank, could bring it down well  has been stabilising, we are more in
         policy, Sum Assured on Maturity along  ahead of the 12 year period stipulated  blue-chip and the large-caps. LIC has
         with Loyalty Addition shall be payable.  by the Reserve Bank of India (RBI).  invested Rs 61,000 crore in equity

         Loyalty Addition: If the policy has com-  Officials of the country's largest life  markets in last financial year and in the
         pleted five years and atleast 5 full  insurance company said that Depart-  current year they have invested more
         years' premium have been paid, the  ment of Investments and Public Asset  than Rs 13,000 crore in equity. While
         policy holder shall be eligible for Loy-  Management (DIPAM) is looking for  in G-Sec it is estimated they would be
         alty Addition at the time of exit,  consultants for its initial public offer-  buying Rs 35,000 crore in first quarter
         whether on Death or Maturity.      ing (IPO) of the state-owned insurer.  of this fiscal. R

         Life Insurance Today                      January - June 2020                                        85
   80   81   82   83   84   85   86   87   88   89   90