Page 15 - The Insurance Times July 2020

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
a mutual benefit society. This is an going any medical examination. In the current fiscal, growth of first
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 is
LIC's Aadhaar Shila is a plan designed going to be paradigm shift in the In-
1,50,000
exclusively for female lives, which of- dian insurance industry in the current
Minimum Age at entry : 8 years (com-
fers a combination of protection and year and move will be more towards
pleted)
savings. This plan provides financial health products and term products.
support for the family in case of unfor- Maximum Age at entry : 55 years
"I don't expect any large-scale shift to
tunate death of the policyholder any (nearest birthday)
term products, but what I do expect is
time before maturity and a lump sum Policy Term : 10 to 20 years that people will supplement their tra-
amount at the time of maturity for the
Premium Paying Term : Same as Policy ditional buying with additional term
surviving policyholder. In addition, this
Term cover to have a higher level of cover.
plan also takes care of liquidity needs 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 years currently looking to invest in blue-chips
of policy but before the date of matu- LIC likely to bring down its and large-caps. "We are traditionally
rity, Sum Assured on Death and Loyalty stake in IDBI Bank contrarian investors, at the time when
Addition shall be payable. valuation was available, we picked up
LIC, which currently has 51% stake in
Maturity Benefit: On maturity of the IDBI Bank, could bring it down well good stocks initially. Now the market
policy, Sum Assured on Maturity along ahead of the 12 year period stipulated has been stabilising, we are more in
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 offering buying Rs 35,000 crore in first quarter
whether on Death or Maturity. (IPO) of the state-owned insurer. of this fiscal. T

The Insurance Times, July 2020 15