 |
Insurance
29-Dec-23
|
|
|
|
|
|
|
|
|
|
|
|
LIC pays 27.61% as commission from first year premium to agents
|
|
|
|
|
|
|
According to the Insurance Regulatory and Development Authority of India (IRDAI) in its annual report has said that the public sector life insurance company LIC pays agents a commission of 27.61% on the first year's premium.
To understand this, if you pay Rs 100 as first premium while buying the policy, the agent will get Rs 27 as commission from your first year premium.
Note that this is the average commission paid to insurance agents. Therefore, some policies can have higher commissions while others may have lower commissions. Generally, term insurance policies have lower commissions compared to endowment policies.
However, unit-linked insurance plans (ULIPs) typically have very low commissions compared to other types of life insurance policies. This also indicates that the commission paid on non-linked endowment and term plans is much higher than the average rate of 27%.
IRDAI data also highlights that there has been a substantial increase in the premium collected from non-linked policies (such as endowment plans, term plans etc.) as compared to unit-linked policies.
Although the IRDAI report reveals that LIC pays 27% commission, the growth in total commission paid by LIC is lower than that paid by private sector life insurance companies.
Private-sector life insurance companies paid more money as commissions as compared to public-sector life insurance companies.
The ratio of first-year commission to premium received in private sector companies grew from 10.94% in 2021-22 to 15.78% in FY 2022-23 - an increase of almost 5%. However, there was a very low growth in the public sector company's first-year commission increased from 26.55% to 27.61% - a rise of approximately 1% only.
It is important to note that there has been a growth in the total premium received by life insurance companies by 12.98%. This has also led to a slight increase in total commission expenses to 5.41% in FY 2022-23 from 5.18% in FY 2021-22.
Despite an increase in commission paid by the private sector, the first-year premium collection has also dipped. For private-sector companies, the first-year premium collection decreased from Rs 73,943.39 crores in FY 2021-22 to Rs 70,834.75 crores in FY 2022-23. However, for public sector companies, the first-year premium collection increased from Rs 36,649.35 crores in FY 2021-22 to Rs 39,089.94 crores.
|
|
|
|
Previous News |
Stock alert: LIC, NTPC, Divis Labs, United Spirits, Indian Oil Corp
(
Market Commentary
-
Stock Alert
27-May-24
08:38
)
|
|
|
Indices rally for 3rd day; auto shares jump
(
Market Commentary
-
Quick Review
14-Jun-24
15:46
)
|
|
|
Life Insurance Corporation of India consolidated net profit declines 49.35% in the September 2023 quarter
(
Results
-
Announcements
11-Nov-23
07:50
)
|
|
|
Life Insurance Corporation of India standalone net profit declines 50.32% in the September 2023 quarter
(
Results
-
Announcements
11-Nov-23
07:47
)
|
|
|
LIC pares stake in BHEL
(
Hot Pursuit
-
29-Dec-23
15:10
)
|
|
|
LIC pays 27.61% as commission from first year premium to agents
(
Insurance
-
29-Dec-23
11:18
)
|
|
|
LIC dilutes stake in Hindustan Copper
(
Hot Pursuit
-
20-Jul-23
13:01
)
|
|
|
LIC reduces stake in Orissa Minerals Development Company
(
Corporate News
-
13-Jul-23
16:21
)
|
|
|
LIC reduces stake in Tata Motors
(
Hot Pursuit
-
19-Dec-23
12:48
)
|
|
|
LIC's net income jumps manifold to Rs 8,334 crore in December quarter
(
Insurance
-
09-Feb-23
19:37
)
|
|
|
LIC buys additional shares of Voltas through open market for Rs 635 crore
(
Insurance
-
07-Nov-22
20:16
)
|
|
|
|
|
|
Other Stories |
|
|
|
|
|
|
|
|
|
|
|
|
|