Samridhi Plus Safeguards Policyholders Investment From Market Variations

Submitted by: Bima Deals

The Life Insurance Corporation of India (LIC) has sold about 54,000 policies and collected premium of over Rs 213 crores within just four days of the launch of its new plan LIC Samridhi Plus. VINAY KUMAR SINHA, LIC zonal manager (north), spoke to THE PIONEER about its new policies and business plans for this fiscal. Edited excerpts:

As a Zonal Head of the Northern Zone, what are your business plans for this monetary?

We are already in the last month of the current monetary. North Zone has already garnered in excess of 6,500 crores as First Premium Income and procured more than 40 lakh Policies. We hope to achieve the target assigned to us by the fiscal end. I m confident as all my 17 Divisions are geared up for the job at hand.

The activisation levels of our agency force are at their highest and the existing mix of products available is also conducive for achieving the budget on both the Premium & Number of policy counts.

I m happy to share that our Pension & Group Schemes Unit of North Zone has already surpassed its yearly budget by more than 100% by garnering over 8,990 crores premium and more than 21 lack lives.

What are the new methods that LIC has offered recently keeping in mind the changing needs of the people?


LIC has been very responsive as far as designing of new products is concerned. We were the first to come out with a ULIP product Pension Plus in the new ULIP rule. Recently two new products have been introduced Bima Account – I & II and LIC Samridhi Plus.

While Bima Account-I & II is a non-ulip guaranteed returns product suitable for investors looking for guaranteed return over 5 or 10 years. Samridhi Plus is a ULIP that guarantees the highest NAV over 100 months. Both products are extremely unique and very suitable to the current scenario. Though interest rates are at a reasonably good level at present, one can not be certain how long this will last. Both the above products are guaranteeing certain returns over a medium term. This feature is absolutely unmatched. LIC has already sold 1.08 lakh Bima Account-I & II policies with premium of approximately 80 crores.

The customers have also shown confidence in our latest unit linked product Samridhi Plus. LIC has sold about 54,000 policies and collected premium of over Rs 213 crores within just four days of its launch. Since, Samridhi Plus would be available for a limited period only, our efforts would be to mop-up a sizeable premium through this plan in the coming days.

How has the business moved after the new ULIP strategy came into force in September?

The new ULIP strategy have worked to the advantage of the customer which is how it should be. Charges on products have been reduced and the customers are the beneficiaries. This has made things very aggressive in the market.

All I can say is that with the experience of LIC’s Asset Management, our ULIP products are most competitive in the market and going by the sales, the customers too seem to have realized this. Endowment Plus a ULIP plan, launched on 20th September, 2010 has been appreciated by the customers. LIC has sold over 11 lac policies of this plan and collected a premium of more than Rs 5,600 crores.

Has there been more tilt towards ULIPs considering the lower returns provided by other instruments?

I would say that the demand for any product is determined by the need of the individual. There are people (especially youngsters) who prefer pure term assurance (only risk cover) products which are products that have no investment element. Then, there are others who prefer a combination of the two.

ULIPs are preferred by those who have a higher risk desire. Naturally, the returns on ULIPs are higher. When you talk about return in the context of Insurance Products, what is important is that extra element of risk cover that an insurance policy comes with. So returns from insurance products can never really be compared fairly with other instruments.

What kind of distribution channels do you wish to expand in the remaining part of 2010-11?

At present, more than 85% of our business comes from our agents channel. LIC has been very innovative as far as this channel is concerned e.g. there is a Chief Life Insurance Advisor scheme wherein an agent(doing a certain minimum required business) can become a CLIA and recruit other agents and mentor them. This way our reach increases various.

Also these CLIAs have the authority to assemble premium thereby reducing rush at our Branch Cash Counters. Such premium collection offices are called Premium Points. In our Zone we have more than 3000 Premium Points at present.

Then there are other channels like the Bank Assurance, Micro Insurance (micro policies to be distributed through NGOs etc.) and Direct Marketing. All these channels are doing well in our Zone and are totally focused on achieving their respective targets.

What steps you are taking to check the erosion rate of Agents?

At present our Zone is having more than 1.87 lakh agents. The high attrition rate of agents is a matter of concern to us. Besides extensive training the Corporate Office has introduced two schemes for their retention. The Swavalamban scheme of Government of India has been extended to our non-club Agents. Besides, we have introduced a group superannuation scheme Samvardhan for our agents having annual commission of Rs 1 lakh or more with a view to assist them in creating a sizeable corpus during their productive years which can be used to provide pension in old age. This should help in retaining and professionalizing our agency force.

Source: [The Pioneer]

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