LIC sold 50,000 Jeevan Azad policies in 10-15 days: LIC Chairman MR Kumar

Life Insurance Corporation of India (LIC) has sold 50,000 Jeevan Azad policies in 10-15 days since its launch, said M R Kumar the state-owned insurer's chairman on Thursday during the virtual press meet. Jeevan Azad is a non-participating savings life insurance plan, which was launched by the insurer in January 2023.

In Jeevan Azad, the premium paying term is the policy term minus 8 years. For example, if an investor opts for an 18-year policy term, then the person will have to pay the premium for 10 years (18-8). On maturity, the policy pays out a guaranteed lump sum amount which is the basic sum assured opted at the time of taking the policy. The policy offers a minimum basic sum assured of Rs 2 lakh and the maximum basic sum assured of Rs 5 lakh. The policy can be taken for a term of 15 to 20 years.

How much return does it offer? For a 30-year-old person who pays Rs 12,083 for 10 years, the maturity value will be Rs 2 lakh (sum assured) at the end of 18 years. The net yield works out to 4-5 per cent for the plan.

Under the policy death benefit is the ‘Basic Sum Assured’ opted at the time of taking the policy or 7 times of annualized premium, provided it is not less than 105 per cent of total premiums paid upto the date of death.

LIC has been focussing on non-participating policies such as guaranteed plans because of the higher margins they offer to shareholders. “We continue to remain focussed on creating a portfolio mix to optimise value for all stakeholders, and in that context, increasing the proportion of Non-par business in a consistent and profitable manner,” said Kumar.

During the press meet it reported a steep rise in net profit at Rs 6,334 crore for the quarter ended December 31, 2022 as against Rs 235 crore in the year-ago period. The steep jump in profits is on account of a transfer of Rs 5,670 crore from its non-participating fund to the shareholders' fund. The company's net premium income also increased to Rs 1.1 lakh crore in Q3FY23 as compared with Rs 97,620 crore in Q3FY22, a jump of 15 per cent

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