Controversy Over LIC Policy Changes: Impact on Agents and Policyholders

Congress MP Manickam Tagore raises concerns about new LIC policy changes that could harm LIC agents' livelihoods and affect millions of policyholders by increasing premiums and reducing commissions. These amendments, effective October 1, 2024, are seen as conflicting with LIC's mission to insure people, especially in rural areas.

Recent changes in LIC policies have raised significant concerns among agents and policyholders, as Congress MP Manickam Tagore warns of potentially adverse impacts on livelihoods and accessibility to life insurance. The amendments, effective from October 1, 2024, have sparked fears around rising premium costs and diminishing agent commissions.

Tagore, representing Virudhunagar, has communicated these apprehensions to Finance Minister Nirmala Sitharaman. He emphasized that the new policies counteract LIC's mission to provide insurance to rural areas. The minimum sum assured has risen to Rs 2 lakh, and overall premiums have increased, making insurance less affordable for economically weaker groups.

The agents' commissions, unchanged since 1938 despite regulatory allowances for increases, are further reduced by new policies, impacting sales efforts. Additionally, issues such as reduced bonuses, lower entry ages for popular policies, and a new 'clawback commission' policy exacerbate the situation, prompting a call for governmental intervention.

(With inputs from agencies.)