Now we’ve all had an instance when some random guy might approach us to sell us some kind of insurance, well these people are the agents employed by LIC. So what exactly is a lic agent? LIC agents is a authorized sales marketing agent appointed by LIC of India for their plans and policies. LIC agents earn commissions on their sales. There are multiple other benefits also given to a LIC agent.
A lic agent is someone employed by LIC to sell their policies to the general populous, meaning they are paid for every policy you buy from them, well the payment they get is in form a commission which they get after every premium paid by the respective buyer of the policy and the percentage of the commission might vary with the type of policy sold.
Here is a list of commissions received by an lic agent as on March, 2020 based on the plan sold and different types of commission agent can get..
LIC Agent Commission Chart 2020
The new revised commission chart for 2020 is out. LIC of India revises it commission chart for agents every year. There are just a few minor changes this time in 2020 from the commissions of 2019. Download the commission chart 2020 here.
Types of commission
|First commission||Depends on the term and type of policy|
|First year policy||Commission Payable on first year premium|
|Bonus Commission||Subject to condition|
|Renewal Commission||Depending on term of policy and the type of policy|
So as you can see the agent starts getting his or her commission as soon as you the buyer starts paying the premium.
Whenever a policy is sold by LIC of India. LIC commissions are paid. These commission values are expenses that LIC pays to their network of agents and agencies to get policies sold. The LIC commissions can vary from 2% to almost 35% depending upon the policy and tenure. LIC agents commission in 2020 are out and you can see the percentages of commission against each policy (with table number) in above section.
LIC Agent Commission Details
LIC agents get many benefits and the details of these commission are not just limited to cash but it also includes insurance, expenses, office maintenance, stationery purchase etc. There are many ways a LIC agent is paid commission is just one part of a agent’s total earnings. A agent gets many other benefits besides commission but yes all the benefits are basis the commission he / she earns. LIC policy commission attracts many other benefits for agents.
A agents gets the following commissions
- First premium commission
- Full premium term commissions
- Yearly bonus
- Club membership benefits
Commission based on type of policy
LIC agent commission rates depend on various things like policy table number, the term, etc.
LIC Agent commission on money back policies in 2020
|Premium Paying Term||Commission|
|1st Year||2nd and 3rd Year||4th Year Onwards|
|As per plan||15%||10%||6%|
source: plan money tax
LIC Agent commission on endowment policies in 2020
|Premium Paying Term||Commission|
|1st Year||2nd & 3rd year||4th year Onwards|
|2 to 4 yr||5%||2.25%||2.25%|
|5 to 9 yr||10%||5%||5%|
|10 to 14 yr||20%||7.5%||5%|
|15 yr & above||25%||7.5%||5%|
Source plan money tax
LIC Agent commission on term plans in 2020
|First Year||2nd and 3rd year||4th year onwards|
|5 -9 years||10%||5%||5%|
|10 – 14 years||25%||7.50%||5%|
|15 years and above||25%||7.50%||5%|
LIC Jeevan Labh Agent ComissionA agent gets 25% commission on LIC Jeevan Labh policy. This commission is for the first premium and then 2nd and 3rd year the commission is 7.5% and for 4th year onward till whenever the policy is in force the agents gets 5% commissions on premiums.
Source Plan Money Tax
LIC Agent commission on pension plans like Jeevan Shanti, Pradhan Mantri Vaya Vandana Yojana(PMVVY) in 2020
|Premium Paying Term||Commission|
|First Year||2nd Year Onwards|
|2 to 4 year||5%||2%|
|More than 4 years||7.5%||2%|
source: Plan Money Tax
LIC commissions have two slabs one is policies lower or equal to 14 years and then policies more than 15 years term.The commission for policy term 14 is lesser than policies with term as 15 years or greater.
(NOTE IN CASE OF A SINGLE PREMIUM PLAN THE COMMISSION IS 2% OF THE PREMIUM)
Continuing on the topic of commission the agent will continue getting the commission even if he or she leaves the job or even dies granted that the business he brought in continues. The maximum commission a LIC agent can get is 25%, so based on that lets take an example
Akshay has taken a term insurance with a yearly premium of 1 lakh rupees so by the chart
|2nd and3rd year||100000||7.5%||7500|
|4th year onwards||100000||5%||5000|
Another important thing to note is that an agent will also get a bonus commission after he meets a simple requirement of 5 agency years and getting premiums of 5 lakh rupees this commission is about 40% of their commission (visit the link for a short story on LIC commission sharing)and is initially paid yearly but later after a certain period has passed becomes something the agent get monthly.
Should you buy a policy from an agent:
Well this a tough one the only options you’ve got are buying the policy via an agent or well you can buy a policy online, the latter most definitely is a cheaper option since all the commission do get out but is it the better one?
The answer to that are you ready and responsible to get all the premiums paid on time, while buying from an agent the agent is somewhat responsible for your premiums since his own commission is at stake therefore he or she will definitely remind your upcoming payment, which might not sound like a big deal but with our busy lives we might often forget such things,
Next also comes apart in which if something were to go wrong you have some one who’s going to deal with LIC which as many have experienced can be a real big hassle, comparing that with having bought the policy from the life insurance agent he or she will be the one handling the problem amd all your safer from all the hassle.
That being said the premium paid for a policy online and via can agent can differ by as much as 25 to 30 % that’s most definitely a big difference and you can save yourself a lot by buying policies online.
So at the end it comes to your personal preference do you want to save money or save yourself the trouble of dealing with a company like LIC or any insurance company for that matter, either way remember to invest smartly and keep your family informed about the policy, also if going to an agent make sure hi is reputed and has been in business for a while.
So concluding with the article and how you can become a lic agent?
To become a LIC agent all you need is the educational qualification of being 10th pass and you should be above 18 years of age if you meet the required criteria you can just go and contact the development officer at the nearest the LIC branch. YOU will then need to pass an interview conducted by the branch manager and if you clear the interview you will be sent for a training program for 25 days which will be followed by an exam, on clearing the exam you will get your appointment letter and ID card and you will be part of the development team.
6 passport size photos
Class 10 marksheets
Address proof: Voter ID, aadhar card, driving license amd coy of pan card.
So that concludes the overview on a LIC agent , hope you found something useful in the article and have a better understanding on this profession and their commission system. The LIC commission chart 2020 given above is taken from reliable sources and can be changed anytime without any prior intimation by LIC of India.