LIC agent commission on policies

LIC Agent Commission

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?

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..

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.

Commission based on type of policy

Money Back plan

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%
12 year 15% 8% 6%

source: plan money tax

 Endowment plan

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

Term Plan

LIC Agent commission on term plans in 2020

Year Commission    
  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%

Source Plan Money Tax

 Pension Plan

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

(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

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Akshay has taken a term insurance with a yearly premium of 1 lakh rupees so by the chart

year Premium Commission Rate Commission
1st year 100000 25% 25000
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 and is initially paid yearly but later after a certain period has passed becomes something the agent get monthly.

become-a-lic-agent Gurgaon

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 som 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 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.

Documents needed:

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.

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