19 New LIC Plans Launched on October 1, 2024

19 New LIC Plans Launched – As of October 1, 2024, LIC has introduced 19 new insurance plans following the IRDAI Master Circular, which mandated a significant overhaul of life insurance products across the sector. This move marks a significant moment in India’s insurance industry, as LIC adapts to regulatory changes to offer improved products to its customers. This article delves into the 19 new or modified plans launched by LIC, the major changes in surrender value, and their impact on both customers and agents.

Why New Plans?

The IRDAI Master Circular, issued earlier in 2024, called for the discontinuation or modification of various life insurance products by September 30. Insurance companies were directed to ensure that their products align with new regulatory standards, focusing on improving transparency, fair treatment of customers, and reducing mis-selling. LIC responded by releasing 19 new or modified plans that comply with these directives.

Key Changes Mandated by IRDAI

• Surrender Value Calculations: The most notable change mandated is the improvement in surrender value benefits. As per the new rules, customers will receive at least 50% of the surrender value after the first policy year, reducing the losses customers face if they opt out early.

• Maximum Age Limits: There is speculation that new plans may revise the maximum entry age for certain policies, making them more flexible.

• Agent Commissions and Premium Adjustments: To balance the improved surrender value for customers, LIC may adjust either agent commissions or premium rates. These changes will have a ripple effect on the pricing and overall value of policies.

The 21 New or Modified LIC Plans

LIC has brought forward a mix of completely new products and modified versions of its best-selling plans. Below is a breakdown of the 21 new offerings:

1. LIC New Pension Plan (Table No. 867): A modified version of the pension plan that offers more flexibility in payout options.
2. LIC Index Plus (Table No. 873): A ULIP-based plan allowing policyholders to invest in indices for potential market-linked returns.
3. LIC Single Premium Endowment Plan (Table No. 717): Formerly known as Table No. 917, this plan now offers modified benefits with a single premium option.
4. LIC New Endowment Plan (Table No. 714): A revamped version of the popular endowment plan that provides savings with insurance coverage.
5. Jeevan Anand (Table No. 715): This plan combines life coverage with the opportunity for savings, now available in a new avatar.
6. Jeevan Lakshya (Table No. 733): A popular choice for long-term savings, modified to align with IRDAI’s new guidelines.
7. Jeevan Labh (Table No. 736): LIC’s best-selling plan, now restructured to meet the new regulatory framework.
8. Jeevan Umang (Table No. 745): A whole-life policy offering annual survival benefits, restructured to enhance its value.
9. Micro Savings Plan (Table No. 751): Aimed at low-income groups, this policy is now back with modified terms for better accessibility.
10. New Jeevan Utsav (Table No. 771): Introduced last year, this plan has undergone modifications to suit the latest standards.
11. AmritBaal Plan (Table No. 774): A new children’s policy that ensures financial security for young ones.
12. Jeevan Akshay VII (Table No. 857): This annuity plan remains unchanged and continues to provide reliable income for retirees.
13. Yuva Term (Table No. 875): A term plan aimed at younger policyholders, offering life cover at affordable premiums.
14. Digi Term (Table No. 876): A digital term insurance plan that is easy to purchase and manage online.
15. Yuva Credit Life (Table No. 877): A credit-linked life insurance plan for young borrowers.
16. Digi Credit Life (Table No. 878): A similar plan to Yuva Credit Life but aimed at a broader audience, offering digital convenience.
17. New Tech Term (Table No. 954): A purely digital term plan offering high coverage with low premiums.
18. Jeevan Amar (Table No. 955): A popular term insurance plan with no changes in its structure.
19. New Jeevan Shanti (Table No. 858): A deferred annuity plan that remains unchanged, providing future income security.
20. LIC Nivesh Plus (Table No. 749)
21. LIC Bima Jyoti Plan (Table No. 760)

LIC new Circular: List of Modified Product PDF

Changes in Surrender Value Calculations

One of the most critical modifications in the new LIC plans relates to the surrender value calculations. Under the new system, policyholders will receive a minimum of 50% of the surrender value if they choose to exit the policy after the first year. This change has been introduced to curb mis-selling and encourage policyholders to stay invested in their plans for the long term.

Impact of New Surrender Value Rules

The new surrender value rules bring immediate benefits to policyholders by reducing the financial losses they suffer if they surrender their policies early. It encourages long-term retention while offering more flexibility. However, to accommodate these new regulations, LIC may adjust premium rates or reduce agent commissions to maintain profitability.

Also see: What will be the Surrender Value of LIC from October 1

Possible Premium and Commission Adjustments

Given the more generous surrender value, LIC might need to revise its premium structure for some plans. Alternatively, the commission structure for agents could be adjusted to reflect the increased payouts to customers in case of early surrenders.

• Higher Premiums: LIC could introduce higher premium rates to balance out the higher surrender values. This change may affect customer affordability, particularly for long-term policies.

• Agent Commission Modifications: Another possible adjustment could be in the commission structure, potentially reducing agent earnings, particularly for plans that see early surrenders. This may impact the livelihood of agents, making it crucial for them to adjust their sales strategies.

Changes to Maximum Entry

Another potential change in the new plans is the adjustment to the maximum entry age for certain policies. While details are yet to be officially confirmed, the introduction of higher surrender values may also bring changes to age-related criteria. The idea behind this is to make insurance plans more accessible to a broader range of people, especially in light of increased life expectancy and changing demographic trends.

Impact on Policyholders

The introduction of the 21 new LIC plans is set to benefit policyholders by offering more flexible terms, higher surrender values, and potentially better coverage options. The changes are aimed at reducing misselling and providing policyholders with a fairer deal if they decide to cancel their policies early. However, policyholders may need to pay slightly higher premiums in some cases due to the increased surrender payouts.

For those looking to invest in long-term life insurance plans, these new policies offer a fresh take on traditional schemes, with the added advantage of regulatory compliance and customer protection.

Impact on LIC Agents

The new plans and their associated changes will have a significant impact on LIC agents. While the new products offer more transparency and better customer benefits, the changes in surrender value calculations and commission structures might require agents to adapt their approach. Agents may need to focus on building stronger, long-term relationships with their clients rather than relying on quick sales.

Strategies for Agents

Agents will need to be well-versed in the nuances of the new plans and how they benefit customers in the long term. Focusing on educating clients about the improved surrender value and the long-term benefits of staying invested will be key to success in this new environment.

Future Outlook

The launch of these 21 new plans is a significant step for LIC as it navigates a rapidly changing regulatory environment. With IRDAI’s directives focusing on customer-centric policies and reduced mis-selling, LIC is poised to maintain its leadership position in India’s insurance sector. As more details emerge about the exact structure of these plans, both agents and customers will need to stay informed to make the most of the opportunities available.

Conclusion

The 21 new LIC plans launched on October 1, 2024, mark a significant step in the evolution of life insurance products in India. With a focus on customer protection, higher surrender values, and possible changes to agent commissions and premiums, these plans are designed to align with the latest regulatory standards while offering better financial security to policyholders. As more details become available with the release of LIC master circular, policyholders and agents alike can expect to see further changes that will shape the future of life insurance in India.

LIC has once again demonstrated its ability to adapt to regulatory changes while continuing to offer a wide range of life insurance solutions to meet the needs of its customers.

FAQs

Disclaimer: The information provided in this article is for general informational purposes only and may not reflect the most up-to-date developments or policy changes made by LIC or IRDAI. Please consult official sources or a licensed insurance advisor before making any financial or policy-related decisions. LIC reserves the right to modify or discontinue plans as per regulatory guidelines.