What changes are going to happen in LIC from October 1, 2024 – Life Insurance Corporation of India (LIC) is going to introduce significant changes from October 1, 2024. These changes will not only impact the company but also its 14 lakh insurance advisors, policyholders and the overall insurance industry of India. This article discusses in detail the major changes being implemented by LIC, including new digital tools, changes in commission structures, and new initiatives aimed at enhancing the efficiency and effectiveness of LIC agents.
Why LIC decided to change the policy
One of the most notable changes is the closing of several popular LIC plans on September 30, 2024. This decision reflects a significant shift in LIC’s product offerings and is driven by various factors including regulatory changes and market dynamics.
What are the reasons for closing of the plan?
The main reason for closing of these plans is the directive of the Insurance Regulatory and Development Authority of India (IRDAI). IRDAI has observed that certain practices in the market, such as advisors offering commissions to customers for securing policies, have distorted the market. This has made it difficult for new advisors to survive and has created an uneven playing field. To address these issues, IRDAI has mandated changes in commission structures, which has prompted LIC to either re-evaluate all its plans or closing older policies.
Update 1: New Commission Structure
Starting from October 1, 2024, there will be a significant change in the commission structure for LIC advisors. The IRDAI’s new guidelines aim to curb the practice of offering commissions to customers, which has been detrimental to new advisors and the market as a whole.
Reduction in First-Year Commissions
Under the new structure, the commission for the first year will be reduced, while the renewal commission will be increased. This change is designed to discourage advisors from offering a portion of their commission to customers as an incentive to buy policies. By balancing the commission structure, the IRDAI hopes to create a more sustainable and fair environment for all advisors, particularly the newer ones who have struggled to compete against more established advisors who could afford to offer commissions.
Impact on Advisors
For advisors, this change means a shift in how they approach their business. The focus will now be on building long-term relationships with clients rather than securing immediate sales through commission-based incentives. This will likely lead to a more stable and sustainable business model for advisors, although it may require some adjustments in their sales strategies.
Also See: LIC Work From Home Jobs 2024
Update 2: The Launch of the LIC Sales Stack App
One of the most groundbreaking updates is the introduction of the LIC Sales Stack App. This digital tool is set to become a game-changer for LIC agents. In response to the growing need for digital solutions and the changing landscape of the insurance industry, LIC is set to launch a new app called the “Sales Stack.” This app is designed to function as a virtual office for LIC advisors, providing them with a range of tools to manage their business more efficiently.
Features of the LIC Sales Stack App
The Sales Stack app is a comprehensive digital platform that will allow LIC advisors to perform a wide range of tasks from the comfort of their homes. These tasks include policy onboarding, premium collection, claim processing, and servicing existing policies. Essentially, the app will enable advisors to conduct nearly 90% of their work remotely, reducing the need for them to visit LIC branches.
Benefits for Advisors
The primary benefit of the Sales Stack app is the flexibility it offers. Advisors will be able to work from anywhere, at any time, without being tied down to a specific location. This is particularly beneficial for those who travel frequently or live in remote areas. Additionally, the app will save advisors time, allowing them to focus on generating new business and improving customer service rather than dealing with administrative tasks.
Improved Customer Service
The app is also expected to enhance customer service by allowing advisors to respond to client inquiries more quickly and efficiently. For example, if a customer needs assistance with a policy or has a question about their coverage, the advisor can use the app to provide immediate support. This will lead to higher customer satisfaction and a more positive experience overall.
Update 3: The Launch of Jeevan Samarth
Another significant change coming to LIC is the launch of “Jeevan Samarth,” a new initiative aimed at transforming the way LIC advisors operate in the market. Jeevan Samarth is part of a broader “Agency Transformation Project” that LIC has undertaken in collaboration with ATKearney.
Objectives of Jeevan Samarth
The primary goal of Jeevan Samarth is to equip LIC advisors with the skills and tools they need to compete effectively in the market. This includes training on how to leverage digital marketing, technology, and other advanced techniques to grow their business. The program will also focus on helping advisors understand and navigate the competitive landscape, particularly in the face of increasing competition from private insurance companies.
Focus on Digital Marketing and Technology
Jeevan Samarth will place a strong emphasis on digital marketing and technology. Advisors will be trained on how to use digital tools to reach new customers, optimize their marketing efforts, and improve their overall efficiency. This is a critical component of the program, as the insurance industry becomes increasingly digital and customers expect more personalized and convenient services.
Preparing Advisors for Future Challenges
The program is also designed to prepare advisors for the challenges of the future, including the rise of artificial intelligence (AI) and other technological advancements. By embracing these technologies, advisors will be better equipped to meet the changing needs of their customers and stay ahead of the competition.
Update 4: The Launch of Customer Stack App: A New Tool for Policyholders
In addition to the Sales Stack app for advisors, LIC is also developing a new app for customers called the “Customer Stack.” This app is designed to provide policyholders with a range of digital services, making it easier for them to manage their policies and interact with LIC.
Features of the Customer Stack App
The Customer Stack app will offer a variety of features that will allow policyholders to manage their policies, make premium payments, and access other services directly from their smartphones. The app will also include a chatbot powered by AI, which will provide personalized assistance to customers 24/7.
Benefits for Policyholders
The primary benefit of the Customer Stack app is convenience. Policyholders will be able to manage their policies and access services at any time, without having to visit a branch or contact an advisor. This will save them time and make it easier to stay on top of their insurance needs.
Personalised Experience
The app will also provide a more personalized experience for customers. By using AI and other advanced technologies, the app will be able to offer customized solutions and recommendations based on each customer’s unique needs and preferences. This will help LIC build stronger relationships with its customers and improve overall customer satisfaction.
Update 5: Introduction of Mark Tech
In addition to the Jeevan Samarth initiative, LIC is also introducing a new system called “Mark Tech,” which is inspired by digital marketing strategies. Mark Tech is a key component of LIC’s digital marketing strategy and aims to enhance the effectiveness of LIC’s customer campaigns.
What is Mark Tech?
Mark Tech is a system that uses AI and digital marketing techniques to optimize LIC’s marketing efforts. The goal is to increase customer engagement and reach by using data-driven insights to create more targeted and effective campaigns. This will allow LIC to reach a broader audience and provide more personalized services to its customers.
Benefits for Advisors
For advisors, Mark Tech will provide access to a range of digital marketing tools and resources. This will enable them to reach potential customers more effectively and efficiently. By leveraging AI and other advanced technologies, advisors will be able to offer more customized solutions to their clients, which will help them build stronger relationships and increase customer loyalty.
Improved Customer Engagement
Mark Tech is also expected to improve customer engagement by providing more personalized and relevant information to customers. This will help LIC build stronger relationships with its customers and increase the overall effectiveness of its marketing efforts.
Update 6: Changes to the Surrender Value
Starting from October 1, 2024, significant changes are being implemented in the surrender value calculation of LIC policies. The revised formula will now offer a higher surrender value, benefiting policyholders who choose to exit their policies early. This change aims to make the policies more attractive and flexible by ensuring that policyholders receive a fairer amount relative to the premiums paid, even if they decide to surrender the policy before its maturity. The exact percentage of the new surrender value is yet to be officially confirmed but is expected to be more favorable than before.
Conclusion
The changes taking place at LIC from October 1, 2024, represent a major shift in the company’s operations and strategy. From closing popular plans to launching new digital tools and initiatives, LIC is positioning itself for the future and setting a new standard for the insurance industry. These changes will have far-reaching effects on advisors, policyholders, and the entire industry. While there may be challenges ahead, the opportunities for growth and success are significant, and those who embrace these changes will be well positioned for success in the new digital landscape.
FAQs about What changes are going to happen in LIC from October 1, 2024
What major changes are expected in LIC from October 1, 2024?
LIC is introducing new digital tools, including the Sales Stack app for agents and the Customer Stack app for policyholders, along with significant changes in commission structures.
What is the Sales Stack app, and how will it benefit LIC agents?
The Sales Stack app is a digital platform that acts as a virtual office for LIC agents, allowing them to perform most of their work, including policy sales and servicing, from anywhere, significantly reducing the need to visit branches.
Why are many LIC plans being closed by September 30, 2024?
LIC is closing several plans due to regulatory changes and the need to streamline offerings in line with new IRDAI guidelines, which include changes in commission structures to curb unethical practices.
How will the new commission structure impact LIC agents?
The new commission structure, which reduces first-year commissions and increases renewal commissions, aims to discourage agents from offering illegal commissions to clients, thus leveling the playing field for all agents.
What is the Jeevan Samarth initiative, and how will it help LIC agents?
Jeevan Samarth is an agency transformation project that will train LIC agents in competitive strategies, digital marketing, and technology adoption to help them stay ahead in the evolving insurance market.
Disclaimer: The information presented in this article is for general informational purposes only. While efforts are made to ensure accuracy, the details regarding LIC’s changes effective from October 1, 2024, may be subject to updates or revisions. Readers are advised to consult official LIC sources or financial advisors for the most current and applicable guidance before making decisions.