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Mumbai, Dec. 8 Life Insurance Corporation of India is planning to garner Rs 25,000 crore through its new ‘single premium’ endowment product offering ‘Jeevan Aastha’.

The plan would offer guaranteed benefits on maturity and death. The plan offers a guaranteed return of 10 per cent of the maturity sum assured for a 10-year term and a 9 per cent return for a five-year period.

Beginning Monday, the close-ended plan is open for subscription for 45 days.

“The launch of Jeevan Aastha is part of our strategy to prop up our premium collections,” said Mr T.S. Vijayan, Chairman, LIC.

The company has seen a dip in its new business premium collections in the first six months of this fiscal primarily due to a decline in demand for unit-linked plans. In the last financial year, almost 80 per cent of fresh premium collections came from Unit Linked Insurance Plan (ULIP). Now, the collections from ULIPs have come down drastically on account of the volatility in the stock markets.

“In the current scenario, the customer mood has swung back to non-linked products. They are looking for guaranteed return and safety of their investment. The growth in this segment is around 40 per cent in the first half of the fiscal,” said Mr Vijayan.

Explaining the features of the product, Mr D.K. Mehrotra, Managing Director, LIC, said the plan offers a basic sum assured of Rs 1.5 lakh, which could increase in multiples of Rs 30,000 with no upper limit. On maturity of the plan, the sum assured along with the guaranteed return would be paid to the customer.

While 50 per cent of the amount collected through this policy would be invested in government securities, the remaining would be invested in debt instruments. “Since we are offering a guaranteed return, there would be no investment in equities this financial year,” Mr Vijayan said.

IRDA norms stipulate that life insurers invest not less than 50 per cent of their corpus in Government securities or other approved securities, not less than 15 per cent in infrastructure and social sectors, and not exceeding 35 per cent in equities and other instruments such as debentures.

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