Companies

LIC to give ₹2,710 cr Covid advance to 6.65 lakh agents

G Naga Sridhar Hyderabad | Updated on April 14, 2020 Published on April 14, 2020

Each agent to get ₹50,000 as commission

In a major move, Life Insurance Corporation of India (LIC) will be releasing around ₹2,710 crore as advance to over six lakh agents.

“The Corporation has agreed to release ₹50,000 as advance commission to over six lakh agents as Covid-19 social advance,” Singarapu Srinivas, President, Life Insurance Agents Federation of India (LICAF), told BusinessLine on Tuesday.

Those agents who have completed five years of service are eligible to receive the advance. Out of the 12 lakh agents in the country, 6.65 lakh agents will benefit by this decision.

The first instalment will be released on April 15 while the remaining ₹25,000 will be credited to agents’ accounts on May 15. The advance will be recovered by October this year without any interest.

Another ₹536 crore has also been given to agents as commission bills for the month of March, he added. The move is timely because most of the business for LIC agents is in the month of March every year as it is the tax savings season. While an agent does four to six polices on an avearge per month, in March the number rises to about a dozen.

According to V Sudheer Kumar, Chief Life Insurance Adviser, due to social distance norms as well as restrictions on physical movement, agents could not get any new business.

When contacted, a senior official of LIC told BusinessLine on the condition of anonymity that a significant chunk of business for the corporation comes in the end of the year. “The lockdown was a tax-saving period too and we understand that agents could not get new business,” he said.

As the corporation extended the closing of books till April 14 due to operational difficulties, the exact business impact on the business will be known only later, he added.

After the announcement of national lockdown last month, LICAF had also submitted a representation to Prime Minister Narendra Modi highlighting the plight of agents and requested for a separate financial package.

Published on April 14, 2020

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