India’s LIC cuts first-year commission to 20%

This adjustment brings the total first-year commission down from 35% to 28%.

The Life Insurance Corporation of India (LIC) is reportedly reducing its first-year commission on policies from 25% to 20%, with bonuses also likely lowered from 10% to 8%, according to industry sources, as reported by CNBC TV8.

This adjustment brings the total first-year commission down from 35% to 28%.

The move is part of LIC's response to the implementation of new regulations requiring higher surrender values for endowment policies, effective 1 October.

Under these new rules, policyholders who choose to surrender their policies will receive a more substantial payout. In addition to the lower commissions, LIC is believed to have increased the renewal commission from 5% to 7.5%.

The minimum sum assured is also expected to have risen from ₹1 lakh to ₹2 lakh.

Premiums across LIC’s product range are likely to have increased by low single-digit percentages.

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