The Life Insurance Corporation of India (LIC) has reduced the first-year commission for its agents from 35% to 28%, following a comprehensive revision of the surrender value guidelines. The move aims to align LIC’s agent payouts with the new customer-centric surrender value structure that ensures better benefits for policyholders who choose to terminate their policies early.
This reduction is part of LIC’s broader effort to streamline operational costs while enhancing policy value for customers. The new commission structure, effective immediately, will see agents earning lower commissions in the first year of policy sales. However, policyholders stand to gain as they will now receive higher payouts if they surrender their policies within the initial years.
While this change benefits customers by increasing their surrender value, it might impact the income of LIC’s vast network of agents. LIC’s decision reflects ongoing adjustments to market conditions and regulatory shifts in the life insurance sector, ensuring that its policies remain competitive and customer-focused.
The new commission and surrender value rules demonstrate LIC’s commitment to balancing agent incentives with consumer protection and financial sustainability.
