Life Corporation of India (LIC) launched two insurance products - children’s money back plan and single premium plan, to combat the decline in its market share in the state-owned life insurance.
Children’s Money Back plan is designed to meet the educational and the marriage expenses. It is a participating, non-linked money back plan according to a statement issued from LIC. The plan offers a risk cover for the child all along the policy term, with periodic payments until the end of policy term.Parents can choose from available options, i.e., to take a premium waiver or add a health rider to enhance the cover. In case of a death of the proposer, the premium will be waived off in the remaining period of the policy.
Jeevan Sangam is a participating, single premium plan that offers savings and insurance protection for the child. The proposer will be able to choose a maturity sum assured by investing a pre-defined single premium. The principal investment shall depend on the vestment age of the insured.
Both these plans are open for sale for a maximum of 90 days from the date of launch.
V. K. Sharma, M.D., LIC said in his interview “By launching these products we can offer insurance security to all the policyholders until the age of 60 years. This is the first time we are launching a single premium product. Moreover, we are happy to say it is completely taxcomplaint,too. An ULIP plan will be launched in the next fiscal year and is under planning process.”
Being the country’s largest insurer LIC has seen a sharp decline in the shares up to 70% where its new business premium shrunk by over 21% from April to December in 2014.
A decrease of 21 % from the first three-quarters of 2014 against the same period of the previous year (2013) which is Rs 56,667 crore from Rs 65,7774.47 crore.
Therefore, to improve its market share LIC has launched these affordable and highly lucrative children plans. The government-backed insurance conglomerate believes that people will be willing to invest in such plans as they receive guaranteed benefits.
(Source: This article has been adapted from the article "LIC unveils Children's Money Back Plan & single premium plan" that appeared on 3 March, 2015 in economictimes.indiatimes.com)
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