Explainer: LIC agents will get more gratuity and family pension, know who will benefit? - Newztezz Online


Tuesday, September 19, 2023

Explainer: LIC agents will get more gratuity and family pension, know who will benefit?

The government has increased the limit of gratuity for agents and employees of Life Insurance Corporation of India (LIC). Besides, the rules related to family pension and term insurance cover have also been amended. After all, which agents and employees will get the benefit?

More than 90 percent of the premium collection work for the business of the country's largest insurance company 'Life Insurance Corporation of India' (LIC) is done by its 13 lakh agents and about 1 lakh employees spread across the country. Now the government has made provisions for better gratuity, better commission policy and better family pension for all of them. But a question may also be in your mind that LIC agents work on commission, how do they get the benefit of gratuity and pension? Now who is going to benefit from the increased limit?

LIC is a government insurance company. It has been created by a special act of Parliament. Therefore, like the job of Railways, the service rules of LIC's agents and employees have been defined in the LIC (Agents) Regulations. In this, rules related to their gratuity and pension have also been decided.

The agent should be this senior for gratuity.

A person who has been working as a LIC agent for 15 years or more. He has the right to receive gratuity as per rules. Its limit has now been increased from Rs 3 lakh to Rs 5 lakh. Before Rs 3 lakh, this limit used to be Rs 1 lakh. Although there is its own calculation as to how much gratuity you will get, but a major factor in that calculation is the 'qualifying years' of the LIC agent.

Now let us also understand 'qualifying years'. Suppose a person is a LIC agent, then he has to bring a fixed amount to the business company every year. It works on factors like number of policies and minimum new premium. If the person meets this target, then the qualifying year of his agencyship is completed. Along with this, some other terms and conditions also have to be fulfilled. In such a situation, when his gratuity is decided, the factor of qualifying years is kept in mind and on the basis of this, the 'eligibility rate' of gratuity is decided. Factors like age and total premium collection also matter in this.

Family safe with term insurance and pension

Along with increasing the gratuity limit, the government has also decided to make the family pension uniform for LIC agents. In such a situation, the families of agents who die untimely death will now get family pension at a uniform rate of 30 percent. At the same time, the limit of term insurance has also been increased to Rs 1.5 lakh. Which earlier was only Rs 10,000 maximum. On one hand, this is expected to provide better financial security to the families of agents. On the other hand, the government's effort is to keep the agents who have left agencyship connected with the company.

There will be benefit in commission also

The government has given another relief to LIC agents. That is, till now, if an agent left his agency due to some reason, then on joining again, he did not get the benefit of commission of his old policy. With this, it will now be easier for the agents to rejoin LIC after taking a break in between. Their income will be better. Women agents will especially benefit from this step.

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