LIC Agent Commission Chart 2025

Becoming a LIC agent is a career in the insurance sector that provides flexibility, job satisfaction, and the opportunity to earn big commissions. Agents have the opportunity to provide customers with financial security while earning a living because of the confidence and reputation of the Life Insurance Corporation (LIC). So, see below the LIC agent commission chart 2025.  

Duties of an LIC Agent:

LIC agents do more than just sell policies. Their primary responsibilities are summarized as follows:

1. Offering guidance to clients: LIC agents educate clients about various life insurance plans and help them choose the one that best suits their needs.
2. Selling policies: Agents are responsible for promoting LIC’s insurance products, achieving sales targets, and acquiring new clients.
3. Customer service: Agents aid in processing claims, ensure that clients are aware of when premiums are due, and assist policyholders in understanding the terms of their policies.
4. Relationship maintenance: Building and maintaining long-lasting relationships with clients is crucial to an agent’s success since it promotes referrals and repeat business.

Qualifications Needed for an LIC Agent:

The following is a breakdown of how to become a LIC agent:

1. Necessary Conditions:

A diploma from the tenth grade is the minimal educational prerequisite.
The minimum age is eighteen.

2. How to Apply for LIC Agent Status:

Interview: Attend an interview at a LIC development office.
Training: Complete a 25-hour course.
It is necessary to pass the Insurance Regulatory and Development Authority of India (IRDAI) test.

3. Exam Passage After:

You become a LIC agent.
Start selling insurance plans to earn commissions.

4. No other requirements:

A specialized degree is not required.
It is not required to have previous work experience.

5. Services Offered:

Make insurance plan recommendations.
Provide suggestions for investment plans, including money-back plans, pension plans, and child plans.

Understanding the New Commission Structure:

Impact on Policyholders:

The two primary changes that policyholders must cope with are an 8–9% increase in life insurance premiums and the requirement that policies be held for a minimum of a year in order to qualify for surrender value. This change aims to improve policy retention by making insurance a long-term financial commitment for the insured.

Impact on Agents:

The decline in the first-year commission forces agents to make adjustments by selling additional policies to maintain their income. Even if their initial revenues on a new insurance policy drop, the increase in renewal commissions offers better long-term revenue potential. This better aligns agents’ incentives with long-term customer retention by ensuring that they have a stake in policyholders maintaining their coverage.

An Example Circumstance:

Consider an agent advertising a policy with a ₹1 lakh premium. Under the old commission system, the agent would have earned ₹35,000 in the first year. Under the new approach, the agent now earns ₹28,000 in the first year, but they also receive a higher renewal commission in the second year, which is ₹7,500 as opposed to the previous ₹5,000. Although the revised structure may result in a reduction of immediate income, it offers more advantages for maintaining long-term relationships with policyholders.

Commission Earned by LIC Agents

LIC agents receive a commission from policyholder premiums. The commission percentage is influenced by the type of insurance, the year premiums are paid, and the plan sold.

The following is a breakdown of the LIC agent commission structure:

1. The Plan for Endowments:

An endowment plan is a type of life insurance policy that provides funds in addition to insurance coverage, according to LIC terminology. It offers protection as well as investment.

Premium Paying Term Commission for the First Year Commission for the Second & Third Year Commission from the Fourth Year Onwards
15 years and above 25% 7.50% 5%
10 years to 14 years 20% 7.50% 5%
5 years to 9 years 10% 5% 5%
2 years to 4 years 5% 2.25% 2.25%

2. Money-Banking Plans:

The Money Bank Plan is one type of insurance policy that provides both life insurance and a savings component.

Premium Paying Term Commission for the First Year Commission for the Second & Third Year Commission from the Fourth Year Onwards
As per plan 15% 10% 6%
12 years 15% 8% 6%

3. Children’s Plans

Child plans are specialized insurance policies designed to provide children with the future financial security they will require.

Premium Paying Term Commission for the First Year Commission from the Second Year Onwards
9 years and above 10% 5%
5 years to 9 years 7.50% 5%
2 years to 4 years 5% 2%

4. Pension Plans:

The purpose of pension plans, which are insurance products, is to provide people with financial security in retirement.

Premium Paying Term Commission for the First Year Commission from the Second Year Onwards
More than 4 years 7.50% 2%
2 years to 4 years 5% 2%

Commission Calculator:

There is a formula for calculating the LIC agent commission. A percentage of the policyholder’s premium is used to calculate the commission. The formula varies according to the year of the policy because commission rates for the first year of the insurance are different from those for subsequent years.

Formula for the First-Year Commission:

First-Year Commission = Annual Premium (First Commission Rate / 100)

For example:

In the event that a LIC agent offers a policy with an annual premium of ₹50,000 and the commission schedule looks like this:

The first-year commission is 25%.

The calculations that follow will be performed:

50,000 (25/100) ₹12,500

Formula for Second and Third-Year Commissions

The second or third year commission is calculated by dividing the Annual Premium (second or third commission rate) by 100.

For example:

In the event that a LIC agent offers a policy with an annual premium of ₹50,000 and the commission schedule looks like this:

Second or third year: 7.5%

The calculations that follow will be performed:

50,000 (7.5 / 100) = ₹3,750 (P.A.)

The equation for years four and up

Fourth Year Onward Commission = Annual Premium (Fourth Commission Rate/100).

For example:

In the event that a LIC agent offers a policy with an annual premium of ₹50,000 and the commission schedule looks like this:

Starting in the fourth year: 5%

The calculations that follow will be performed:

50,000 (5/100) = ₹ 2,500 (P.A.)

This formula can be used to calculate your earnings as a LIC agent based on commission percentages and premium amounts.

Conclusion:

Working as a LIC agent offers a rewarding career with flexibility, substantial earning potential, and the satisfaction of helping others secure their futures. LIC is a great choice for people who want to start a career in insurance because of its reputation, comprehensive training, and enticing commission plans. If you’re interested in becoming an agent, follow the above steps to take advantage of the benefits and incentives that LIC offers.

Prospective agents can make wise decisions about this field of business by having a solid understanding of the commission system. Regardless of your career or side gig ambitions, working as a LIC agent can result in both financial gain and personal joy.

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