Formed on September 1, 1956, its primary objective was to spread life insurance widely across the country, especially in rural areas, and provide financial security to all insurable individuals at a reasonable cost. Even after the liberalization of the Indian insurance sector in the late 1990s, LIC continues to be the dominant life insurer in the country. LIC boasts a vast network of branches, divisional offices, and agents, ensuring a wide reach across India. It offers a comprehensive suite of life insurance and investment products, including term insurance, endowment plans, unit-linked insurance plans (ULIPs), pension plans, and health insurance. LIC is also a major investor in various sectors of the Indian economy and has built a strong reputation for trust and reliability among the people of India over its many years of operation.
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Government considers ₹5,000 crore capital infusion for three public sector insurance companies as losses resurface.
Vijayan emphasized that strengthening the operational aspects of insurance companies requires more than just increasing capital. Over the past decade, the number of employees in these companies has drastically decreased, from approximately 16,000 to around 7,000 per company. This significant reduction in workforce has likely impacted the efficiency and effectiveness of these organizations.
According to Vijayan, it is essential to not only boost capital but also to augment manpower. The process of listing companies can lead to improved capitalization, which can be achieved through various means such as initial public offerings (IPOs) or private equity investments. Furthermore, mergers can also play a crucial role in strengthening these companies. By combining resources and operations, merging companies can eliminate redundancies, reduce costs, and enhance their overall competitiveness.
The ultimate goal, Vijayan stressed, is to achieve economies of scale, which is a critical factor in the insurance industry. Currently, only the Life Insurance Corporation of India (LIC) enjoys this advantage, which has enabled it to maintain its market dominance. Economies of scale allow companies to reduce costs, improve efficiency, and increase profitability, ultimately leading to better services and products for customers.
In the context of the insurance industry, achieving economies of scale can be particularly challenging due to the high capital requirements and intense competition. However, by focusing on operational strengthening, increasing manpower, and pursuing strategic mergers, insurance companies can position themselves for long-term success. Vijayan’s comments highlight the need for a comprehensive approach to strengthening the insurance industry, one that goes beyond mere capitalization and addresses the critical issue of manpower and scale.
The insurance industry is expected to play a vital role in the country’s economic growth, and it is essential that companies in this sector are equipped to meet the evolving needs of customers. By prioritizing operational strengthening, manpower augmentation, and strategic consolidation, insurance companies can build a strong foundation for future growth and success. As Vijayan noted, this will ultimately benefit not only the companies themselves but also the customers they serve, who will have access to a wider range of products and services.
Key Provisions:
- 100% Foreign Direct Investment (FDI) in insurance intermediaries
- Enhanced powers to the Insurance Regulatory and Development Authority of India (IRDAI)
- Implications for the Indian insurance sector
100% FDI:
- Allows full foreign ownership in insurance intermediaries such as brokers, third-party administrators, and surveyors
- Expected to attract more foreign investment into the sector
IRDAI Powers:
- IRDAI to have more regulatory control over the insurance sector
- Powers to regulate and supervise insurance companies, intermediaries, and other stakeholders
- Ability to impose penalties and take enforcement actions against non-compliant entities
What It Means for India:
- Increased foreign investment in the insurance sector
- Enhanced regulatory framework for the insurance industry
- Potential for increased insurance penetration and density in India
- Improved consumer protection and dispute resolution mechanisms
- Opportunities for growth and development of the Indian insurance market
The New Insurance Bill, 2025, also known as the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, is a significant milestone in India’s financial sector reforms. The Bill aims to modernize India’s insurance ecosystem, expand coverage, and strengthen regulatory oversight. It was approved by the Union Cabinet and is set to be introduced in Parliament. The Bill’s primary objectives are to deepen insurance penetration across India, attract long-term domestic and foreign investment, improve regulatory effectiveness and transparency, promote innovation and competition in insurance products, strengthen policyholder protection, and support inclusive growth and financial security.
The key provisions of the New Insurance Bill, 2025, include allowing 100% Foreign Direct Investment (FDI) in the insurance sector, liberalization for foreign reinsurers, stronger powers for the Insurance Regulatory and Development Authority of India (IRDAI), and greater operational autonomy for the Life Insurance Corporation (LIC). The 100% FDI limit is expected to attract global insurers and long-term capital, aligning with India’s ambition to achieve universal insurance coverage by 2047. The Bill also reduces the Net Owned Funds (NOF) requirement for foreign reinsurers from ₹5,000 crore to ₹1,000 crore, encouraging foreign reinsurance players beyond public-sector GIC Re.
The Bill significantly enhances the role of IRDAI, granting it disgorgement powers to recover unlawful gains, one-time registration for insurance intermediaries, and a higher threshold for IRDAI approval of equity transfers. Additionally, the Bill provides greater operational autonomy for LIC, allowing it to open new zonal offices without government approval and restructure overseas operations as per host-country regulations. However, the Bill leaves out some notable provisions, including composite licenses, reduction in capital requirements, and provision for captive insurance companies.
The absence of composite licenses means that insurers will continue to operate in silos, with life and non-life insurance remaining separate. The minimum capital norms also remain unchanged, which may limit innovation and financial inclusion, especially in underserved areas. The Bill’s silence on captive insurance companies delays the evolution of India’s corporate risk ecosystem. Despite these exclusions, the New Insurance Bill, 2025, is a significant step toward transforming India’s insurance landscape. It lays the foundation for deeper insurance penetration and global integration, and its provisions are expected to encourage global participation in India’s growing insurance market, supporting economic resilience by spreading risk and improving financial security. As the Bill is debated in Parliament, the gaps in the Bill are likely to shape discussions on how far and how fast India should liberalize its insurance sector.
New Insurance Bill 2025: Key Features Include 100% FDI, Enhanced Protection for Policyholders, and More in Sabka Bima Sabki Raksha Bill
The Indian government has introduced the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, aiming to revolutionize the country’s insurance sector. The bill proposes significant changes to the Insurance Act, 1938, the LIC Act, 1956, and the IRDA Act, 1999, with the goal of achieving universal protection by 2047. Key features of the bill include raising foreign direct investment (FDI) in the insurance sector from 74% to 100%, with the condition that one of the top officials must be an Indian citizen.
The bill also allows for sector-specific licenses, enabling insurers to operate in niche lines such as cyber, property, or marine insurance. Additionally, it permits mergers between non-insurance and insurance companies, and shifts from detailed statutory prescriptions to a regulation-driven framework, giving the Insurance Regulatory and Development Authority of India (IRDA) the authority to set operational norms.
Other notable provisions include establishing a Policyholders’ education and protection fund, expanding the definition of insurance intermediaries, and easing licensing requirements for surveyors and loss assessors. The bill also allows the Life Insurance Corporation (LIC) to establish zonal offices without prior approval from the Centre and enables overseas branches to maintain funds.
The government believes that the bill will accelerate growth, improve policyholder protection, bring transparency to regulations, and attract significant investments, creating more opportunities for insurers and intermediaries across India. The move to raise FDI to 100% is expected to attract more foreign investment, with the sector having already attracted Rs 82,000 crore through FDI. The bill is part of the government’s new-generation financial sector reforms, and its passage is expected to have a significant impact on the Indian insurance sector. Overall, the bill aims to make insurance coverage more accessible and affordable for all, and to establish India as a major player in the global insurance market.
Life Insurance Corporation (LIC) is reportedly considering acquiring a stake in ManipalCigna Health Insurance.
The Life Insurance Corporation of India (LIC) is in talks to acquire a significant stake in ManipalCigna Health Insurance, a joint venture between India-based Manipal Education & Medical Group and US-based Cigna Corporation. The proposed deal would value the health insurer at approximately Rs35bn-37.5bn ($408m-437m) and would mark LIC’s entry into the health insurance space. The stake being considered is between 40-49%, which would give LIC a substantial presence in the health insurance market.
The Manipal Group currently holds a 51% stake in ManipalCigna, while Cigna holds the remaining 49%. If the deal is finalized, it would be a significant move for LIC, which has been looking to expand its presence in the insurance sector. The company’s managing director and CEO, Siddhartha Mohanty, has hinted at a deal announcement by the end of March, but did not disclose the identity of the target company.
The completion of the deal is subject to approvals from LIC’s board and regulatory authorities. Mohanty has indicated that the size of the stake is subject to various factors, including valuations and a board decision, suggesting that LIC may not seek a controlling interest in the health insurer. The deal would be a natural fit for LIC, which has been looking to diversify its portfolio and expand its presence in the insurance sector.
The acquisition discussions have been ongoing, and while no binding agreement has been signed yet, the deal is expected to be finalized soon. The move would be a significant development in the Indian insurance sector, with LIC’s entry into the health insurance space likely to increase competition and drive growth in the market. With its strong brand and extensive distribution network, LIC is well-positioned to make a significant impact in the health insurance sector.
The deal would also be a positive development for ManipalCigna, which would gain access to LIC’s vast resources and expertise. The partnership would enable ManipalCigna to expand its reach and offer a wider range of products and services to its customers. Overall, the proposed deal between LIC and ManipalCigna is a significant development in the Indian insurance sector, and its completion would be a major milestone for both companies.
On October 8, 2025, insurance agents and associations are likely to raise the issue of Goods and Services Tax (GST) with the Insurance Regulatory and Development Authority of India (IRDAI) and the Finance Ministry.
The insurance industry in India is facing a significant issue related to the Goods and Services Tax (GST) and Input Tax Credit (ITC). Private insurers have reduced distributor payouts by 15-18% to offset the loss of ITC, following the GST exemption on life and health insurance premiums. This move is expected to have a significant impact on agents, brokerages, and individual advisors, particularly small and independent operators. The reduction in payouts will directly cut into their working capital, leading to reduced take-home income and morale, especially in smaller towns and rural markets.
The current GST framework, if left unadjusted, may set a precedent where insurers maintain profitability by squeezing distribution costs rather than improving efficiency. Industry associations and agents are likely to take up the issue with the Insurance Regulatory and Development Authority of India (IRDAI) and the Finance Ministry. The President of the General Insurance Agents Federation Integrated stated that the change will shrink access to insurance, which is against the Prime Minister’s vision of Insurance for All by 2047.
In contrast, Life Insurance Corporation (LIC) and other public sector insurers have decided to maintain existing commission structures, even as they pass the full GST relief to policyholders. LIC plans to offset the impact through higher policy sales and new product pricing. Public sector general insurers, including New India Assurance, Oriental Insurance, United India Insurance, and National Insurance, have also opted against cutting commissions, choosing instead to absorb the ITC loss.
Private insurers, on the other hand, are passing on the ITC burden to agents because their business models and cost structures leave little room to absorb additional expenses. The removal of ITC has raised operating costs by roughly 2-3% of premiums, and private companies must adhere to stricter IRDAI Expense of Management (EoM) caps. Absorbing this loss would directly dent profitability and risk regulatory breaches. Several private general and standalone health insurers, including Tata AIG, Aditya Birla Health Insurance, Niva Bupa, Care Health, and ICICI Lombard, have implemented revised commission structures, making payouts inclusive of 18% GST, which means distributors will bear the tax cost.
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A smart way to earn ₹20,000 every month for life
The LIC Jeevan Utsav plan, offered by the Life Insurance Corporation of India, is a retirement plan designed to provide lifelong income after a limited premium-paying term. This innovative policy allows individuals to choose a premium payment period of 5 to 16 years, after which they will receive an annual income of 10% of their sum assured for life, until they turn 100. The annual income is capped at ₹2.5 lakh per year, or approximately ₹20,000 per month.
Key highlights of the LIC Jeevan Utsav plan include flexible premium term options, lifetime income, and a minimum sum assured of ₹5 lakh. The plan is available to individuals between 90 days and 65 years old. In the event of the policyholder’s death, the full sum assured is paid to the nominee. Policyholders can also choose to receive their income regularly or through a flexi option.
The waiting period for the plan varies depending on the chosen premium term. For example, a 5-year premium term has a 5-year waiting period, while an 8-16 year term has a 2-year waiting period. The plan also offers additional perks, including tax savings and a loan facility.
The LIC Jeevan Utsav plan combines lifelong income, tax benefits, and financial protection for loved ones, making it an attractive option for those seeking a financially secure and peaceful retirement. Interested individuals can visit the official LIC website or contact a registered LIC agent for more information. However, it is essential to verify the details with official LIC sources before making any financial decisions.
Overall, the LIC Jeevan Utsav plan provides a unique opportunity for individuals to secure their retirement with a guaranteed income stream. With its flexible premium terms, lifetime income, and additional benefits, this plan can help individuals achieve their retirement goals and enjoy a financially secure future. It is crucial to carefully review the plan’s terms and conditions to ensure it aligns with your individual needs and financial objectives.
FSIB recommends R. Chander for MD’s position in LIC
The Financial Services Institutions Bureau (FSIB) has announced its recommendation for the position of Managing Director at the Life Insurance Corporation of India (LIC). After interacting with five candidates from LIC on September 30, 2025, the Bureau has selected R. Chander for the role. The decision was based on the candidates’ performance during the interface, as well as their overall experience and relevant parameters.
R. Chander, currently the Chief Investment Officer and Executive Director (Investment Front Office) at LIC, has been chosen for the position of Managing Director. The FSIB statement confirmed that Chander’s recommendation was made after careful consideration of his qualifications and performance.
The LIC currently has four whole-time directors, including R. Doraiswamy, who serves as the Chief Executive Officer and Managing Director. The other Managing Directors are Sat Pal Bhanoo, Dinesh Pant, and Ratnakar Patnaik. The addition of R. Chander as a new Managing Director is expected to strengthen the leadership team at LIC.
The recommendation made by the FSIB is a significant development for LIC, as it prepares to expand its leadership team. The move is likely to have a positive impact on the corporation’s operations and strategic decision-making. With Chander’s experience and expertise in investment management, he is well-positioned to contribute to the growth and success of LIC.
The FSIB’s recommendation is subject to further approval, but it marks an important step in the process of appointing a new Managing Director at LIC. The development is also significant in the context of the Indian insurance industry, as LIC is one of the largest and most prominent players in the market. The appointment of R. Chander as Managing Director is expected to be closely watched by industry observers and stakeholders.
In conclusion, the FSIB’s recommendation of R. Chander as Managing Director at LIC is a notable development that reflects his strong credentials and experience. The move is expected to have a positive impact on the corporation’s leadership team and operations, and is likely to be closely followed by industry observers and stakeholders.
A mountain of transgressions and shattered vows
The article discusses the breach of trust by the Life Insurance Corporation of India (LIC), the country’s largest insurer, with its customers. The concept of “uberrima fides” or utmost good faith is a fundamental principle in insurance, which demands complete honesty from both parties. However, LIC has consistently violated this principle by delaying payouts, repudiating claims, and hiding behind technicalities.
The article highlights several issues with LIC’s practices, including outdated systems, deliberate indifference, and a culture of opacity and avoidance. For instance, LIC still demands notarized documents, multiple visits, and handwritten forms, making it difficult for customers to file claims. The company’s systems are designed to wear down customers, leading to delays and eventual abandonment of claims.
Moreover, LIC’s claim settlement ratio of 98% may seem impressive, but it still means that thousands of crores are rejected each year on flimsy pretexts. The company knows that most people will not fight back due to lack of time, resources, or legal knowledge. Those who do fight back often win in forums and courts, but justice is delayed, and sometimes denied.
The article also notes that LIC sits on more than ₹20,000 crore in unclaimed amounts, mostly belonging to poor or rural families who are unaware or unable to navigate the process. The company’s tracing efforts are minimal, and it earns interest on this float, making it better for LIC if the money remains unclaimed.
The author argues that LIC’s practices are not accidental but rather a system calibrated to hoard. The company’s motto, “Yogakshemam Vahamyaham” or “Your welfare is our responsibility,” has become a mockery, as it prioritizes profits over people. The article concludes that it is time for LIC to stop hiding behind nostalgia and numbers and to honor the principle of utmost good faith.
The author demands that LIC pay interest when it delays, stop weaponizing technicalities, end petty repudiations, and finally honor its commitments. Every rupee withheld is a breach of faith, and every delay is a betrayal. The article suggests that LIC’s practices are not just financially cautious but also morally collapsed, betraying the very creed it was built upon. Overall, the article is a scathing critique of LIC’s practices and a call to action for the company to reform and prioritize its customers’ welfare.
LIC Schemes: LIC has introduced two new plans, offering potentially high returns.
The Life Insurance Corporation of India (LIC) has introduced two new insurance products, LIC Jan Suraksha and LIC Bima Lakshmi, which will be available for sale starting October 15. Both schemes are non-linked and non-participating, meaning they are not affected by market fluctuations, ensuring a safe investment. These products cater to different individual needs and are designed with the domestic market in mind.
LIC Jan Suraksha is specifically designed for low-income individuals, offering insurance coverage at a low premium. This plan is risk-free, making it an affordable and reliable option for those with limited income. It is a non-participating, non-linked insurance plan, which means it does not offer any bonuses and is not linked to the market.
On the other hand, LIC Bima Lakshmi is designed for the middle-class, providing both life insurance and savings benefits. A maturity amount is paid upon completion of the policy term, and investments are completely safe since it is not linked to the market. This plan is also non-participating and non-linked, meaning its returns are independent of market performance, and there are no bonuses. It aims to cover individuals who want to combine savings with insurance protection.
The launch of these two schemes provides investors with more options, catering to the diverse needs of the general public. Both plans offer a sense of security and stability, as they are not affected by market fluctuations. It is essential to note that investors should make informed decisions and take responsibility for their financial investments. The introduction of these products by LIC is expected to provide a boost to the insurance sector, offering more choices to customers and promoting financial inclusion.
Earn a monthly pension of up to ₹44,000.
The Life Insurance Corporation (LIC) of India has introduced the Smart Pension Plan 2025, a retirement planning solution that provides a guaranteed monthly income for life in exchange for a one-time lump sum investment. This non-linked, non-participating annuity plan is available for a minimum investment of ₹1 lakh. The plan’s payout structure is such that an investment of ₹10 lakh yields approximately ₹6,000 per month, while a larger investment of ₹50 lakh can result in a monthly pension of up to ₹44,000.
The LIC Smart Pension Plan 2025 is particularly suited for senior citizens aged 60 years and above, offering a range of benefits that cater to their financial needs during retirement. These benefits include a guaranteed monthly pension, an easy application process with fixed returns, and liquidity support in emergencies. Additionally, the plan provides tax benefits, which can help enhance savings potential.
One of the primary advantages of the LIC Smart Pension Plan 2025 is that it ensures the safety of one’s investment while providing a dependable income stream during retirement. With the rising costs of living and limited financial avenues available in old age, this plan can serve as a reliable companion for a secure and worry-free future. By investing in the LIC Smart Pension Plan 2025, individuals can enjoy a regular monthly income for life, thereby mitigating the risks associated with outliving their savings.
The plan’s implementation on February 18, 2025, marks a significant development in the Indian insurance industry, as it addresses the growing need for retirement planning solutions. With its attractive features and benefits, the LIC Smart Pension Plan 2025 is poised to become a popular choice among individuals seeking to secure their financial future. As such, it is essential for those planning their retirement to consider this plan and take advantage of its benefits to ensure a comfortable and secure post-work life.
LIC of India will launch 2 new schemes starting tomorrow, namely LIC’s Jan Suraksha and LIC’s Bima Lakshmi.
The Life Insurance Corporation of India (LIC) is set to launch two new schemes, LIC’s Jan Suraksha and LIC’s Bima Lakshmi, starting tomorrow. These schemes aim to provide financial security and protection to individuals and their families. Here are the details of the two schemes:
LIC’s Jan Suraksha
LIC’s Jan Suraksha is a micro-insurance plan that offers a sum assured of up to ₹50,000. The plan is designed for individuals who are not covered under any other life insurance policy. The scheme provides a death benefit to the nominee in the event of the policyholder’s death. The plan has a minimum entry age of 18 years and a maximum entry age of 50 years.
The premium for LIC’s Jan Suraksha is affordable, with a minimum annual premium of ₹100. The plan also offers a free look period of 15 days, during which the policyholder can return the policy if they are not satisfied with the terms and conditions.
LIC’s Bima Lakshmi
LIC’s Bima Lakshmi is a money-back plan that offers a combination of protection and savings. The plan provides a lump sum benefit to the policyholder on the death of the child, as well as a survival benefit paid at regular intervals. The plan is designed for parents who want to secure their child’s financial future.
The plan offers a sum assured of up to ₹1 lakh, with a minimum entry age of 0 years (for children) and a maximum entry age of 12 years. The premium payment term is limited to 5-10 years, with a maximum maturity age of 25 years.
The key benefits of LIC’s Bima Lakshmi include a money-back benefit of 20% of the sum assured at the end of the 5th, 10th, and 15th policy years, as well as a maturity benefit of 40% of the sum assured at the end of the policy term.
Key Features
Both schemes offer a range of benefits and features, including:
- Affordable premiums
- Flexible payment options
- Free look period
- Tax benefits under Section 80C and Section 10(10D) of the Income Tax Act, 1961
- Option to take a loan against the policy
- Rider options, such as accidental death and disability benefit rider
Overall, LIC’s Jan Suraksha and LIC’s Bima Lakshmi are designed to provide financial security and protection to individuals and their families. The schemes offer a range of benefits and features, making them an attractive option for those looking to invest in a life insurance policy. With their launch tomorrow, individuals can visit the LIC website or visit a nearby branch to learn more and purchase the policies.
LIC clocks 14.6% growth in individual premium for June
The Life Insurance Corporation of India (LIC) has reported a significant increase in individual premiums for the month of June 2025. According to data released by the Life Insurance Council, LIC’s individual premiums grew by 14.6% year-on-year, outpacing the 12.12% growth rate of private life insurers. This robust growth is a positive sign for the company, which is the largest life insurer in the country.
In terms of overall premium collection, LIC collected Rs 22,082.37 crore in group premiums in June 2025, down from Rs 23,731.13 crore in June 2024. The overall new business premium fell by 3.43% to Rs 27,395 crore in June 2025, compared to Rs 28,366.87 crore in June 2024. The total number of policies issued by LIC during the month stood at 12.49 lakh, down from 14.65 lakh in June 2024.
For the quarter ending June 2025, LIC’s total premium collection stood at Rs 59,410.69 crore, up from Rs 57,440.89 crore in the same period last year. The individual premium segment grew by 5.34% to Rs 12,503.68 crore, while the group premium segment increased by 2.93% to Rs 46,907.01 crore. LIC issued a total of 30.43 lakh policies during the quarter, down from 35.72 lakh policies in the same period last year.
The data suggests that while LIC’s individual premium business is growing strongly, the company’s group premium business and overall policy issuance are declining. The decline in group premium collection and policy issuance could be a cause for concern, and the company may need to take steps to revitalize its group business. Overall, however, LIC’s performance in the quarter ending June 2025 is a positive sign for the company, and it remains to be seen how the company will perform in the coming months.
It is worth noting that the life insurance industry is highly competitive, and companies need to continuously innovate and adapt to changing market conditions to remain competitive. LIC’s ability to grow its individual premium business is a testament to its strong distribution network and product offerings. However, the company needs to focus on reviving its group business and increasing policy issuance to maintain its market leadership.
In conclusion, LIC’s performance in the quarter ending June 2025 is a mixed bag, with strong growth in individual premiums but declining group premium collection and policy issuance. The company needs to take steps to address these challenges and maintain its market leadership in the highly competitive life insurance industry.