Becoming an LIC agent is a promising career in the insurance sector, offering flexibility, job satisfaction, and a chance to earn good commissions. With the trust and legacy of the Life Insurance Corporation (LIC) of India, agents have an opportunity to provide financial security to individuals while earning a livelihood.
In this blog, we’ll explore what a LIC agent does, the qualifications needed, how to become an agent, and details about the commissions they earn.
| The LIC agent receives a maximum commission of 25% on the first year for policies of 15 years and above, and the commission is reduced to 5% after the 4th year. |
LIC Agent
An LIC agent is a person authorized by the Life Insurance Corporation of India to sell and service LIC policies. Agents are essentially intermediaries between the insurance company and the customers. Their role includes advising clients on various insurance plans, assisting them in selecting the right policy, and ensuring proper service post-sale. In return for their services, agents earn a commission based on the type and value of the policies they sell.
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Responsibilities of an LIC Agent
Being an LIC agent is more than just selling policies. Here’s a breakdown of their key responsibilities:
1. Advising clients: LIC agents educate customers about various life insurance plans and help them choose the most suitable one based on their needs.
2. Selling policies: Agents are responsible for promoting LIC’s insurance products, meeting sales targets, and acquiring new clients.
3. Customer support: Agents assist policyholders in understanding policy terms, help with claim processing, and ensure that clients are kept informed about premium payments.
4. Maintaining relationships: Building and maintaining long-term relationships with customers is critical to an agent’s success, as it helps in getting repeat business and referrals.
Become an LIC Agent
Becoming an LIC agent is a simple, step-by-step process. Here’s how you can become one:
1. Meet Eligibility Requirements
Age: The applicant should be at least 18 years old.
Qualification: A minimum qualification of a high school diploma (10th pass).
2. Contact an LIC Branch Office
Visit your nearest LIC branch office and express your interest in becoming an agent.
You’ll be connected to a Development Officer who will guide you through the process.
3. Complete Training
LIC provides a mandatory 50-hour training program, covering life insurance fundamentals, policies, and regulations set by IRDAI (Insurance Regulatory and Development Authority of India).
4. Pass the IRDAI Exam
After completing the training, you must clear the IRDAI Pre-Licensing Exam to obtain a license.
The test is fairly straightforward and focuses on life insurance topics.
5. Register as an LIC Agent
Once you pass the exam, you will receive an LIC agent license.
With this license, you can officially start selling LIC policies and earning commissions.
Qualifications Needed for an LIC Agent
Here’s a breakdown of how to become an LIC agent:
1. Minimum Requirements:
Educational Qualification: At least 10th pass.
Minimum Age: 18 years.
2. Process to Become an LIC Agent:
Interview: Attend an interview at an LIC development office.
Training: Complete a 25-hour training program.
Exam: Pass the exam conducted by the Insurance Regulatory and Development Authority of India (IRDAI).
3. After Passing the Exam:
You become an LIC agent.
Start selling insurance policies and earning commissions.
4. No Additional Requirements:
No specialized degree is needed.
No prior work experience is required.
5. Services Offered:
Recommend insurance policies.
Suggest investment plans like money-back plans, pension plans, child plans, etc.
Benefits of Becoming an LIC Agent
Being an LIC agent comes with several advantages:
1. Flexible Working Hours: LIC agents can work at their own pace, making it an ideal career for those seeking work-life balance.
2. Unlimited Income Potential: Your earnings are commission-based, meaning the more policies you sell, the more you earn.
3. Job Satisfaction: Helping people secure their futures through insurance provides a sense of accomplishment.
4. Bonuses and Incentives: LIC offers various bonuses, performance-based incentives, and rewards for agents who meet their sales targets.
5. Support and Training: LIC provides continuous training and development opportunities to ensure agents stay updated on new policies and trends.
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Commission Earned by LIC Agents
LIC agents earn a commission on the premium paid by policyholders. The commission percentage depends on the type of policy, the year of premium payment, and the plan sold.
Here’s a breakdown of the LIC agent commission structure:
1. Endowment Plan
An Endowment Plan in LIC terms is a type of life insurance policy that provides both insurance coverage and savings. It offers a combination of protection and 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 Bank Plans
Money Bank Plan is a type of insurance policy designed to provide both life coverage 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. Child Plans
Child Plans are specialized insurance policies designed to provide financial security for a child’s future needs.
| 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
Pension Plans are insurance products designed to provide financial security during 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% |
Also Read: Loan Against LIC Policy
Commission Calculator
There is a formula you can use to calculate the LIC agent commission. The commission is calculated as a percentage of the premium paid by the policyholder. The formula varies depending on the year of the policy, as commission rates for the first year are different from subsequent years.
Formula for First-Year Commission
First-year commission= Annual Premium (First Commission Rate / 100)
Example:
If an LIC agent sells a policy with an annual premium of ₹50,000 and the commission structure is:
First-year commission: 25%
The calculations will be as follows:
50,000 (25/100) = ₹12,500
Formula for Second and Third-Year Commission
Second or Third Year Commission = Annual Premium (second or third commission rate)/ 100
Example:
If an LIC agent sells a policy with an annual premium of ₹50,000 and the commission structure is:
Second/Third year: 7.5%
The calculations will be as follows:
50,000 (7.5 / 100) = ₹3,750 (P.A.)
Formula for Fourth Year Onwards
Fourth Year Onward Commission = Annual Premium (Fourth Commission Rate/ 100 )
Example:
If an LIC agent sells a policy with an annual premium of ₹50,000 and the commission structure is:
Fourth year onwards: 5%
The calculations will be as follows:
50,000 (5/100) = ₹ 2,500(P.A.)
This formula can be applied based on the premium amount and commission percentages to calculate your earnings as a LIC agent.
Also Read: LIC Investment Plans
Conclusion
Becoming an LIC agent offers a rewarding career with flexibility, high-income potential, and the satisfaction of helping people secure their futures. With LIC’s reputation, comprehensive training, and attractive commission structures, it’s a great opportunity for those looking to start an insurance career. If you’re interested in becoming an agent, follow the steps outlined above and take advantage of the benefits and incentives LIC offers.
With detailed knowledge about the commission structure, aspiring agents can make informed decisions about this career path. Whether you’re looking to earn a side income or build a full-fledged career, the role of an LIC agent can provide financial growth and personal satisfaction.
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Frequently Asked Questions
How to check LIC agent commission?
LIC agents can check their commission by logging into the LIC agent portal or through their commission statement.
What is the commission structure for LIC agents?
The commission varies, usually 25-35% on the first-year premium, with lower percentages on subsequent renewals.
How much commission does an LIC agent earn on a policy?
LIC agents typically earn 25-35% commission on the first-year premium, depending on the policy type.
Do LIC agents receive commissions on renewals?
Yes, LIC agents earn a lower commission on policy renewals, generally around 5-7.5%.
Is the LIC agent commission a one-time payment?
No, LIC agents earn commissions on both new policies and renewals.
How does the commission differ across various LIC policies?
Commissions vary by policy type, with higher percentages on endowment policies and lower rates for term insurance.
Are LIC agent commissions subject to taxes?
Yes, LIC agent commissions are taxable under the income tax laws.
Can an LIC agent earn a commission on their own policy?
Yes, LIC agents can earn commissions on policies they purchase for themselves.
Does LIC provide bonuses in addition to commissions for agents?
Yes, LIC offers bonuses based on the agent’s performance and business volume.
How is LIC agent commission calculated for term insurance policies?
For term insurance, commissions are generally lower, usually around 10-15% of the first-year premium.
