LIC cuts Bima Nivesh yield by 50 bps, leaves premium untouched

Sitanshu Swain

Mumbai, July 15: The Life Insurance Corporation (LIC) is re-launching one of its popular high-yield plan, Bima Nivesh, by reducing its yield by almost 50 basis points, with a slightly low return, on July 24.

The new rate of return of Bima Nivesh will be pegged at around nine per cent, down from the present 9.5 per cent, after adjusting the yield with the falling domestic interest rate.

However, the premium of the earlier Bima Nivesh will be retained at the same level.

This is for the first time that the state-owned life insurance behemoth is launching a product with a rider.

The new Bima Nivesh, which is a single-premium assurance plan with compounding guaranteed additions, will have a single rider for facilitating a ‘‘term assurance’’ which can be availed of by a policy-holder by paying an additional premium.

Also, the minimum entry age of the new Bima Nivesh policy is being reduced from 35 to 18 by the LIC. LIC, during the first quarter of the current fiscal, has been able to mobilise almost Rs 1800 crore.

The institution is planning to make changes in other pension plans also after getting the approval of the Insurance Regulatory Development Authority (IRDA).

Apart from increasing the agency force, the corporation is planning to tie up with a multitude of corporate agents and public sector banks which will be pressed into distribution service shortly. It has already tied up with the Bank of Punjab, HDFC Bank, UTI Bank and IDBI Bank for payment of premiums by the policy holders.

A review of the first quarter performance of LIC indicates that the institution’s business has continued to upswing during the period.
The institution had a record-breaking performance during 2000-2001.
In a bid to spurce up its nation-wide marketing network, LIC is expanding its existing 8,000,00-strong agent force by almost 20 per cent during the year.