LIC lowers some premiums as life expectancy rises
05 February 2014
The Life Insurance Corporation of India (LIC) has rejigged its mortality table for policyholders to incorporate the improved average life expectancy of Indians, which has moved from 60 years in 1996 to 65 years in 2011, thereby passing on the benefits of the increase in life expectancy, SK Roy, chairman of LIC said.
This has resulted in a little over 10 per cent reduction in the premium being paid by some policy holders, depending on the age groups and products, say financial advisors.
The revised risk pricing mortality table incorporates the increase in average life expectancy of Indians, he said, while declining to mention a specific number of beneficiaries.
He said the revision of portfolio to adopt to a new mortality table is in accordance with regulatory requirements.
''At higher ages, it is quite significant, because mortality over the 20-year term has improved dramatically as far as longevity is concerned.''
At present, LIC has around eight products that account for about 90 per cent of market requirements, Roy said, adding that LIC has no plans to launch unit-linked products (ULIP) now.
''We want to concentrate on the traditional platform which has always been the mainstay of LIC,'' he said.
These products generate a significant portion of LIC's total sales.
He said LIC's premium sales would pick up in the two months ending 31 March 2014, adding that at least Rs5,000 crore more would be invested in the next two months, taking its total equity investments this fiscal to a minimum of Rs40,000 crore. Total investments of LIC, including debt, would be Rs2,20,000 crore, he said.
LIC, which had set a growth target of 12 per cent in first premium income, has seen it growing at 30 per cent, Roy added.