Tamil Nadu Congress leader and Member of Parliament, Manickam Tagore, has written to Union Finance Minister Nirmala Sitharaman, expressing concern over recent policy changes by the Life Insurance Corporation (LIC) that could negatively impact millions of agents and policyholders.The senior Congress leader has called for the Union Finance Minister’s immediate intervention to protect the welfare of LIC agents and policyholders.
Tagore’s letter describes recent amendments to LIC policies as deeply troubling, with potential adverse effects on the livelihoods of approximately 1.4 million LIC agents and millions of policyholders who rely on LIC for affordable life insurance.
In his letter, Tagore notes that LIC has recently raised the minimum sum assured to Rs. 2 lakh and increased premium rates, which could disproportionately impact rural, lower-income, and middle-income groups. These groups, he suggests, may now struggle to afford life insurance at higher premiums.
Tagore also criticises LIC for not increasing agents’ commission rates, noting that as of October 1, 2024, the commission rates have even been reduced.
Furthermore, he highlights that the annual bonuses declared by LIC have been decreasing over time, diminishing the value of policies for policyholders.
The Congress MP expressed particular concern over the “clawback commission” policy, which holds agents responsible for policy surrenders, requiring them to repay the commission earned.
He argued that this is unfair, as agents should not be penalised for policyholder decisions that may be influenced by factors beyond their control.
Tagore’s letter concludes by urging the Union Finance Minister to review these changes and take corrective action to ensure LIC continues to provide accessible and affordable life insurance to all sections of society.
He contends that decisions affecting LIC agents and policyholders should consider their welfare, rather than being skewed in favour of corporate interests.