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Insurance Rs.11,500 crore commission paid to insurance agents in April-September 2018

Rs.11,500 crore commission paid to insurance agents in April-September 2018

The gross commission of agents has increased by 15%.
Team Cafemutual Mar 3, 2019

The latest data from the industry trade body, Life Insurance Council (LIC) shows that the life insurance industry has disbursed gross commission of Rs.11,528 crore in April-September 2018 as against Rs.10,033 crore in the corresponding period preceding fiscal, an increase of 15% in a year.

IRDAI data shows that during the same period the industry has received new business premium collection of close to Rs. 93,000 crore from 1.16 crore policies. A rough calculation indicates that life insurance industry pays 12% of its new business premium as gross commission to their agents.

Considering that the life insurance industry has 20 lakh agents, a rough calculation shows that each agent has earned close to Rs.58,000 in the first six months.

Experts attribute this increase to IRDAI’s decision to hike the commission structure of insurance agents under various policies in 2017.

While the first year commission of traditional policies like whole life, endowment and money back having over 12 years of premium payment term is 35% of annual premium, insurers can pay up to 15-33% of annual premium on policies having premium paying term of less than 12 years depending on the tenure. Higher the tenure, more would be the upfront commission. The insurance regulator has fixed the trail commission at 7.5% throughout the premium paying term.

The life insurance industry had assets under management of Rs.34 lakh crore in FY 2017-18.

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7 Comments
Rajesh Hattangady · 2 weeks ago
Does life insurance products and servicing these policies warrant such high payouts for agents?
Shouldn't IRDA follow suit what AMFI and SEBI
done in the mutual fund industry?
Irfan Ahmad · 2 weeks ago
Lic commission high but M.F.commission is low why
Thakkar Kailash Nanji · 2 weeks ago
Intelligent Banker sell Insurance policy
Vivekanand Prasad · 2 weeks ago
Why the ratio of Insuered peoole is lesser in India , while commission in this sector is HIGH
Ranjan · 2 weeks ago
SEBI must reply why this disparity in Insurance commission and MF commission. SEBI cannot be only regulator if it cannot contribute to the development of MF Industry. It is high time that MF industry should have separate SRO.
AnilMishra · 1 week ago
A MF sip can be of 6 months / 10 years or more also.
Insurance Policy On average is a 20 year Lock in product.
Selling and Servicing both products are totally different.
The best part is many ARN holders are selling Insurance and insurance agents are selling MF too.


Reply
Anil Mishra · 1 week ago
A MF sip can be of 6 months / 10 years or more also.
Insurance Policy On average is a 20 year Lock in product.
Selling and Servicing both products are totally different.
The best part is many ARN holders are selling Insurance and insurance agents are selling MF too.


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