# Significant Enhancements to Gratuity, Renewal Commission, Term Insurance, and Family Pension
RNS: In a landmark decision, the Union Finance Ministry has given the green light to several welfare measures designed to benefit Life Insurance Corporation (LIC) agents and employees. These progressive measures encompass an increase in gratuity limits, expanded eligibility criteria for renewal commission, broader term insurance coverage for LIC agents, and the introduction of a uniform rate of family pension for LIC employees.
The Finance Ministry, in a media release, stated that “More than 13 lakhs agents and more than 1 lakh regular employees, who play a pivotal role in the growth of LIC and the deepening of insurance penetration in India, will benefit from these welfare measures.”
The approved changes, which will soon be officially gazetted, are as follows:
(1) Gratuity Ceiling Raised: The maximum ceiling on gratuity payable to LIC agents has been substantially increased from Rs. 3 lakhs to Rs. 5 lakhs. This enhancement, however, is subject to the maximum eligibility of the agent, which depends upon their renewal commission and the specific gratuity calculation.
(2) Renewal Commission Continuity: Under the revised framework, an LIC agent will now be eligible to receive the renewal commission from their old agency even if they are reappointed as a new agent with a fresh agency code. This provision is expected to provide agents with greater financial stability during transitions.
(3) Expanded Group Term Insurance: The government has also approved an expansion of the free-of-cost group term insurance coverage available to LIC agents. Previously ranging between Rs. 3,000 to Rs. 10,000, the coverage limit has been raised significantly. It will now extend from Rs. 25,000 to Rs. 150,000. This coverage will be applicable to agents whose age at the time of demise falls between 50 to 60 years. The minimum amount of death cover will be Rs. 25,000, while the maximum will be capped at either the agent’s last year’s renewal commission or Rs. 150,000, whichever is lower.
(4) Uniform Family Pension: To ensure the well-being of LIC employees’ families, the Finance Ministry has approved the introduction of a uniform rate of family pension. This pension will be disbursed at a fixed rate of 30%, benefiting the families of LIC employees across the board.
The government’s approval of these enhancements reflects a positive step toward recognizing the invaluable contributions of LIC agents and addressing their evolving needs in the insurance landscape. The impending changes will be officially notified in the government gazette within the next 2-3 days.
Upon notification, LIC will issue administrative instructions detailing the implementation of these enhancements, including the effective date of these changes.
In addition to these substantial enhancements, there is further good news for LIC agents. LIC will soon issue a circular extending the reinstatement period for terminated agents from the current 2 years to an extended 5-year period. This move is expected to provide opportunities for agents to rejoin the LIC family and continue their valuable work in the insurance sector.
These forward-looking measures reflect the government’s commitment to supporting the dedicated agents and employees of LIC, recognizing their invaluable contributions to the growth and development of the insurance sector in India. The implementation of these welfare measures is expected to strengthen the insurance landscape while enhancing the financial security of LIC agents and the families of LIC employees.
