LIC to withdraw multiple high-yielding schemes from November 30

New Delhi: Life Insurance Corporation of India (LIC), the country's biggest life insurance company, is about to withdraw over two-dozen individual insurance products, eight group insurance schemes and seven-eight riders from November 30.

The individual insurance schemes that are to be withdrawn on November 30 are some of LIC's best selling and high-yielding schemes such as Jeevan Anand, Jeevan Umang, Jeevan Lakshya and Jeevan Labh. "We will be closing some products, modifying them as per the new norms and then relaunching them in the coming months," M. R. Kumar, Chairman, LIC, told Financial Chronicle.

According to media reports, the state-owned insurance behemoth would revise these plans in line with the insurance regulator's revised customer-centric product guidelines and relaunch them in the next few months. But the new products would fetch lower bonus rates and will have higher premium rates.

Not only LIC, butother insurance companies will also withdraw their policies that are non-compliant with the latest IRDA rules, from November 30.The new regulations were issued on July 8, 2019. According to industry sources, around 80 different life insurance products from all the life insurance companies would go off the shelf after November 30.

"We don't see any disruptions in the market. The insurers are on the job. Around 75-80 products may have been withdrawn by November 30 as they are not compliant. However, a significantly large number of products are compliant and would continue to be sold from December 1 with a tweak in pricing. Insurers will have to reprice the products within the bandwidth to manage their risk. In certain cases the premium rates can fall also," A senior official from the IRDAI told Financial Chronicle. The official added that the guidelines make insurance products "more customer-centric and curb mis-selling."