LIC cuts first-year commission to 28% post change in surrender value norms

The Life Insurance Corporation of India (LIC) has reduced the first-year commission for agents from 35% to 28% following changes in surrender value norms. The Insurance Regulatory and Development Authority of India (IRDAI) mandated these changes to ensure better payouts for policyholders who exit early. The new norms, effective from October 1, 2024, also increase the minimum sum insured for term policies to INR 2 lakh. LIC has adjusted its commission structure, increasing renewal premiums to 7.5%. These changes aim to enhance customer benefits and align with regulatory requirements, impacting agents’ earnings and operational strategies.