An Open Appeal TO Chairman LIC of India

To

The Chairman

LI C Of India

  Sub: Service Standard To Suit Customers Not Agents

Respected sir, 

With due regards 

I know very well that you do not have much time to go through each complaints received .

I am facing indifferent attitude of LIC officials in getting payment of my policy which already matured. I have written to you and in return I got nothing but a four line formal letter to close the chapter. 

However I have gained some experience in course of making follow up for payment . I submit before you some points which need your preferred attention and which will be beneficial for policyholders in general and if your clients are happy and comfortable , there is no doubt in it that the organisation like LIC will flourish by leaps and bounds.

1. Command Area of LIC branches:-

  All branches of LIC should attend to policy holder irrespective of branch wherefrom policy has been issued. Branch officials  should ascertain veracity of policy and KYC of claimant of payment and arrange for payment even if the policy has been issued from some other branch. Verification is not a tedious task when technology has become so much helpful. If you think that it is not possible for a branch to attend to clients of other branch, then you should ensure that each branch mobilise business from a defined command area only.

All details of all Policies  should be made available to all branch and all records should be online . Branches ignoring clients of other branch must be suitably advised and taken to task if needed. When all banks are now on CBS platform, it is not difficult for LIC also to bring all their offices under CBS platform.

2. Role of Agents: 

All agents who mobilise business for LIC and earn commission should serve their clients . Commission to agents should be payable for one year they mobile policy and not for subsequent period of time. Because most of policy holders pay their premium online through internet or through bank. Role of agents is limited to rural areas.

3. Attending Public Complaints :- 

Complaints lodged under grievance portal should be attended with keen interest . The culture of issuing a formal letter or promising letter to policy holders and then closing the complaint is not good in the interest of any organisation. Complaints must be escalated to higher and higher level  after passing of each three day or seven day until it reaches to its logical end. 

4. Eligible Period  For Payment of Commission:--

Agents are paid more commission in entire tenure of policy compared to policy holders. LIC earn extraordinary high profit but do not share the same to policy holder in proportion they deserve it. Agents are paid commission ranging from 5 to 40 percent on premium received whereas policy holder get hardly a return of 6 to 8 percent per year. 
( See comparative Details given below )

Excel sheet How Agents Earn commission

5. Employees of LIC:—

In most of cases , it is found that staff working in a branch are guided by agents and staff speak the language of agents who earn money from policy holders and share with them. To sacrifice the interest of clients is a sin. Customers are the backbone of all organisation . As such Staff of all branches should be trained to become more friendly to clients than to their agents.

6. Agents in LIC :—

Agents should be made legally answerable to customers from whom them mobilise business of insurance .If they do not  take any pain after first year they do not have any moral right to demand commission for entire period of policy. LIC may save such extraneous payment and give added bonus to those clients who invest in LIC.

Click here to know how LIC loot policy holders

7. Facility of Transfer of Policy :- 

This should be made possible as per discretion of policy holders and not depending on whims and fancies of staff employed in any branch. 

You may buy share of any company sitting in any place in any town using Internet and sell it any day , you will get payment of share Value within two to three days.

You may invest in any mutual fund online and get payment online.

You may invest in bank FD online and get payment online .

But in case of LIC , you may pay premium online but you may not get payment online at the time of maturity. You have to act as per whims of LIC office, that from the branch which has issued it.

If you in transferrable service, you will be posted at various places, you will buy policy at different places,pay premiums regularly online from anywhere and keep all policy in force. But when they mature, it is necessary for you to knock the door of LIC office which has issued the policy and then dance as per office staff gives direction to you.

Why offices of LIC stick to four to five decades old rules of manual processing a policy and payment of the policy to policy holder on due date of maturity?

Will you please make arrangement for issuance of policy in demat form and payment to client online in tune with details of bank registered in the beginning or modified at a later date without insisting for visit to a branch or office ?

8. Terms of Policy:-  

All terms and conditions related to each and every policy should be mentioned in easy and comprehensible words in policy documents. It should be the duty of every agent to explain each terms and condition to prospective client and should be acknowledged duly by the client.

9. Last but not the least , there should be flexibility in each policy which may ease the process of payment in favour of policy holders without harming the organisation in any way. There should be officers in each branch which are recruited directly from market and which do not blindly speak the language of agents.

I hope you will take my above little suggestion in good spirit and act thereupon if the same are found good for the health of policy holders and the organisation.

Thanking you

Yours faithfully 

Comparative Position of Earning made by Investor and Agent:--

Rate of Commission which accrue to an agent is as follows for regular policies:-

For First year --- Commission @ 21 to 35% of premium

For Second Year-Commission @ 10%

For Residual Year - Commission @5 to 6% 

 If I deposit a sum of Rs.100 has annual premium in LIC to buy a regular policy , I will get on an average return of 6 to 8 percent annual yield for  period for which policy has been bought.

It means I will get Rs.6 to Rs.8 as dividend or/and  bonus upon my investment of Rs.100 every year after end of tenure of the  policy.

On the contrary agent who mobilised me for buying the said policy  will get more than what I get after investing Rs.100 without investing any amount .

In the first year an agent will get Rs.21 to Rs.35 per Rs.100 of premium deposited towards my regular policy.

In the 2nd year  he will get 10% of my annual premium i.e Rs.10/-

and for residual years , agent will get 5 to 6% every year.

In aggregate agent may earn more than an investor get return .

Secondly agent will get commission every year and he may open a cumulative account to earn more. Whereas investor like my will get hardly 6 to 8 percent on my total investment after end of total period say 20 years. 

Thirdly agent will get automatic credit of commission every year in his account whereas investor will have to knock the door of LIC , complete various formalities and then depend of whims of LIC staff when they release the payment . 

Fourth, investor has to bear the risk of market, If market is dull LIC will get less and then it will announce less dividend or less bonus . Whereas Agent bears no risk and make no investment , only earn as long as policy premiums are paid.

God knows what will happen in case of premature death of investor. In such case nominee will have to move from heaven to hell to get the claim settled. It means ,nominee will have to complete Himalayan task for getting the claim settled.

Click Here to Read Agents earn more commission

Indifferent Attitude of LIC Staff at Time You Want Payment