Imagine a scenario where you cannot find a job or do not want to work but desperately need money. Or, you wish to make extra money for family while saving for the future.
These are common situations that millions of Indians face. But there is nothing to really worry about. Thanks to Life Insurance Corporation of India or LIC, you can simply work as the LIC agent and make money.
And making money is not the only attraction to become LIC agent: you also get attractive salary, commission and perks like lifetime pension and membership to exclusive clubs.
You can avail loans at very low interest rates to buy that dream home. And you also enjoy the prestige that comes with working for a respectable organization of the Indian government.
Yes. Working as a LIC agent makes all this possible. Want to become one? Continue reading.
Who Is LIC Agent?
A LIC agent is a very prestigious position. As LIC agent, you become a member of the selected community that works in India’s huge Banking Financial Services and Insurance (BFSI) industry.
LIC agent is a woman or man that promotes life insurance and other insurance policies floated by the Life Insurance Corporation of India (LIC).
Currently, LIC offers various types of life insurance plans. Means, you will promote these financial products from LIC within and outside your social circle.
LIC agents are not employees: it is a form of self-employment or business made possible by India’s largest public sector insurer.
If this interests you, go ahead and find how to become LIC agent from this article.
How to Become LIC Agent
Becoming LIC agent is both, tough and easy. It depends upon your personal skills and aptitude. I will now describe various steps on how to become LIC agent.
Further, anyone above the age of 18 years and has successfully completed Secondary School Certificate (SSC), its equivalent or higher can become LIC agent.
Step-1: LIC Portal
The most important and first step to become LIC agent is to register the corporation through LIC portal.
You have to provide basic details including your name, village, town, city or locality where you reside, contact number and email ID and educational qualifications.
While the LIC portal does not say this, I recommend you also include a concise summary- two or three sentences- about reasons why you wish to become LIC agent. This can prove very helpful to the LIC officer processing your registration.
However, the simplest procedure is to visit your nearest LIC office or meet the local LIC Development Manager.
Step-2: Pass the Interview
The local Development Officer or Branch Manager at the LIC office will interview you. Now, remember, it is very important to pass this interview. Unless you successfully complete this step, there are no chances of going ahead with your ambition to become LIC agent.
There are no particular questions for which you need to prepare for this interview. The officer will ask questions about yourself, test your general knowledge and ask you a few questions related to money and finances.
At the same time, unknown to you, the officer will also judge your personality, the way you present yourself, etiquette and clarity of speech, among others.
Step-3: Free Training
Once you successfully complete this interview, the officer will ask you to enroll for a free training course. Usually, this will be conducted at a LIC office in your city. If you are residing in a town or village, it is necessary to travel to the nearest venue where this training course is held.
The training course has 25-hours duration. It is spread over three to four days. During the course, you will learn everything about the life insurance business and what it involves.
You will also learn about the Insurance Regulatory and Development Authority of India (IRDAI) and its rules governing life insurance.
IRDAI, as the name says, is an organization of the Indian government that regulates the insurance business in this country. Hence, knowing about this body is extremely important for working as a LIC agent.
Step-4: Register for Exam
Upon successfully completing your interview and training, the next step is registering for the LIC Agent Test (PRT). There are two ways of registering for LIC Agent PRT.
- Online: Register yourself at IRDAI portal.
- Offline: Register yourself with the nearest LIC branch office.
You can seek the assistance of a LIC Development Officer to register for the Pre Recruitment Test. You will need certain documents to register.
- Four passport-size color photographs.
- Photocopy of your SSC or its equivalent or highest education degree mark sheet.
- Photocopy of Permanent Account Number (PAN) Card.
- Cancelled Cheque.
If you do not have a bank account, I recommend you open one before applying for LIC Agent Pre Recruitment Test (PRT). Get a cheque book from the bank.
- Following a judgment by the Supreme Court of India, you do not need an Aadhar Card to open a bank account.
- Your PAN card will be enough. However, you will need to provide a valid address proof like ration card, driving license or any documents from the state or Central government.
- Having a PAN card is compulsory. So before applying for the Pre Recruitment Test for LIC Agent, get one from the Income Tax Department.
Fees for LIC Agent Exam
According to the IRDAI portal, fees for online registration are higher than for offline registration. The fee structure is as follows.
- Online Registration & Exam
- Registration Fee: Rs.150.
- Online Training Fee: Rs.150.
- Study Material/ Book: Rs.200.
- Pre Recruitment Test (Online) fee: Rs.500.
- Total: Rs.1,000.
When you register online with IRDAI, you will get a Unique Reference Number and password. Keep the URN safely. You can change the password to remember it better.
- Offline Registration & Exam
- Registration Fee: Rs.150.
- Study Material/ Book: Rs.200.
- Pre Recruitment Test (Offline) Fee: Rs.500.
- Total: Rs.850.
Dates of LIC Exam
There are no fixed dates on which IRDAI conducts Pre Recruitment Tests for aspiring LIC agents. However, once you register for the Pre Recruitment Test, LIC will inform you about the exam dates and venues.
Remember, it is better to check the IRDAI regularly if you are registered online. The LIC portal carries important news about exam dates.
If you have registered offline through an LIC Development Officer or at the LIC branch office, stay in touch with them to know about upcoming Pre Recruitment Tests.
LIC Exam Hall Ticket
Offline applicants for the LIC agent Pre Recruitment Test can collect their exam hall tickets from the nearest LIC office. The ticket has to be attested by a senior LIC officer.
For online applicants, the hall ticket for LIC agent Pre Recruitment Test will be available for download on the IRDAI portal.
Studying for LIC Agent Exam
Actually, studying for the LIC agent entrance exam – also called the LIC agent Pre Recruitment Test is very simple.
Simply visit the Insurance Institute of India (III) website and download the study material. Plus, you have the book from IRDAI/ LIC.
Also, read lots of newspapers and magazines to sharpen general knowledge.
LIC Agent Exam Syllabus
The LIC syllabus consists of English and Hindi languages as well as some basic mathematics and general knowledge.
It also covers various rules, regulations and laws governing life insurance business in India. These laws are made by IRDAI.
You have to complete at least 100 hours of studies before appearing for the LIC agent exam or the Pre Recruitment Test.
LIC Agent Exam
Now we come to the examination itself. As I explained earlier, this exam is called Pre Recruitment Test. Others call it LIC agent’s exam.
- This exam is of 60 minutes duration.
- You will be given 50 questions.
- These questions are objective type- meaning you have to select the right one from the given choice.
- Each question is worth one mark. Meaning, the entire test is for 50 marks.
You need to score at least 18 marks in the LIC agent’s examination to qualify for working. The more marks you score, the better.
Become LIC Agent
Upon successfully completing the Pre Recruitment Test, you are ready to become LIC agent. LIC will issue an appointment letter designating you as their authorized agent. You will also get a license from IRDAI to perform your duties as LIC agent.
Remember, you cannot become LIC agent with just an appointment letter from the corporation. You also need the insurance agency license from IRDAI before getting into this business.
LIC Agent Salary & Commission
Now that you know how to become LIC agent, let us take a look at how much money you can make.
- You get 35 percent of premiums paid during the first year by life insurance policyholders.
- If you work harder and get more people to buy LIC life insurance, you can get up to 40 percent bonus on first year commission. There are other terms and conditions too.
- Retirement benefits or gratuity up to Rs.200,000 will be given if you complete business guarantee of at least 15 years. This means LIC will receive premiums from people who you sold LIC life insurance for the next 15 years after you retire.
- Hereditary Benefits are available for families if the LIC agent dies for any reason. To qualify for this, LIC agents should have sold life insurance policies worth Rs.100,000 in premium before death. Hereditary Benefits are given to nominee or legal heirs of the LIC agent.
- If you have generated premium worth Rs.200,000 and stop working for LIC or lose agency for any reason, the corporation will continue to pay its commission.
- Your income rises automatically because of selling more LIC life insurance policies when you work as a LIC agent. There are no upper limits to your income.
- During the next two years (year-2 and year-3) of selling a policy, you will get a commission at the rate of 7.5 percent of total annual premium that a LIC life insurance policy holder pays.
- From Year-4 of policy, you will get five percent of the annual commission paid to LIC by the person whose life you have insured.
- LIC provides complimentary life insurance cover for its agents. Meaning, their families will receive insurance payout due to the premature death of an LIC agent.
Perks for LIC Agents
Once you become LIC agent, there are several perks available for rewarding hard work.
- Entry to Branch Manager’s Club: for newly appointed LIC agents who perform exceptionally well.
- Divisional Manager’s Club: When you perform very well as Branch Manager’s Club member. Your club status increases with your performance.
You also get entry to:
- Zonal Manager’s Club
- Chairman’s Club
- Corporate Club
More Benefits for LIC Agents
Additionally, you get several financial benefits for saving money.
- Interest free vehicle loan.
- Low interest home loan.
- Office maintenance allowance.
- Furniture allowance.
- Advance for festival celebrations,
- Reimbursement of mobile and landline telephone bills.
LIC City Career Agent
In metropolitan cities, LIC appoints life insurance agents under a special category. They are called City Career Agents or CCAs.
Other than the benefits I list above, CCAs also get a monthly stipend of Rs.7,000 from LIC. This is due to the high cost of living in metro cities of India.
Salient Features of LIC Agency
Do you know that becoming an LIC agent has many more benefits other than making money?
- Lifelong income: LIC pays you the commissions on premiums for policies you sold long after you retire.
- Some LIC agents earn between Rs.1.2 million to Rs.1.5 million per month, which is higher than the best paid job in India.
- You can also sell LIC policies by opening an online agency.
- ID card issued by LIC for agents is considered as valid, government issued proof of identity.
- LIC provides all support for its agents.
But there are some flipsides of becoming a LIC agent too.
Flipsides as LIC Agent
From September 1956, Life Insurance Corporation of India (LIC) enjoyed a complete monopoly over life insurance sector of India.
However, the Indian government took away this monopoly in the year 2000, leaving the life insurance market open for domestic and foreign players as well as joint ventures between India and international insurers.
Consequently, LIC agents can face several problems.
- Stiff competition from private insurers, especially those holding JV with foreign companies.
- Better investment options available to ‘middle-class’ Indians who were once the main customers for LIC life insurance.
- Loss of faith in insurance products due to high premiums and relatively low returns.
- Fear of claims being rejected by insurers for any reason. Nobody reads the fine print and stories of rejection spread fast.
- The inability of LIC to provide customized products vis-à-vis private and JVs in the life insurance sector.
- Better medical facilities leading to higher life expectancy.
- Private sector and JV insurers upping age limit for people taking life insurance. Some insurers go as far as 99 years – something that LIC cannot simply beat.
- Private and JV insurers bundling life, health and other plans to offer a single, all-purpose insurance policy where LIC continues to lag.
- Stiff competition from websites of insurance companies that allow direct, online buying, effectively eliminating need for agents.
- Reluctance among Indians to deal with agents due to fears of getting cheated.
- Mutual Fund companies offering free life insurance or highly subsidized life cover for their Systematic Investment Plan (SIP) subscribers.
- Inexpensive life insurance schemes like Ayushman Bharat of the Indian government and Postal Life Insurance (PLI) by India Post that are available at very low premiums.
Regardless of flipsides, there are very strong reasons to become LIC agent. During the financial year 2018-2019, a premium from new life insurance business increased 6.20 percent year-on-year to Rs 755.88 billion (US$ 11.28 billion), from April 1, 2018 to August 31, 2018.
By the year 2020, the life insurance industry of India will cross the US$330 billion mark, according to market sources. This means, there is ample scope for making money and leading happy life as LIC agent. Now that you know how to become LIC agent, give it a try. It can open doors to wealth.