Life Insurance Corporation of India (LIC) has found success with its Unit Linked Pension Plan in the pension space. LIC had sold more than 30,000 policies of Pension Plus since its launch in September 2010 when the new ULIP norms came into effect.
Pension plans in the Unit Linked category are something all life insurance players had stayed away from as the new norms required the policy to provide a 4.5% guaranteed rate of return per annum. Most companies were wary of achieving the same and stayed away from the pension plan segment. Only the Life Insurance Corporation of India launched a new pension plan called “Pension Plus” and the results are there to see. In fact, the only other life insurance player to launch a pension plan is ICICI Prudential which launched a single premium unit linked insurance product in the pension space called “LifeLink Pension SP”. The company has launched an aggressive campaign to market this product, but it is still early days to gauge the success of the insurance product.
Other life insurance companies are still not ready with pension plans in the ULIP space. LIC has rightly grabbed the opportunity and Pension Plus alone has garnered close to Rs. 150 crores in premium in just a little more than a month.
This will further add to the trust element that people have with LIC. Almost all major life insurance companies chose to stay away when told to provide a minimum guarantee as low as 4.5% per annum – one wonders what use the glossy projections of 6% and 10% were supposed to serve. Even a savings bank account guarantees a rate of return and charges almost nothing!