Insurance Agent Commission is different from company to company, here in this article we will learn about the insurance companies in India and how the Insurance Agent Commission is defined by companies.
First, let us understand who insurance agents are? so Insurance agents serve as the mediator between insurance companies and those who seek to purchase insurance policies. Insurance agents may focus on providing their clients with one particular type of insurance, or they may sell a variety of insurance policies. Various types of insurance include life, property, disability and health insurance.
There are 24 Life Insurance companies, 33 General Insurance Companies, most of them are providing health insurance, registered with IRDA(Insurance Regulatory and Development Authority of India) in India.
List of few top Life insurers:
- Life Insurance Corporation of India
- HDFC Standard Life Insurance Co. Ltd
- Max Life Insurance Co. Ltd.
- ICICI Prudential Life Insurance Co. Ltd
- Kotak Mahindra Life Insurance Co. Ltd.
- Aditya Birla SunLife Insurance Co. Ltd.
- TATA AIA Life Insurance Co. Ltd.
- SBI Life Insurance Co. Ltd.
- Exide Life Insurance Co. Ltd.
- Bajaj Allianz Life Insurance Co. Ltd and more you can find the full of list Life Insurance companies Here.
List of few top General insurers:
- Bajaj Allianz General Insurance Co. Ltd.
- ICICI Lombard General Insurance Co. Ltd.
- IFFCO Tokio General Insurance Co. Ltd.
- National Insurance Co. Ltd.
- The New India Assurance Co. Ltd.
- The Oriental Insurance Co. Ltd.
- United India Insurance Co. Ltd.
- Reliance General Insurance Co. Ltd.
- Royal Sundaram General Insurance Co. Limited
- Tata AIG General Insurance Co. Ltd. and more you can find the full list of General Insurance companies Here.
Commission Structure of Life Insurance Agents
Insurance Agent Commission is nothing but the commission that an Insurance Agent gets from the corporation. It varies from Policy to policy, and also the Commission of Insurance Agent is based on the term of the policy. therefore higher the term, the higher the commission will be.
The first Agent commission will be dependent on term of the policy and type of the policy (Endowment, Money back, etc). Here we have provided the information about the commission that an Insurance agent gets. The Insurance Agent Commission in Insurance is also based on the type of the policy which is available on the insurer’s website.
The maximal commission the Insurance Agent gets in the first year is approx 25% for 15 years, and above and the commission is cut down to approx 5% after the 4th year.
For Endowment Natured Policies with 15 years or more term the first-year commission of 25% and a Bonus Commission on the same to the extent of 10% on the First Yr Premium. 35% is payable if the Agent is eligible for Bonus. Otherwise, the maximal Commission payable to be 25 % on the First Year Premium. furthermore, the sale of Life Insurance gives repeated commission payments for one sale.
Insurance Agents Commission from 1st April 2017
Life insurance agent commission for Single-Premium Products:
| CATEGORY | 1st MAXIMUM COMMISSION PAYBLE |
|---|---|
| All Life Insurance Products(except Term Plans) | 2% |
| Term Plans | 7.5% |
| Immediate/Deferred pension or Annuity Plans | 2% |
| 1-year renewable Group Term plan | 5% of premium paid or Rs. 10 lakhs(whichever is less). |
| Group Term plan | 5% |
Life insurance agent commission for Regular Premium Products:
| CATEGORY | 1st-year | Renewal Commission |
|---|---|---|
| Individual Term Insurance | 40% | 10% |
| Individual Non-Term Insurance products | ||
| For 5 Year Policies | 15% | 40% |
| For 6 Year Policies | 18% | 7.5% |
| For 7 Year Policies | 21% | 7.5% |
| For 8 Year Policies | 24% | 7.5% |
| For 9 Year Policies | 27% | 7.5% |
| For 10 Year Policies | 30% | 7.5% |
| For 11 Year Policies | 33% | 7.5% |
| For 12 or more Year Policies | 35% | 7.5% |
| Individual Deferred Annuity/Pension | 7.5% | 2.0% |
Health Insurance Agents Commission:
| CATEGORY | COMMISSION |
|---|---|
| Health Individual | 15% |
| Health Group(Employer-Employee) | 7.5% |
| Health Group(Non-Employer-Employee) | 15% |
| Health Group(Credit linked up to 5 yrs) | 15% |
General Insurance (Other than Vehicle) Agents Commission:
| CATEGORY | Commission to Agents | Commission to Intermidiary |
|---|---|---|
| Fire-Retail | 15% | 16.5% |
| Fire-Corporate(Risk SI<=25ooCr) | 10% | 11.5% |
| Fire-Corporate(Risk SI>25ooCr) | 5% | 6.25% |
| Marine-Cargo | 15% | 16.5% |
| Marine-Hull | 10% | 11.5% |
| Miscellleneouse-Retail | 15% | 16.5% |
| Miscellleneouse-Corporate/Group | 10% | 12.5% |
Vehicle Insurance Agents Commission:
| CATEGORY | COMMISSION |
|---|---|
| MOTOR(Comprehensive) | 15% |
| MOTOR(Stand-alone TP) | 2.5% |
Now Let us see How LIC Agent earns as a commission:
LIC Agent Commission Details
| 1st Commission | Depend on the term of the policy and type of the Policy |
| 1st Year Commission | Commission payable on the 1st year premium. |
| Bonus-Commission | Subject to conditions. |
| Renewal Commission | Depend on the type of the policy and Term of the policy. |
Types of Agent Commission in LIC
| YEAR | 1st Type(MONEY BACK) | 2nd Type(ENDOWMENT) |
|---|---|---|
| 1st YEAR | 15% | 25% |
| Bonus Commission | 40% Commission | 40% Commission |
| 2 years | 10% | 7.5% |
| 3rd years | 10% | 7.5% |
| 4th years onwords | 6% | 5% |
Hope this is helpful for you.
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