LIC Aims More Income From Traditional Products

Mumbai: Life Insurance Corporation of India (LIC) has set aim of increasing the share of new business premium from traditional products to generate resources for investments in longer-term infrastructure projects and government bonds. The public sector life insurer has framed a plan to increase the share of new business premium income from traditional insurance products to 35 per cent in 2007-08 from 20 per cent in 2006-07. The popularity of unit-linked insurance plans (Ulips) unexpectedly pushed up the growth of LIC''s new premium income to over 100 per cent in 2006-07. LIC''s requires for long-term funds cannot be met from Ulips, as individuals prefer to invest most of their funds in equities. The insurer also benefits because the risk premium is borne by the policyholder.