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LIC plans to combine high-cover term insurance with ULIPs for enhanced customer benefits
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CEO R Doraiswamy supports 100% FDI in insurance to boost competition and technology adoption
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Proposed reforms include amendments to Insurance Act, LIC Act, and IRDAI Act for sector growth
Life Insurance Corporation of India (LIC) is preparing to broaden its protection-led offering by combining high-cover term insurance with unit-linked insurance plans (ULIPs), aiming to give customers "the best of both worlds", CEO and MD R Doraiswamy said in a conversation with NDTV Profit.
Doraiswamy’s comments came as the insurance sector discusses a major reform push, which he described as a long-awaited initiative that would amend provisions of the Insurance Act, the LIC Act and the IRDAI Act.
He said the proposed changes, including the move towards 100% foreign direct investment (FDI) in insurance, could help accelerate the national goal of "insurance for all by 2047", when India marks 100 years of Independence.
According to Doraiswamy, higher FDI could bring in more insurers, intensify competition, improve technology adoption and strengthen transparency and customer service across the industry.
He also pointed to increased regulatory powers and clearer standard operating processes for framing regulations, along with steps such as easing net-worth requirements for foreign reinsurance companies to deepen reinsurance support and enable wider insurance penetration.
LIC expects the regulator to also come back with some kind of cap on commissions. Doraiswamy also stated that as a customer-centric product in India, insurance has always been thought of as a diversification of portfolio and investment. "There was a time when people thought of insurance as primary savings. The they moved on to other forms of savings keeping insurance as part of their diversified portfolio," he explained.
LIC's focus will be to increase term but it will also look at the potential of ULIPs. "So, we are combining term insurance with ULIPs so that customers get the best of both worlds. Very high term insurance protection is a need for the current generation, along with their savings getting good returns."
Even so, LIC sees strong potential in combining term protection with market-linked savings through ULIP-based structures, offering higher cover alongside investment participation.
Doraiswamy said LIC expects term’s share in its portfolio to rise in the near term, supported by digital and intermediary-sold products, as the corporation positions itself to compete in a more open and crowded market.
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