Do LIC Agents Buy LIC Policies for themselves, or Only Sell and Make a Living?
It is not so easy to sell Insurance plans because is it not compulsory to buy. Vehicle insurance is compulsory to ride on the roads, but Life Insurance is not compulsory.
LIC agents, the backbone of the Life Insurance Corporation of India, play a pivotal role in reaching out to potential policyholders, educating them about various insurance products, and helping them secure their financial future. A common question that arises is whether LIC agents buy LIC policies for themselves or merely sell them to make a living. The answer is multifaceted, encompassing aspects of financial security, belief in the product, and the nature of their earnings.
The Nature of LIC Agents' Earnings
LIC agents are not salaried employees; they work on a commission basis. This means they earn a commission only on the policies they successfully sell. Here’s a breakdown of how their earnings typically work:
Commission on New Policies:
- First-Year Commission: LIC agents earn a significant commission in the first year of the policy depending on the type of policy and the terms agreed upon.
- Renewal Commission: In subsequent years, agents earn a smaller renewal commission, ensuring a continued income stream as long as the policyholder keeps renewing the policy.
Incentives and Bonuses:
- Performance Bonuses: Agents who meet or exceed their sales targets may receive bonuses, awards, and other incentives.
- Training and Development: LIC invests in training its agents, offering them continuous development opportunities to improve their sales skills and product knowledge.
Why LIC Agents Buy LIC Policies Themselves
1. Belief in the Product:
- Confidence in LIC's Offerings: LIC agents are trained extensively on the benefits and reliability of LIC policies. Their belief in the product is often so strong that they see the value in purchasing policies for themselves and their families. This firsthand experience allows them to genuinely vouch for the products they sell.
2. Financial Security:
- No Regular Salary: Since LIC agents do not have a fixed salary and their income depends solely on commissions, purchasing an LIC policy provides them with a financial safety net. Policies such as endowment plans, money-back plans, and pension plans ensure that agents have savings and a regular income in the future.
3. Tax Benefits:
- Deductions Under Section 80C: Premiums paid towards LIC policies are eligible for tax deductions under Section 80C of the Income Tax Act. By buying policies themselves, agents can reduce their taxable income and save on taxes.
4. Setting an Example:
- Leading by Example: When agents buy LIC policies, they set a strong example for their clients. It showcases their trust in the product and can be a powerful selling point. Clients are more likely to trust an agent who has personally invested in the products they are recommending.
5. Meeting Sales Targets:
- Self-Purchase for Targets: Sometimes, agents may purchase policies to meet their sales targets. Achieving these targets can be crucial for earning bonuses, retaining their status, and receiving other benefits associated with their performance.
The Role of Canvassing and FAQs in an LIC Agent’s Job
1. Canvassing:
- Proactive Outreach: LIC agents spend a significant amount of time canvassing, which involves reaching out to potential clients through various means such as phone calls, meetings, seminars, and social media.
- Building Relationships: Successful canvassing is not just about making a sale but about building long-term relationships with clients. Agents need to understand their clients' needs, financial goals, and risk tolerance to recommend suitable policies.
2. Providing FAQs and Using Keywords:
- Educating Clients: Agents provide frequently asked questions (FAQs) documents to educate clients about different policies, their benefits, terms, and conditions. This helps in addressing common queries and concerns that clients may have.
- Using Keywords: In their communication, agents often use specific keywords related to insurance benefits, such as "financial security," "tax savings," "retirement planning," and "child education." These keywords resonate with clients’ goals and highlight the advantages of LIC policies.
Challenges Faced by LIC Agents
1. High Competition:
- Market Saturation: The insurance market is highly competitive, with numerous agents vying for clients. Standing out requires not just knowledge and skill but also perseverance and a proactive approach.
2. Client Trust and Convincing:
- Building Trust: Convincing clients to invest in life insurance requires building a high level of trust. Agents need to be knowledgeable, transparent, and genuinely interested in their clients' welfare.
3. No Guaranteed Income:
- Commission-Based Income: The commission-based structure means that agents may face financial uncertainty, especially during times when sales are low. This makes financial planning crucial for their stability.
LIC agents do more than just sell insurance policies; they often buy them themselves. This practice stems from their deep belief in the product, the need for financial security, the desire for tax benefits, and the strategy to meet sales targets. Their role involves not only selling policies but also educating clients, building relationships, and providing ongoing support. While the job comes with challenges, the dedication and hard work of LIC agents ensure that they play a critical role in securing the financial future of many families, including their own.
Investing in LIC policies is a wise decision, whether you are an agent or a client, as it provides a robust safety net for the future. For LIC agents, buying policies themselves is a testament to their trust in the product and a step towards their financial stability.
