Agents commission in Insurance Policies ?

POSTED BY Jagoinvestor ON April 28, 2010 COMMENTS (240)

In this article we will see the commission structure of Insurance Policies . We will look at Endowment/Moneyback/ULIP plans and how much commission an agent earns per year out of those policies.

As per Insurance Act, 1938, The insurance companies are allowed to pay a maximum commission of 40 per cent of the first year’s premium, 7.5 per cent of the second year’s premium and 5 per cent from there on. The commission paid is limited to 2 per cent in case of single premium policies. In case of pension plans, the commission is limited to 7.5 per cent of the first year’s premium and 2 per cent there on. Currently most of the policies are very much paying these kind of commissions . Let us quickly look some of the facts on Life Insurance .

  • Average sum assured of the insured Indian is around Rs 90,000
  • 1 trillion worth of policies lapsed in 2008-09 , this is mostly because investors have discarded their old policies to buy new one’s , thanks to agents who tell people about another “hot” plan in market. Another reason is that investors buy policies which have higher premium than what they can afford in reality and later feel that its time to stop it .
  • India Insurance penetration is around 7.5% of global numbers . i.e: 0.16% of the GDP, which is , against a global average of 2.14
  • As per IRDA report 2008-09 , Insurance Industry had 29.37 lakh agents by the end of Mar 2009 , out of which 13 lakh agents were added during 2008-09 .

Life Insurance Commission Example


Policy Type Premium Paying Term Upfront Commission (1st Year) Trail Commission (2nd & 3rd yr) Trail Commission (from 4th yr)
Endowment / Term Plans 15+ yrs 25% – 35%  * 7.5% 5%
Endowment / Term Plans 10-14 yrs 20% – 28%  *
7.5% 5%
Endowment / Term Plans 5-9 yrs 14% 5% 5%
Endowment / Term Plans Single Premium 2% 0% 0%
Money Back 15+ yrs 15% – 21%  *
10% 5%
ULIPs Regular Premium
20 – 40% 2% 2%
ULIPs Single premium 2% 0% 0%


Note : Some of the numbers are in range, which means the commission can lie between that range . Mostly its minimum commission + Bonus if any


  • Policy Type : Endowment Policy
  • Premium Paying Term : 20 Yrs
  • Premium/Year : Rs 1 Lacs

Agents Commission

Commission Amount
1st Year Rs 35,000 1 X 35%
2nd Year Rs 15,000 2 X 7.5%
4-20th Year Rs 85,000 17 X 5%
Total Rs 1.35 Lacs 6.75%

Q: So are you imaging which is more costly ? Mutual funds or Insurance Policies ?

Read subramoney’s article on this topic.

How to use this information ?

Agents have to make sure that they follow-up with clients and track the premium payment, this leads to overheads and regular feedback from agents side , apart from that there are operational expenses incurred by agents , so we should not forget those points . As a customer , you should be knowing how much an agent is making out of you , this should form the basis of the quality service for you . An agent should help you understand your Insurance requirement and provide you the best solution , He should assist you in buying the Policy and over the years he should update you/ help you with all the changes .

Hot discussion topic

As per a govt-appointed committee , Insurance commissions should totally be removed by 2011 . “Immediately the upfront commissions embedded in the premium paid (to agents by insurance companies) be cut to no more than 15 per cent of the premium. This should fall to 7 per cent in 2010 and become nil by April 2011”, said the consultation paper prepared by Committee on Investor Awareness and Protection. (Link) .

What do you feel about removing the commissions from Insurance products totally ? Will it impact the Insurance Industry , how much ? Do you think it will lead to fall in premium payments or new policy getting issued ? I personally feel YES . What are your views ?

240 replies on this article “Agents commission in Insurance Policies ?”

  1. Ali Asgar says:

    Thanks for sharing this impressive blog. I am also LIC Agent

  2. abhi says:

    hi i m Abhijeet i give one customer to Lic new endowment plan(814/35)=premium 13790/- &lic term plan(823)/35)=14541/-
    of sum assured 5000000 policy term -35 yrs, , what will be my commision in 1st year

    reply me

    1. It would be around 30% for the first year !

  3. ravish says:

    Commission of insurance agents should be reduced and policy should disclose clearly that there must be discount of at least … percent in first premium in the gone days a agents has to convince the customer now it has become essentially instead of convincing the customers.

    1. deshraj says:

      yes good thought benefit should be given to customer

    2. Thanks for your comment ravish

  4. sanjeev says:

    hi i m sanjeev i give one customer to wealth builder plan in sbi life insurance
    of premium-50000/ and policy term -10 yrs, premium paying term-5 yrs, what will be my commision in 1st premium

    reply me

    1. You need to check your company for this

  5. TarunSharma says:

    Hello Manish,
    I wanna take a term plan of HDFC income plus, it would be beneficial or not. Please suggest me

    1. Yes Tarun

      It would be good choice. We have a direct association with HDFC for our Jagoinvestor Readers. Let us know if you are interested to buy this policy. We will connect you to our trusted partner for taking this policy.

      Just fill up this –


      1. TarunSharma says:

        Manish what about their claim settlement? is it Good?
        what ever they promise, they will provide all the benefits or it depends on the market ?

        1. Yes, their claim settlement is amongst the top 3 ! .. Its a good policy !

    2. sandeep says:

      Tell me this information

    3. ANSHULTANEJA says:


  6. sanchit says:

    What is commission of agent icici pru elite life 2 policy

    1. sanchit says:

      What is commission of agent icici pru elite life 2 policy

    2. Hi sanchit

      This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that


  7. Sandip says:

    Can i invest 50000 rs.yrlyfor 10 yes team for my baby’s future planing in hdfc super income plan?
    Pls give me a suggestion

    1. You can do that if you want, but I dont suggest it. Rather you should try mutual funds

      Hi Sandip

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      We create a FREE online account for you, from where you can invest and redeem online.

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  8. Sana shaikh says:

    How to calculate annual premium

    1. The company will tell you

  9. himanshu says:

    i am looking for an investment come tax benefit plan.. i think ULIP can help with that.. Any suggestions?

    1. Better go with Mutual funds !

    2. Mehul says:

      Hello Himanshu, Any financial planning needs to be analysed as it depends on multiple factors. What Manish said is correct for most of the investors (Mutual Funds and Term plan combination) but it may need to change based on your age, past, current and future investments.

  10. prakas says:

    Good Post Dear
    I want to know what is commission of general insurance agent and which general insurance company is best for joining as a agent so please reply with detail.

  11. chitresh says:

    Dear Sir,

    is State Bank of india smart wealth builder plan better to invest.
    please sir tell me about bond fund because they are saying that they will invest my 100% money to bond fund.

    11% of compound return. and10 times normal death benefit , 20 times accidental death benefit

    1. Dont go for it . Take normal mutual funds

      1. Advent Hatsan says:

        Why not to buy smart wealth builder

  12. Jagadeesh says:


    can you let me know agent commission percentage for Auto Insurance?

    1. I am not aware of that

  13. maruty says:

    wht is agents commission under keyman insurance policy

    1. Hi maruty

      This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that


  14. ramesh says:

    sir ,i have monthly investment rs3000 and 20 year sbi life saving insurance and how many rs return after 20 year

    1. Hi ramesh

      The best answer you can get only from the agent you invested through or just contact the company. The thing is your case is a bit personalised and other than company, no one can give accurate information


    2. vedhanathan says:

      Dear ramesh,

      according to IRDA rules and regulations,your amount is invested in governments bonds and debentures so you are getting minimum 2.5 times of your total investment.

  15. Gaurav says:

    Hi , I am Planning to buy ICICI Wealth Builder II & I want to know what will be the commission to ICICI’s Employee as I am not buying it from any agent.

    1. Syed Badruddin says:

      Sir, employee get it as his incentive more than a agent commission as you see , here in ULIP the commission shown as 25% in frist year but actually we get only 6% as agent I am the agent of ICICI Prudential, and we assist you till the end of your policy but when you purchase from Direct Channel it you have to follow for each and every switching in policy its not about commission or incentive of employee its your freedom. Plz feel free to contact me through my email

    2. It would be same commission , as they are the agents in this case (I mean ICICI employee)


  16. rupesh says:

    Dear sir,
    i want to know about the ulip policy in state bank of india, i need to open 15th years premium term, so give me suggestion to invest 3000/- pm, and you will get after 17 to 18 lacs after maturity of the policy, so i know how much the agent should charge the commission on ulip policy in sbi bank.

    1. ULIP is not suggested

  17. Nagashetty says:


    Need money back policy detail. if i invest every Rs.1,00,000.00 for 7 years. after 7 years how much i can get. please describe with examples.

    This is leason learnt for me.


  18. chetan desai says:

    Dear sir,
    i am agent of life insurance company and i got commission on policy . i want to know that ” is the service tax applicable on commission amount ” ? ( commission amount given by company ) kindly provide the rule /section if applicable.

    1. I am not sure on that

    2. Kalpesh says:

      No. U. Not. Have to pay service tax till now as Lic commission is not covered under service tax till date

  19. L MAHADEVAN says:



    1. I am not clear on that .. you should check about this from some other advisors !

    2. Kalpesh says:

      There is no. Such kind of rule .. U. should check with tata AIA insurance company for ur commission and check the policy status is it done in ur own code or not

  20. Dr. N. Nandakumar says:

    Do agents get trail commission on pension plans. Overtime we accumulate funds in our pension plans, and when we calculate trail commission for them it doesn’t make sense continuing in such plans. Are there ways to prevent trail commission?

    1. If it does not have insurance element , I dont think they get it !

  21. soumikdaschoudhury says:

    Hi Manish,
    I was planning to take a ULIP policy. So I heard about this ICICI Guaranteed Wealth Protector Plan. I went to a ICICI Branch and one of them explained me everything regarding the plans. But they couldn’t explain me all the charges that have to be borne by me. What they say doesn’t match with what written in their website. Also this plan is not available Online on their website. So my question is whether I need to give any COMMISSION related charges if I purchase it offline(through bank or advisor). Also how this fund is performing since its inception?

    Thanks n Regards

    1. Yes, there will be charges for agents commission. If I were at your place, I would have avoided this !

  22. vishal says:

    please give me information regarding agent commission on FD in lic.

    1. Can you give the name of FD ?

      1. vishal says:

        please mansion all plan .

  23. nandini says:

    Every year i had to pitch in my money (salary 4lac/yr) to save taxes and i found this as the good one. Although i have a term insurance cover of 25L from SBI. What other options do u recommend, so that every year i dont have to end up paying taxes.

    1. You found what as “good one” ?

  24. Nandini K says:

    Dear Manish,

    I recently invested in Relaince Endowment Regular plan. I paid RS 1.28 lac per annum with cover for 20L and 20L cover for the riders. At the end of 16 years the agent says that the money for the survivor is 42L. My husband disputes with it. Although they claim they woudl give compounded bonus. My husband says that these are assumed returns and not assured. Im in 15 day free look period please let me know whether i should continue or discontinue

    1. All the numbers are just assumed ! . Not guaranteed . You bought wrong thing I guess, What was the reason for buying this ?

  25. Ansu Biyani says:

    I’ve found most of the LIC agents giving 25% to 70% on the Premium to the Policy Holder.

    Thanks GOD, Govt. of India has not asked the Authorities of The IRDA (Irresponsible Regulatory) to make the DOWRY Law.

    They would have made something like this –
    Persons giving DOWRY will be punished, not the people who are asking.

    Corruption begins in LIC from the 1st dialogue of selling the Policy.

  26. PINTER says:

    i want to take an investment plan online, which one ll be better for me to avoid agent comission , i am 26 yrs old,income more than 9 lacks per yr

    1. there are few ULIPS’s which are online.

      1. PINTER says:

        which one i should take from ulip or any other plan????????

  27. Prakash P. Joshi says:

    People mostly make mistake in mixing “Investment + Life Insurance” and by doing so they put themselves in great loss on both the fronts. To induce them to do so Agents work hard and by mis selling the product [unsuitable Life Insurance Policy] they [proponent] are duped and only Agent & LI Co. gets benefit. People should take pure Term Policy (without a bait of ‘refund of premium’ clause) at the early age immediately by the time of starting of earning for a loner period of 30 / 35 years preferably thru “Online Mode”.. LI Agents gets heafty commission precisely for this wonderful job / service isn’t it?

  28. harry says:

    hi, an agent is telling me a plan of aegon relicare ulip maximise plan

    they give triple benifits to me tell is this plan ok
    4 along term .

  29. vivek says:

    Hi Manish,

    Hope you are doing good.

    I have a HDFC young star champion ULIP plan, paying 36K premium from 2009.Paid 4 premium till now 144K and FV is 131K.Please advise shall i continue or paid up now or after 5 years.and if i paid up now is there any charges.
    Proportion of Fund is 60:40 Growth fund : Secure managed Fund.

    Wating for your valuable comments.

    Best Regd,

    1. Better surrender it after 5 yrs !

  30. deepti says:

    Dear Manish,
    A corporate agent told me about the BSLI vision plan..i would like to know the disadvantage or hidden side of this plan as he has painted a rosy picture in front which am not too sure off…also please guide me about the best children plan…

    Thanks & regards

    1. BEtter avoid it ! ….

  31. @Ranbir says:

    I want buy a traditional policy. Which is batter & reliable lic or sbilfe

    1. go for LIC then .. do you know about the returns ?

  32. bharu says:

    Hi Manish,
    I hv a LIC policy recommended by an agent.After few premiums.I started paying my premiums online.Does that prevent any commission to my agent?

    1. NO , agent will still get it

  33. pavan gupta says:

    I am actually trying to understand what you want to tell through this post , as a policy is running on my name say 12048/- and i get the exact amount reciept of that money regualrly by the agent now why should i concern that agent is getting the commision means is he taking extraa money from me on the name of policy premium ?? company is paying him the commission right ?? then where I am at loss and how ??

    Please clarify . I am beginner with these financial issues.

    1. This article is not saying that . Its just for awareness purpose that agents get commission out of your money . Its important to know this, because an agent might sell you some junk product on which his commission is very high . Thats what happens with ULIPS selling and Traditional Insurance ..

      1. DB DESAI says:

        There is nothing wrong in agents getting commission out of customer’s money. This is universally applicable to whatever is manufactured and sol. That’s how business is done. That is the purpose of doing business by anyone. In case of financial products you come to know the quantum of commission in other products you don’t come to know. Agent is neither deducting the money or charging you extra of demanding cash in excess of premium. It is in built. There are reasons also to that, acceptable or not is a different issue again. Customers are also to blame because they select the wrong agent, buy products for wrong reasons and from wrong companies. Even a good meaning agent is helpless sometimes dealing with the demands of the customer because ultimately he is in business. Customers are not ready to pay fees upfront to the agent for telling the truth. There may be few exceptions but generally people like indirect cost like taxation. Everyone is happy to save income tax, wants to save income tax, evade tax etc. but doesn’t think about indirect taxes. In real estate, branded garments, hotels, medicines, education who knows the margins and commissions but nobody complains. Lot of work has to be done to make the customer aware and educate not only in saving on commission but also on paying right amount of fees for good advice.

        1. Thanks for your views on this topic !

  34. HARRI SHUKLA says:


    1. We do not suggest that policy to anyone .. better keep your investments and insurance seperate !

  35. RAKESH VIKRAM says:


    1. Junaid says:


  36. Tirumala says:


    I wanted to take New LIC policy. Please advice which policy is better for me.

    Age -25. Gender-Male
    Policy ammount – 30000 to 35000 yearly.

    My Agent told me that new Jeevan bema gold is best policy for me.
    Can you please tell me which one is the best policy for me.
    Jeevan anad, jeevan sarla, jeevan rekha, new jeevan gold from these which one is the better policy. It should be useful for tax deductions also.

    My Agent also told me like he will get commission 15% on this new jeeva bema gold plan, and after that 5% is this correct?

    1. Yes he is correct about commission , regarding hte best policuy for you , ask your agent how it is best ? What is the CAGR return you will in that policy ?

  37. Deena says:

    Hi Manish,

    I am surprised to see that my LIC insurance agent has made Rs. 9000 in First year as upfront commission for my 5 lakh Jeevan Anand policy which was more than my one month salary at that time[I can’t tolerate this as I haven’t spent that much money neither for my parents nor for me in my first year’s salary].

    On agents commission.. yes I agree with you.. it should be reduced. Most of the agents doesn’t know the math on how much insurance is required for a personnel. They only talk about other insurers who have applied policies with him and they talk about other unnecessary topics which would emotional attract the insurer.

    I have insurance policies for which I am paying Rs. 42000 a year for a sum assured of Rs. 8 lakhs. I don’t think it is worth[R.s 42000 for 8 lakhs] after reading your posts on Term Insurance + PPF.

    1. Deena

      Yes, then what is your next action now ? I would suggest if your policy has crossed 3-4 yrs, better make it paid up now

      1. Deena says:

        Yes Manish, I will be making it paid up!!

        > Yes, then what is your next action now ?
        Looking for a better Term insurance plan and opening up a PPF account in SBI 🙂

        1. Do it fast ,dont put it on never ending checklist !

      2. Deena says:

        Hi Manish

        I had enquired about Bajaj Allianz iSecure Term plan, they claim that their CSR is ~93% and solvency ratio is ~560%. How do you see this? Is there any better plan than this with competitors taking CSR and Solvency into account?

        1. Deena

          You can go for them, but I woudl say got for Aviva or HDFC at this moment

      3. Rajwant says:

        dear manish,

        Don’t confuse to anyone regarding agent’s commission. every one getting some money as per his/her work and its his/her rights.

        1. Agree with you .. everyone is entitled for the money for his/her work. But how about informing investors about it ?

    2. Divya says:

      I pity your thought process. Is your worry that an agent is earning because he has sold you a policy?
      you must be doing something to earn money right what if someone says you do not deserve it. Do you even now how business runs, how much money car dealer makes on car, or how much money Apple makes on one single iphone.
      you are fine with all of that but not your agent rt?

      1. Mohinder says:

        yes. Right

  38. atul says:

    hi sir,
    my name is atul gupta.. i m working as sales representative in in online process. i pitch many plan to my customer. give m name of those website where i can check out my customer so that i can make greate relation with them and can give them policy. give m information of agent commission related site.. and why online is better than offline..

    1. I am not sure what do you mean by “name of those website where i can check out my customer” , what is checkout ?

      And what all you want to know about online vs offline ?

  39. Prafulla says:

    Dear All,
    In place of getting in to how much commission an agent is getting out of the investors money, pl look in to how much money the M.P.s and M.L.A.s are making out of the money of every Indians.
    Because everybody is earning commission in the business. Be it a agent, owner of a shop, central/State govt. employee, Doctor or ………..
    Secondly pl also look in to what an agent is taking pain to look after your investment.

    1. Thanks for your views on this topic !

  40. kalaiselvi says:

    iam an agent in L.I.C , what is agent commission for single premium plan for e.g( jeevan vaibhav ).

    1. You will get it from your LIC office !

  41. Kamal Gupta says:

    Dear Manish

    Will you please tell me that how many years ( minimum) required to be completed as insurance advisor, so that he will get commission on the policies uninterrupted even after get the license terminated due to not procuring new business.


  42. ramanjaneyulu says:

    sir my police endonment polic 2times paying money 4300+4300=8600
    2025 my period time is finishing but i asked one question?
    how mutch commition comming my agent tearms finish how mutch comming

    1. He will get 25% in first year , and then 5% each year ..

  43. Lakshmi says:

    I want the definitions of Held Commission,Folioadjastment,Manual Commission

  44. mohak arora says:

    hey manish
    mohak again i also wanted to ask u that u have mentioned about the agents getting commission
    so what u r telling is the premium increases when we take a policy from an agent than from the website directly ????

    and if so how can we determine these things ???
    and from now on wards what should we do and how ??


    1. Mohak

      Now you know that offline term plans cost more .. its you who have to decide if you want to buy online or offline

  45. mohak arora says:

    hey manish
    super work there dude
    anyways i wanted to ask u that i am 23 years old and want to invent in some kind of a plan
    so what should i go with and i have also looked into few those are
    bajaj allianz cash rich plan and also aegon religare imaximise

    and also i wanted to if there is any way that i could use these policies and all so that i could get confiremed monthly income
    for example
    i take a policy now and also go on taking a policy every year say for a term of five years
    and after five years i will get money back one by one and after that i also continue my pprocess

    this is my thinking i want to know is this the right way if not plz tell me how can i do this
    as i want to invest in such a way that the market money is rotated and i get monthly income

    mohak arora

  46. Prasad.Tr. says:

    Hi manish Chauhan,
    I am Looking best plan for my Child, 9 month baby. I had option from LIC “Jeevan Saral”. from

    a) I would like to know where will i get more benefit, called me and said my entire amount will be invest in policy. if go to LIC agent they get 20% to 30% commission from my premium.

    b) They given sheet where it mentioned ” LIC Maturity Calculated @ 10% I.R.R” What is IRR? We will get 10%?
    In that sheet it mentioned if we invest 2000/- for 15 years 8,88,794.00

    Kindly sugguest

    1. Prasad

      a) In this case is your agent and they will get commission ,you really dont benefit just by going to them unless they are giving some other extraordinary service to you .

      b) IRR is the return you will get the end of the policy , 10% is just a projection and not the real one

      My suggestion is to stay way from any policy like these , read this :

  47. anil vatsyan says:

    will i get my money back If I discontinue the policy,How can I stop further investment in this/?

    1. anil vatsyan says:

      The link you send is really nice…How Can stop further fund,
      Where should I invest where I get maximum return without risk,I really frustrated after reading on that link.
      Please suggest how Can I save tax.I am loosing money in all the cases.

      1. Anil

        If you stop paying before 3 yrs .. you will loose everything .. after 3 yrs, you will get 30% of what you have paid (except first year) . You are in a tough position !


  48. anil vatsyan says:

    I have two policies from LIC Jeevan saral scheme for 20 years.
    I deposit 3062 for one policy per 3 months.
    and 3062 for second policy per 3 total yearly deposit is 24496.
    So I would like know is it a good Policy.
    How can I withdraw the policy if it is not good and not beneficial .I have paid the premium for first 6 months till now.RS 12248.
    waiting for your reply 🙁

    1. anil vatsyan says:

      Currently my age is 24 years

  49. Ved Prakash Dubey says:

    Dear Manish
    I had purchased profit plus(188) policy in 2007. My fund type is growth. I want to switch the fund type. please let me know the formula by which I may calculate the NAV after switching the fund type. plz expalin it by example.

    VP Dubey

    1. Ved

      It does not work like that .. why will you calculate the NAV ? your units numbers will actually change when you make a switch , NAV is published each day by the company itself

  50. SKAR says:


    When you indicate the 1st year commission for the agent to be so high, can I ask the agent to pay some part of my 1st year premium? Do they do so?

    1. Skar

      If you ask a doctor to give a part of his salary , you can surely expect to get a treatment which is not the best .. its like asking a guy , can you give me some part of your daughter fees money , the money you will use in your household expenses and some part of your parents medicine expenses . that will decrease your respect in his eyes . It will come back to you in a very bad way , never do it .. and its illegal for them to do this , dont force them


  51. Dominic says:

    I had another policy Tata-AIG InvestAssure. It already sucked most of my blood. Anyway I just completed 5 years and my IRR stands at -6% (minus 6%). Now the market is down I am waiting to quit this policy.

    1. Dominic

      What is the reason to get out of the policy now when the market are so down ? I am talking from the “timing the market” point of view .. If there is no penalty , then are you planning to take the money and put it back in equity MF ?


      1. Dominic says:

        I am just doing it as you mentioned above. Earlier when the market was at its peak (Oct’10; NAV 36) I moved 80% of my funds from Equity to “Income/Debt” fund. Last week (NAV 27) I moved 25% back into equity. If the NAV goes down further 15%, I’ll move another 25% into equity from income fund. BTW my Income fund part of this ULIP has grown 10% last year. Appreciate your comments.

        1. Dominic

          Good .. You are going right .. just be open to be “wrong” at times and learn more out of it .. 🙂 .. I hope you have analysis and some work on the back and not doing it just by random guess


  52. s k dash says:

    Dear sir
    I have taken TATA – AIG FLEXI PLUS policy.
    I have to pay Rs 30,000 p.a. for 21 years for S.A. of Rs8,10,000.
    I have already paid two premia for this policy where the charges were around 26%.
    Is it a good policy? Will it give good returns in long run?

    Should I continue with this policy or stop it after some years?

    S K DASH

    1. No its not a good policy .. please try to get out of it soon .. read your policy document


      1. s k dash says:

        Aftert 6 years there is no surrender charge. So will it be wise on my part to continue here at least for 6 years? or should I quit immediately?
        My fund value is now around Rs35,000/- and I have paid Rs60,000/-

        1. S K Daash

          better discontinue it now

          1. s k dash says:

            BUT I’ll lose a huge portion of my investment now!

            1. SK Dash

              Its like saying .. i got cancer in my fingers and its spreading slowly slowly in whole body , how can I cut it , It will pain

              Your condition is like that .. you are looking at only 25k loss which is RIGHT now .. bt if you continue , you will keep on making huge loss in long run .. Your condition can be severe later . better take that small pain right now


    2. DK Bhardwaj says:

      Mr Dash;

      What was your goal to buy this policy. Frankly, the best policy is the one which is alive when you need it most.

  53. vignesh says:

    Hi manish

    Really nice post. My father is 52. he is not working now. He has one jeevan ananad policy which he paid the premium for 9 yrs. Now he gave voluntary retirement and till elevern years remaining for the policy to lapse.
    Annual premium:12000
    Tenure:20 yrs
    Final sum : Aroung 4.5 lakhs
    I personally feel to discontinue this policy as he did not need a one here after as he got retiremnet. He cant get any new insurance also(Acident hapened). Insurance agent is telling me to continue as he cant take up any insurance here after.
    If i surrender this I ll get only 65 percent of the amount i paid amount(1,12000).
    After discontinuing this policy
    I ll start an sip in the ballced fund for the next 11 yrs
    Amount:3.5 lakhs

    what is your call on this?
    pls guide me…

    1. Vignesh

      I think your father should make it paid up now .. and better put the future premiums in some MIP or POMIS to get immediate pension for your father


      1. VIGNESH says:

        Hi manish

        thanks for the reply. He is having enough fixed deposits and enough MIS in his name. he is also getting a pension of 15000. .I read in a article that even after 60 if they have risk taking ability then they can invest in some balanced funds.He lacks equity exposure. So i thought of investing in a balanced fund.
        That is the reason for going for the balance fund. and am also there to support him in all kind.

        Without any doubt can i cancel this JEEVAN anand?

        Small analysis

        jeevan ananad final amt after 11 yrs from now: 450000
        surrender value now : 70000(I ll do stp in the same balanced fund)

        Balaced fund final amt: 500000( Where i invest 12000 per yr with returns 13 percnt) here i can take out the loss also.


        1. Vignesh

          How much more time is left for maturity of LIC Jeevan Anand ? Because it might be the case that your father might start getting pension out of it .

          For balanced funds ,m you can look at HDFC Balanced


  54. Moksha says:


    Can anyone help me with a contact of a good insurance agent in Mumbai?

    1. Moksha

      You can call justdial and ask them for this .


      1. Moksha says:

        Thanks Manish

  55. Abdul says:

    Dear Manish,
    glad to see your site which educates people about the Insurance and its necessities and how agents manage to fool aroung the people.after reading the postings here i think i am also fooled by an agent
    1)i have taken a policy Jeevan Anand, SA is RS 10,00,000 PPT= 16 years,premium is RS 72,752 PA.i have already paid 4 installments.
    2)Jeevan Saral – SA 10,00,000, PPT =16 years , Premium = RS 48,040. paid 2 premiums.
    i would like to know, are these policies are good worth continue? if not, how can i get rid of them? kindly advice.

  56. devendra jha says:

    dear sir,i am a composite agent of lic and nic for the last 14 years ,i am not very clear about the gratuity which i will get if i stop working as an agent , also can lic of india stop my commission for my 14 years of work done under the present law of corporation blaming me for bringing less business.

    1. Devendra

      NO , they cant stop your commission which you should be getting because of the work done till now , I cant comment on the future regulatory decisions .


  57. radhika says:

    dear sir,

    iam one of the part of your agencyship member but iam not know about the recent comession plans can i get the payments of moneyback+ and health plan , how many years i will get on those plans. please mail me on this .

    thanking you sir,

    agent advioser

    1. Radhika

      Which agentship are you talking about ?

  58. Harish Kumawat says:

    My cousin newly became BSL agent. He came to me for investment with his friend and to obelize my cousin I purchsed Birla Sun Life Platinum IV on dated 26/12/2009. His friend cheated my cousin and deposited policy under the agentship of his own (As he was looking to complete his target). He promised that he will give all earning to my cousin by that policy but till date he is not giving.
    May I know how much agents will earn through my Birla Sun Life Platinum IV policy? I am paying Rs 50,000 per year and have paid two installments..

    1. The agent should earn somewhere between 30-40% , which is 15-20k in the first year and then 3-4k per year from next year . However that is different point . first you should ask what are the charges for you . These are the charges

      Premium Allocation Charge 10% in the first year and 4% in the second and third years
      Policy Administration Charge Rs 720 on the first Rs 1,000 of sum assured in all years plus Rs 6 per Rs 1,000 of the sum assured in the first 3 years
      FMC 1 1.50%
      Surrender Charge 16%, 13% and 10% of annual premium for policy years 1, 2 and 3, respectively, nil thereafter
      Partial Withdrawal Charge Free

      Read :


  59. P T says:

    You have possibly made a mistake in the calculation of commission for the second year. The Premium is Rs. ! Lac and commission payable in year 2 is 7.5% then the amount of commission should be Rs. 7,500/= and not 15,000 as is tabulated by you. Could you say how you calculated Rs. 15,000/= as commission in 2nd year?

    1. P T says:

      okie I got it there is a mistake in what you have written the commission of 7.5% is payable for 2nd and 3rd year.

      Anyways are these commission rates latest. I hear there has been a lot of cutback in commissions post 1 Sept 2010. Could you update us with latest commissions?

    2. PT

      Its not the commission “In 2nd year” , Its commission “upto 2nd year” so 15000 includes 7.5 for first year and 7.5k for second year


  60. Eisen says:

    Hi Manish,

    I am a huge fan of this blog and have been reading it extensively for the past one week. I am stuck in a huge financial dilemma now regarding my life insurance policies (yeah I know what you are thinking 🙁 ) . This is my current situation … my family has never made any investments except in FD’s and a bunch of useless life insurance products :'( !!! We have zero liabilities too, family income about 60k p.m. and less than 10k expenses p.m. , so none of us might actually require an insurance.
    The following are the policies which have been taken in the name of my brother, my dad and myself . (All from LIC, yeah lucky !@#$%, the agent who coaxed my relatives and my family). All of us are working and have no dependents.

    For my brother,
    1. Money back policy started in 2007 (s.a. 2lakhs) yearly premium 12,497
    2. Money back policy started in 2008 (s.a. 5lakhs) yearly premium 31,292
    3. Jeevan Anand, started in 2008 (s.a. 5 lakhs) yearly premium 25,028

    For myself,
    1. Money back policy started in 2009(s.a. 5 lakhs) yearly premium 31,195
    2. Term policy for 25 lakhs cover (maybe the best decision i took, sadly after reading your blog I realized I need not have insurance at this stage)

    For my dad (single parent)
    New Beema Gold, (s.a. 3.3 lakhs) yearly premium 23,242 payable for 16 years.

    After reading this blog, I have decided to do some good financial planning for each of us, but first I need to take care of these insurance products!!

    Please advice….

    1. Rajesh says:

      Wow, that agent made a real KILLING selling you guys those policies.
      My suggestion: Since you have already paid 2 premiums for most policies make them paid up and take term policies at appropriate times for each of you and do some good financial planning depending on each of your goals.
      Manish, what is your take???

      1. Rajesh

        You cant make it paid up unless you have paid upto 3 premiums . thats the biggest problem with endowment policies .

        Term policy should be taken anyways, the premium is less anyways 🙂


    2. Eisen

      The sad part is that you are standing at the worst point , 2-3 yrs passed in the Endowment plans is the worst point, because you paid good amount and now if you want to stop , you will loose a big amount, still it might make sense considering a long term commitment you are giving for your investments .

      For your bother , he should stop paying the policies and use the future premiums in Mutual funds, he will have to forget the policies and the mney he paid if 3 yr are not completed, this might sound totally idiotic and insane , but given some 12-15 yrs of premium is still to be paid, its fine . You will recover it . Same for you .

      You dont require insurance you said , but I think you can consider continuing it, at some point your Father will not work and will get FInancially dependdent on you . That time it would make sense, after all you can be happy that if some thing happens to you , your father and sit and live his life without working .


      1. Eisen says:

        🙁 sad state of affairs. So, let all the policies lapse (except my term policy) and take term insurance for others too? BTW, for one of the policies I have paid for 3 years.

        1. Eisen

          Be ready to be rude to your agent as he will make sure you dont take away his commissions .


          1. Eisen says:


            Yeah it sure is going to be one hell of a day!!


      2. shaheen says:

        Why do you agree with him when he says he does not need insurance? what if he meets an accident tommorrow and is totally incapacitated? then what happens? how will he earn? how will he survive? how long his father going to be with him? how long his brother going to support him? when money matters enter into the picture, it does not take long to ruin the best of relationships no matter how strong.

        1. Shaheen

          I am talking about pure life cover and not about disability , for disability insurance he can take stand alone cover .


  61. sheryl says:

    hey, i wanted to know -who earns more- an insurance agent or a mutual fund distributor? bcos i wanted to get into one of them. Also can a AMFI certified mutual fund agent work for more than one mutual fund organisations like hdfc and sbi at a time as in sell different products 2 the customers. The same question for insurance agents

    1. Sheryl

      Depends on what time frame are you looking for . An insurance agent will earn more in short term , but over long term MF distributor will make much more .

      A MF agent can sell the product of any number of companies , but Insurance agent can do it for one company


  62. shaheenazk says:

    if commission portion is removed do you think people will walk into the offices of insurances companies and get themseleves an insurance policy? NO! or may be you think people will get one online! NO! awaremess among the general public regarding importance of life insurance is abysmally low. moreover, its not that easy for general public to decide which insurance product suits their needs optimally.

    now this is where insurance agent come in. i know you will say insurance agents push only those plans in which they get the maximum commission or they will ask you to cancel their exisiting policies and take the one he/she is recommending etc etc. my question is that why people do not bother to go through the offer documents carefully before investing? why do they take every word of the insurance agent? if they ALL did then they would never repent if they chose to invest in the insurance plan in question. but in reality, this hardly ever happens. And later, when the expectations are not met, the insurance agent is the first person they find to blame for their financial disappointment whereas, it should be the other way round.

    most importantly, all insurance agents are not dishonest. an honest one has to be spotted. the root cause of dishonesty among insurance agents is prevalence of the practice of asking for a portion of agent’s commission by very those people on whoose lives insurance policy is to be taken. i curse the day when this malpractice started.

    lastly, commission paid to LIC agents on ULIP for regular premium for the 1st year is 7.5% unlike 20%-40% paid to insurance agents of private companies!

    1. shaheenazk

      Thats not the point , Even with agents how many people are properly insured , If no agents are there , the situation does not go that bad . Even now , people are hugely underinsured . Customers who are aware about their needs do not need agents actually .


      1. shaheen says:

        Manish, if people are under insured that is because most of them are either not aware of that or even if they are, they cannot spare the money to be adequately insured citing other needs. and how many customers you know are really aware about their insurance needs? 🙂

        1. Shaheen

          You are stressing on the Problem , we have to change that slowly and thats what I am trying to do . If people are not aware , lets work on making them aware .


          1. shaheen says:

            This is precisely where the agents come into the picture. they are required to create awareness among the general public. its a misconception that ALL agents are only interested in pushing those policies in which they get the maximum commission.

            1. Shaheen

              Yes, I agree , not 100% are bad . I am greatful to have responsible agents like you on this blog . Would you like to contribute some nice article on awareness ?


        2. Moksha says:

          Hi Shaheen,

          You work for LIC or any particular Insurance agency company?

          1. shaheen says:

            LIC. I have left this profession now.

    2. Dinesh says:


      are you also an insurance agent ? What is the duty of insurance agent…and do they perform it honestly…its always sad that people care about single rupees of their own but play with money of others…you are right when you said that many people don’t know about importance of insurance but when whether agent fulfill their needs with right product? NOO! Shouldn’t he assist people which is his real duty…THAT HE NEVER does…not even 1% agent do their job correctly…they are “robbers” in real time…

      1. shaheen says:

        Dinesh, yes i am an agent of LIC. I would say only one thing. Majority of the people believe that all politicians are corrupt. similarly, the majority believes that all insurance agents are dishonest. if i were to say, that i am one of those few who are honest, obviously i will sound like a person beating his own trumpet. i invite you to consult me for an insurance policy and you will know whether i am telling the truth or lying. that is all i can say.

        1. Shaheen & Dinesh

          I guess we are not focusing on the right thing here . we have got personal here and spending time in discussing it , To support Shaheen point, I have met and know many agents whether from LIC or pvt insurance ,they are all honest and want to do some good things ,so saying that ALL agents are bad is wrong , also 1% is a small number it would be much more . But saying that more agents are dishonest than honest would be something I would agree . So Shaheen dont take anyone word that a handful of agents are good , I know there are many many .

          To support Dinesh point , most of the people meet bad agents who have not told them truth and never saw a right person , so how come they know that good people also exist, so they form an opinion that they dont exist. So even Dinesh is correct in his own way .


  63. sudheer kumar says:

    pls advice me following
    1.Best insurence
    2.pension plans funds
    4.good stocks

    my avg income arnd 25laks/pa & i am 33 married


    1. Sudheer

      We cant give recommendations without understanding your situation , Better you hire a financial planner , or another option is to learn from blog and decide for yourself .


    2. DK Bhardwaj says:


      Can you by any product under the earth without spelling the details. Even a train has at least 6 classes of travel?

      Specifications are a must for everything sir.

  64. Dominic says:

    Just need your suggestion guys.

    Two months back I have taken 3 insurance policies. (Sorry I recently started reading all these good articles and blogs)
    1. SBI Smart ULIP II- Monthly 6000/- (15% Charges 1st Yr)
    2. SBI Unit plus III Pension – Monthly 6000/- (10% Charges 1st Yr)
    3. Birla Sun Life Dream Retirement plan – Monthly 8500/- (27% Charges 1st Yr) includes SA of 14 lakhs.

    First one I am allowed to stop after paying 6 month premium and I have already paid 5 moths.
    Second and the third I have paid the initial 3 month premiums( 18000/- and 25500/-) and I thought of discontinuing and invest the same monthly amount in MFs.

    The BSL the charges for the first year alone comes around 28000/-. I am aware I’ll be losing a big chunk and I may get some peanuts at the end of third year. Do you guys think it’s worth?

    I kind of feel bad as I have started these policies in haste. Appreciate any suggestion in this regard.

    1. Dominic

      Now , as per the recent rule by IRDA , the lock in period’s of ULIP is 5 yrs , not 3 yrs . You can only stop paying premiums of ULIP after payment of 1st year premium , subject to company rules .


      1. Dominic says:

        Thanks Manish.

        In my policy document its clearly mentioned that if your policy term is 3 years I have to pay minimum of 6 months and if my term is 5 years then I have to pay minimum of 1 year. In my application I have mentioned 3 year term.

        Do you have any comments on “discarding” the BSL policy? Do you think I can make up this 25ooo in gains if I invest 8500 per month in MF for at least 5 years.
        Best Regards

        1. Dominic

          It might be that you are required to pay just 6 months, But can you withdraw the money in 6 months or 3 years only ?

          If you want to make 25000 of gain by investing 8,500 per annum for 3 yrs , it means you want to pay 3.06 lacs ( 8500 * 36 months) and then get atleast 331000 (25k profit) . This turns out to be around 5.1% return in 3 yrs . What you can do now is forget the 3 month payment of 25500 and now invest rest 33 months worth of money in simple plain RD or some Debt fund .

          With most conservative return estimates of even 7% , you will get the same 3.1 lacs which is same like earliar situation .

          I would say try debt oriented mutual funds which can give you around 10% return with some risk . That will mean much better return .


          1. Dominic says:

            To answer your first question, Yes I will get the money minus surrender charges at the end of the 3rd year.

            Really appreciate your detailed response. Thank you.

            Best Regards

  65. NKanani says:

    Thanks Manish for this article (of course, and Thanks for others that you have been writing to enlighten us all)!

    Looking at the percentages table – the term plan has same % of commission as Endowment plan. Even then, why do the agents not talk about term plans more? Could it be because of the premium amount being low, that the commission amount would be lower in Term plans?

  66. Vivek says:

    Hi Manish,
    I m intrested in buying term insurance plan,well AR iplan looks fine for me.Jus wanted to know i want a cover of 1 crore.
    Wat wud u suggest i shud go for a breakup policy ,i mean shud i take 2 policies or jus one with 1 crore cover.and wat r the benefits and disadvantages for takin 2 instead of one.
    Age : 26 yrs,Unmarried and no dependents presently.
    Pl reply.

  67. Manish S says:

    i Manish C,
    Does an agent continue toget commision even when we pay the premium online?
    Will he get commision on all premiums even if i do not use his services for paying premims subsequently?


  68. raj says:

    I fully agree that Commissions can’t be removed in Our scenario. However, the release of Commissions to the Agents should be somehow linked to the services provided to the Client by the Agent. May be in the form a documentary evidence that Agent actually helped in Helping the Client to Pay the Premium OR A Letter/Certificate from Client.

    Agree thie is difficult put some good idea needs to fulfill this gap.

    As AGENT VANISHES AFTER SELLING, particularly A BAD Product and Client wanders to even deposit Premium, facing queques etc. If he can’t do it online

    1. Raj

      Thanks for your comment . I dont think agent is fully responsible for standing in queue and doing all that work , Mainly he is suppose to help you in documentation , remind you about it , etc .


  69. Narendra N Kondajji says:

    Dear Friends,

    According IRDA regulations, an insurance agent gets his remuneration (as commission) to perform following duties and responsiblities. Legally, he is the primary underwriter.

    8. Code of Conduct.—-(1) Every person holding a licence, shall adhere to the code of conduct specified below:-

    (i) Every insurance agent shall,—
    (a) identify himself and the insurance company of whom he is an insurance agent;
    (b) disclose his licence to the prospect on demand;
    (c) disseminate the requisite information in respect of insurance products offered for sale by his insurer and take into account the needs of the prospect while recommending a specific insurance plan;
    (d) disclose the scales of commission in respect of the insurance product offered for sale, if asked by the prospect;
    (e) indicate the premium to be charged by the insurer for the insurance product offered for sale;
    (f) explain to the prospect the nature of information required in the proposal form by the insurer, and also the importance of disclosure of material information in the purchase of an insurance contract;
    (g) bring to the notice of the insurer any adverse habits or income inconsistency of the prospect, in the form of a report (called “Insurance Agent’s Confidential Report”) along with every proposal submitted to the insurer, and any material fact that may adversely affect the underwriting decision of the insurer as regards acceptance of the proposal, by making all reasonable enquiries about the prospect;
    (h) inform promptly the prospect about the acceptance or rejection of the proposal by the insurer;
    (i) obtain the requisite documents at the time of filing the proposal form with the insurer; and other documents subsequently asked for by the insurer for completion of the proposal;
    (j) render necessary assistance to the policyholders or claimants or beneficiaries in complying with the requirements for settlement of claims by the insurer;
    (k) advise every individual policyholder to effect nomination or assignment or change of address or exercise of options, as the case may be, and offer necessary assistance in this behalf, wherever necessary;

    (ii) No insurance agent shall,—-
    (a) solicit or procure insurance business without holding a valid licence;
    (b) induce the prospect to omit any material information in the proposal form;
    (c) induce the prospect to submit wrong information in the proposal form or documents submitted to the insurer for acceptance of the proposal;
    (d) behave in a discourteous manner with the prospect;
    (e) interfere with any proposal introduced by any other insurance agent;
    (f) offer different rates, advantages, terms and conditions other than those offered by his insurer;
    (g) demand or receive a share of proceeds from the beneficiary under an insurance contract;
    (h) force a policyholder to terminate the existing policy and to effect a new proposal from him within three years from the date of such termination;
    (i) have, in case of a corporate agent, a portfolio of insurance business under which the premium is in excess of fifty percent of total premium procured, in any year, from one person (who is not an individual) or one organisation or one group of organisations;
    (j) apply for fresh licence to act as an insurance agent, if his licence was earlier cancelled by the designated person, and a period of five years has not elapsed from the date of such cancellation;
    (k) become or remain a director of any insurance company;

    (iii) Every insurance agent shall, with a view to conserve the insurance business already procured through him, make every attempt to ensure remittance of the premiums by the policyholders within the stipulated time, by giving notice to the policyholder orally and in writing;

    1. @ Narendra

      🙂 LOL 🙂

      Itna to agent ne IRDA exam clear karne main bhi nahin padha hoga.

      1. srinivasu says:

        WELLSAID !

    2. Fazeel says:

      Nowhere it’s written, he’s the underwriter – he just has to ensure that premium is paid. In case of lapse, he doesn’t have to pay from his pockets.
      Besides all that you mentioned is not followed by 90% of agents.

      1. Fazel

        Yes , he does not have those duties mandatory , however he should be doing this as a professional ethics .


  70. Wonder I should become an agent 😉

    I think that the removal of commisions on insurance products is going to hit the agents badly, they make good money out of it… and these trail commisions go on further like the example you took in Mutual funds commision article…

    1. Amandeep Singh

      The removal of commissions will not be 100% great , things will be very ugly , customers will default on their payments as there will be no one to run after them .


  71. Zamil says:


    Great article. Keep it in.
    But the thing which initiated me to write is that look and feel of new blog.
    Really love it and enjoy it. I expect more good posts in the coming future.
    Wish you all the best.

    1. Zamil

      Thanks , It will get better in coming days .


  72. dr kishan says:

    a very nice sequel to ur last post. these two posts ultimately show how much the agents get through investors eventhough the entryload has been abolished.
    both are big eyeopeners to the common public.
    by the way the new look of ur blog is just stunning and outstanding. it has a really pleasing look.
    hoping to “get rich”
    dr kishan

    1. dr kishan

      Thanks , I will keep it much better . constant improvement is going on ..


  73. Sunny Talreja says:

    Thanks for such a great eye opener. No doubt this is why the agents of bank keep pushing for buying ULIPs and not the FDs.
    BTW is there any mechanism to avoid such huge commissions? I mean can I directly visit one of the main branch of my bank or have some online gateway and totally do away with broker and their huge commissions.

    1. Sunny Talreja

      NO , The commissions are bundled with the premiums , You cant skip paying the commissions , the commissions should go away from product itself, for example Aegon Religare iTerm policy , they do not have any intermediary and hence were able to bring down the cost down by as much as 50% .


  74. Pingback: How much does Mutual Funds Agents earns in commission ?
  75. dslearner11 says:

    Hi Manish,

    Probably this comment of mine is not appropriate for the the above post.
    But i did not know where to ask this query .

    Can you please review Reliance Infrastructure Fund – Retail Plan (G), which was launched in May/June 2009. In your previous posts you have mentioned that you will review it, but then i did not find that post in your blog.

    I am ready to take the risk and since 80% of it is in equities and is
    in infrastructure, which is India’s growth sector in both short term and long term i had choosen this fund.

    I invested 30k in it last year. should i continue investing in it
    or switch to a new fund? I am looking for a long term investment.

    1. dslearner11

      It will not be possible to review funds like this , Just remember that its a sectoral fund, and if you are confident in the sector with high risk appetite , you can have this .


      1. dslearner11 says:

        🙂 Thanks for replying. But the intent of my question was to know your opinion about the fund.
        Ofcourse, it is me who have to decide but just wanted to know an expert’s comment on this.

        1. dslearner11

          Its just like other funds , Lets see how it performs over some months or years . We always have good funds in market , so no need to put money here .


  76. rohit says:

    hi manish
    eye opener that is why you mentioned some time back religare cost comparetively lesss throw your inputs on that
    i have lic term plan 35laks-13k annual premium

    1. ts gnanadev says:


      after seeing the religare term plan in jago investor took term plan for 25L premium 5400/annum. comparatively cheaper than any other term plans.
      Thanks Manish!!

      1. ts gnanadev

        Actually it would be interesting to know what is the premium for 50 lacs for you ? I think it should not be more than 6k . They have weird way of calculating the premium price . 50 lacs premium is less than 40 lacs .


        1. AKGaur says:

          OK.LIC of India is costly.These MNC dont have any trackrecord.You dont know ,where they will be after 15
          years.Be Indian buy Indian.Take whole life policy,which
          is cheaper.Diffrence invest in SIP of good MF.Follow Dhirendra
          on fund ka funda,starnews sunday 12.30 noon.

          1. AKGaur

            There is no reason you have given why Pvt insurance companies will not be around after 15 yrs ? thats not things work , Business takes time to develop . Just because LIC is govt company and very old does not prove that pvt insurance companies will not be around after several years , there are enough companies in India which are 100 yrs old and are private companies .

            Can you please give some data to prove that Whole Life policies are cheaper, Lets take Jeevan Tarang ,its a whole life plan , Give your inputs on that.


    2. Roopesh Majeti says:

      hi rohit,
      I think you took it for high price.
      My LIC [ term ] policy is for 40 Lacs but charges only 10,830/-.
      Might be the agent is getting good commission on your premium.
      For my case, i took it with the help of my cousin, who explained the charges clearly.

      1. Rohit

        You didnt ask ts gnanadev age ? On what basis are you saying that his premium is low or high , It also depends on age .


        1. Sagar Dhonde says:

          And alos depend on the risk of your job,i got LIC term plan,
          I am 25 years old,plan is for 25 years only & SA is 30Lakhs.
          My premium is 13050/annum,which is about double than that of ordinary LIC term plan.They give me justification that,
          I am an offshore marine,thts why my premium is high.

  77. firdaus says:

    Great information.. thanks

    1. firdaus

      Thanks , would like to hear your views on the commissions to agents in mutual funds and Insurance , what do you think about it ?


  78. Milind Kotibhaskar says:

    Good article Manish. May I know how much do these agents earn through a term policy?

    1. Milind

      Its there in the table , see ” Endowment / Term Plans” .


  79. Amol S says:

    Most of the time endowment policies are bought for the period of > 15 years. In that case, don’t you think 25%-35% commission bracket is too much ? i.e. Rs 35,000 for a premium of Rs. 100000. I 100 times regret for buying one such endowment policy after reading many of your good articles.

    1. Amol

      25-35% is only for first year .. over the years , the whole commission will be less than 8-9% , which is still very high . Dont you think iTerm from AR is a better choice then , because they charge lesser premium because they dont have agents in between .


      1. srinivasu says:

        taking any cheap term plan from internet may not be a good idea.Because you are taking it for pure risk cover NOT for maturity benefit.
        in case of any claim a freindly agent who knows about this, will be a great help with the local life insurance company.
        Any death claim within 2 years is treated as EARLY CLAIM and needs investigation by co..
        in my view may be the premiums are more when compared, take it through a family / freind agent.
        disclose all material facts about your health,family history, your habbits like smoking etc…
        never avoid MEDICAL TESTS, they are all free.
        keep the policy bond and receipts in safe custody
        never take any ulips from banks,these relationship managers known as forest monkeys changing from one branch to another, many times to other banks in different locations.
        thanks for this service

        1. I agree on most of it , just not on “Take it from friend/neighor”

          If the person is competent enough and knows the thing , then he should qualify , not just by being friend .


      2. DK Bhardwaj says:


        I would like to get wiser which company and which endowment product gives a commission of 8-9% percent or around 2nd year onwards. Are you aware that some companies had even restricted the commission after 6 years to zero.

        I would sincerely request you to please brush up knowledge and then respond to valued clients. You shall be inadvertently or advertently killing the industry.

        Please avoid spreading misinformation for the sake of clients, industry and advisors at large.

        1. Hi DK

          You are too fast in judgement , you didnt understand what I wanted to say when i said 8-9% over a long term .. For most of the endowment products , the first year premium is 25%, 7.5% for 2 more years and then 5% every year there after .. Yes there might be some products where teh commission is restricted to 0% in later years ,but its for all the products .

          What i meant by 8-9% is considering high commission in first year and then low premiums in next few years .. here is my rationale , if a premium is 10k per year and the policy runs for 20 years , then the total payment done by client is 2 lacs , and the agent earns 2.5k in first year , 750 for 2nd and 3rd year which is 1.5k and then for next 17 yrs it would be 500 , which is 8.5k , so total would be 2.5k + 1.5k + 8.5k = 12.5k and it comes to 6.25% of the overall payment done by the client over the years .. that is where is had put 8-9% , which I can see is more than actual .

          But the idea was to show that over a long term its not very high like the first year premium.

          Also in your last reply, you said that jagoinvestor only thrashes agents and not custometrs , which is not true .. I very well understand that mis buying is as much as responsible as misselling . there are good agents , but they dont over number the bad one’s , thats the reason the “bad agents” word comes more often .

          So , note that whatever I am saying is from majority point of view and nothing else .. Good agents never have to worry about this point .


          1. DK Bhardwaj says:


            Firstly, please tell the readers in which other industry the payments are made public except MFs and Insurance sector. Other points you must convey to readers are;

            a) As is widely known, pay back is a sad norm
            b) amount of money an agent has to spend to secure the business because no product is sold in first meeting. Distances, petrol costs, time and humiliation an agent may have to face
            c) What happens when policy holder cancels/stops/ prematurely withdraws/policy lapse cases or unfortunately dies. And pay back has already been accepted by the client. Who compensates the agent? But service standards and expectations do not change!!!!
            d) Unlike most of other professions, here agent is expected to obtain licence from IRDA and company, produce minimum new premium to remain in the reckoning etc
            e) What is the success rate of conversion
            f) What is the average premium and commission thereof
            Again article in Premium magazine,” Not by Commissions alone ” brings out the true picture and success rate of agents and muck thrown at all in general though one would blame squarely LIC for present scenario.
            Abroad, if an agent even obliquely hints at offering his earnings, he is shown the door because he is looked down upon as below par.

            Yes, it is a good line if you have political linkage where all and sundry can be compelled to buy or you should belong to Bollywood. One wonders how can a person sell thousands of policies and be in Guinness Book of World Records because As I understand, application form is supposed to be filled by agent and signed. Please show me if a person can contact 3000 people, be a first underwriter, fill the forms, collect documents and sign ensuring no mistakes are done.

            Your take Sir.

            1. DK

              I am agreeing to your points … I am not clear where are we not agreeing .. I have also written article on commission payback and why its illegal and wrong :

              I am myself agreeing that these are the issues on agents side . But you also have to accept that there are agents who are misselling , dont you agree on that ?


            2. DK Bhardwaj says:


              My only objection to your blog is negativity instead of educating the people on the subject of investment as each individual would have different need to meet different goal to achieve, hence different tool and vision.

              As I mentioned, there was a lot to learn from full page article on each Tuesday by UTI in TOI. No advertising about UTI, plain and simple education to investors with no sniping at any section.

              As I was reading your comment about a plan of TATA AIG Flexi. Immediate reaction from your end was sell it. You did not interview the guy, you had no knowledge on his need, no individual can have product knowledge of all insurance products which would run to few hundreds now. You had no idea about liabilities, income, age, profession, reason to purchase the product. I am sure no company would throw a product in the market without a rationale or market study. I am sure actuaries are not paid hefty sums for the heck of it.


            3. DK

              It depends from person to person what you consider as negative and educational .. I dont see anyone else complaining on this front . Regarding the comment on TATA AIG policy, Almost all the pension plans , children plans , ULIP’s are just not suitable for a common man and he cant not make the best out of it . So a general suggestion is to get rid of it , we work on simple principle , if you cant understand it , you dont need to have it .


            4. dk bhardwaj says:

              Sir, it gives the impression that you have perfect knowledge about all 16-17 companies and their floated plans. IRDA should alter their policy to let any agent sell product of any company though IRDA thinks that it is difficult to learn and understand all products of all companies by a single individual advisor, the reason for restriction of one company to one advisor.

              If one were to seriously interview an alert population, everyone would like to have a guaranteed regular money, particularly when one retires or is incapacitated to work.

              Why no one counters is precisely akin to reason of mis selling. I read the mails and find that many of us are far removed from realm of financial markets but are experts in evaluating. As they say, we as Indians know all about cricket. I am not here to sit on judgment but since I am exposed to monetary market and spend a good time to learn by knowledge gathering and do conduct talks as a visiting faculty and write as well, I think I have a little grasp on the subject PLUS since I have seen nearly 65 summers and gone through the life, appreciation may be more comprehensive though age does not define maturity always and I agree.

              I take part in your blog with an earnest desire to awaken and educate in my small way.

              Someone commented that I an ULIP inclined because I sell ULIPs though my views on ULIPs and MFs have been that regulations have squeezed both and this week;s financial reports stand testimony to my observations where both ULIPs and MFs have lost a huge market share as much as insurance sector and fall has been of great magnitude.

            5. Dk

              You are welcome to comment and share your views .. you will hear different kind of criticism and people will not disagree with you . there is no issue in that , I face that every day … just make sure you do what you feel right .. thats all matters


    2. Sukhvinder singh says:

      Are you worried what agent is getting ? in fact you should think about what return you are getting and compare with other available options. There is and never will be any product which is better than lic of india because this is govt guaranteed plan.

  80. jb says:

    I was trying to understand your two posts on mutual fund and insurance agent costs from a total cost to investor perspective but there are obviously some gaps since your posts are from the total commission perspective. It would be interesting to calculate total expenses to an investor also (and as compared with expected returns – using avg index returns perhaps)? I didn’t know that the trail commission is a fixed annual cost factored into the NAV – is it part of the expense ratio also that is reported by funds? What about the upfront commission – is it also part of ER? Thanks!

    1. jb

      Do you mean one should also find out how much an investor spend for buying the products , Its not clear ?


      1. jb says:

        Never mind, yes I was going off on a tangent and essentially looking for total cost to investor as opposed to the commissions earned by agents. As a request! 🙂

        And, my comment should probably be in the mutual fund post instead of the insurance one as I was also asking if upfront and trail commissions are part of the expense ratio reported by mutual funds.

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