Life Insurance Corporation of India (LIC) is likely to have reduced the first-year commission on its policies to 20% from 25% and bonus to 8% from 10%, according to sources.

This means that the total first-year commission is likely to have decreased from 35% to 28%.

This reduction is part of a broader strategy following the implementation of higher surrender values effective October 1.

Under the new regulations, insurance companies must offer a higher surrender value for all endowment policies.

This change means that customers who opt to surrender their policies will receive a more substantial refund.

Sources indicate that LIC is also likely to have increased the renewal commission to 7.5% from the previous 5%. Furthermore, the minimum sum assured is expected to have increased to ₹2 lakh from ₹1 lakh.

Premiums across various products are likely to have increased in low single-digit percentages.

CNBC-TV18 has reached out to LIC for confirmation, but a response from the company is still awaited.

However, LIC has indicated to CNBC-TV18 that all its current products are compliant with the new regulations.

In  a separate development, LIC has introduced a new insurance product called the Single Premium Group Micro Term Insurance Plan, effective from October 7, 2024.

This product is designed as a Non-Participating, Non-Linked, Group Pure Risk insurance solution, aimed at providing affordable and flexible life insurance for various financial and social institutions.