LIC’s Jeevan Akshay collects Rs2,355 cr on last day

NAGPUR: PSU insurer, Life Insurance Corporation (LIC) collected Rs2,355 crore in the Jeevan Akshay pension plan on Wednesday — when the scheme ended. The Nagpur division netted in Rs52.3 crore on a single day. Collections continued till late in the evening. After SBI slashed rates on bulk deposits on November 16, there was a large scale diversion of funds from banks to this pension plan which gives an average return of 7.5%.The new Jeevan Akshay which came into effect from Thursday carries an average return of 7% instead.
The SBI cut the rate for bulk deposits after it was flush with funds due to demonetisation. With chances of cuts in rates for retail deposits too, there was a sudden flow of funds from banks to the pension plan. The insurance agents too were seen hard-selling the plan.
The LIC Nagpur division’s collection for Wednesday alone comes to 74% of the entire previous year’s collection at Rs70 crore. This year it has raked in Rs239 crore in Jeevan Akshay scheme.
The scheme had to be revised due to the current situation. LIC itself may not be able to generate as much as 7.5% due to the low interest scenario ahead. The funds received for Jeevan Akshay are parked in debt-based securities for which the returns may come down in future.
There are two main variants of the scheme. There are plans in which the original investment is returned after death and those in which the fund is retained with LIC. The rate is higher at over 10% in the latter. However it is expected that majority of sales may have been in the plans in which the capital is returned, a source in the LIC said.