You want to become a LIC agent or you’re already one. You want to make sales, meet the targets, and get that hefty commission. But, is that it? Absolutely not! You must build strong relationships with your clients while adding value to their financial safety. Fortunately, we’ve covered the roles and legal responsibilities of LIC agents, and the ethics you need to live by.
By the end of this blog, you’ll not only understand the legalities and ethics, but you’ll also learn how to stay on the right track by being a valuable life insurance agent of LIC and stand out from the crowd.
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Your Role as an LIC Agent: Legal Responsibilities of LIC Agents & Ethics that Comes with It
What is the Main Responsibility of LIC Agent?
Your role as a LIC agent is multifaceted. While your responsibility is to pitch policies, it’s also about keeping your client’s needs in mind.
Anyone can meet targets but before that, you need to educate your client on different insurance products and recommend policies based on their unique needs, not based on commissions.
For you to become a responsible and valuable partner to your clients, let’s look at the legal responsibilities of LIC agents and the necessary policies to keep in mind.
The Legal Responsibilities Toolkit You Need As LIC Agent
In order to become a LIC agent, you need to operate within stringent rules and regulations, policies, and laws. These govern that the LIC agents conduct business ethically with their clients and act responsibly within the organization and the broader insurance ecosystem.
1. The Insurance Act, 1938: The Foundation of Indian Insurance Law
The Insurance Act, of 1938 governs how insurance works in India.
It says that only a licensed, trained insurance agent can act as an insurance agent. The act also regulates the commission structure to prevent conflicts of interest that could arise from recommending high-commission policies over client-appropriate ones .
This means that the LIC agents should only sell the right policies for their client’s needs and stick to the rules about how much commission they can earn.
2. The Life Insurance Corporation General Rules, 1956
These rules, periodically amended (most recently in 2022), form the backbone of LIC operations. 
According to this rule, only individuals who have undergone training and passed the licensing exam can act as LIC agents. Also, it states that agents cannot mislead or misrepresent policy terms to their clients and strictly stick to the rules that are detailed in the internal manuals.
3. Anti-Bribery and Anti-Corruption Policy by LIC
This policy makes sure that all transactions are conducted with utmost integrity.
This keeps the LIC agents in check by prohibiting them from offering or accepting any form of bribe and engaging in any corrupt practices, such as favoritism or undue influence.
Any such incidents will be reported to LIC’s compliance team.
4. Anti-Fraud Policy by LIC
This policy focuses on protecting the interests of policyholders and maintaining the corporation’s reputation.
This entails LIC agents educating their clients on fraudulent schemes, reporting any suspicious transactions to the authorities, and identifying red flags of fraudulent activities, such as forged documents or false claims
Now that you’ve understood the legal responsibilities of LIC agents. Let’s take a look at what are few ethics you need to follow with your heart to create a positive impact.
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Ethics to Live By Along with the Legal Responsibilities of LIC Agents
Integrity. Professionalism. Most importantly, honesty. These three main factors are what the legal policies require you to abide by.
This can make you a responsible and ethical LIC agent while you’re acting as a bridge between people and their financial safety nets.
1. Client’s Needs Before Yours
Any life insurance agent would want to sell policies that yield them high commissions.
But, do you want to put that above your client’s needs?
It’s always best to put the needs and interests of your client that suit their budget first, keeping aside your personal financial biases.
2. Full Disclosure with All Honesty
For your client to make an informed decision, you need to disclose all the details necessary with all honesty.
This means it’s your responsibility to make your clients understand all the benefits and disadvantages of what they’re buying.
3. Respect Your Client’s Privacy
As a LIC agent, you handle sensitive personal data. This not only breaks the trust of the client, it also violates the LIC’s legal policies.
Employ systems that protect your client’s data and be transparent about how it is stored.
4. Fair & Swift Claims Processing
To keep your client’s trust and maintain your company’s credibility, make sure you avoid delays, reducing claim amounts without any valid reason.
5. Accountability is Key
Well, nobody is perfect and everybody makes mistakes. By being open about what’s gone wrong and owning up to it while taking corrective measures can help build trust in both customers and the agency.
How LIC Agents Should Stay On The Right Path?
Understanding the legal responsibilities of LIC agents and knowing their ethics is just the first step.
You can attend regular training to help you stay updated and attend workshops that can address your queries.
In the process of becoming a responsible and ethical LIC agent, you might have ups and downs, you might be unsure of something or you might even have trouble getting started.
Consulting experts like Ajay Gupta can ease this process for you, just as it was done for other 100+ LIC agents.
Bottom Line - LIC Agent is more than just being a Sales Person
Being an LIC agent is about more than just meeting sales targets.
It’s about trust, integrity, and putting your client’s needs first. When you understand and follow the legal responsibilities of LIC agents alongside ethical practices, you not only safeguard your career but also become a valued partner in your client’s financial journeys.
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