Unable to sustain its assured return schemes in a falling interest rate regime, the Life Insurance Corporation plans to withdraw at least three schemes -- New Jeevan Shree, Bima Nivesh and Bal Vidya by March-end this year.
New Jeevan Shree, the endowment plan for high net worth individuals, is likely to be withdrawn on March 25, official sources told PTI in Delhi on Sunday.
Sources said a similar scheme with perhaps a different name would be launched next fiscal.
The withdrawal of New Jeevan Shree, one of LIC's best sellers, is mainly due to the fact that the high return (about 7-8 per cent) cannot be sustained in the present interest rate regime when benchmark 10-year government papers are giving only a 6.5 per cent return.
The insurance monolith had withdrawn the Jeevan Shree scheme last year and launched the New Jeevan Shree considering the demand from niche clients.
LIC also intends to withdraw its single premium Bima Nivesh plan by March 31 considering the one per cent cut in interest rates on small savings and PPF announced in this year's budget.
The interest rate on the Bima Nivesh scheme, which was launched two years ago with an assured return of about 11 per cent for a 10-year period, may be revised but the rate of return is yet to be decided, sources said.
The Insurance Regulatory and Development Authority had warned insurers about the high returns in single premium policies and asked them to build adequate reserves.
Sources also said that LIC is likely to withdraw an insurance scheme for children 'Bal Vidya' as its sale was not as per expectations.
Otherwise, sources said, other LIC schemes like Jeevan Mitra scheme are doing well.
The corporation launched Jeevan Bharati, a money-back scheme with critical illness cover and other benefits, on the International Women's Day (March 8). This is the third policy where LIC is offering critical illness riders. The other policies where such benefits are offered are 'Asha Deep' and 'Jeevan Asha'.
Although the life insurer is withdrawing some of its attractive schemes, it still hopes to increase its premium income to over Rs 900 billion (Rs 90,000 crore) this fiscal from about Rs 720 billion (Rs 72,000 crore) last fiscal.
