Life Insurance Corporation of India (LIC)

What is LIC?

The Life Insurance Corporation of India (LIC) is the largest life insurer in India, with more than half of the market by first-year premium. It was created on 1 September 1956 under the Life Insurance Corporation Act, 1956, when the government nationalised life insurance and merged the existing insurers and provident societies into one corporation. LIC was the only life insurer in India until the sector reopened to private companies after the IRDA Act, 1999.

LIC is a statutory corporation, not a company under the Companies Act, but it is regulated by IRDAI like other life insurers. Its shares have been listed on the NSE and BSE since its initial public offering in May 2022, and the Government of India remains the majority shareholder.

LIC by the numbers

According to LIC's results press release for the year ended 31 March 2026:

The banca figure shows how much LIC still depends on its agents: the remaining 92% or so of individual new business premium comes mainly through its agency force.

How LIC is governed

The LIC Act, 1956 sets LIC's structure, and LIC must also comply with the Insurance Act, 1938 as it applies to it. The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025 gave LIC more operational freedom: it can now open zonal offices without prior government approval, run its overseas branches' funds and surpluses under host-country law, and set up its Employees and Agents Relation Committee in the manner it decides. The Act also made LIC's duty to comply with applicable Insurance Act provisions explicit.

Foreign investment in LIC is limited to 20% under the automatic route, while other insurers may now be fully foreign-owned (see FDI in insurance).

What LIC means for distribution

• The largest agency force in the country. LIC's model rests on a very large network of individual agents and development officers. Its agency structure, with long-tenured agents, club memberships and renewal-linked income, is the benchmark against which private insurers design their own agency channels.
• Group business dominance. With about 70% of group first-year premium in FY 2025 to 26, LIC is the main competitor in employer-employee schemes, gratuity and superannuation funds, and group credit life. Brokers and corporate sales teams of private insurers compete with it on service and pricing in this segment.
• A shift towards non-par products. LIC's individual non-par share on an APE basis rose to 35.11% in FY 2025 to 26 from 27.69% a year earlier, and its VNB margin rose with it. That means its agents are being asked to sell more protection and guaranteed non-par plans alongside traditional participating endowments.
• Bancassurance is growing from a low base. LIC's banca and alternate channel premium crossed ₹5,000 crore in FY 2025 to 26, growing by more than 45%. In banks with open architecture, LIC is increasingly a shelf competitor, not only an agency insurer.
• Persistency lessons. LIC publishes persistency by premium and by policy count. Its 13th month persistency by policy count, at 64.87% in FY 2025 to 26, is well below the premium-based figure, which suggests that smaller policies lapse more often than larger ones.
• Trust as a selling point. For many households, LIC's government ownership and long history make it the default choice. Private insurer agents in smaller towns often meet this preference and need to explain claim records and product features clearly rather than criticise LIC.