IC38 Exam Mock Test Paper

Commission for LIC Agent

As in above picture it shows if an insurance advisor does the business of 1crore with annual premium of 5 lacs the commission advisor earns on it is 1.75 lacs(commission rate considered to be 35%) for the service provided and to be provided to policyholder in future .Now, in next year advisor doubles the business and brings the business of 2 crore with annual premium of 10 lacs then the commission income would be 387500 Rs

Surprised!!!!!!!!!!!!!!!!!!

That is true as for the second year advisor gets the renewal commission of the work done in previous year.So, commission earned for the business brought in second year (35% of 10 lacs) 350000 and renewal commission of business done in previous year (7.5% of 5 lacs) 37500.

If we assume that insurance advisor works for only 10 years and keeps on doubling the business every year then do you know what would be the income of advisor after 10 year

Total premium collected in 10 years 2,75,00,000 ,total renewal commission would be 5% of total premium i.e 13,75,000 per annum which means monthly income of 1,14,583 as long as policy is in-force.

So, by taking LIC Agency

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