Public sector insurance major Life insurance Corporation of India hopes to register a total premium income of Rs 10,000 crore (Rs 100 billion) from the Varisth Pension Bima Yojana in 2004-05 for which the Central government has already agreed to provide a subsidy of two per cent. The amount to be shelled out by the government would be around Rs 160 crore (Rs 1.6 billion).

The insurance major sold 262,000 VPBY policies till January and earned a premium of Rs 4,754.69 crore (Rs 47.55 billion). Officials are of the view that premium income from the Yojana was likely to cross Rs 6,000 crore (Rs 60 billion).

Meanwhile, LIC has managed to achieve only 41 per cent of its targeted premium income in the first ten months of the current fiscal.

The insurance major has, however, achieved 58 per cent of its target of number of policies sold.

On the sum assured front, it has achieved around 53 per cent of its target.

LIC registered a premium income of Rs 4,726.39 crore (Rs 47.26 billion) till January 31, which was, however, a decline of 18 per cent in comparison to the previous year.

The decline was largely due to declining single premium policies, which no more carries the tax savings tag. On the number of policies and sum assured, it has however reported a 11.15 per cent and 20.59 per cent growth against the corresponding previous period.

To do good the decline in sale of single premium policies, LIC has decided to launch a few new products with very competitive returns - such as Jeevan Saral, which was likely to provide returns to the extent of 10 per cent - higher than the VPBY, which offers a nine per cent return. New products such as unit-linked insurance policies are also in the pipeline.

"We hope to do good the fall in premium income with Bimaplus, a pension plan and new products which are all expected to do very well in the next couple of months," explained D K Mehrotra, zonal manager, LIC.