"We are in the process of designing a pure term product which would be sold through both online and through agents," said S Roy Chowdhury, LIC ED- marketing, to a leading newspaper in the country. He also added that the rates would be lower.

Currently the company charges a higher premium for its term plans when compared to other private competitors. For example, a 30-year-old non-smoker has to pay an annual premium of Rs 7,300 for a cover of Rs 25-lakh policy under LIC's term plan Amulya Jeevan, while the same customer could purchase ICICI Prudential's iProtect for Rs 3,350 or Kotak Life's e-term plan for Rs 2,750.

To reduce this gap, LIC is planning to launch its online term policy. This will can save the company on its agent commission. This move will make the government owned insurer more competitive and bring its cost in-line with private insurers reduce their rates further. The state-owned company is also looking at selling policies through bank branches.

According to reports LIC has set a target to double its income by selling through bank branches. The insurer is targeting new business income of 54,000 crore this year. At present, 20 banks, including United Bank, UCO Bank, Central Bank, Corporation Bank, BoM and PNB, sell LIC policies.

The insurer, LIC, has announced a bonus of Rs 21,580 crore for its policyholders for 2010-11. This is approximately 95% of its net surplus of Rs 22,716 crore. The rest 5% has gone to the government.

It has announced a higher bonus rate under seven with-profit plans, namely Jeevan Anand, Jeevan Tarang, Jeevan Madhur, Child Future Plan, Jeevan Shree I, Jeevan Bharti I and Jeevan Pramukh.

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