New Delhi, June 18: Life Insurance Corporation (LIC) proposes to withdraw two more endowment policies from mid-July.

The insurance behemoth has already withdrawn 21 policies over the past two years to bring down its payout costs because of the high returns it has been paying on these policies.

Bhavishya Jeevan, a special endowment plan with profits, and Jeevan Balya (an endowment plan for children) will be discontinued from July 15. It is learnt that LIC has circulated an internal letter to all its branches notifying its decision to pull the plug on these schemes.

However, the move will not affect existing policyholders who will continue to be serviced on the same terms and conditions.

“Yes, the two policies will be withdrawn soon. There is a possibility that we will discontinue some more policies,” LIC managing director R. N. Bhardwaj said.

Early this year, the insurer stopped Bima Nivesh triple cover, one of its popular policies.

A senior LIC agent said both Bhavishya Jeevan and Jeevan Balya were reasonably popular, but the insurer had burnt its fingers by paying out bonuses in the range of 11-11.5 per cent. This is because the average premium of both the policies were very low in comparison with the bonus pay-out, the agent added.

Under the Bhavishya Jeevan Policy Plan-95, premia payable during the first five years are higher than those payable later. This plan is identical to an ordinary endowment assurance plan without profits. The plan involves high annual premium payments for the first five years after which the annual premium is reduced to a one-third.

As for Jeevan Balya Plan-101, the plan is designed to enable a parent (called the proposer) to provide for the child with the payment of a very low premium. It is an endowment assurance policy with the risk commencing from the vesting date.

In addition, the premium waiver benefit and income benefits are included as additional benefits by payment of appropriate additional premiums, during the deferment period.

LIC also plans to introduce three to four unitised life insurance policies this year, LIC chairman S. B. Mathur had said earlier. There are indications that at least two unit-linked products might be launched either next month or in September.

He, however, cautioned, “For a unit-linked policy to successful, the pre-requisite is that the policyholder is well-informed. The risk on investment is entirely borne by the investor.'