Thursday, 14 April 2016


The AAO exam of LIC conducted by IBPS is around the corner and there have been many questions inter-alia regarding the job profile, major promotional avenues and comparison with banks. Firstly, one should know about LIC as an organisation for that. It is the only Life Insurer in India that is fully owned by the Government of India. The Life Insurance Corporation of India was founded in 1956 when the Parliament of India passed the Life Insurance of India Act that nationalised the private insurance industry in India. Over 245 insurance companies and provident societies were merged to create the state owned Life Insurance Corporation.

The organisation has a 4 tier structure and a fifth tier has been added for micro insurance later. At the helm is Central Office, based in Mumbai and then 8 Zonal Offices followed by various Divisional Offices at different locations. The fourth tier is the main coming out of the fact that most of newly recruited AAO will be posted at the fourth tier known as Branch Office and it is here that he/she will be given the independent charge of a particular department.


In a branch office, there are generally viz a viz Sales, New Business, Policy Service, Claims, Accounts, Office Service and IT departments. The first four are the front end departments and directly deal with the people at large and next three are the back end departments that mainly cater to the needs of employees and daily business of the branch.

The sales department has under its jurisdiction, in a layman term, all agents and Development Officers. Generally an Asstt Branch Manager (ABM), having designation equivalent to an AAO, is the head of the department. However, in case of his/her absence, an AAO is also given additional or independent responsibility.

New Business
This is the department where the agent brings the policy for the first time and AAO will be the authority having full discretion whether to accept any insurance or not. You also have discretion regarding charging extra premium on the basis of non-fulfilment of certain conditions. If you have good relations, you generally waive such things on recommendation of Branch Manager.

Policy Servicing
This is the most important department in the sense that, it really helps the common man. Many times the policy premiums are not paid leading to lapsation of policy or people want loan for something. As an officer, you can really help people in this and fast track the things. It is the busiest of all the departments on all days.

Claims Deptt
This department has main work at the end of the month or if any death claim arises. Most of the business of LIC comes in the month end or beginning and thus claims are settled accordingly. However, your vigil and pro-active approach can help you, as an officer in settling things over a period of time as well so as to reduce last minute rush

Accounts deptt
It basically helps in overseeing all the payments made or received and any financial and accounting thing happening in the branch. It is a bit cumbersome and an accounts person is almost the last to leave the office.

Office Service
Office Service department deals with personnel matters such as salary disbursement, income tax deduction, billing etc. Therefore, you are considered the most responsible person in terms of personal benefits.

IT Deptt
IT department generally does not have any AAO at the branch level but they do have AAO at divisional office level.


The training of an AAO consists of 9 months of theoretical and practical training at any of the Zonal Training Centre (ZTC). One MDC (Management Development Centre) at Mumbai has been closed for AAO training. The training is subdivided into 3 sub parts
  • 3 Months Theoretical training at any of the ZTC where you will be attending classes as full salaried employee and will have all benefits like lodging and boarding free of cost.
  • 3 Months Practical Training at any branch office in that zone. Guest houses will be provided to you and each week you’ll go to a different department altogether and learn about everything. Full salary and benefits will be given including meal coupons.
  • 3 Months Theoretical Training: In this, you will again be back to your ZTC and you will present whatever you have learnt and also you will be given a refresher on whatever you did in previous theoretical training.

After all this, you will be absorbed as an officer and will be sent to any branch on preference and on the basis of the availability of vacancies.

Hierarchical Gradation.

There are two branches of LIC personnel department, one is AAO (known as Administration side) and the other is ADO/DO (known as marketing side). Agents are not considered as employees of the organization in terms of they being non-permanent. Both the Administration side and the Marketing side converge at the fourth level of AAO promotion i.e. at DM/MM.

For example, there for DO (Group B), the promotion level is

DO à ABM (Astt Branch Manager) à BM à SrBM (Senior Branch Manager) and convergence.
For AAO (Group A), the promotion level is like
AAO à AO à ADM à DM and convergence

Comparison between LIC and Other Banks

  • Salary: The “in hand” salary of LIC is much more than what a normal Bank PO gets. Further, even if you take the salary of SBI PO after 4 increments, the salary of LIC is more. Further, in first nine months of training, you can just enjoy life as LIC will borne the whole expenditure which is not there in any other bank.
  • Work Pressure: The pressure in LIC AAO is far far less than any other bank except on month end and beginning and year end. Further, on a daily basis, one may go bome by maximum 6pm and you need not worry about anything. Generally public dealing is done till 3pm and after that many departments are not loaded as such.
  • Promotion: This is one of the negative points of LIC given the fact that promotions are not based on any exam and not as fast as banks. It takes almost 5-6 years minimum for any AAO to reach AO.
  • Perks: The perks of LIC AAO are not equivalent to other banks. However, you will not feel the same as that is only a meager amount. Further, LIC Employee association is in talks with higher authorities and better perks will be given in a short span of time.
  • Postings: You’ll most probably get nearby home postings though you will not be able to commute on a daily basis. Certain cases may be there where they will throw you at any far end.
  • Other benefits like good contacts because of large agent base and respect is equivalent to the banks or may be more than that.

The information contained in this article is for general information purposes only. The information is provided by Sahil Garg and while I endeavour to keep the information up to date and correct, I make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.