Ad war: LIC and ACESO engage in advertisement battle over policyholders

An advertisement battle has erupted between one of the country's oldest insurance firms-- the Life Insurance Corporation of India (LIC) and a lesser-known firm ACESO Endowment Service Pvt Ltd.

In a recent advertisement in The Economic Times, ACESO Endowment Service took a dig at LIC, urging consumers to choose its ALIP service, instead. In June this year, ACESO launched Assignment of Life Insurance Policies (ALIP) for LIC policyholders which allows them to receive the surrender value of their endowment insurance policies while retaining their life cover benefits.

The ACESO ad mentioned, "Attention, LIC policyholders and LIC agents...Say no to surrender of your LIC policy instead opt for ALIP".

The company claimed that policyholders will get benefits of "immediate payouts, continuity of risk benefits and revival of legal policies" if they opt for ALIP.

In an obvious rebuttal, LIC came out with an ad on 13 August wherein it cautioned policyholders not to assign life insurance policies to unregulated entities.

LIC wrote, "Certain unregulated entities may be seeking to benefit at the cost of LIC's strong market position and sovereign guarantee, without any approval or authorization from LIC of Inda and at the cost of LIC's policyholder's interest".

"LIC believes that these products and services may pose a significant risk to policyholders' and their family's interests and are fraught with risks and may be prone to being misused," the LIC ad mentioned.

LIC chairman Siddhartha Mohanty told Moneycontrol that ACESO's ad is a "trading in policies". Mohanty added, "In principle, we oppose this. We will explore all options".

However, Ketan Mehta, founder of ACESO told Moneycontrol that LIC's ad could amount to contempt of the Supreme Court (SC) order – filed by LIC against Insure Policy Plus Services — in December 2015.

According to Moneycontrol, the apex court dismissed LIC’s appeal, which cleared the decks for the launch of products like ALIP. “Any refusal by the insurer to assign policy lodged by policyholders will negate the SC judgment, which will amount to contempt of court,” Mehta said.

While launching ALIP, ACESO's head of research Ranjit Kulkarni said, "LIC's endowment policies are significant, representing 80% of annual issuances. However, with a persistency ratio of around 50%, many policies don't reach maturity.

Kulkarni said, "ALIP offers a viable alternative to premature surrender, unlocking the policy value while safeguarding future coverage".