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Role of LIC

Role of LIC

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Published by Bhagwan Sangle

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Published by: Bhagwan Sangle on Nov 22, 2009
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Role of Life Insurance Corporation in Insurance Sector of IndiaByDhruva RavaniStudentMBA Semester IIIR.D. Gardi Department of Business ManagementRajkot 
ABSTRACT
It is worth interesting to note that the origin of the concept of insurance is very old anddates back almost 4500 years ago in the ancient empire of Babylonia. This concept prevailed and developed during the medieval period in Europe. The emphasis of insurance was on traders' merchants and seafarers in marine industries at that time to provide them safety in terms of money against certain unseen risks including death. Theconcept of insurance has its origin in Indian scriptures. The Vedas give the idea of 'Yougkshema' means a promise to provide community insurance to the risk bearers as back as around 1000 B.C., which was practised by the Aryans.In 1956 a radical step was taken by the central govt. regarding nationalization of insurance industries which emerged as the Life Insurance of India the major objective of this corporation was to give maximum benefits to maximum citizens of India by providing them wide range of benefits against a number of risks. The details of Lick's business during last 5 years are given in the paper, which are self – explanatory.
INTRODUCTION
Almost 4500 years ago, in the ancient Land of Babylonia, traders used to bear risk of thecaravan trade by giving loans that had to be later repaid with interest when the goodsarrived safely. In 2100 B.C. the code of Hammurabi granted legal status to the practice.That perhaps, was how insurance made its beginning.Life insurance had its origins in ancient Rome, Where citizens formed burial clubs thatwould meet the funeral expenses of its members as well as help survivors by makingsome payments.In 1347, in Genoa, European maritime nations entered into the earliest known insuranceand decided to accept marine insurance as a practice. Back to the 17th century, in 1693,astronomer Edmond Halley constructed the first mortality and compound interest. In1756, Joseph Dodson reworked the table, linking premium rate to age. The 19th centurysaw huge developments in the field of insurance, with newer products being devised tomeet the growing needs of urbanization and industrialization.
LIFE INSURANCE IN INDIA
Insurance in India can be traced back to the Vedas. For instance, Yougkshema, the nameof Life Insurance Corporation of India's corporate headquarters, is derived from the RigVeda. The term suggests that a form of 'community insurance' was prevalent around 1000BC and practised by the Aryans.Bombay Mutual Assurance Society, the first Indian life assurance society, was formed in
 
1870. Other companies like Oriental, Bharat and Empire of India were also set up in the1870 – 90s.The Insurance Act was passed in 1912, followed by a detailed and amended InsuranceAct of 1938 that looked into investments, expenditure and management of thesecompanies' funds.By the mid – 1950s, there were around 170 insurance companies and 80 provident fundsocieties in the country's life insurance scene. However, in the absence of regulatorysystems, scams and irregularities were almost a way of life at most of these companies'funds.As a result, the government decided to nationalise the life assurance business in India.The Life Insurance Corporation of India was set up in 1956 to take over around 250 lifeassurance companies. After the RN Malhotra Committee report of 1994 became the firstserious document calling for the re-opening up of the insurance sector to private players – that the sector was finally opened up to private players in 2001.WHAT IS LIFE INSURANCELife Insurance is a contract for payment of a sum of money to the person assured on thehappening of the event insured against. Usually the contract provides for the payment of an amount on the date of maturity or at specified dates at periodic intervals or atunfortunate death, if it occurs earlier. It is concerned with two hazards that stand acrossthe life- path of every person that of dying prematurely leaving a dependent family tofend itself and that of living to old age without visible means of support.GROWTH OF NEW BUSINESSDuring the 1997-98 LIC sum assured through policies 63927.83 Crore Rs. In 1998-99LIC sum assured 75606.26 Crore Rs. In 1999-00 LIC sum assured 91490.94 Crore Rs. In2000-01 LIC sum assured 124950.63 Crore Rs. In 2001-02 LIC sum assured 192784.96Crore Rs. We can see that LIC gets success in new business. NUMBER OF POLICIESIn 1997-98 LIC's number of polices are 850.03 in lakh. In 1998-99 LIC'S number of 
 
 polices are 917.26 in lakh. In 1999-00 LIC's number of polices are 1013.89 in lakh. In2000-01 LIC's numbers of policies are 1131.11 in lakh. In 2001-02 LIC's number of  policies 1258.76 in lakh. We can see that LIC's position is very good. Numbers of  policies are increased.ANALYSIS OF INCOMEThis chart shows various income of LIC. LIC gets 14.11 % income through first year  premium. LIC gets 40.74 % income from Renewal Premium. LIC gets 12.43 % incomefrom Single Premium. LIC gets 31.19 % income from investments. LIC gets income 1.53% from Miscellaneous.CONCLUTIONLIC gets achievement in various fields. We can see that LIC gets success in new business. Numbers of policies are increased. We can see LIC's income from variousfields. Overall LIC has doing profitable business. But it is only LIC's own business. But itis not compared with other's insurance institute. So it is not completed. 
Role Of Life Insurance Adjusterby Alec Morgan
The role of a life insurance adjuster begins from the time an individual files aclaim. It is the adjusters’ brains that work when planning for and processing aclaim. They have the power to decide what to do with a certain policy claim andhow to go about it.After an individual makes a policy claim, the process is undertaken by an adjuster.The claimant and witnesses may be interviewed along with the hospital records, police records and examining the property damage in order to make an estimate onthe amount of the company’s liability. Other professionals like architects,engineers, physicians, lawyers, accountants and construction workers may also beconsulted for more detailed opinion on the claim.The lifeinsurance adjustersgather information through photographs, statementsand video tape (written/audio). After the claim is evaluated and made legitimate,the adjuster negotiates the deal with the claimant and finally settles the amount to

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