CONTENTS

Sr.no

Topic

History Of LIC

Introduction

Types Of Life Insurance

Objective Of LIC

Benefits with LIC

Role of insurance in personal life

Tax Life Insurance

LICs Product
LICJeevanVarsha
LIC JeevanAnand
LIC JeevanSaral
LIC BimaBachat

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Page. No

 LIC JeevanSaathi Plus

LIC Children Plan
LIC Wealth Plus
LIC JeevanVirrdhiz

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Conclusion

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Bibliography

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Webilography

HISTORY OF LIC

The story of insurance is probably as old as the story of mankind. The same
instinct that prompts modern businessmen today to secure themselves against loss
and disaster existed in primitive men also. They too sought to avert the evil
consequences of fire and flood and loss of life and were willing to make some sort
of sacrifice in order to achieve security. Though the concept of insurance is largely
a development of the recent past, particularly after the industrial era past few
centuries yet its beginnings date back almost 6000 years. Life Insurance in its
modern form came to India from England in the year 1818. Oriental Life Insurance
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Company started by Europeans in Calcutta was the first life insurance company on
Indian Soil. All the insurance companies established during that period were
brought up with the purpose of looking after the needs of European community and
Indian natives were not being insured by these companies. Bharat Insurance
Company (1896) was also one of such companies inspired by nationalism. The
Swadeshi movement of 1905-1907 gave rise to more insurance companies. The
United India in Madras, National Indian and National Insurance in Calcutta and the
Co-operative Assurance at Lahore were established in 1906. The Life Insurance
Companies Act, 1912 made it necessary that the premium rate tables and periodical
valuations of companies should be certified by an actuary. The Insurance Act 1938
was the first legislation governing not only life insurance but also non-life
insurance to provide strict state control over insurance business. The demand for
nationalization of life insurance industry was made repeatedly in the past but it
gathered momentum in 1944 when a bill to amend the Life Insurance Act 1938 was
introduced in the Legislative was accomplished in two stages; initially the
management of the companies was taken over by means of an Ordinance, and later,
the ownership too by means of a comprehensive bill. The Parliament of India
passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life
Insurance Corporation of India was created on 1st September, 1956, with the
objective of spreading life insurance much more widely and in particular to the
rural areas with a view to reach all insurable persons in the country, providing them
adequate financial cover at a reasonable cost.

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Today LIC functions with 2048 fully computerized branch offices, 109 divisional
offices, 8 zonal offices, 992 satellite offices and the Corporate office. LICs Wide
Area Network covers 109 divisional offices and connects all the branches through
a Metro Area Network. LIC has tied up with some Banks and Service providers to
offer on-line premium collection facility in selected cities. LICs ECS and ATM
premium payment facility is an addition to customer convenience. Apart from
online Kiosks and IVRS, Info Centers have been commissioned at Mumbai,
Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many
other cities. With a vision of providing easy access to its policyholders, LIC has
launched its SATELLITE SAMPARK offices. The satellite offices are smaller,
leaner and closer to the customer. The digitalized records of the satellite offices
will facilitate anywhere servicing and many other conveniences in the future. LIC
continues to be the dominant life insurer even in the liberalized scenario of Indian
insurance and is moving fast on a new growth trajectory surpassing its own past
records. LIC has issued over one crore policies during the current year. It has
crossed the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005,
posting a healthy growth rate of 16.67% over the corresponding period of the
previous year. From then to now, LIC has crossed many milestones and has set
unprecedented performance records in various aspects of life insurance business.
The same motives which inspired our forefathers to bring insurance into existence
in this country inspire us at LIC to take this message of protection to light the
lamps of security in as many homes as possible and to help the people in providing
security to their families

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Some of the important milestones in the life insurance business in India are:

1818: Oriental Life Insurance Company, the first life insurance company on Indian
soil started functioning.

1870: Bombay Mutual Life Assurance Society, the first Indian life insurance
company started its business.

1912: The Indian Life Assurance Companies Act enacted as the first statute to
regulate the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to
collect statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with
the objective of protecting the interests of the insuring public.

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1956: 245 Indian and foreign insurers and provident societies are taken over by the
central government and nationalized.

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INTRODUCTION

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INTRODUCTION

Insurance provides financial protection against a loss arising out of happening of

an uncertain event. A person can avail this protection by paying premium to an
insurance company. A pool is created through contributions made by persons
seeking to protect themselves from common risk. Premium is collected by
insurance companies which also act as trustee to the pool. Any loss to the insured
in case of happening of an uncertain event is paid out of this pool. Insurance works
on the basic principle of risk-sharing. A great advantage of insurance is that it
spreads the risk of a few people over a large group of people exposed to risk of
similar type.

DEFINITION

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Insurance is a contract between two parties whereby one party agrees to undertake
the risk of another in exchange for consideration known as premium and promises
to pay a fixed sum of money to the other party on happening of an uncertain event
(death) or after the expiry of a certain period in case of life insurance or to
indemnify the other party on happening of an uncertain event in case of general
insurance. With such a large population and the untapped market area of this
population Insurance happens to be a very big opportunity in India. Today it stands
as a business growing at the rate of 15-20 per cent annually. Together with banking
services, it adds about 7 per cent to the countrys GDP. In spite of all this growth
the statistics of the penetration of the insurance in the country is very poor. Nearly
80% of Indian populations are without Life insurance cover and the Health
insurance.

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LIFE INSURANCE IN INDIA ORIGIN OF LIC

Almost 4,500 years ago, in the ancient land of Babylonia, traders used to bear risk
of the caravan trade by giving loans that had to be later repaid with interest when
the goods arrived safely. In 2100 BC, the Code of Hammurabi granted legal status
to the practice. Life insurance had its origins in ancient Rome, where citizens
formed burial clubs that would meet the funeral expenses of its members as well as
help survivors by making some payments. As European civilization progressed, its
social institutions and welfare practices also got more and more refined. With the
discovery of new lands, sea routes and the consequent growth in trade, Medical
guilds took it upon themselves to protect their member traders from loss on
account of fire, shipwrecks and the like. Since most of the trade took place by sea,
there was also the fear of pirates. So these guilds even offered ransom for members
held captive by pirates. Burial expenses and support in times of sickness and
poverty were other services offered. Essentially, all these revolved around the
concept of insurance or risk coverage. That's how old these concepts are, really. In
1347, in Genoa, European maritime nations entered into the earliest known
insurance contract and decided to accept marine insurance as a practice. The first
step... Insurance as we know it today owes its existence to 17th century England.
In fact, it began taking shape in 1688 at a rather interesting place called Lloyd's
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Coffee House in London, where merchants, ship-owners and underwriters met to

discuss and transact business. By the end of the 18th century, Lloyd's had brewed
enough business to become one of the first modern insurance companies. Back to
the 17th century. In 1693, astronomer Edmond Halley constructed the first
mortality table to provide a link between the life insurance premium and the
average life spans based on statistical laws of mortality and compound interest. In
1756, Joseph Dodson reworked the table, linking premium rate to age.
The first stock companies to get into the business of insurance were chartered in
England in 1720. The year 1735 saw the birth of the first insurance company in the
American colonies in Charleston, SC. In 1759, the Presbyterian Synod of
Philadelphia sponsored the first life insurance corporation in America for the
benefit of ministers and their dependents. However, it was after 1840 that life
insurance really took off in a big way. The trigger: reducing opposition from
religious groups. The 19th century saw huge developments in the field of
insurance, with newer products being devised to meet the growing needs of
urbanization and industrialization. In 1835, the infamous New York fire drew
people's attention to the need to provide for sudden and large losses. Two years
later, Massachusetts became the first state to require companies by law to maintain
such reserves. The great Chicago fire of 1871 further emphasized how fires can
cause huge losses in densely populated modern cities There were more offshoots of
the process of industrialization. In 1897, the British government passed the
Workmen's Compensation Act, which made it mandatory for a company to insure
its employees against industrial accidents. With the advent of the automobile,
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public liability insurance, which first made its appearance in the 1880s, gained
importance and acceptance? In the 19th century, many societies were founded to
insure the life and health of their members, while fraternal orders provided
lowcost, members-only insurance. Even today, such fraternal orders continue to
provide insurance coverage to members as do most labour organizations. Many
employers sponsor group insurance policies for their employees, providing not just
life insurance, but sickness and accident benefits and old-age pensions. Employees
contribute a certain percentage of the premium for these policies. Insurance in
India can be traced back to the Vedas. For instance, yogakshema, the name of Life
Insurance Corporation of India's corporate headquarters, is derived from the Rig
Veda. The term suggests that a form of "community insurance" was prevalent
around 1000 BC and practised by the Aryans.
Burial societies of the kind found in ancient Rome were formed in the Buddhist
period to help families build houses, protect widows and children. 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 the
1870-90s. It was during the swadeshi movement in the early 20th century that
insurance witnessed a big boom in India with several more companies being set up.
Act of 1938 that looked into investments, expenditure and management of these
companies' funds By the mid-1950s, there were around 170 insurance companies
and 80 provident fund societies in the country's life insurance scene. However, in
the absence of regulatory systems, scams and irregularities were almost a way of
life at most of these companies. For years thereafter, insurance remained a
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monopoly of the public sector. It was only after seven years of deliberation and
debate - after the RN Malhotra Committee report of 1994 became the first serious
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.

TYPES OF LIFE INSURANCE

1. Term Insurance Policy

2. Whole Life Policy

3. Endowment Policy

4. Money Back Policy

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Life insurance may be divided into two basic classes temporary and permanent or
following subclasses term, universal, whole life and endowment life insurance.
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Term Insurance Term assurance provides life insurance coverage for a specified
term of years in exchange for a specified premium. The policy does not accumulate
cash value. Term is generally considered "pure" insurance, where the premium
buys protection in the event of death and nothing else. There are three key factors
to be considered in term insurance: Face amount (protection or death benefit),
Premium to be paid (cost to the insured), Length of coverage (term). Various
insurance companies sell term insurance with many different combinations of these
three parameters. The face amount can remain constant or decline. The term can be
for one or more years. The premium can remain level or increase. Common types
of term insurance include Level, Annual Renewable and Mortgage insurance."
Level Term policy has the premium fixed for a period of time longer than a year.
These terms are commonly 5, 10, 15, 20, 25, 30 and even 35 years. Level term is
often used for long term planning and asset management because premiums remain
consistent year to year and can be budgeted long term. At the end of the term, some
policies contain a renewal or conversion option. Guaranteed Renewal, the
insurance company guarantees it will issue a policy of equal or lesser amount
without regard to the insurability of the insured and with a premium set for
theinsured's age at that time. Annual renewable term is a one year policy but the
insurance company guarantees it will issue a policy of equal or lesser amount
without regard to the insurability of the insured and with a premium set for the
insured's age at that time. Another common type of term insurance is mortgage
insurance, which is usually a level premium, declining face value policy. The face
amount is intended to equal the amount of the mortgage on the policy owners
residence so the mortgage will be paid if the insured dies. A policy holder insures
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his life for a specified term. If he dies before that specified term is up (with the
exception of suicide see below), his estate or named beneficiary receives a payout.
If he does not die before the term is up, he receives nothing. However, in some
European countries (notably Serbia), insurance policy is such that the policy holder
receives the amount he has insured himself to, or the amount he has paid to the
insurance company in the past years.
1.Term Insurance Policy
This policy is pure risk cover with the insured amount will be paid only if the
policy hold dies in the period of policy time. The intention of this policy is to
protect the policy holders family incase of death. For example, a person who takes
term policy of Rs.500000 for 20 years, if he dies before 20 years then his family
will get the insured amount. If he survive after 20 years then he will not get any
amount from the insurance company. It is the reason why term policies are very
low cost. So, this type of policy is not suitable for savings or investment.
2.Whole Life Policy
As the name itself says, the policy holder has to pay the premium for whole life till
his death. This policy doesnt address any other needs of the policy holder. because
of these reasons this kind of policy is not very popular or insurance company not
suggesting to take this policy.
3.Endowment Policy

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It is the most popular Life Insurance Plansamoung other types of policies. This
polciy combines risk cover with the savings and investment. If the policy holder
dies during the policy time, he will get the assured amount. Even if he survives he
will receive the assured amount. The advantage of this policy is if the policy holder
survives after the completion of policy trnure, he receives assured amount plus
additional benefits like Bonus,etc. from the insurance company. In this kind of
policy, policy holder receices huge amout while completing the tenure.
In addition to the basic policy, insurers offer various benefits such as double
endowment and marriage/ education endowment plans. The cost of such a policy
is slightly higher but worth its value.

4.Money Back Policy

Money Back Policy is to provide money on the occasions when the policy holder
needs for his personal life. The occassions may be marriage, education,etc. Money
will be paid back to the policy holder with the specified duration. If the polciy
holder dies before the policy term, the sum assured will be given to his family. A
portion of the sum assured is payable at regular intervals. On survival the
remainder of the sum assured is payable.

The four basic types of permanent insurance

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 Whole life,
Universal life

Limited pay

Endowment.

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 Whole life coverage:

Whole life insurance provides for a level premium, and a cash value table included
in the policy guaranteed by the company. The primary advantages of whole life are
guaranteed death benefits, guaranteed cash values, fixed and known annual
premiums, and mortality and expense charges will not reduce the cash value shown
in the policy. The primary disadvantages of whole life are premium inflexibility,
and the internal rate of return in the policy may not be competitive with other
savings alternatives. The death benefit can also be increased through the use of
policy dividends. Dividends cannot be guaranteed and may be higher or lower than
historical rates over time. Premiums are much higher than term insurance in the
short term, but cumulative premiums are roughly equal if policies are kept in force
until average life expectancy. Cash value can be accessed at any time through
policy "loans" and are received "income-tax free". Since these loans decrease the
death benefit if not paid back, payback is optional. Cash values support the death
benefit so only the death benefit is paid out. Dividends can be utilized in many
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ways. First, if Paid up additions is elected, dividend cash values will purchase
additional death benefit which will increase the death benefit of the policy to the
named beneficiary. Another alternative is to opt in for 'reduced premiums' on some
policies. This reduces the owed premiums by the unguaranteed dividends amount.
A third option allows the owner to take the dividends as they are paid out.
(Although some policies provide other/different/less options than these - it depends
on the company for some cases)

Universal life coverage:

Universal life insurance (UL) is a relatively new insurance product intended to

provide permanent insurance coverage with greater flexibility in premium payment
and the potential for greater growth of cash values. There are several types of
universal life insurance policies which include "interest sensitive" (also known as
"traditional fixed universal life insurance"), variable universal life (VUL),
guaranteed death benefit, and equity indexed universal life insurance. A universal
life insurance policy includes a cash value. Premiums increase the cash values, but
the cost of insurance (along with any other charges assessed by the insurance
company) reduces cash values. However, with the exception of VUL, interest is
credited on cash values at a rate specified by the company and may also increase
cash values. With VUL, cash values will ebb and flow relative to the performance

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of the investment subaccounts the policy owner has chosen. The surrender value of
the policy is the amount payable to the policyowner after applicable surrender
charges, if any. Universal life insurance addresses the perceived disadvantages of
whole life namely that premiums and death benefit are fixed. With universal life,
both the premiums and death benefit are flexible. Except with regards to
guaranteed death benefit universal life, this flexibility comes at a price: reduced
guarantees. Depending on how interest is credited, the internal rate of return can be
higher because it moves with prevailing interest rates (interest-sensitive) or the
financial markets (Equity Indexed Universal Life and Variable Universal Life).
Mortality costs and administrative charges are known. And cash value may be
considered more easily attainable because the owner can discontinue premiums if
the cash value allows itOption A is often referred to as a level death benefit.
Generally speaking, the death benefit will remain level for the life of the insured
and premiums are expected to be lower than policies with an Option B death
benefit. Option B pays the face amount plus the cash value. If cash values grow
over time, so would the death benefit which is payable to the insured's
beneficiaries. If cash values decline, the death benefit would also decline.
Presumably option B death benefit policies require greater premium than option A
policies.

Limited-pay:

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Another type of permanent insurance is Limited-pay life insurance, in which all the
premiums are paid over a specified period after which no additional premiums are
due to keep the policy in force. Common limited pay periods include 10-year, 20year, and paid-up at age 65.

Endowments:

Endowments are policies in which the cash value built up inside the policy, equals
the death benefit (face amount) at a certain age. The age this commences is known
as the endowment age. Endowments are considerably more expensive (in terms of
annual premiums) than either whole life or universal life because the premium
paying period is shortened and the endowment date is earlier. In the United States,
the Technical Corrections Act of 1988 tightened the rules on tax shelters (creating
modified endowments). These follow tax rules as annuities and IRAs do.

Accidental Death Accidental death is a limited life insurance that is designed to

cover the insured when they pass away due to an accident. Accidents include
anything from an injury, but do not typically cover any deaths resulting from health
problems or suicide. Because they only cover accidents, these policies are much
less expensive than other life insurances. It is also very commonly offered as
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"accidental death and dismemberment insurance", also known as an AD&D policy.

In an AD&D policy, benefits are available not only for accidental death, but also
for loss of limbs or bodily functions such as sight and hearing, etc. Accidental
death and AD&D policies very rarely pay a benefit; either the cause of death is not
covered, or the coverage is not maintained after the accident until death occurs. To
be aware of what coverage they have, an insured should always review their policy
for what it covers and what it excludes. Often, it does not cover an insured who
puts themselves at risk in activities such as: parachuting, flying an airplane,
professional sports, or involvement in a war (military or not). Accidental death
benefits can also be added to a standard life insurance policy as a rider. If this rider
is purchased, the policy will generally pay double the face amount if the insured
dies due to an accident. This used to be commonly referred to as double indemnity
coverage. In some cases, some companies may even offer triple indemnity
coverage

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OBJECTIVES OF LIC
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Spread Life Insurance widely and in particular to the rural areas and to the socially
and economically backward classes with a view to reaching all insurable persons in
the country and providing them adequate financial cover against death at a
reasonable cost. Maximize mobilization of people's savings by making insurancelinked savings adequately attractive. Bear in mind, in the investment of funds, the
primary obligation to its policyholders, whose money it holds in trust, without
losing sight of the interest of the community as a whole; the funds to be deployed
to the best advantage of the investors as well as the community as a whole, keeping
in view national priorities and obligations of attractive return. Conduct business
with utmost economy and with the full realization that the moneys belong to the
policyholders. Act as trustees of the insured public in their individual and
collective capacities. Meet the various life insurance needs of the community that
would arise in the changing social and economic environment. Involve all people
working in the Corporation to the best of their capability in furthering the interests
of the insured public by providing efficient service with courtesy. Promote amongst
all agents and employees of the Corporation a sense of participation, pride and job
satisfaction through discharge of their duties with dedication towards achievement
of Corporate Objective.

MISSION &VISION
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Mission "Explore and enhance the quality of life of people through financial
security by providing products and services of aspired attributes with competitive
returns, and by rendering resources for economic development."

Vision "A trans-nationally competitive financial conglomerate of significance to

societies and Pride of India."

BENEFITS WITH LIC

This is like a post office R.D. scheme. You can deposit yearly, half yearly,
Quarterly or Monthly (ECS) in LIC scheme. Maturity received In LIC scheme is
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tax free under section 10-10D of income tax act. You can withdraw partial or full
amount if necessary after 10 years. The amount deposited in LIC is exempted
under section 80C of income tax act. You can continue LIC scheme after 10 years.
You cannot continue Post Office scheme after 10 years. In case of death 250 times
monthly premium + total premium paid (1st years premium & extra Premium
paid) + LA, if any payable. If you forget to take maturity at the end of 10 years.
You can get return beyond 10 years in LIC scheme. LIC policy gives Maturity
Benefit to the customer. Auto-cover facility is a very good facility in these policies.
LIC policy gives you a Death Benefit with the investment. Time to time company
provide Bonus to the customers. Company gives Assured Benefit to the customers.
LIC policies give Tax Benefits to the policy holders. It gives a good Surrender
Value to the clients. LIC provide Accidental Death And Disability Benefit to policy
holders. LIC give Guaranteed Surrender Value in case of surrender the policy. LIC
provide Paid Up Value to the policy customers.

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ROLE OF INSURANCE IN PRSONEAL

The need for life insurance comes from the need to safeguard our family. If you
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care for your familys needs you will definitely consider insurance. Today
insurance has become even more important due to the disintegration of the
prevalent joint family system, a system in which a number of generations coexisted
in harmony, a system in which a sense of financial security was always there as
there were more earning members. Times have changed and the nuclear family has
emerged. Apart from other pitfalls of a nuclear family, a high sense of insecurity is
observed in it today besides, the family has shrunk.

Needs are increasing with time and fulfillment of these needs is a big question
mark. How will you be able to satisfy all those needs? Better lifestyle, good
education, your long desired house. But again - you just cannot fritter away all
your earnings. You need to save a part of it for the future too - a wise decision. This
is where insurance helps you. Factors such as fewer number of earning members,
stress, pollution, increased competition, higher ambitions etc are some of the
reasons why insurance has gained importance and where insurance plays a
successful role. Insurance provides a sense of security to the income earner as also
to the family. Buying insurance frees the individual from unnecessary financial
burden that can otherwise make him spend sleepless nights. From the very
beginning of your life, to your retirement age insurance can take care of all your
needs. Your child needs good education to mould him into a good citizen. After his
schooling he need to go for higher studies, to gain a professional edge over the
others - a necessity in this age where cut-throat competition is the rule. His career
needs have to be fulfilled. Insurance is a must also because of the uncertain future
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adversities of life. Accidents, illnesses, disability etc are facts of life which can be
extremely devastating.

Other than the hospital lisation, medication bills these may run up its the
aftermath of the incident, the physical well being of the individual that has to be
taken into consideration.

Will the individual be in a position to earn as before? A pertinent question. But

what if he is not? Disability can be taken care of by insurance. Your family will not
have to go through the grind due to your present inability. Moreover, retirement, an
age when every individual has almost fulfilled his responsibilities and looks
forward to relaxing can be painful if not planned properly. Have you considered the
increasing inflation and taxes? Will your investment offer you attractive returns
under such circumstances? Will it take care of your family after you?

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An insurance policy will definitely take care of these and a lot more. Insurance
today has opened up new vistas for every section of society. Even for the village
farmer insurance holds a lot of potential. Considering how dependent our
agricultural system is on the monsoon, the farmer sees a dim future. The
uncertainty of the monsoon too can be taken care of by insurance. Looking at the
advantages of an insurance policy a number of farmers have gone in for insurance.
Insurance has become a necessity today. It provides timely financial as also
rewards with bonuses.

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TAX AND LIFE INSURANCE

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&
Taxation of life insurance in the United States Premiums paid by the policy owner
are normally not deductible for federal and state income tax purposes. Proceeds
paid by the insurer upon death of the insured are not included in gross income for
federal and state income tax purposes;[9] however, if the proceeds are included in
the "estate" of the deceased, it is likely they will be subject to federal and state
estate and inheritance tax. Cash value increases within the policy are not subject to
income taxes unless certain events occur. For this reason, insurance policies can be
a legal and legitimate tax shelter wherein savings can increase without taxation
until the owner withdraws the money from the policy. On flexible-premium
policies, large deposits of premium could cause the contract to be considered a
"Modified Endowment Contract" by the Internal Revenue Service (IRS), which
negates many of the tax advantages associated with life insurance. The insurance
company, in most cases, will inform the policy owner of this danger before
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applying their premium. The tax ramifications of life insurance are complex. The
policy owner would be well advised to carefully consider them. As always, the
United States Congress or the state legislatures can change the tax laws at any
time. Taxation of life assurance in the United Kingdom Premiums are not usually
allowable against income tax or corporation tax, however qualifying policies
issued prior to 14 March 1984 does still attract LAPR (Life Assurance Premium
Relief) at 15% (with the net premium being collected from the policyholder). Noninvestment life policies do not normally attract either income tax or capital gains

tax on claim. If the policy has as investment element such as an endowment policy,
whole of life policy or an investment bond then the tax treatment is determined by
the qualifying status of the policy.

Qualifying status is determined at the outset of the policy if the contract meets
certain criteria. Essentially, long term contracts (10 years plus) tend to be
qualifying policies and the proceeds are free from income tax and capital gains tax.
Single premium contracts and those run for a short term are subject to income tax
depending upon your marginal rate in the year you make a gain. All (UK) insurers
pay a special rate of corporation tax on the profits from their life book; this is
deemed as meeting the lower rate (20% in 200506) liability for policyholders.
Therefore a policyholder who is a higher rate taxpayer (40% in 2005-06), or
becomes one through the transaction, must pay tax on the gain at the difference
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between the higher and the lower rate. This gain is reduced by applying a
calculation called top-slicing based on the number of years the policy has been
held. Although this is complicated, the taxation of life assurance based investment
contracts may be beneficial compared to alternative equity-based collective
investment schemes (unit trusts, investment trusts and OEICs). One feature which
especially favors investment bonds is the '5% cumulative allowance' the ability to
draw 5% of the original investment amount each policy year without being subject
to any taxation on the amount withdrawn. If not used in one year, the 5%
allowance can roll over into future years, subject to a maximum tax deferred
withdrawal of 100% of the premiums payable. The withdrawal is deemed by the
HMRC (Her Majesty's Revenue and Customs) to be a payment of capital and
therefore thetax liability is deferred until maturity or surrender of the policy. This is
an especially useful tax planning tool for higher rate taxpayers who expect to
become basic rate taxpayers at some predictable point in the future (e.g.
retirement), as at this point the deferred tax liability will not result in tax being due.
The proceeds of a life policy will be included in the estate for death duty (in the
UK, inheritance tax (IHT)) purposes, except that policies written in trust may fall
outside the estate. Trust law and taxation of trusts can be complicated, so any
individual intending to use trusts for tax planning would usually seek professional
advice from an Independent Financial Adviser (IFA) and/or a solicitor.

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T.Y.B Com (BFM)

Pension Term Assurance Although available before April 2006, from this date
pension term assurance became widely available in the UK. Most UK product
providers adopted the name "life insurance with tax relief" for the product. Pension
term assurance is effectively normal term life assurance with tax relief on the
premiums. All premiums are paid net of basic rate tax at 22%, and higher rate tax
payers

can

gain

an

extra

18%

tax

relief

via

their

tax

return.

Although not suitable for all, PTA briefly became one of the most common forms
of life assurance sold in the UK until the Chancellor, Gordon Brown, announced
the withdrawal of the scheme in his pre-budget announcement on 6 December
2006.

SPECIAL INVESTMENT NORMS FOR LIC

As per last weeks IRDA announcement, no insurance company can invest more
than 10% of its total fund size or 10% of the outstanding shares of the investee
company (whichever is less) in any company . Since the announcement the
Insurance industry had been abuzz with discussions on how this would impact the
biggest Life Insurance player- LIC. Finance Ministry resources said that IRDA is
examining an option to exempt LIC's existing investments from these norms and
38
T.Y.B Com (BFM)

apply these only on its new investments. If this option is not offered to LIC, it
could impact a lot of blue chip companies like Ranbaxy, ITC, Cipla, and L&T etc
where LIC currently has a substantial stake. So watch this space to see what IRDA
finally mandates the Insurance behemoth.

LIC PROFIT PLUS: MATCHING BENEFITS OF INVESTMENT AND

INSURANCE
This is a unit linked endowment plan that provides complete protection and also
gathers benefits with your investment funds. The policyholder can choose the level
of cover within the limits, which will depend on the policy term chosen, the
amount of premium payable and whether the premium is payable or collectible one
time or regularly during the premium paying term.

The allocated premium will be utilized to purchase units as per the selected fund
type. The premiums can be paid regularly at the intervals or distances of yearly,
half-yearly, monthly. Four major type of investment funds are available under the
profit plus plan, including, short-term investment, bond fund, secured fund,
balanced fund. If the death of the policy holder occurs, higher of the sum assured
shall be available. On the life assured surviving the maturity date of the contract,
an amount equal to the policyholders fund value is payable. The unit fund is
39
T.Y.B Com (BFM)

subject to different charges and value of units may increase or decrease, depending
on the net asset value. The LIC profit plus comprises of various features they are;
partial withdrawals, switching, and discontinuance of the premium. The partial
withdrawals can be either in the form of the fixed amount or else in the form of the
fixed number of units. Under the feature of switching, the policy holder may
switch between the sorts of funds for the integral fund value along the period of the
policy term which is subject to some charges. However, once surrendering this LIC
profit plus policy, it is impossible to restore the policy again. If your age is above
18, you may prefer for the accident benefit that is equal to the amount of life
covers subject to a minimum of Rs. 25,000/- and maximum of Rs. 50 lakh. If ever
the death occurs due to an accident, an additional sum equal to critical illness
benefit shall be payable.

If your age lies between 18 and 50 years, you may opt for the critical illness benefit
that is equal to the life cover subject to a minimum of Rs.50,000 and maximum of
Rs. 5 lakh provided the policy term is 10 years and above.

If premiums are not paid within the grace period, policy will lapse. The same can
be revived within two years from the due date of unpaid premium. Under this plan,
risk will commence either after two years from the date of commencement of
policy or from the policy coinciding with or immediately following the completion
of seven years of age, whichever is later in case the age at entry of the life assured
40
T.Y.B Com (BFM)

is less than or equal to ten years. There shall not be any life cover during this
period. The value of installment payable on the date specified shall be subject to
investment risk that is the NAV may go up or down depending upon the
performance of the fund. If you are not satisfied with the terms and conditions of
the policy, you may return the policy to us within 15 days.

OVERVIEW
Parties to contract There is a difference between the insured and the policy owner
(policy holder), although the owner and the insured are often the same person. For
example, if Joe buys a policy on his own life, he is both the owner and the insured.
But if Jane, his wife, buys a policy on Joe's life, she is the owner and he is the
insured. The policy owner is the guarantee and he or she will be the person who
41
T.Y.B Com (BFM)

will pay for the policy. The insured is a participant in the contract, but not
necessarily a party to it. However, "insurable interest" is required to limit an
unrelated party from taking life insurance on, for example, Jane or Joe. Also, most
companies allow the Payer and Owner to be different, e. g., a grandparent paying
premiums for a policy on a child, owned by a grandchild [or vice versa]. The
beneficiary receives policy proceeds upon the insured's death. The owner
designates the beneficiary, but the beneficiary is not a party to the policy. The
owner can change the beneficiary unless the policy has an irrevocable beneficiary
designation. With an irrevocable beneficiary, that beneficiary must agree to any
beneficiary changes, policy assignments, or cash value borrowing. In cases where
the policy owner is not the insured (also referred to as the celui qui vat or CQV),

Insurance companies have sought to limit policy purchases to those with an

"insurable interest" in the CQV. For life insurance policies, close family members
and business partners will usually be found to have an insurable interest. The
"insurable interest" requirement usually demonstrates that the purchaser will
actually suffer some kind of loss if the CQV dies. Such a requirement prevents
people from benefiting from the purchase of purely speculative policies on people
they expect to die. With no insurable interest requirement, the risk that a purchaser
would murder the CQV for insurance proceeds would be great. In at least one case,
an insurance company which sold a policy to a purchaser with no insurable interest
(who later murdered the CQV for the proceeds), was found liable in court for

42
T.Y.B Com (BFM)

contributing to the wrongful death of the victim (Liberty National Life v. Weldon,
267 Ala.171 (1957)).

Contract terms Special provisions may apply, such as suicide clauses wherein the
policy becomes null if the insured commits suicide within a specified time (usually
two years after the purchase date; some states provide a statutory one-year suicide
clause). Any misrepresentations by the insured on the application are also grounds

for nullification. Most US states specify that the contestability period cannot be
longer than two years; only if the insured dies within this period will the insurer
have a legal right to contest the claim on the basis of misrepresentation and request
additional information before deciding to pay or deny the claim.

The face amount on the policy is the initial amount that the policy will pay at the
death of the insured or when the policy matures, although the actual death benefit
can provide for greater or lesser than the face amount. The policy matures when
the insured dies or reaches a specified age (such as 100 years old).
Permanent Life Insurance Permanent life insurance is life insurance that remains in
force (in-line) until the policy matures (pays out), unless the owner fails to pay the
premium when due (the policy expires OR policies lapse). The policy cannot be
43
T.Y.B Com (BFM)

canceled by the insurer for any reason except fraud in the application, and that
cancellation must occur within a period of time defined by law (usually two years).
Permanent insurance builds a cash value that reduces the amount at risk to the
insurance company and thus the insurance expense over time. This means that a
policy with a million dollar face value can be relatively expensive to a 70 year old.
The owner can access the money in the cash value by withdrawing money,
borrowing the cash value, or surrendering the policy and receiving the surrender
value.

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T.Y.B Com (BFM)

LIC S PRODUCT

LIC JeevanVarsha
LIC JeevanAnand
LIC Children FeaturePlan :
LIC Wealth Plus:
45
T.Y.B Com (BFM)

 LIC JeevanSaral :
LIC BimaBachat
LICJeevanSaathi Plus :
LIC JeevanVriddhi:

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T.Y.B Com (BFM)

LICS JEEVAN VARSHA

LICs JeevanVarsha is a close ended Money Back Plan with Guaranteed

Additions. The plan returns periodical payments as a proportion of Sum Assured at
specified durations, on survival during the term of the policy and on maturity. This
plan returns full Sum Assured on death irrespective of earlier pay backs.
Guaranteed Additions are payable on death and Maturity. Loyalty Additions *may*
also be payable during the last year of the policy on both maturity and death. Since

47
T.Y.B Com (BFM)

LIC couldnt collect the expected amounts from JeevanAstha policy, now they
have come out with this JeevanVarsha money back policy with a tenure to choose
from 9 years and 12 years. The plan will be open for purchase from 16th February,
2009 to 31st March, 2009. Let us look at this policy features and analyse more.
Features:

* The minimum entry age for this policy is 15 years while maximum maturity Age
is 75 years.

* Policy Term : 9 years & 12 years

* Premium Paying Term: 9 years

* Premium payment modes: Yearly, Half-Yearly, Quarterly, Monthly (by ECS

mode only).

* Minimum Sum Assured Rs 75,000/- for monthly ECS mode while Rs 50,000/for other modes

* Maximum Sum Assured: No limit. Also, sum assured shall be in multiples of Rs

5,000/48
T.Y.B Com (BFM)

Benefits:

Survival Benefits:

Survival Benefit

Term 9 years

Term 12 years

3rd Year

15% of SA

10% of SA

6th Year

25% of SA

20% of SA

9th Year

12th Year

60% of SA + GA + LA (if
any)
-

30% of SA
40% of SA + GA + LA (if
any)

Guaranteed Addition:

* Rs. 65 per 1000 of SA/year for a policy of 9 years term.

* Rs. 70 per 1000 of SA/year for a policy of 12 years term.

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T.Y.B Com (BFM)

Loyalty Addition:

Applicable to those policies where in Life Assured has survived the stipulated date
of maturity or on the Life Assureds death during the last policy year. All this again
at the descrition of LIC based on various factors which they havent specified
clearly. For better understanding and benefits illustration visit LIC site here
My take:
Be specific on what you are looking for. If insurance is your basic need, go for
pure insurance policies than compromising on both the insurance and profits via
this kind of policies. Think about term insurance policies for cover while think of
fixed deposits, mutual funds for investment. FDs will give atleast 8-9% returns as
compared against 6.5% of this LICs JeevanVarsha. Prioritize what your needs and
plan accordingly.
Update: Some of the readers requested for more detailed info with respect to
calculations. So, here it is. I have compared the JeevanVarsha with Bank fixed
deposits and take a look at the image below to understand it before. I have
considered the same example as that of a 35 years individual for the calculations at
Rs 65 per thousand as Guaranteed Additions for a term of 9 years. However, I have
not included Loyalty additions as there is no clarity on that from LIC of India. For
bank FDs I have considered interest at 8.5%. So, I leave the remaining analysis to
your descrition. May be the elite knowledgeable LIC agents may be able to prove
me wrong completely!
50
T.Y.B Com (BFM)

LIC - JEEVAN ANAND

51
T.Y.B Com (BFM)

What is JeevanAnand ?

JeevanAnand is an Endowment Policy along with a Whole Life Policy in one. A

combination plan. Assume a 20 year old person takes the policy with a life cover
of Rupees 10 lakhs for 15 years. He pays the premium each year for all 15 years. If
he dies during this period, his nominee gets the Life Cover amount. However is he
survives the period of 15 years, he will get the life cover amount alongwith the
bonuses that have accumulated each year. But the chapter doesnt end then ! LIC
still gives him a life cover for the same amount (Rs.10 Lakhs) for as long as he
lives....(Whole Life Insurance) without any extra cost ! So assuming he lives upto
65 years he gets 10 Lakh rupees life cover free for 30 years.

JeevanAnand a good whole life plan' JeevanAnand is really good having excellent
returns and very much beneficial plan is a combination of the Whole Life Plan and
the most popular Endowment Assurance Plan.we have analyzed JeevanAnand, one
of LIC's most popular endowment plans.

LIC Children feature Plan

52
T.Y.B Com (BFM)

LIC Children feature Plan is a childrens moneyback policy in which the

premium is returned on the policy anniversary after the child attains 18 years, 20
years, 22 years and 24 years. If the child dies within the policy tenure after risk
commencement, then the Sum Assured along with Guaranteed Additions are paid
and the policy is terminated.

Key Features of LIC Children feature Plan

53
T.Y.B Com (BFM)

This plan can be taken by the childs parents or grandparents for a child
between 0 to10 years
Premium needs to be paid till the child is 17 years old.
Risk starts to commence after 2 policy years or the child is at least 7
years old,
whichever is later.
No medical examination is required under this plan.
Loyalty or Terminal Bonus is payable on death or maturity.
An Additional Premium Waiver Benefit rider can be taken along with this
plan.
There is a Guaranteed Addition of Rs. 75 per thousand Sum Assured for
each completed year.

Benefits you get from LICChildren feature Plan

Death Benefit Sum Assured + Bonuses after commencement of risk. Otherwise,

the sum of basic premiums are paid back

Maturity Benefit Guaranteed Additions along with Loyalty additions is payable

in a lumpsum.

Survival Benefit
54
T.Y.B Com (BFM)

When child is 18 years of age - 20% of the Sum Assured

When child is 20 years of age - 20% of the Sum Assured
When child is 22 years of age - 30% of the Sum Assured
When child is 24 years of age - 30% of the Sum Assured

Income Tax Benefit Premiums paid under life insurance policy are exempted
from tax under Section 80 C and maturity proceeds are exempted from tax under
Section 10 (10D)

Eligibility in LIC Children feature Plan

Minimum

Maximum

Sum Assured (in Rs.)

1,00,000

25,00,000

Policy Term (in years)

18 years Childs Age at Entry

Premium Payment Term (in

years)
55
T.Y.B Com (BFM)

18

Entry Age of Life Insured

10

Age at Maturity

26

Single premium (in Rs.)

NA

(Child)

Payment modes

56
T.Y.B Com (BFM)

Single, Yearly, Half-yearly, Quarterly,

Monthly or SSS

LICS WEALTH PLUS

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IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT

PORTFOLIO IS BORNE BY THE POLICYHOLDER
LICs Wealth Plus is a unit linked plan that safeguards your investment from
market fluctuations, so that your investments are protected in financially volatile
times. This plan offers payment of Fund Value at the end of policy term, based on
highest Net Asset Value (NAV) over the first 7 years of the policy, or the NAV as
applicable at the end of the policy term, whichever is higher. NAV of the fund will
be subject to a minimum of Rs. 10/-. The policy term is 8 years with an extended
life cover for 2 years after the completion of policy term. This plan will be
available for sale for a limited period.
You can pay the premium either in a single lump sum or for 3 years. You can
choose the level of cover within the limits, which will depend on your age whether

58
T.Y.B Com (BFM)

the policy is a Single premium or Limited premium contract and on the level of
premium you agree to pay.
Premiums paid after allocation charge will purchase units of the Fund. The Unit
Fund is subject to various charges and value of units may increase or decrease,
depending on the Net Asset Value (NAV).

1. Payment of Premiums:
You may pay premiums regularly at yearly, half-yearly, quarterly or monthly
(through ECS mode only) intervals over the 3 years premium paying term.
Alternatively, a Single premium can be paid.
2. Guaranteed NAV:
In this product there is a guarantee of the highest NAV recorded on a daily
basis, in the first 7 years of the policy, subject to a minimum of Rs. 10. This
means the payment at the end of the policy term will be based on highest
Net Asset Value (NAV) recorded over the first 7 years of the policy, or the
NAV as applicable on the end of the policy term, whichever is higher. The
guarantee will be applicable only for payment made at the end of the policy
term irrespective of any partial withdrawals made during the policy term.
The period of 7 years starts from the date of commencement of policy.

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T.Y.B Com (BFM)

3. Eligibility Conditions and Other Restrictions:

(a) Minimum Age at entry

10 (age last birthday

(b) Maximum Age at entry

65 years (age nearer birthday)

(c) Policy Term

8 years

(d) Extended Life Cover

policy term
60
T.Y.B Com (BFM)

2 years after the completion of

(e) Minimum Premium:3 years Premium Paying policies

[20,000] p.a.

(Other than monthly (ECS) mode)

Monthly (ECS) mode

Rs. [2,000] p.m.

Single premium policies

Rs. [40,000] p.a.

(f) Sum Assured under the Basic Plan -

Minimum Sum Assured:

3 years Premium Paying Term: 5 times the annualized premium

Single Premium: 1.25 times the single premium.

Maximum Sum assured:

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T.Y.B Com (BFM)

Rs.

3 years Premium Paying Term:

10 times the annualized premium if age at entry is upto 50 years

5 times the annualized premium if age at entry is 51 years and above

Single Premium:
5 times the Single premium if age at entry is upto 40 years.
2.5 times the Single premium if age at entry is 41 to 50 years.
1.25 times the Single premium if age at entry is 51 years and above.
Where the minimum Sum Assured is not in the multiples of Rs. 5,000, it will
be rounded off to the next multiple of Rs. 5,000. Annualized Premiums shall
be payable in multiple of Rs. 1,000 for other than ECS monthly. For monthly
(ECS), the premium shall in multiples of Rs. 500/-.

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LIC JEEVAN SARAL

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T.Y.B Com (BFM)

LICs JeevanSaral is a unique plan by Life Insurance Corporation of India having

good features of the conventional plans and the flexibility of unit linked plans.
This is a Monthly Recurring Life Insurance Plan by Lic of India where the
proposor get 250 times monthly premium + total premium paid + LA if any in case
of death. To the policyholder it provides :

higher life cover

a smooth return,

liquidity & a lot of flexibility

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T.Y.B Com (BFM)

BENEFITS :

LIC Monthly Recurring type Scheme

This is like a Post office or Recurring Deposit Scheme. You can deposit
Yearly, Hly, Quarterly or Monthly in LIC scheme

Maturity amount received is Tax Free under section 10-10d of income Tax
act.

Any number of partial withdrawals through partial surrendering after 10

years

The amount deposited in LIC is exempted under section 80c of income Tax
act.

In case of death 250 times monthly premium + Total Premium paid - (1st
years premium & Extra premium paid ) + LA if any payable.

Special Features :

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T.Y.B Com (BFM)

 High life cover at very low premium

Extended risk cover for one year after 3 years premium payment.
Optional higher cover available through Term Riders
The policyholder can choose a maximum term but can surrender at any time
without any surrender penalty or loss after 5 years
Premium Mode :You have an option to choose the premium mode MONTHLY
ECS / SSS . Quarterly , Half Yearly or Yearly. There is no single premium payment
mode available under this policy. For monthly premium option you cannot pay by
cheque.

ECS

is

compulsory

for

monthly

mode.

Quarterly , Half Yearly and yearly premium can be paid thru ECS , Cheque or LIC
Online premium payment .
Any time money ( ATM ) Plan 165 JeevanSaral By LIC

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T.Y.B Com (BFM)

LIC BIMA BACHAT

BENEFITS :
What is BimaBachat?

LICs BimaBachat is a money-back policy which offers financial security and

assurance to the policy holder and his family. BimaBachat requires the policy
holder to pay only one premium. The amount paid for the premium depends on the
duration of the policy taken and life insurance is available till the date of maturity.

67
T.Y.B Com (BFM)

What other benefits do I receive during the specified duration of the policy?

For a term of 9 years: The policy holder will receive 15% of the sum assured at the
end of every
3rd and 6th policy year.

68
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For a term 12 years: The policy holder will receive 15% of the sum assured at the
end of every 3rd, 6th and 9th policy year.

For a term 15 years: The policy holder will receive15% of the sum assured at the
end of every 3rd, 6th, 9th and 12th policy year.

What additional benefits do I get upon maturity?

If the policy holder outlives the duration of the policy, at the time of maturity, a
single premium payment (excluding extra premium) is made along with loyalty
additions,

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T.Y.B Com (BFM)

if

any.

How much insurance do I get?

The policy holder is insured for an amount equal to the sum assured.
What about the installment received already?

The insurance cover is irrespective of the installments received.

When am I eligible for the guaranteed surrender value?

The guaranteed surrender value is available only after completion of at least one
policy year. This value is equal to 90 % of the single premium paid (excluding
extra

premium).

What other benefits does this insurance cover offer?

BimaBachat is the only money-back policy that offers a loan facility. The rate of

70
T.Y.B Com (BFM)

interest for this will be determined from time to time by the corporation. Presently
the rate of interest is 9% p.a. payable half-yearly.

It also offers other benefits like the 15 day cooling off period, grace period and
revival.

Who is eligible for the policy? Are there other conditions or restrictions?

The following are the requirements that one needs to be aware of before applying
for

this

policy:

The person applying for the policy should have completed 15 years and should
not be older than 66 years.

The policy will mature when the person is 75 years old.

There is a choice of three terms to choose from (9, 12 and 15 years) for the policy
depending on the age and requirement of the applicant.

71
T.Y.B Com (BFM)

 The minimum sum that needs to be assured is Rs 20,000/- and there is no limit on
the amount that can be assured.

It is important to note that the sum assured should be in multiples of Rs 5000/only.

The policy requires the holder to pay a single premium.

72
T.Y.B Com (BFM)

LIC JEEVAN SAATHI PLUS :

Features :

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IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT

PORTFOLIO IS BORNE BY THE POLICYHOLDER
LICs JeevanSaathiPlus is a unit linked plan wherein a couple can take the
insurance cover on their lives under a single policy. The proposer under the plan
shall be called Principal Life Assured (P.L.A.) and the other life (wife/husband)
shall be called Spouse Life Assured (S.L.A.). The premiums can be paid either in
lump sum (single premium) or regularly throughout policy term. The P.L.A. can
choose the level of cover (Sum Assured) for both lives within the limits, which will
depend on whether the policy is a Single premium or Regular premium contract,
age and the amount of premium agreed to pay. For regular premium policies, in
case of death of the P.L.A. during the term of the policy, the plan also provides for
waiver of all future premiums including outstanding premiums, if any, provided
life cover is in force.
P.L.A. will also have an option to make additional investments under the policy
through Top-up premiums.
1. Payment of Premiums:
P.L.A. may pay premiums regularly at yearly, half-yearly, quarterly or monthly
(through ECS mode only) intervals over the term of the policy. Alternatively, a
Single premium can be paid.

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T.Y.B Com (BFM)

2.Risks borne by the Policyholder:

1. LICs JeevanSaathiPlus Plan is a Unit Linked Joint Life Insurance product

which is different from the traditional insurance products and is subject to the
risk factors.
2. The premium paid in Unit Linked Life Insurance policies are subject to
investment risks associated with capital markets and the NAVs of the units
may go up or down based on the performance of fund and factors influencing
the capital market and the policyholder is responsible for his/her decisions.
3. Life Insurance Corporation of India is only the name of the Insurance
Company and LICs JeevanSaathi Plus is only the name of the unit linked life
insurance contract and does not in any way indicate the quality of the
contract, its future prospects or returns.

4. Please know the associated risks and the applicable charges, from your
Insurance agent or the Intermediary or policy document of the insurer.

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T.Y.B Com (BFM)

5. The various funds offered under this contract are the names of the funds and
do not in any way indicate the quality of these plans, their future prospects
and returns.
6. All benefits under the policy are also subject to the Tax Laws and other
financial enactments as they exist from time to time.
4. Loan:
No loan will be available under this plan.

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T.Y.B Com (BFM)

LIC'S JEEVAN VRIDDHI

LIC has launched a single premium plan today, i.e. March 1, 2012 which
guarantees a maturity amount as well as a possible loyalty bonus and which looks
very attractive. Let's dig deeper and find out the pros and cons of the new LIC
policy.

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T.Y.B Com (BFM)

But before we start, the perennial question of comparing insurance and

investments. Insurance is of course different from Investments and we need not
confuse the two. Insurance is generally a long term contract, and with potentially
higher commission costs. However, insurance premium gives you a tax deduction
and the insurance lump sums are tax free.
On the other hand, pure investment products like stocks and mutual funds sound
much more alluring but comes with a risk tag. And generally, the common
investors make a mess of the returns because of greed and fear.

While we debate the insurance v/s investment in theory, here comes a policy which
combines the best of both worlds. Enter LIC. JeevanVriddhi combines a risk cover
(five times the premium), tax benefits under Sec 80C, guaranteed maturity amount,
one time payment, liquidity (loans available after 1 year) and also tax free maturity
amount. And not to forget a possible return of 12% over the 10 year term!!. Here
are the details:

Benefits :
i)

Maturity Benefit: On maturity, the Guaranteed Maturity Sum

Assured along with Loyalty Addition, if any, shall be payable.

78
T.Y.B Com (BFM)

ii)

Loyalty Addition: Depending upon the Corporations experience

the policy will be eligible for Loyalty Addition on date of maturity
at such rate and on such terms as may be declared by the
Corporation.

iii)

Death benefit: On death, Basic Sum Assured shall be payable. The

Basic Sum Assured shall be 5 times the Single Premium excluding
extra premium, if any.

ELIGIBILITY CONDITIONS AND OTHER RESTRICTIONS:

a)

Minimum Entry Age

: 8 years (completed)

b)

Maximum Entry Age

: 50 years (nearest birthday)

c)

Minimum Basic Sum Assured

: Rs.150, 000/-

d)

Maximum Basic Sum Assured

: No Limit

e)

Minimum Premium

: Rs. 30,000/-

Premium shall be available in multiples of Rs. 1,000/-.

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T.Y.B Com (BFM)

f)

Policy Term

: 10 years

g)

Premium payment mode

: Single premium only

h)

Guaranteed Maturity Sum Assured : The Guaranteed Maturity Sum Assured

will depend on the single premium payable and the age at entry of the life to be
assured.

CONCLUSION

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T.Y.B Com (BFM)

81
T.Y.B Com (BFM)

CONCLUSION

The concept of insurance is largely a development of the recent past, particularly

after the industrial area past few centuries yet its beginnings date back almost
6000 years. Life Insurance in its modern form came to India from England in the
year 1818.

Insurance provides financial protection against a loss arising out of happening of

an uncertain event. A person can avail this protection by paying premium to an
insurance company.

Insurance is a contract between two parties whereby one party agrees to undertake
the risk of another in exchange for consideration known as premium and promises
to pay a fixed sum of money to the other party on happening of an uncertain event
(death) or after the expiry of a certain period in case of life insurance

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LIC to take this message of protection to light the lamps of security in as many
homes as possible and to help the people in providing security to their families

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BIBLOGRAPHY

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BIBLOGRAPHY

Books

Insurance principles and practiceCompany - M.N. S.Chand

Indian Insurance Narayanan. -HJaico Mishra

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Webilography

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Webilography

www.Insurance.com

www.Insurance India. Com

www.licindia.com

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