lic india | Insurance | Service Industries

INTRODUCTION

I ns ur ance is a s ocial device w her e uncer t ai n r is ks of i ndi viduals m ay b e combi ned i n a gr oup and t hus made m or e cer tai n - s mall per iodi c contr ib uti ons b y t he indivi duals pr ovi de a found out of w hich t hos e w ho s uffer l os s es m ay b e r ei m bur s ed. I n additi on t o being a me a ns t o pr ot ec t ones e l f, t he i ns ur ance I ndus tr y is a n e ffic ie nt condui t for t he s a vi ng of pe opl e t o be c ha nne le d t owar ds e c o n o m i c g r o w t h . I n I n d i a , t h e I n s u r a n c e I n d u s t r y7 i s m o r e t h a n 1 5 0 ye a r s o l d . T o d a y, i t i s m o n o p o l i z e d b y t w o P S U ' s i n t h e i r r es pecti ve fi el ds of li fe a nd Ge ner al Ins ur a nc e. H owe ver , wit h t he s ucces s ful p as s age IRD A Bill t hr ough bot h hous es of par li ament i n D e c e m b e r 1 9 9 9 t h e s e c t o r h a s b e e n o p e n e d u p t o p r i v a t e p l a ye r s . T his will pr ovi de d m uc h. N e e de d i mp et us t o t he I ndus tr y a nd w ill impr ove t he qualit y of s er vi ce and pr oducts and will als o i ncr eas e e mpl oym e nt opp or tunities . T her e ar e s ti ll s ome is s ues t heir nee d t o be s or t ed out, p ar ticul ar l y wi th r egar d to t he s tat us of i n t e r m e d i a r i e s a s e n v i s a g e d b y t h e I n s u r a n c e R e g u l a t o r y A u t h o r i t y.

RESEARCH OBJECTIVE
T he r ep or t gi ves t he br ief backgr ound of t he s ect or and pr oceeds t o h i g h l i g h t t h e s h o r t c o m i n g s o f t h e e x i s t i n g s e t u p a n d p l a ye r s . T h e benefits of l iber ali zed s ect or ar e enumer at ed. T he r ep or t als o tr i es

Locating the source of data. 3. and Insurance Post. ‡ Internet PRIMARY DATA . Experimental. RESEARCH METHODOLOGY To conduct the market research first of all it is necessary to create a research design. TYPES OF DATA USED: Both primary and secondary data is used in the research. A research design is basically a blue print of how a research is to be conducted. Descriptive 3. Insurance Times. Determining the types of data needed. it may include. T h e s t r e s s i s als o gi ven on knowi ng t he awar enes s level of gener al p ubl ic. 4. Exploratory 2. Choosing the approach 2. SECONDARY DATA Secondary data is one which already exists and is collected from the publishedsources. Data Collection Methods To conduct the market research the data is collected by two sources. During this researchDescriptiveandExploratory approach is taken into consideration because of the availability of relevant information to describe the relationships between the marketing problem and the available information. The sources from which secondary data was collected are: ‡ Newspapers and Magazines like Economic Times. 1.to i denti f y t he mar ket potenti al for i ns ur ance pr oducts and t he s t r a t e g y t h a t c a n w e e m p l o ye d t o e x p l o i t t h e s a m e . Choosing a method of data RESEARCH DESIGN Basically there are 3 types of approaches used during the any research: 1.

Nepal by the name of Life Insurance Corporation (Nepal) Limited in collaboration with Vishal Group Limited. Ken-India . Shri C..Assurance Company Limited. 100 divisions and 7 zonal offices spread over the country. Kuala Lumpur and Life Insurance Corporation (International) E. An off-shore . outlined the objectives of LIC thus to conduct the business with the utmost economy. The Corporation has registered a joint venture company in 26th December. 1956. namely.The primary sources of data refer to the first handinformation Primary data is collected during the survey with the help of Questionnaires INTRODUCTION OF THE COMPANY ³LIFE INSURANCE CORPORATION OF INDIA (LIC) Life Insurance Corporation of India (LIC) was formed in September. thereby making insurance widely popular. with capital contribution from the Government of India. while piloting the bill.048 branches. LIC is associated with joint ventures abroad in the field of insurance. Life Insurance Corporation Act. by an Act of Parliament. to render prompt and efficient service to policy holders. a local industrial Group. The Life Insurance Corporation of India also' transacts business abroad and has offices in Fiji. to charge premium no higher than warranted by strict actuarial considerations. Bahrain. Since nationalization. Mauritius and United Kingdom. LIC has built up a vast network of 2. to invest the funds for obtaining maximum yield for the' policy holders consistent with safety of the capital. and a spirit of trusteeship. Deshmukh. The then Finance Minister. United Oriental Assurance Company Limited.C. 1956. Nairobi.D. 2000 in Katmandu. viz.

with head offices at Calcutta. 1956. GIC and its subsidiaries have representation either directly through branches or agencies in 16 countries and through associate locally incorporated subsidiary companies in 14 other countries. The New India Assurance Company Ltd. i.owned subsidiary company of GIC.. Ken-India . viz. All the five entities are Government companies registered under the Companies Act. the National Insurance Company Ltd.. and The United India Insurance Company Ltd. A wholly. is operating in Singapore and there is a joint venture company. The share capital of GIC and that of the four companies are held by the Government of India. The Oriental Insurance Company Ltd. New Delhi and Madras.I. The four companies have 2699 branch offices. Bombay. 1360 divisional offices and 92 regional offices spread all over the country. More than 100 non-life insurance companies including branches of foreign companies operating within viz. The general insurance business has grown in spread and volume after nationalization.company L. General Insurance Corporation (GIC) which was the holding company of the four public sector general insurance companies has since been delinked from the later and has been approved as the "Indian Reinsurer" since 3rd November 2000. (Mauritius) Off-shore Limited has also been set up in 2001 to tap theAfrican insurance market General Insurance: General insurance business in the country was nationalized with effect from 1st January.. 1972. respectively. 1973 by the General Insurance Business (Nationalization) Act.e. Indian International Pvt. Ltd.C..

However. UK has also been registered. the Corporation has amended the above provision. A new wholly owned subsidiary called New India International Ltd. If the payment of premium ceases after 3 years. a paid-up policy for such reduced sum assured will be automatically secured provided the reduced sum assured exclusive of any attached bonus is not less than Rs. considering the increased longevity of the Indian population. Suitable For: This policy is suitable for people of all ages who wish to protect their families from financial crises that may occur owing to the policyholder's premature death. Such reduced paid-up policy is not entitled to participate in the bonus declared thereafter but the bonuses already declared on the policy will remain attach.. PRODUCTS OF LIC Whole Life with Profits Plan ± 002 Features: This plan is mainly devised to create an estate for the heirs of the policyholder as the plan basically provides for payment of sum assured plus bonuses on the death of the policyholder. provided the policy is converted in to a paid-up policy after the premiums are paid for 5 years.Assurance Ltd. . The premiums under the policy are payable up to age 80 years of the policyholder or for a term of 35 years whichever is later. in Kenya. thereby proving for payment of sum assured plus bonuses in the form of maturity claim on completion of age 80 years or on expiry of term of 40 years from date of commencement of the policy whichever is later.250/-.

PLAN 005 (WITH PROFITS) Features: This is the best form of life assurance for family provision since it enables the Life Assured to pay all the premiums during the ordinarily vigorous and most productive years of life. The Without-Profit option is available under Table no. 3. if any. If the policyholder pays at ¨ © ¨ §¡¦¤ ¥¤ £¢ ¡  B B : . LIMITED PAYMENT WHOLE LIFE . He need not pay any premium in the later stages of life if and when his conditions might become adverse.SUR Sum assured plus accrued bonuses and t e terminal bonuses. i any. on t e policyholder attaining age 80 years or on expiry of term of 40 years from the date of commencement of the policy whichever is later. DEATH BENEFIT: Sum assured plus accrued bonuses and the terminal bonuses. With Profits Limited Payments Policies do not cease to participate in profits after completion of the premium paying period but continue to share in the periodical Bonus Distribution until the death of the Life Assured. on the death of the policyholder are paid to his/her nominees/heirs.

ENDOWMENT WITH PROFIT PLAN . The premium paying term under this plan is five years minimum and 55 years maximum. a reduced paid-up assurance policy comes into force.014 FEATURES: ‡ Moderate Premiums ‡ High bonus ‡ High liquidity ‡ Savings oriented This policy not only makes provisions for the family of the Life Assured in event of his early death but also assures a lump sum at a desired age.least 3 years' premiums and then discontinues paying any more premiums. Thereafter. The lump sum can be reinvested to provide an annuity during the remainder of his life or in any other way considered suitable at that time. provided all premiums have been paid. Premiums are usually payable for the selected term of years or until death if it occurs during the term period. Such a reduced paid-up Policy will not be entitled to participate in the profits declared. Suitable For: . BENEFITS Survival benefits If the Life Assured survives the premium paying period and the policy continues in full force. but such Bonus as has already been declared on the Policy will remain attached thereto. but no further premiums are required to be paid.

is not less than Rs. this plan is apt for people of all ages and social groups who wish to protect their families from a financial setback that may occur owing to their demise. 250/-. a free paid-up policy for a reduced sum assured will be automatically secured provided the reduced sum assured. The reduced sum assured will become payable on the event as stipulated in the policy.Being an endowment assurance policy.20000 sum assured on anyone life) and the policy will continue to be in force. . Even students above the age of 18 years can avail of this benefit. BENEFITS Disability Benefit: In case policy holder becomes totally and permanently disabled due to an accident before reaching the age of 70 and the policy is in full force.sum assured per year he or his family are entitled to the following benefits on death or permanent disability caused by accident. exclusive of any attached bonus. Premium Stoppage: If payment of premiums ceases after at least THREE years' premiums have been paid . he will not be required to pay further premiums. The amount assured if not paid by reason of his death earlier will payable at the end of the endowment term where it can be invested in an annuity provision for the rest of the policyholder's life or in any other way he may think most suitable at that time. (the Disability Benefit is available in respect of the first Rs. 1000/. Accident Benefit: By paying a small extra premium of Rs. l per Rs.

ANMOL JEEVAN . (G) Rebates: ‡ y Sum Assured Rebate: NIL in case of regular premium policies and Re. Every year the Life Insurance Corporation distributes its surplus among policyholder to 'with profits' polices in the form of bonuses.I (WITHOUT PROFITS) BENEFITS On Death during the Term of the Policy: Sum Assured On Maturity : Nil RESTRICTIONS (A) Minimum age at entry : 18 years (completed) (B) Maximum age at entry : 55 years (nearer birthday) (C) Maximum age at maturity : 65 years (D) Minimum Term : 5 years (E) Maximum Term : 25 years (F) Minimum Sum Assured :Rs. . Substantial bonuses have been declared in the past after each valuation of policy liabilities.25 lakh and above in case of single premium policies. Death Benefits: Payment of full sum assured + Vested Bonus. but only if it is a 'with profits' policy.Yearly and Single premium. (H) Mode of Premium Payment: Yearly. Five Lakh (G) Maximum Sum Assured :Rs. five lakh. if any.Bonus: Is there anything extra payable besides the sum assured at the time of claim settlement? Yes. Three Crore (Inclusive of all term Assurance plans) Note: The policy would be issued in multiples of Rs. Mode Rebate : 1% of Annual premium for yearly mode and nil for half yearly mode y Half-Yearly mode. Half. BENEFITS Survival benefits: Payment of full Sum' Assured + Vested Bonus + Final Additional bonus. l Sum Assured for policies of Rs. one lakh for Sum Assured aboveRs.

it may be revived during the life time of the Life Assured. This plan is also available to female lives (category I and II lives only) and to physically handicapped persons subject to certain conditions. ‡ No Surrender Value will be available under this plan. the policy will still be valid and the Sum Assured paid after deduction of the said premium as also unpaid premiums falling due before the next policy anniversary of the Policy. The corporation reserves the right to accept or decline the revival of discontinued policy.UNDERWRITING. but before the date of expiry of policy term. If the premium is not paid before the expiry of the days of grace. AGE PROOF AND MEDICAL REQUIREMENTS: The plan is available to Standard and Sub-standard lives (upto Class VI EMR). Standard age proof will have to be submitted along with the Proposal Form. If death occurs within this period and before the payment of the premium then due. The revival of the discontinued policy shall take effect only after . PAID-UP AND SURRENDER VALUE: ‡ The policy will not acquire any paid-up value. GRACE PERIOD FOR NON -FORFEITURE PROVISIONS: A grace period of 15 days will be allowed for payment of yearly or half-yearly premiums. on submission of proof of continued insurability to the satisfaction of the Corporation and the payment of all the arrears of premium together with interest at such rate as may be prevailing at the time of the payment. the Policy gets lapsed. REVIVAL If the Policy has lapsed.

25000 to the earning head of the family and compensation due to loss of earning head of the family @ Rs.per day upto a maximum of 15 days. Vested bonus would also be paid along with the sum assured on the second death. including Special Reports. BENEFITS Survival benefits: If one or both the lives survive to the maturity date. PAYMENT OF CLAIMS No Claims concession will be applicable to this Policy. The sum assured is again be payable on the death of the other partner in case both the husband and wife were to die during the term of the policy.towards hospitalization floated amongst the members of the family. BACK-DATING INTEREST The policy can be back dated within the financial year. if any. One.30000/. NEW INSURANCE SCHEMES Universal Health Insurance Scheme The Universal Health Insurance policy is available to groups of 100 or more families. along with the accumulated bonus. The cost of the Medical reports. the policy continues on the life of the surviving partner without him/her having to pay any further premiums.the same is approved by the Corporation and is specifically communicated to the Life Assured. The policy provides for reimbursement of medical expenses upto Rs. the sum assured. two things happen. after a . No dating back interest shall be charged.50/. should be borne by the Life Assured. two. LIC pays to the surviving spouse the full sum assured.e. And. i. is payable. required for the purposes of revival of the policy. Death Benefits: In case either of the couple dies during the policy's term. the life cover on the survivor continues free of cost. death cover due to an accident for Rs.

000/.can be availed of individually or collectively by members of the family . Rs.50 per day for a family of five limited to spouse and children (i. Rs. contact lens and hearing aid.548 per annum). A subsidy of Rs. Rs. Miscarriage.waiting period of three days. and Rs. the total reimbursement of Rs.e. ‡ Cost of spectacles. abortions etc. when the earning head of the family is hospitalized. ‡ Treatment for Pregnancy. ‡ Enlisted hospitals run by NGOs/ Trusts/ selected private hospitals with fixed schedule of charges.2/. 730 per annum) for covering dependent parents within the overall family size of seven.Per day (Le. cosmetic or aesthetic dental surgery or treatment. Childbirth. ‡ Primarily diagnostic expenses not related to sickness/injury. Rs. Main Exclusions: ‡ All pre-existing diseases. ‡ Hospitalization should be for a minimum period of 24 hours.e. ‡ Hospital. Age Limitations: This policy covers people between the age of 3 months to 65 years.per day (i. Floater Basis: The benefit of family' will operate on floater basis i. 30.365/-per annum) for an individual.1! . For purpose of this policy HOSPITAL means: ‡ Any Hospital/Nursing home registered with the local authorities and under the supervision of a registered and qualified Medical practitioner. this time limit is not applied to some specific treatments and also where due to technological advancement hospitalization for 24 hours may not be required. 1. Nursing Home runs by Government. The premium under the policy is Rs. However. ‡ Corrective.e. 100 per year towards annual premium for "Below Poverty Life" families is also provided under the Scheme.

Each individual¶s insurance needs and requirements are different from that of the others. These plans help you see your savings yield rich benefits and help you save tax even if you don¶t have consistent income. Unit plans are investment plans for those who realize the worth of hard-earned money. LIC¶s Insurance Plans are a policy that talk to you individually and gives the most suitable options that can fit ones¶ requirement. ‡ Jeevan plus ‡ Future plus ‡ Bima plus .Insurance plans: As individuals it is inherent to differ.

The Unit Fund is subject to various charges and value of the units may increase or decrease. partial withdrawal will be allowed subject to Policyholder¶s Fund Value being atleastRs. the partial withdrawals shall not be allowed. iii) For 2 years¶ period from the date of withdrawal.000/. The level of cover will depend on the level of premium you agree to pay. iii) Discontinuance of premiums: If premiums are payable either yearly.and you may pay any amount exceeding it. half-yearly. The plan therefore serves the purpose of insurance-cum-investment.20. ii) Partial withdrawals may be in the form of fixed amount or in the form of fixed number of units. A lapsed policy can be revived during the period of two years from the due date of first unpaid premium. quarterly or monthly (ECS) and the same have not been duly paid within the days of grace under the Policy. depending on the Net Asset Value (NAV). if any. Other Features: i) Partial Withdrawals: You may encash the units partially after the third policy anniversary subject to the following: i) In case of minors. 10. the Policy will lapse. on or after18th birthday). 1. Premiums paid after allocation charge will purchase units of the Fund type chosen. From second year onwards each year¶s premium will be 25% of the first year premium. Payment of Premiums: You may pay premiums regularly at yearly. the Sum Assured under the Basic plan shall be reduced to the extent of the amount of partial withdrawals made. half-yearly. the Life Cover and Accident Benefit rider. if any. The minimum First year premium will be Rs.e. . I) Where atleast 3 years¶ premiums have been paid. v) Under policies where atleast 3 years¶ premiums have been paid. Four types of investment funds are offered. iv) Under policies where less than 3 years¶ premiums have been paid and further premiums are not paid. ii) Switching: You can switch between any fund types for the entire Fund Value during the policy term subject to switching charges.000/-. quarterly or monthly (ECS) intervals for 5 years. partial withdrawals shall be allowed from the policy anniversary coinciding with or next following the date on which the life assured attains majority (i.‡ Market plus ‡ Money plus ‡ Profit plus ‡ Fortune plus Fortune plus: It is a unit linked assurance plan where premium payment term (PPT) is 5 years and the premium payable in the first year will be 50% of total premium payable under the policy. shall continue during the revival period.

Till such period that the Policyholder¶s Fund Value reduces to Rs. In case of Death: Higher of Sum assured under the Basic Plan or the Policyholder¶s Fund Value. The Sum Assured shall be subject to provisions of Partial Withdrawals made. A lapsed policy can be revived during the period of two years from the due date of first unpaid premium or before maturity. if any.000/-. shall be paid only after the completion of 3 policy years. the amount as under F above. In case of Surrender (including Compulsory Surrender): Policyholder¶s Fund Value / monetary value as the case may be. however. Till the date of maturity.During this period. C. by canceling an appropriate number of units out of the Policyholder¶s Fund Value every month. In case of Partial Withdrawals: For 2 year¶s period from the date of withdrawal. I. two years from the due date of first unpaid premium. . In case of Death: The Policyholder¶s Fund Value. In case of death due to accident: Only. if any. shall be taken. The benefits payable under the policy in different contingencies during this period shall be as under: A. the Life Cover and Accident Benefit rider cover. the charges for Mortality and Accident Benefit cover. The benefits under such a lapsed policy shall be payable as under: F. E. if Accident Benefit is opted for. the policy lapses. 5. whichever is earlier. iv) Revival: If due premium is not paid within the days of grace. G. the sum assured under the basic plan shall be reduced to the extent of the amount of partial withdrawals made. In case of Death due to accident: Accident Benefit Sum Assured in addition to the amount under A above. On Maturity: The Policyholder¶s Fund Value. B. D. In case of Surrender (including Compulsory Surrender): The Policyholder¶s Fund Value. No amount shall be payable within 3 years from the date of commencement of policy. H. or ii. or iii. shall be payable after the completion of the third policy anniversary. deduction of all the other charges shall continue. In case of Partial withdrawal: Partial Withdrawals shall not be allowed under such a policy even after completion of 3 years period. in addition to other charges. The Surrender value. shall cease and no charges for these benefits shall be deducted. This will continue to provide relevant risk covers for: i. whichever is earlier. The period during which the policy can be revived will be called ³Period of revival´ or ³revival period´. II) Where the policy lapses without payment of at least 3 years¶ premiums. However. if any.

the policy shall terminate and Policyholder¶s Fund Value as on such date shall be refunded to the Life Assured and thereafter revival will not be allowed. the policy shall be terminated and thereafter revival will not be entertained. the NAV may go up or down depending upon the performance of the fund. the policy may be revived within two years from the due date of first unpaid premium. If 3 years¶ or more than 3 years¶ premiums have been paid and the Policyholder¶s Fund Value reduces to Rs. The Corporation reserves the right to accept the revival at its own terms or decline the revival of a lapsed policy. Reinstatement: A policy once surrendered will not be reinstated. The revival of a lapsed policy shall take effect only after the same is approved by the Corporation and is specifically communicated in writing to the Proposer / Life Assured. the policy may be revived within two years from the due date of first unpaid premium but before the date of maturity.If premiums have not been paid for at least 3 full years. Irrespective of what is stated above. There shall not be any life cover during this period. v) Settlement Option: When the policy comes for maturity.e. If at least 3 full years¶ premiums have been paid and subsequent premiums are not paid. . you may exercise ³Settlement Option´ and may receive the policy money in instalments spread over a period of not more than five years from the date of maturity. The value of installment payable on the date specified shall be subject to investment risk i. The revival shall be made on submission of proof of continued insurability to the satisfaction of the Corporation and the payment of all the arrears of premium without interest. 5000/-. if less than 3 years¶ premiums have been paid and the Policyholder¶s Fund Value is not sufficient to recover the charges. No proof of continued insurability shall be required but all arrears of premium without interest shall be required to be paid.

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