A Project report

On
General Insurance and LIFE insurance
Process and policies of of LIC

Submitted in Partial Fulfillment for the degree of

Bachelor of Business Administration

S.S. JAIN SUBODH P.G. (Autonomous) COLLEGE JAIPUR

(2020-21)

SUBMITED BY SUBMITED TO
PRANIT JAIN DR. GAURI DHINGRA
B.B.A V Sem. Assistant Professor

Roll no: 1941116

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 CERTIFICATE
This is to certify that the Project Report entitled “General Insurance and LIFE insurance
Process and policies of of LIC’’is a record of project work done by independently by
Kartikey sharma under my guidance and supervision and that it has not previously
formed the basis for the award of any degree, fellowship or associate ship.

Dr. GAURI DHINGRA

DESIGNATION

S.S. Jain Subodh P.G. (Autonomous) College Jaipur

2
 DECLARATION
I PRANIT JAIN student of B.B.A. SEM V here declare that the project work presented
in the report is my own work has been carried out under the supervision of B.B.A.
Faculty GUIDE of S.S. Jain Subodh P.G. (AUTONOMOUS) College. This work has not
been previously submitted to any other university for any examination.

PRANIT JAIN

S.S. Jain Subodh P.G. (Autonomous) college Jaipur

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ACKNOWLEDGEMENT
It is not often in life that u get a chance of appreciating and expressing your feelings in
black and white to thank the people who have been a crucial part of your successes, your
accomplishment, and your being that you are today. I take this opportunity first of all
thanks the faculty at S.S. Jain Subodh P.G.(Autonomous) College ,specially Dr .Gauri
Dhingra and Dr Chitra Rathore Head, department of B.B.A. for inculcation and instilling
me the knowledge ,learning, willpower, value and the competitiveness and
professionalism required by me a management student .I would like to give special
thanks to Dr Gauri Dhingra for educating me silver lining in very dark cloud. Her
enduring efforts, guidance, patience and enthusiasm have given a sense of direction and
purposefulness to this project and ultimately made it a success.I express my sincere and
heartiest thanks to everyone who has contributed towards the successful completion of
the project.Last but not the least; I would like to thanks: to my family my parents for
supporting me spiritually throughout my life. The errors and inconsistency remain my
own.

Pranit jain

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CHAPTER NO CHAPTER NAME PAGE NO

1 INTRODUCTION 6-9

2 10-19
COMPANY
PROFILE

3 20-21
RESEARCH
METHODOLOGY

4 22-44

POLICIES

5 45-46
FINDINGS

6 47-48
CONCLUSION

BIBLIOGRAPHY

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CHAPTER 1

INTRODUCTION

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INSURANCE COMPANIES IN INDIA

In India, Insurance is a national matter, in which life and general insurance is yet a booming
sector with huge possibilities for different global companies, as life insurance premiums account
to 2.5% and general insurance premiums account to 0.65% of India's GDP. The Indian Insurance
sector has gone through several phases and changes, especially after 1999, when the Govt. of
India opened up the insurance sector for private companies to solicit insurance by passing
Insurance Regulatory and Development Authority (IRDA) Bill, allowing FDI up to 26%. Since
then, the Insurance sector in India is considered as a flourishing market amongst global insurance
companies. However, the largest life insurance company in India is still owned by the
government.

The history of Insurance in India dates back to 1818, when Oriental Life Insurance Company
was established by Europeans in Kolkata to cater to their requirements. Nevertheless, there was
discrimination among the life of foreigners and Indians, as higher premiums were charged from
the latter. In 1870, Indians took a sigh of relief when Bombay Mutual Life Assurance Society,
the first Indian insurance company covered Indian lives at normal rates. Onset of the 20th
century brought a drastic change in the Insurance sector.

In 1912, the Govt. of India passed two acts - the Life Insurance Companies Act, and the
Provident Fund Act - to regulate the insurance business. National Insurance Company Ltd,
founded in 1906, is the oldest existing insurance company in India. Earlier, the Insurance sector
had only two state insurers - Life Insurers i.e. Life Insurance Corporation of India (LIC), and
General Insurers i.e. General Insurance Corporation of India (GIC). In December 2000, these
subsidiaries were de-linked from parent company and were declared independent insurance
companies: Oriental Insurance Company Limited, New India Assurance Company Limited,
National Insurance Company Limited and United India Insurance Company Limited.

With an annual growth rate of 15-20% and the largest number of life insurance policies in force,
the potential of the Indian insurance industry is huge. Total value of the Indian insurance market
(2004-05) is estimated at Rs. 450 billion (US$10 billion).

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 The life insurance industry in India grew by an impressive 36%, with premium income from
new business at Rs. 253.43 billion during the fiscal year 2004-2005, braving stiff competition
from private insurers. This report, "Indian Insurance Industry: New Avenues for Growth 2012",
finds that the market share of the state behemoth, LIC, has clocked 21.87% growth in business at
Rs.197.86 billion by selling 2.4 billion new policies in 2004-05. But this was still not enough to
arrest the fall in its market share, as private players grew by 129% to mop up Rs. 55.57 billion in
2004-05 from Rs. 24.29 billion in 2003-04.

Though the total volume of LIC's business increased in the fiscal year (2004-2005) compared to
the previous one, its market share came down from 87.04 to 78.07%. The 14 private insurers
increased their market share from about 13% to about 22% in a year's time. The figures for the
first two months of the fiscal year 2005-06 also speak of the growing share of the private
insurers. The share of LIC for this period has further come down to 75 percent, while the private
players have grabbed over 24 percent.

There are presently 12 general insurance companies with four public sector companies and eight
private insurers and private insurance companies collectively have a 10% share of the non-life
insurance market.

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CHAPTER 2

COMPANY PROFILE

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 COMPANY PROFILE
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 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. However, later with the efforts of eminent people like Babu
Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives
were being treated as sub-standard lives and heavy extra premiums were being charged on them.
Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company
in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise with
highly patriotic motives, insurance companies came into existence to carry the message of
insurance and social security through insurance to various sectors of society. 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. In 1907, Hindustan Co-operative Insurance Company took its birth in
one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The
Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the
companies established during the same period. Prior to 1912 India had no legislation to regulate
insurance business. In the year 1912, the Life Insurance Companies Act, and the Provident Fund
Act were passed. 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. But the Act
discriminated between foreign and Indian companies on many accounts, putting the Indian
companies at a disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance business. From 44
companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total
business-in-force as Rs.298 crore in 1938. During the mushrooming of insurance companies
many financially unsound concerns were also floated which failed miserably. 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 Assembly. However,

10
it was much later on the 19th of January, 1956, that life insurance in India was nationalized.
About 154 Indian insurance companies, 16 nonIndian companies and 75 provident were
operating in India at the time of nationalization. Nationalization 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.

LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate
office in the year 1956. Since life insurance contracts are long term contracts and during the
currency of the policy it requires a variety of services need was felt in the later years to expand
the operations and place a branch office at each district headquarter. Re-organization of LIC took
place and large numbers of new branch offices were opened. As a result of re-organization
servicing functions were transferred to the branches, and branches were made accounting units.
It worked wonders with the performance of the corporation. It may be seen that from about
200.00 crores of New Business in 1957 the corporation crossed 1000.00 crores only in the year
1969-70, and it took another 10 years for LIC to cross 2000.00 crore mark of new business. But
with re-organization happening in the early eighties, by 1985-86 LIC had already crossed
7000.00 crore Sum Assured on new policies.

Today LIC functions with 2048 fully computerized branch offices, 100 divisional offices, 7
zonal offices and the corporate office. LIC’s Wide Area Network covers 100 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. LIC’s ECS
and ATM premium payment facility is an addition to customer convenience. Apart from on-line
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

11
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.

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.

1956: 245 Indian and foreign insurers and provident societies are taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a
capital contribution of Rs. 5 crore from the Government of India.

The General insurance business in India, on the other hand, can trace its roots to the Triton
Insurance Company Ltd., the first general insurance company established in the year 1850 in
Calcutta by the British.

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

1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of
general insurance business.

1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of
conduct for ensuring fair conduct and sound business practices.

1968: The Insurance Act amended to regulate investments and set minimum solvency margins
and the Tariff Advisory Committee set up.

1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general
insurance business in India with effect from 1st January 1973.

107 insurers amalgamated and grouped into four companies’ viz. the National Insurance
Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd.
and the United India Insurance Company Ltd. GIC incorporated as a company

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 LIC SUBSIDIARIES
Unlike provisions for private players in the insurance sector, the LIC Act provides for setting up
subsidiaries through policy holders fund. It is due to the LIC act that LIC of India has a number
of subsidiaries which help it in leveraging its potential to the maximum, providing an enhanced
set of diversified services to its customers. These subsidiaries include LIC International, LIC
Nepal, LIC Lanka, LIC Housing Finance and LIC Mutual Fund.

LIC INERNATIONAL

This is a joint venture offshore company promoted by LIC which commenced operations in
July, 1989 with the objectives of offering US$ denominated policies to cater to the insurance
needs of NRIs and providing insurance services to holders of LIC policies currently residing in
the Gulf. LIC International operates in all GCC countries.

LIC NEPAL

A joint venture company formed in 2001 with the Vishal Group of Industries, Nepal.

LIC LANKA

A joint venture company formed in 2003 with the Bartleet Group of Companies, Sri Lanka.

LIC HOUSING FINANCE LTD.

The Company is recognized by National Housing Bank and listed on the National Stock
Exchange (NSE) & Bombay Stock Exchange Limited (BSE). LIC Housing Finance Ltd. is one
of the largest Housing Finance Company in India. Incorporated on 19th June 1989 under the
Companies Act, 1956, the company was promoted by LIC of India and went public in the year
1994. Its main objective is to provide long term finance for construction or purchase of houses or
apartments. It has a Dubai office.

LIC MUTUL FUND LTD.

Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989 and contributed
Rs. 2 Crores towards the corpus of the Fund. LIC Mutual Fund was constituted as a Trust in
accordance with the provisions of the Indian Trust Act, 1882.

There are some other subsidiaries of LIC which are

1. LIC Mutual Fund Asset Management Company Ltd.

2. LIC HFL Care Homes Ltd.

3. LICHFL Asset Management Company Private Limited.

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4. LICHFL Trustee Company Private Limited.

5. LICHFL Financial Services Limited, etc.

WHAT IS LIFE INSURANCE?

Life insurance is a contract that pledges payment of an amount to the person assured (or his
nominee) on the happening of the event insured against.

The contract is valid for payment of the insured amount during:

 The date of maturity, or

 Specified dates at periodic intervals, or

 Unfortunate death, if it occurs earlier.

Among other things, the contract also provides for the payment of premium periodically to the
Corporation by the policyholder. Life insurance is universally acknowledged to be an institution,
which eliminates 'risk', substituting certainty for uncertainty and comes to the timely aid of the
family in the unfortunate event of death of the breadwinner.

By and large, life insurance is civilization’s partial solution to the problems caused by death. Life
insurance, in short, is concerned with two hazards that stand across the life-path of every person:

1. That of dying prematurely leaves a dependent family to fend for itself.

2. That of living till old age without visible means of support.

Life Insurance Vs. Other Savings

Contract of Insurance:

A contract of insurance is a contract of utmost good faith technically known as uberrima fides.
The doctrine of disclosing all material facts is embodied in this important principle, which
applies to all forms of insurance.

At the time of taking a policy, policyholder should ensure that all questions in the proposal form
are correctly answered. Any misrepresentation, non-disclosure or fraud in any document leading
to the acceptance of the risk would render the insurance contract null and void.

Protection:

Savings through life insurance guarantee full protection against risk of death of the saver. Also,
in case of demise, life insurance assures payment of the entire amount assured (with bonuses
wherever applicable) whereas in other savings schemes, only the amount saved (with interest) is
payable.
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Aid to Thrift:

Life insurance encourages 'thrift'. It allows long-term savings since payments can be made
effortlessly because of the 'easy installment' facility built into the scheme. (Premium payment for
insurance is either monthly, quarterly, half yearly or yearly). For example: The Salary Saving
Scheme popularly known as SSS provides a convenient method of paying premium each month
by deduction from one's salary. In this case the employer directly pays the deducted premium to
LIC. The Salary Saving Scheme is ideal for any institution or establishment subject to specified
terms and conditions.

Liquidity:

In case of insurance, it is easy to acquire loans on the sole security of any policy that has
acquired loan value. Besides, a life insurance policy is also generally accepted as security, even
for a commercial loan.

Tax Relief: Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax.
This is available for amounts paid by way of premium for life insurance subject to income tax
rates in force. Assesses can also avail of provisions in the law for tax relief. In such cases the
assured in effect pays a lower premium for insurance than otherwise.

Money When You Need It:

A policy that has a suitable insurance plan or a combination of different plans can be effectively
used to meet certain monetary needs that may arise from time-to-time. Children's education,
start-in-life or marriage provision or even periodical needs for cash over a stretch of time can be
less stressful with the help of these policies. Alternatively, policy money can be made available
at the time of one's retirement from service and used for any specific purpose, such as, purchase
of a house or for other investments. Also, loans are granted to policyholders for house building
or for purchase of flats (subject to certain conditions).

Who Can Buy A Policy?

Any person who has attained majority and is eligible to enter into a valid contract can insure
himself/herself and those in whom he/she has insurable interest. Policies can also be taken,
subject to certain conditions, on the life of one's spouse or children. While underwriting
proposals, certain factors such as the policyholder’s state of health, the proponent's income and
other relevant factors are considered by the Corporation.

Insurance For Women

Prior to nationalization (1956), many private insurance companies would offer insurance to
female lives with some extra premium or on restrictive conditions. However, after
nationalization of life insurance, the terms under which life insurance is granted to female lives

15
have been reviewed from time-to-time. At present, women who work and earn an income are
treated at par with men. In other cases, a restrictive clause is imposed, only if the age of the
female is up to 30 years and if she does not have an income attracting Income Tax.

Medical and Non-Medical Schemes

Life insurance is normally offered after a medical examination of the life to be assured.
However, to facilitate greater spread of insurance and also to avoid inconvenience, LIC has been
extending insurance cover without any medical examination, subject to certain conditions.

With Profit and Without Profit Plans

An insurance policy can be 'with' or 'without' profit. In the former, bonuses disclosed, if any,
after periodical valuations are allotted to the policy and are payable along with the contracted
amount. In 'without' profit plan the contracted amount is paid without any addition. The premium
rate charged for a 'with' profit policy is therefore higher than for a 'without' profit policy.

Keyman Insurance

Keyman insurance is taken by a business firm on the life of key employee(s) to protect the firm
against financial losses, which may occur due to the premature demise of the Keyman.

OBJECTIVES OF LIC
 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 insurance-linked 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.

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 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/VISSION
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

“VISSION "A trans-nationally competitive financial conglomerate of significance to societies

and Pride of India."

BOARD OF DIRECTORS

Members On The Board Of The Corporation

» Shri. M R Kumar, Chairman

» Shri. Rajeev Ranjan, Member

» Shri. Pankaj Jain, Member

»Shri. T.C. Suseel Kumar, Managing Director

» Shri. Vipin Anand, Managing Director

» Shri. Mukesh Kumar Gupta, Managing Director

» Shri. Raj Kumar, Managing Director

» Ms. Padmaja Chunduru, Member

» Shri. Devesh Srivastava, Ex-Officio Member

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Awards

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 CHAPTER-3

RESEARCH METHODOLOGY

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 RESEARCH METHODOLOGY
PURPOSE OF THE STUDY
The purpose behind the study of LIFE INSURANCE CORPORATION OF INDIA is to
understand the companies’ background as well as the nature of the various products offered over
many years in India. Purpose is to study the products and their benefits to customers. This gives
a brief idea of the nature of products of the company

OBJECTIVES OF THE STUDY

The objectives behind the study of the plans and policies of LIFE INSURANCE
CORPORATION OF INDIA are: 1. To impart knowledge about the history and objectives of the
company and also its different subsidiaries. 2. To aware the readers about the different plans and
policies provided by LIC, there value and benefits to its customers.

METHODOLOGY DATA COLLECTION:

All the information provided on LIFE INSURANCE CORPORATION OF INDIA in the project
report has been collected through secondary resources. No survey has been conducted to collect
information for the study. Therefore only secondary data is used in the study.

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CHAPTER-4
POLICIES

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POLICIES (SCHEMES) Life Insurance Corporation of India provides number of products to its
costumers. LIC differentiated their policies into five different types which are:

1. Insurance Plans

2. Pension Plans

3. Unit Plans

4. Special Plans

5. Group Scheme

INSURANCE PLANS
As individuals it is inherent to differ. Each individual’s insurance needs and requirements are
different from that of the others. LICs Insurance Plans are policies that talk to you individually
and give you the most suitable options that can fit your requirement.

Mortgage Redemption
PENSION PLANS
Pension Plans are Individual Plans that gaze into your future and foresee financial stability
during your old age. These policies are most suited for senior citizens and those planning a
secure future, so that you never give up on the best things in life.

UNIT PLANS
Unit plans are investment plans for those who realize the worth of hard-earned money. These
plans help you see your savings yield rich benefits and help you save tax even if you don't have
consistent income.

SPCIAL PLANS
LIC’s Special Plans are not plans but opportunities that knock on your door once in a lifetime.
These plans are a perfect blend of insurance, investment and a lifetime of happiness!

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GROUP SCHEME
Group Insurance Scheme is life insurance protection to groups of people. This scheme is ideal
for employers, associations, societies etc. and allows you to enjoy group benefits at really low
costs.

PRODUCTS BY LIC
INSURANCE PLANS
1. Jeevan Anand
Features
Product summary:
This plan is a combination of Endowment Assurance and Whole Life plans. It provides financial
protection against death throughout the lifetime of the life assured with the provision of payment
of a lump sum at the end of the selected term in case of his survival.

Premium:
Premiums are payable yearly, half-yearly, quarterly, monthly or through salary deductions as
opted by you throughout the selected term of the policy or till earlier death.

Bonuses:
This is a with-profit plan and participates in the profits of the Corporation’s life insurance
business. It gets a share of the profits in the form of bonuses. Simple Reversionary Bonuses are
declared per thousand Sum Assured annually at the end of each financial year. Once declared,
they form part of the guaranteed benefits of the plan. Bonuses will be added during the selected
term or till death, if it occurs earlier. Final (Additional) Bonus may also be payable provided the
policy has run for certain minimum period

Benefits
Benefits in case of death during the selected term:

23
The Sum Assured along with the vested bonuses is payable on death in a lump sum. Benefits in
case of survival to the end of selected term: The Sum Assured along with the vested bonuses is
payable in a lump sum on survival to the end of the term. An additional Sum Assured is payable
on death thereafter.

Accident Benefit:
An additional Sum Assured (subject to a limit of Rs.5 lakh) is payable in a lump sum on death
due to accident up to age 70 of life assured. In case of permanent disability of the life assured
due to accident this additional Sum assured is payable in installments.

Supplementary/Extra Benefits:
These are the optional benefits that can be added to your basic plan for extra protection/option.
An additional premium is required to be paid for these benefits.

Surrender Value:
Buying a life insurance contract is a long-term commitment. However, surrender values are
available on the plan on earlier termination of the contract.

Guaranteed Surrender Value:

The policy may be surrendered after it has been in force for 3 years or more. The guaranteed
surrender value is 30% of the basic premiums paid excluding the first year’s premium. Any extra
premium(s) paid and premium(s) towards Accident Benefit are also excluded.

Corporation’s policy on surrenders:

In practice, the Corporation will pay a Special Surrender Value – which is either equal to or more
than the Guaranteed Surrender Value. The benefit payable on surrender reflects the discounted
value of the reduced claim amount that would be payable on death or at maturity. This value will
depend on the duration for which premiums have been paid and the policy duration at the date of
surrender. In some circumstances, in case of early termination of the policy, the surrender value
payable may be less than the total premium paid

2. Jeevan Shree-I
Product summary:
This is an Endowment Assurance plan offering the choice of many convenient premiums paying
terms. It provides financial protection against death throughout the term of plan with the
payment of maturity amount on survival to the end of the policy term.

24
Premiums:
Premiums are payable yearly, half-yearly, quarterly or through Salary deductions, as opted by
you, throughout the premium paying term or till earlier death. Alternatively premium may be
paid in one lump sum (Single premium).

Guaranteed Additions:
The policy provides for the Guaranteed Additions at the rate of Rs. 50/- per thousand Sum
Assured for each completed year for first five years of the policy. The Guaranteed Additions are
payable along with the Basic Sum Assured at the time of claim.

Bonuses:
The policy participates in the profits of the Corporation’s life insurance business from the 6th
year onwards. It will get a share of the profits in the form of bonuses. Simple Reversionary
Bonuses will be declared per thousand Basic Sum Assured annually at the end of each financial
year. Once declared, they will form part of the guaranteed benefits of the plan.

Benefits
Death Benefit:
The Sum Assured along with guaranteed additions and vested bonuses, if any, is payable in a
lump sum on death of the life assured during the policy term.

Maturity Benefit:
The Sum Assured along with guaranteed additions and reversionary bonuses, if any is payable in
a lump sum on survival to the end of the policy term.

Supplementary/Extra Benefits:
These are the optional benefits that can be added to your basic plan for extra protection/option.
An additional premium is required to be paid for these benefits.

Surrender Value:
Buying a life insurance contract is a long-term commitment. However, surrender value is
available on the plan on earlier termination of the contract.

Guaranteed Surrender Value:

25
The policy may be surrendered after it has been in force for 3 years or more. The guaranteed
surrender value is 30% of the basic premiums paid excluding the first year’s premium. In case of
a single premium policy the guaranteed surrender value is 90% of the single premium paid
excluding any extra premium.

Corporation’s policy on surrenders:

In practice, the Corporation will pay a Special Surrender Value – which is either equal to or more
than the Guaranteed Surrender Value. The benefit payable on surrender reflects the discounted
value of the reduced claim amount that would be payable on death or at maturity. This value will
depend on the duration for which premiums have been paid and the policy duration at the date of
surrender. In some circumstances, in case of early termination of the policy, the surrender value
payable may be less than the total premium paid.

3. Bima Bachat
What is Bima Bachat?
LIC’s Bima Bachat is a money-back policy which offers financial security and assurance to the
policy holder and his family. Bima Bachat 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.

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.

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, if any.

How much insurance do I get?

The policy holder is insured for an amount equal to the sum assured.

26
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?

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

Premium payment
Single Premium
The sample premium rates are as under: -

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What incentives do I get for a higher sum assured?
Let’s take an example of a 30 year old with a Bima Bachat policy for 12 years. If the sum
assured is Rs 45,000 then he has to pay a premium of Rs 34800.75. But for a sum assured
amount of Rs 50,000 he will have to pay a premium of Rs 36734.13 only, thus getting a 5%
rebate in premium.

Refer to the table below for other rebate percentages:

Less than Rs. 50,000 NIL

Rs. 50,000 and Less than Rs.1 lakh 5%

Rs. 1 lakh and Less than Rs.2 lakh 7%

Rs. 2 lakh and above 8%

4. The Convertible Term Assurance Policy

Features
This plan of assurance is designed to meet the needs of those who are initially unable to pay the
larger premium required for a Whole Life or Endowment Assurance Policy, but hope to be able
to pay for such a policy in the near future. This plan would be found useful also in cases where it

28
is desired to leave the final decision as to the plan to a later date when, perhaps a better choice
could be made. Policy holders get an option of converting an policy into endowment assurance
or limited payment whole life assurance.

Suitable For:
For all people with earned income under Category I and unearned incomes under Category II,
basically Standard and sub-Standard lives attracting EMR classes I and II.

Benefits
Survival Benefit

Not Applicable

Death Benefit

the sum assured is payable only in the event of death of the Life Assured before the expiry of the
specified term.

Plan parameters

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PENSION PLANS
1.New Jeevan Dhara-I
Features
Product summary:
These are Deferred Annuity plans that allow the policyholder to make provision for regular
income after the selected term.

Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through Salary deduction, as
opted by you, throughout the term of the policy or till earlier death. Alternatively, the premium
may be paid in one lump sum (single premium).

Tax Benefits:

Tax relief under Section 80ccc is available on premiums paid under New Jeevan Suraksha I
(Table No.147). The premiums paid under New Jeevan Dhara I (Table No.148) qualify for tax
relief under Section 88.

Bonuses:

These are with-profit plans and participate in the profits of the Corporation’s annuity / pension
business. Policies get a share of the profits in the form of bonuses. Simple Reversionary Bonuses
are declared per thousand Sum Assured annually at the end of each financial year. Once
declared, they form part of the guaranteed benefits of the plan. Final (Additional) Bonuses may
also be payable provided policy has run for a certain minimum period.

30
 Death Benefit:

On death of the Life Assured during the term of the policy the basic premiums paid, excluding
any rider premiums or extra premiums, up to the date of death accumulated with interest at such
rates as decided by the Corporation will be payable to the nominee. Currently, the interest rate is
3%, 4% or 5 % if the death occurs within the first 10 years, 20 years or thereafter respectively.

Maturity Benefit:

At maturity the policyholder can encash up to a maximum 25% of the maturity proceeds as a tax-
free lump sum. The balance should be compulsorily converted to an annuity at the rates
applicable at the time of maturity of the policy. The policyholder has the choice of opting for any
one of 5 annuity options.

The annuity options available are:

 annuity payable for remainder of life
 annuity payable for life with guaranteed period of 5, 10, 15 or 20 years
 Joint life and last survivor annuity to the annuitant and his/ her spouse under which
annuity payable to the spouse on death of the purchaser will be 50% of that payable to the
annuitant
 Life annuity with a return of purchase price on death of the annuitant
 Life annuity increasing at a simple rate of 3% per annum

Supplementary/Extra Benefits:
These are the optional benefits that can be added to your basic plan for extra protection/option.
An additional premium is required to be paid for these benefits

Surrender Value:
Buying a life insurance contract is a long-term commitment. However, surrender value is
available on the plan on earlier termination of the contract.

Guaranteed Surrender Value:

The policy may be surrendered after it has been in force for 2 years or more but before the
vesting date. The guaranteed surrender value is 90% of the basic premiums paid excluding the
31
first year’s premium. In case of a single premium policy the guaranteed surrender value is
allowed after 2 years from the date of commencement of the policy.

Corporation’s policy on surrenders:

In practice, the company will pay a Special Surrender Value – which is equal to or higher than
the Guaranteed Surrender Value. The benefit payable on surrender reflects the discounted value
of the reduced claim amount that would be payable on death or at maturity. This value will
depend on the duration for which premiums have been paid and the policy duration at the date of
surrender. In some circumstances, in case of early termination of the policy, the surrender value
payable may be less than the total premium paid.

UNIT PLANS-I

1.Market plus-I

This is a unit linked pension plan wherein the pension is payable after a specified period. Four
types of investment Funds namely Bond, Secured, Balanced and Growth Fund are offered.
Though primarily a Pension product, the plan has many attractive features and options which
make it an ideal Retirement solution for the future

BENEFITS
A) - On Vesting: On vesting of the policy, the Fund Value will be utilized to provide a pension
based on the then prevailing Annuity rates. An option to commute up to one third of the payable
benefit in a lump sum is available.

B) On Death: In event of the unfortunate death of the policy holder the Fund Value along with
the Riders, if any, will be payable in a lump sum or as a pension.

OPTIONS
Three attractive benefits, viz. - Life Cover, Accident Benefit and Critical Illness Benefit are
available as options or riders. Life option is available within certain limits depending on the age
at entry of the life assured. The other options are available to all proposers who have opted for
Life Cover. The quantum of the risk covers can also be reduced; subject to the minimum limits,
once a year. A policy can be taken without any of the riders also.

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REVIVAL
An attractive feature of the plan is that provided the premiums have been paid for a minimum
period of three years, all the riders under the policy will continue for a period of two years from
the due date of first unpaid premium by deduction of relevant charges from the policy fund. This
period of two years is called the “Revival Period”. Further, if premiums have been paid for a
minimum period of three years, revival can be effected merely by paying the arrears of premium,
within the Revival Period.

PAYMENT OF PREMIUMS
Premiums can be paid in a lump sum (single premium) and also by monthly (ECS), quarterly,
half-yearly and yearly modes.

CHANGE IN FUND TYPE (SWITCH)

The plan also allows a policy holder to switch from one type of fund to another up to four times a
year, free of charge.

OTHER FEAUTRES
There will be no spread between the Bid and Offer price. The Net Asset Value (NAV) will be
declared on a daily basis. Additional premium in multiples of Rs.1,000 can be paid without any
limit at anytime during the term of policy.

SPECIAL PLANS
1.Bima Nivesh

FeatureS

Bima Nivesh 2005 is a plan with compound rate of guaranteed additions and loyalty additions.
This is the revised version of our popular Bima Nivesh Plan 2004 and is introduced to meet the
overwhelming demand for a single premium plan from our customers. It is a single premium,
ideal investment plan for those who have no regular income but good periodical income. Bima
Nivesh 2005 is available for terms 5 and 10 years. The guaranteed surrender value is payable
after the policy has run for at least one year. Term Assurance Rider is also available by payment
of a single premium at the option of the proposer.

33
Benefits

 Guaranteed Additions: Guaranteed additions at the compound rate of Rs.50 per thousand Sum
Assured per annum for the policy with term of 5 years and at the compound rate of Rs.55 per
thousand Sum Assured per annum for the policy with term of 10 years.

Loyalty Addition: Depending upon the Corporation's experience with regard to mortality,
interest and expenses and based on term of the policy, Loyalty addition, if any, may be declared
by the corporation and paid on maturity.

Maturity Benefit: The Basic Sum Assured along with compounded Guaranteed Additions will
be payable. Loyalty addition, if any, will also be added to this benefit.

Payment on death: In case of the unfortunate death of the Life Assured during the term of the
policy, Sum Assured along with the accrued guaranteed additions will be payable.

Surrender Value: Surrender value is payable after the policy has run at least for one year.

Riders: Term Assurance rider is available.

Eligibility conditions and other restrictions

34
Premium Rates:
Single Premium rates for Rs.1000 Sum Assured are Rs.995 for 5 years term and Rs. 976 for 10
years term; The Term Rider Premium depends on the age nearer birthday and the term of the
policy.

REBATES

1% of basic premium on the premium in excess of Rs.50,000. Rs.500 plus 1.5% of basic
premium on the premium in excess of Rs.1,00,000.

35
LOAN

Loan will be available to the policyholders under this plan within the Surrender Value.

GROUP SCHEME
1.Group Term Insurance Scheme

A. Nature of the Scheme: Group

(term) Insurance Scheme is meant to provide life insurance protection to groups of
people. Administration of the scheme is on group basis and cost is low. Under Group
(Term) Insurance Scheme, life insurance cover is allowed to all the members of a group
subject to some simple insurability conditions without insisting upon any medical
evidence. Scheme offers covers only on death and there is no maturity value at the end of
the term

B. Premium Chargeable:

Group (Term) Insurance Scheme is at present offered under One Year Renewable Group
term assurance plan (OYRGTA). Every year on Annual Renewal date LIC charges the
premium depending upon the changes in size and age distribution of the age group.

A. Different Schemes:

Group (term) Insurance Scheme has a number of varieties. The Scheme may provide for
a uniform cover to all members of the group or graded covers for different categories of
members, cover for all amounts of outstanding housing loans or vehicle advances, or
some other benefits (e.g., life cover to supplement pension or PF benefits in case of
death). The schemes may have add-ons like Double Accident Benefit, Critical Illness
Benefit, Disability benefit etc.

B. General Features of various Group Insurance Schemes:

1. PREMIUM:

36
 The premium under such scheme may be wholly paid by the employer or the Nodal
Agency. However, the scheme may be contributory i.e. the members may also
contribute.

2. DOUBLE ACCIDENT BENEFIT:

payment of double the sum assured on death due to accident (without permanent
disability benefit), may be allowed under Group Insurance Schemes for an extra
premium.

1. ELIGIBILITY:

For Group Insurance Scheme in lieu of EDLIS the insurability condition is that
should be a member of the Provident Fund Scheme of the employer. For other GI
Schemes of employer-employee groups the insurability condition is that the member
should not be absent on ground of sickness on the entry date. For all non-
employeremployee Group Schemes the basic insurability condition is that the
member should be in good health on the date of entry.

2. ADMINISTRATION OF THE SCHEME

At the commencement and thereafter on each Annual Renewal Date, the Group
Policyholder will have to send all the member's data (and particulars of the new
entrants from time to time) to the P & GS unit of LIC. Detailed OYRGTA premium
calculation will be made on each Annual Renewal Date.

1. Janashree Bima Yojana (JBY)

Features

The objective of the scheme is to provide life insurance protection to the rural and
urban poor persons below poverty line and marginally above the poverty line.

ELIGIBILITY:`

37
a) Minimum Basic Sum Assured : Rs. 100,000
b) Maximum Basic Sum Assured : No Limit
(The Basic Sum Assured shall be in multiples of Rs. 5000/-)
c) Minimum Age at entry : 18 years (completed)
d) Maximum Age at entry : 50 years (nearest birthday)
e) Maximum Maturity Age : 75 years (nearest birthday)
f) Minimum Policy Term : 15 years
g) Maximum Policy Term : 35 years

NODAL AGENCY:
A State Government Department which is concerned with the welfare of any such
vocation/occupation group, a Welfare Fund/ Society, Village
Panchayat,NGO,SelfHelp Group,etc.

MINIMUM MEMBERSHIP SIZE:

Twenty five.

FORMS FOR JANASHREE BIMA YOJANA

1. Claim form & discharge receipt under JBY (Annexure A)

2. Application for scholarship under Shiksha Sahayog Yojana (Proforma A)
3. List of students eligible for scholarship under Shiksha Sahayog Yojana (Proforma
B)
4. Certificate of utilization ( Proforma C )

Benefits
In the events of
*Death (other than by accident) of the member, an amount of Rs.30,000/- is payable.
*death/total permanent disability, due to accident, an amount of Rs.75,000/-is
payable. *Permanent partial disability, due to accident, an amount of Rs.37,500/- is
payable.

PREMIUM:
*The premium under the scheme is Rs.200/-per annum per member.
*50% of the premium i.e. Rs.100/- will be contributed by the member and/or Nodal
Agency/State Government.
38
*Balance 50% will be borne by the Social Security Fund.

APPROVED VOCATION & OCCUPATIONAL GROUPS:

A) The group that can be covered are like workers in –
(i) Foodstuffs like khandsari
(ii) Textile
(iii) Manufacture of wood products
(iv) Manufacture of paper products
(v) Manufacture of leather products
(vi) Printing (vii) Rubber and coal products
(viii) Chemical products like candle manufacture
(ix) Mineral products like earthen toys manufacture
(x) Fire cracker's workers
(xi)Construction workers
(xii)Other related cottage industries to be identified by Nodal Agencies and other
groups as identified by the Nodal Agency and approved by LIC.

B) The occupational groups are :

Beedi workers, Brick Kiln Workers(Jalandhar),Carpenters, Cobblers, Fisherman,

Hamals, Handicraft Artisans, Handloom Weavers, Handloom and Khadi Weavers,
Lady Tailors, Leather and Tannery Workers, Papad Workers attached to 'SEWA',
Physically Handicapped self- Employed Persons, Primary Milk Producers, Rickshaw
Pullers/ Auto Drivers, Safai Karmacharis, Salt Growers, Tendu Leaf Collectors,
Scheme for the Urban Poor, Forest Workers, Sericulture, Toddy Tappers, Powerloom
Workers, Scheme for Women in Remote Rural Hilly Areas.

PLAN’S NAV
The net asset value of different schemes of life insurance Corporation of India for the
insured’s is as follows:

39
NAV TABLE

40
41
42
43
CHAPTER-5

FINDINGS

44
 FINDINGS
Findings:

After completing the study following points can be drawn:

1. It has one of the single distribution networks amongst government insurance
players.
2. LIC has many numbers of insurance policies and plans having flexible to meet the
customers’ requirement and expectation.
3. LIC entered the market with aggressive marketing and supported by after sale
services with the help of technology.
4. All LIC Plans come with Sovereign Guarantee i.e., Government of India
Guarantee regarding repayment. Infact, as of now, only LIC plans enjoy this
Government Guarantee.

45
CHAPTER-6

CONCLSION

46
 CONCLSION
After completing the project it is concluded that LIC develop its various plans and
policies, flexible in nature, according to the requirements of its targeted market or
customers and is thus beneficial to its customers in various ways. The most important
benefit it provides to its customers is that it is a government owned company. This
lead to increase in the satisfaction level of its customer that is why LIC has more than
200 million policyholders which is equal to the fourth largest country in world.
Therefore it is not only beneficial but better than other insurance companies not only
regarding its product but also its services.

47
BIBLIOGRAPHY
Information and data used in the project has been collected from the following
sources:

- 1. www.licindia.com

2. www.licmutual.com

3. www.lichousing.com

4. www.wikipedia.org

5. www.reportbuyer.com

6. Outlook Money Magazine 12th August 2009, 09 September 2009

7. Money Today Magazine

11 June 2009, September 2009

48