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LIFE INSURANCE CORPORATION OF INDIA
SUBMITTED TO: Mr. Rajneesh Mishra Lecturer ASB
SUBMITTED BY: Manisha sharma 05 Surbhi sharma 20 Simranpreet singh 37 Isha Sachdeva 03
The Life Insurance Corporation of India (LIC) is the largest state-owned life insurance company in India, and also the country's largest investor. It is fully owned by the Government of India. It also funds close to 24.6% of the Indian Government's expenses. It has assets estimated of 9.31 trillion (US$206.68 billion). It was founded in 1956 with the merger of more than 200 insurance companies and provident societies. Headquartered in Mumbai, financial and commercial capital of India, the Life Insurance Corporation of India currently has 8 zonal Offices and 101 divisional offices located in different parts of India, at least 2048 branches located in different cities and towns of India along with satellite Offices attached to about some 50 Branches, and has a network of around 1.2 million agents for soliciting life insurance business from the public. “Every day we wake up to the fact that more than 250 million lives are part of our family called LIC. We are humbled by the magnitude of the responsibility we carry and realise the lives that are associated with us are very valuable indeed. Though this journey started over five decades ago, we are still conscious of the fact that, while insurance may be a business for us, being part of millions of lives every day for the past 52 years has been a process called TRUST.”
and it charged Indians heftier premiums. It witnessed. formed in 1870.2. First War of Independence. Europeans in India were its primary target market. and in between them the period of world wide economic crises triggered by the Great . History The Oriental Life Insurance Company. was the first native insurance provider. Other insurance companies established in the pre-independence era included • • • • • • • • • Bharat Insurance Company (1896) United India (1906) National Indian (1906) National Insurance (1906) Co-operative Assurance (1906) Hindustan Co-operatives (1907) Indian Mercantile General Assurance Swadeshi Life (later Bombay Life) India’s first 150 years were marked mostly by turbulent economic conditions. The Bombay Mutual Life Assurance Society. was established in Calcutta in 1818 by Bipin Bernard Dasgupta and others. the first corporate entity in India offering life insurance coverage. adverse effects of the World War I and World War II on the economy of India.
the first Indian life insurance company started its business. The subsequent Insurance Act of 1938 brought stricter state control over an industry that had seen several financially unsound ventures fail. . Some of the important milestones in the life insurance business in India are: 1818: Oriental Life Insurance Company. The Indian Insurance Companies Act of 1928 authorized the government to obtain statistical information from companies operating in both life and nonlife insurance areas. A bill was also introduced in the Legislative Assembly in 1944 to nationalize the insurance industry. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. The aggregate effect of these events led to a high rate of bankruptcies and liquidation of life insurance companies in India. The first half of the 20th century also saw a heightened struggle for India's independence. the first life insurance company on Indian soil started functioning.depression. This had adversely affected the faith of the general public in the utility of obtaining life cover. providing the first regulatory mechanisms in the Life Insurance industry. 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. The Life Insurance Act and the Provident Fund Act were passed in 1912. 1870: Bombay Mutual Life Assurance Society.
the first company to transact all classes of general insurance business.. frames a code of conduct for ensuring fair conduct and sound business practices. 1956. LIC Act. the first general insurance company established in the year 1850 in Calcutta by the British.1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. a wing of the Insurance Association of India. set up. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. viz. can trace its roots to the Triton Insurance Company Ltd. with a capital contribution of Rs. Some of the important milestones in the general insurance business in India are: 1907: The Indian Mercantile Insurance Ltd. The General insurance business in India. 1956: 245 Indian and foreign insurers and provident societies are taken over by the central government and nationalised. 1957: General Insurance Council. on the other hand. . 1972: The General Insurance Business (Nationalisation) Act. 1972 nationalised the general insurance business in India with effect from 1st January 1973. LIC formed by an Act of Parliament. 5 crore from the Government of India.
Eventually.107 insurers amalgamated and grouped into four companies viz. one of India's wealthiest businessmen. the National Insurance Company Ltd. GIC incorporated as a company. In the ensuing investigations.. parliamentarian Amol Barate raised the matter of insurance fraud by owners of private insurance companies.. by consolidating the life insurance business of 245 private life insurers and other entities offering life insurance services. the New India Assurance Company Ltd. Nationalization In 1955. the Parliament of India passed the Life Insurance of India Act on 1956-06-19. was sent to prison for two years. including the life insurance. . and the Life Insurance Corporation of India was created on 1956-09-01. which had created a policy framework for extending state control over at least seventeen sectors of the economy. Nationalization of the life insurance business in India was a result of the Industrial Policy Resolution of 1956. and the United India Insurance Company Ltd. owner of the Times of India newspaper. Ram Kishan Dalmia. the Oriental Insurance Company Ltd.
3. 5 for a US $ . which commanded a monopoly of soliciting and selling life insurance in India.6 billion). LIC is the 8th most trusted brand of India . In english it means "with life also. created huge surpluses.after life also.6 million policies and a corpus of INR 459 million (US$ 92 million as per the 1959 exchange rate of roughly Rs. Zindagi ke baad bhi"in hindi. The recent Economic Times Brand Equity Survey rated LIC as the No. SPREAD IN THE COUNTRY Over its existence of around 50 years. has grown to 25000 servicing around 180 million policies and a corpus of over 8 trillion (US$177. 5. and contributed around 7 % of India's GDP in 2006. Life Insurance Corporation of India. which started its business with around 300 offices. 1 Service Brand of the Country. The Corporation. According to The Brand Trust Report 2011. The slogan of LIC is "Zindagi ke saath bhi.
in the investment of funds. OBJECTIVES 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. without losing sight of the interest of the community as a whole. keeping in view national priorities and obligations of attractive return. . the funds to be deployed to the best advantage of the investors as well as the community as a whole. * Maximize mobilization of people's savings by making insurance-linked savings adequately attractive. * 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. * Bear in mind.4. the primary obligation to its policyholders. whose money it holds in trust.
* 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. . pride and job satisfaction through discharge of their duties with dedication towards achievement of Corporate Objective. *Promote amongst all agents and employees of the Corporation a sense of participation.
3. 2. . This plan is different from the traditional Cash Accumulation Plan as the returns under the Plan are linked to the performance of the chosen fund. a unit linked plan for management of Gratuity Funds. Flexibility in structuring the Gratuity Costs based on performance of Fund. Group Insurance is an insurance which covers a group of people (like employees of a common employer or professionals in a common group). LIC brings you LIC’s GRATUITY PLUS PLAN. ADVANTAGES 1. BRIEF OVERVIEW OF SCHEMES OF LIC LIC – GROUP PLAN | GROUP GRATUITY SCHEME | LIC | OVERVIEW | ADVANTAGES | BENEFITS – TAX BENEFIT | FEATURES – SPECIAL FEATURES Key to a successful business is keeping your employees motivated. which in turn reduces the employer’s tension. One switch every year is free of cost.5. GRATUITY PLUS PLAN is suitable for companies who desire to entrust Gratuity Fund management to an insurer and wish to have the flexibility of choice of investments. Facility of Switching between various funds. Happy and secured employees work better. Choice of 4 funds to meet various risk appetites.
2. 3. The policy can be surrendered at any time. 6.4. BENEFITS 1. Scheme can be surrendered at any time. . There is no bid offer spread under this scheme. Alternatively. 7. Cover can be equal to the gratuity payable for anticipated service. The benefit available on surrender of the policy will be the value of total number of units held in the Policy Holder’s Unit Account at the time of surrender. Assistance for execution of legal documents and installation of scheme. life insurance cover as opted for by Policyholder will also be paid by the Corporation. Hassle Free Administration of Scheme 8. 5. the company can also choose for each member a uniform level of cover equal to a minimum of one months salary or more . It provides for life insurance cover at a very minimal cost. There is no surrender penalty imposed. In case of death of member. Gratuity Benefits to Members whenever payable as per Rules of the Scheme shall be paid to the Policy Holder by debiting the requisite no of units to the Policy Holder’s Unit Account at NAV applicable at that time.
TAX BENEFITS: The provisions relating to the approved Superannuation Scheme are set out in Part ‘B’ of the Fourth Scheme of the Income-Tax Act. 1961 and Part XIII of the Income Tax Rules.80% of the contribution (s) towards the past service liability are treated as deductible business expenses spread over in the subsequent years of payment. 1962. in the case of the Contributions scheme qualifies for exemption under Section 80C of the Income-Tax Act.T. The annual contribution is treated as a deductible business expense in term of Section 36(1) (IV) of the I. 1. The employee’s contribution. The income tax concession will be available only if the scheme is approved by the CIT. subject to a minimum balance of Rs. Act. In case the Policyholder’s Unit Account falls below this limit. 3. Five lacs in the Policyholder’s Unit Account. the policy shall compulsorily be terminated and the balance amount in the policy holder’s Unit Account will be refunded to the policy holder.At all times the Policyholder’s unit account should be sufficient to cover the relevant charges and benefits payable at such point of time. In terms of a Notification issued by the Central Board of Direct Taxes . Jeevan Anurag . 2.
40% of the Basic Sum Assured along with reversionary bonuses declared from time to time on full Sum Assured for the full term and the Terminal bonus. For example.18th. Assured Benefit Payment of 20% of the Basic Sum Assured at the start of every year during last 3 policy years before maturity. The plan can be taken by a parent on his or her own life. this plan also provides for an immediate payment of Basic Sum Assured amount on death of the Life Assured during the term of the policy. 19th year and 40% of the Sum Assured along with the reversionary bonuses and the terminal bonus. at the end of the 20th year. if any. At maturity.Benefits LIC’s Jeevan ANURAG is a with profits plan specifically designed to take care of the educational needs of children. if any shall be payable. Death Benefit Payment of an amount equal to Sum Assured under the basic plan immediately on the death of the life assured. 20% of the Sum assured will be payable at the end of the 17th. if term of the policy is 20 years. Benefits under the plan are payable at prespecified durations irrespective of whether the Life Assured survives to the end of the policy term or dies during the term of the policy. . In addition.
his nominee will get Rs. age 25 years. Pankaj. 149 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. 1 lakh.) In case.12. his nominee will get additional Rs. Mr.per thousand per year. Pankaj dies during the Premium Paying Term. takes Jeevan Anand policy for 25 years for Sum Assured Rs. Pankaj’s death. For Example: Mr. Pankaj has already received the bonus.1 Lakh (sum Assured) + Accrued bonus till Mr. Pankaj. Mr. In case. that means Zindagi Ke Saath Bhi Zindagi Ke Bad Bhi… Jeevan Anand plan no.500/.45/. dies ( After premium paying term is over) at the age of 60 years.12.1. Since Mr. LIC will not pay second time bonus. 2.(Rs.500/. . The risk cover will continue even after the maturity. 1 lakh equal to sum assured amount. DETAILS OF WHOLE LIFE SCHEME AND ENDOWMENT SCHEME Summary: Jeevan Anand is the combination of Endowment Assurance and Whole Life plan.is the estimated bonus at Rs.6. Now on Maturity Pankaj will receive Rs. 1 lakh sum assured Plus Rs.
Key Features: 1. Premium Stoppage: If payment of premiums ceases after at least 3 years premiums have been paid. Double accidental cover upto age 70. You only pay till the selected term of years or until death if it occurs during the term period. Jeevan Anand is the combination of Whole Life and Endowment Assurance plan. risk cover continues till the death of the policy holder. 4. The lump sum can be reinvested to provide an annuity during the remainder of policy holders life or in any other way considered suitable at that time. 6. exclusive of any attached bonus. This policy not only makes provisions for the family of the life assured in the event of early death but also assures a lump sum at a desired age. Tax Savings Modes of Premium Payment: You can pay premium yearly. 3. Jeevan Anand Plan Premiums are limited. half-yearly. a free paid-up policy for a reduced sum assured will be automatically secured provided the reduced sum assured. Limited premium payments. 2. monthly or through salary deductions as opted by you throughout the selected term of the policy or till earlier death. Even after the Premium Paying Term (PPT) is over. quarterly. 5. Accident Benefit is available during the Premium paying term adn thereafter upto age 70. .
Final (Additional) Bonus may also be payable provided the policy has run for certain minimum period. Maximum Accident Cover available under this plan . 250/-. Bonuses: Jeevan Anand is a with-profit insurance plan and participates in the profits of the Corporation’s life insurance business. if it occurs earlier. Once the bonus is declared. they form part of the guaranteed benefits of the plan. Simple Reversionary Bonuses are declared per thousand Sum Assured annually at the end of each financial year. No Bonus is paid on death after the premium paying term.is not less than Rs. An amount equal to the Sum Assured is payable if death occurs after the premium paying term.(Endowment term) Death Benefit: Sum Assured along with vested bonuses are payable on death during the premium paying term. You will get the profit in the form of Bonuses. Accident Benefit: Double Accident Benefit is available during the premium paying term and thereafter up to age 70. Bonuses will be added during the selected term or till death. Maturity Benefit: Sum Assured along with all vested bonuses payable at the end of the term to the policy holder. Simple Reversionary Bonus accrues during the premium paying term and is payable at the end of the premium paying term or on earlier death along with final additional bonus. The reduced sum assured will become payable on the event as stipulated in the policy. if any.
will be Rs 5 lakh (this limit excludes accident benefit taken under other plans). The guaranteed surrender value is 30% of the basic premiums paid . 1. Guaranteed Surrender Value: The policy may be surrendered after it has been in force for 3 years or more. surrender values are available on the plan on earlier termination of the contract. PPT Mat. However.00. In case of permanent disability of the life assured due to accident this additional Sum assured is payable in instalments.000/g:) Maximum Sum Assured: No Limit h:) Risk cover: Sum Assured + Bonus i:) Loan on policy: Avaialable j:) Housing loan : Avaialable Surrender Value: Buying a life insurance contract is a long-term commitment. Eligibility Conditions and Restrictions: a:) Minimum Entry Age: 18 Years completed b:) Maximum Entry Age: 65 Years c:) Max. Age: 75 years d:) Min. Premium term: 5 yrs e:) Max Premium term: 57 yrs f:) Minimum Sum Assured: Rs.
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 benefit payable on surrender reflects the discounted value of the reduced claim amount that would be payable on death or at maturity. this plan is apt for people of of all ages and social groups who wish to protect their families from a financial setback that may occur owing to their demise. Who should buy Jeevan Anand policy? Since Jeevan Anand is an endowment assurance plus whole life policy. the Corporation will pay a Special Surrender Value – which is either equal to or more than the Guaranteed Surrender Value. the surrender value payable may be less than the total premium paid. In some circumstances. in case of early termination of the policy. LIC’s policy on surrenders: In practice. This value will depend on the duration for which premiums have been paid and the policy duration at the date of surrender. Any extra premium(s) paid and premium(s) towards Accident Benefit are also excluded.excluding the first year’s premium.
& Service Tax Rs. 4. REASONS WHY LIC IS A MARKET LEADER IN LIFE INSURANCE SECTOR Positions: 1. Has Highest insurance Professionals ( Club Member agents ) 7.1 Million agents) 3.1 insurance company in the world in terms of agency (about 1.7. Largest insurance Company in the world in Customer Base (23 crore customers) 2. Only 4 countries in the world have more population that LIC`s policy holders. Adjudged "The most trusted service Brand" in India. 15 Cr. LIC has paid advance Tax Rs. LIC is one of the Highest income tax playing Organization.Policies in 2007-2008.75 Cr. 9.2627. "Golden Peacock" award for Excellence in "corporate Governance" .1292. Award . 14 Cr.1 insurer in the world in Volume & Sold around 3. 5. by "Economic Times and AC NEILSEN ORG MARG" for the year 2007 for the 5th consecutive year. 6. For Financial Year 2007-08. No. LIC is No. 2nd Biggest Real Estate Owner next to Indian Railways.Recognition 8.
20.insurance Sector. 12. "SKOCH Challengers Award 2008" for "Jeevan Madhur". "Outlook Money NDTV Profit Award 2007" 14.One of the Lowest outstanding Claim Ratio in the world ( Maturity+S B Claim-0.07%) .1 insurance Company in the world in terms of claims paid. 16.Prompt settlement of claims (97% maturity claim settled on or before due date) 21.21 claims per second.2007&2008 (Voted by Consumers) 13.Awarded Reader Digest's "Trusted Brand"2006. "Web 18-Genius of the web Award" Conferred for the best website in insurance Category 15. 19.LIC adjudged as "Best life insurance Company of the year" at the "2nd"NDTV Profit Business Leadership Awards-2007.Settlement of Claims 18.No. Most Sporting Corporate Championship Award Winner-2008 Honouring of the Commitment . LIC settled 139 lakhs claims during the year 2007-2008.LIC adjudged the "Most Preferred Life insurance Company of the year" at the "CNBC AWAAZ" consumer award 2007 for 3rd time in succession. "Loyalty Awards 2008". Double crown for LIC in corporate Olympics 2008.LIC Settles 2.10. 11. 17.
28.Use of High Tech-WAN. Facility is available 24 7. "Suvidha info Serve KIOSKS" all over India. 29.Advanced Technology-For better Customer Service 22.LAN. Dial1251 for details. Premium Payment Facility extended through networked 2048 branches. collecting bank (Axis Bank).Computerized and networked 2048 branch offices and 159 satellite offices throughout the country. 27.EDMS to make LIC a paperless office.Enabling Policy servicing & payments through all branchs in the country. 26.LIC is second largest PC user in the country. . Now LIC Premium can also be paid through. ECS. 1251 OR 020-25514248.45 interactive Voice Response System (IVRS) centers all over the country to provide information on policy servicing. AP online. 25.Info centre set up in 12 cities for customers to interact easily. ATM's through internet.IVRS & EDMS 24. Facility can be availed on following phone Nos. online portals.Policy Holder's Portal allow on line access to policy status and other details. through selected agents. through SMS. 23.
54 lac policies sold through "Jeevan Madhur"Plan.Social Strength 30.1st Pension company in India is floated by LIC as "LIC Pension Fund Ltd" on 21st Nov 2007. National insurance Academy. 8. 40. 31.13 crore citizens through "AAM ADMI BIMA YOJANA" & " JANASHREE BIMA YOJANA". insurance institute of India etc.First to create waves in micro insurance sector by insuring people below the poverty line.A.LIC has foreign operations in Mauritius.Widest range of plans (about 48) for every need of the customer of 0 to 79 years of age. USA&Canada.Biggest Portfolio of Group insurance schemes available. Nepal. 39.LIC has covered lick Risk of 1. 36. Bahrain & Saudi Arabia. 32.Highest Number of Corporate Clients in Group insurance Scheme. LIC Mutual Fund.R. New offices will be hortly oprned in Australia. 38.Very Unique Salary saving Portfolio. 35. 34.LIC .D.an institution builder promoting many financial and insurance institutes like NSE. 37. NCDEX. Fiji and London and has joint venture operating in Sri lanka. 33. In year 2007-2008."Jeevan Saral" one of the product of LIC got "Best innovation product " award from I. . Stock Holding Corporation of India.LIC is known as "Pension Provider" of the country.
New East . health. "Golden Jubilee Foundations" established for undertaking charitable activities like education.32.635 crores during 2007-08 & total investment in this sector is Rs.O.5. viz Pune Division (i) and Pune Division (ii). 46. 43.was splited in 2 divisions. 47.Total investment in Social Sector Rs. drainage & housing etc. People's Money for People's Welfare 44. Schools and Banks under Bima Gram. Jharkhand and Orissa. in infrastructure sector is Rs.000 Crs.Total investment in Nation Building Activities is 5.321 crores.Different incentive schemes for villages.LIC invested more than 11. relief of poverty etc.41. LIC has invested Rs.In socially oriented sector like water.76. Broker ship & Chief Life insurarance Advisor (CLIA). 48. 42.Expending Distribution Channel through Bancassurances. Corporate Agencies. Pune D.Central Zonal Office opened at patina to caterto the needs of states of Bihar. .691 crores 45.56. 5 new Divisional offices were also opened in 2007-08.89.000 Crs. Bima School and Bima Banks.630 crores.
26%.20 billion) in premiums in 45 days of launch in the year 2009. the Corporation was able to settle 97% of all maturity claims on or before the due date signing out Rs.Largest institutional investor in Share Market.07 were Rs. the Corporation’s Jeevan Aastha scheme. During this period. the corporation settled 577.90 crore (US$ 1.74. LIC has a proud record of innovative products that find instant acceptance and success. from the Sale of Equity.559. 6.9 million policies generating a first year premium income of Rs.664 crore (US$ 2.78 Crs. singlepremium plan sold about 1.40.44 million maturity claims.92 crore (US$ 11 billion) despite the global slowdown (Source: IRDA). KEY ACHIEVEMENTS During the 2008/09 financial year.85 crore (US$ 6. It is a .10 billion) in settlement. Additionally. 50.Financial Strengths 49. For example. 29.000 Crs. LIC sold more than 35.100 crore invested every day. the corporation paid Rs. 1.10. 5606. 52.76. 51.105. a close-ended. Out of Total income of Rs.LIC's investment income in 2007-08 was Rs.20 billion) in death claims.3. Largest Financial institutional investor both Equity market & Term House. 52. Current figures show the outstanding claims ratio under the death category at no more than 2.000 death claims and 1.Total Assets of the corporation as on 31. During theyear 2007 LIC earned the profit Rs.To its resounding credit.10. On an average Rs.655 crores.84 million policies collecting Rs.28 Crs.953.20% and in the maturity segment at an exemplary low of 0.514.
In the recent past. Brand Equity rated LIC as the Most Trusted Service Brand. In fact. LIC emerged as the Top Brand in the Insurance Category in the survey conducted by ACNielsen for Brand Equity. Even in the field of technology. too. In the same year. five years in a row.remarkable achievement that not only has LIC continued to maintain the trust of consumers during the economic downturn but has also been felicitated with several awards. for instance amongst several awards. LIC was felicitated with the NDTV-Profit Business Leadership award as also the Asia Brand CongressBrand Leadership Award. It was bestowed the Readers’ Digest Trusted Brand Platinum Award. the CNBC Awaaz Consumer Award in 2009 and the Customer and Brand Loyalty Award in 2009. In 2008. LIC’s innovations and practices were recognized when it won the NASSCOM Award for the Best IT User . its brand leadership has been on evidence. in both 2008 and 2009.
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