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HISTORY OF INSURANCE SECTOR

In India prior to nationalization, general insurance business was

conducted by life insurance companies also but after nationalization in
1972, consequent upon passing of the General Insurance Business
Nationalization Act (GIBNA) General Insurance Corporation of India
was formed and was conferred the exclusive power to regulate and
conduct the business of General Insurance in India. Since 1973 the GIC
and its four subsidiary companies namely New India Assurance Co. Ltd.,
National Insurance Co. Ltd., Oriental Insurance Co. Ltd., and United
India Insurance Co. Ltd. had been the sole players in the field until the
passing of the IRDA Act 1999 which allowed the entry of private
players. Over the past few years a few private players have entered the
arena. The new players have entered the General Insurance field but are
playing cautiously. These are still early days but the field is wide open,
the future is bright and the customer is the one who will be benefited the
most by the growing competition. We hope to see international level of
service and products in the country soon and a multiple choice to select
from.

HOW THE INSURANCE COMPANY DOES OPERATES?

The insurance company operates by collecting

small contributions from many people who are exposed to risks. This
money collected is used to settle those who fall victim of such risks.
These contributions which the insurance company collects are called
premium.

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 INTRODUCTION TO INSURANCE

Insurance is a contractual arrangement that provides for compensation by

an insurer to an insured part if a specify set of circumstances occurs. These
circumstances could be accident, personal injury, death, loss or damage to
property or any other number of instances that can compensate for
financially.

Life is full of risks. Insurance can provide security against some of these
risks. For example, motor insurance provides cover for certain costs
resulting from a road accident or the theft of a car. A contract of insurance
involves the insured making a payment, (a premium) to an insurer. In return
for the premium the insurer agrees to provide the insured with cover for
certain types of losses arising from specified events. For example, a policy
of household insurance might provide cover for damage to a house in the
event of a fire.

When you buy insurance, it means that you are sharing your risk with
others. Simply, the insurance company is a risk management company that
can help anyone to reduce risks associated in day to day activities. Man is
vulnerable to dangers and by virtue of this need insurance to help him cope
in an unfriendly world. Another thing you have to know when buying
insurance is “insurance policy”. The insurance policy is the rule or
guideline of the insurance company. It is the insurance policy that will help
you to choose a better option for your insurance needs.

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 CHARACTERISTICS OF INSURANCE

The insurance has the following characteristics which are, generally

observed in case of life, marine, fire and general insurances.

 Sharing of Risk:-

Insurance is a device to share the financial losses which might

befall on an individual or his family on the happening of a specified
event. The event may be death of a bread-winner to the family in the
case of life insurance, marine-perils in marine insurance, fire in fire
insurance and other certain events in general insurance, e.g., Theft in
burglary insurance, accident in motor insurance, etc. The loss arising
nom these events if insured are shared by all the insured in the form of
premium.

 Co-operative Device:-
The most important feature of every insurance plan is the co-operation of
large number of persons who, in effect, agree to share the financial loss
arising due to a particular risk which is insured. Such a group of persons
may be brought together voluntarily or through publicity or through
solicitation of the agents.
An insurer would be unable to compensate all the losses from his
own capital. So, by insuring or underwriting a large number of persons,
he is able to pay the amount of loss. Like all cooperative devices, there is
no compulsion here on anybody to purchase the insurance policy.

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  Value of Risk:-

The risk is evaluated before insuring to charge the amount of

share of an insured, herein called, consideration or premium. There are
several methods of evaluation of risks. If there is expectation of more
loss, higher premium may be charged. So, the probability of loss is
calculated at the time of insurance.

 Payment at Contingency:-
The payment is made at a certain contingency insured. If the
contingency occurs, payment is made. Since the life insurance contract is
a contract of certainty, because the contingency, the death or the expiry of
term, will certainly occur, the payment is certain. In other insurance
contracts, the contingency is the fire or the marine perils etc., may or may
not occur. So, if the contingency occurs, payment is made, otherwise no
amount is given to the policy-holder.
Similarly, in certain types of life policies, payment is not certain
due to uncertainty of a particular contingency within a particular period.
For example, in term-insurance then, payment is made only when death
of the assured occurs within the specified term, may be one or two years.
Similarly, in Pure Endowment payment is made only at the survival of the
insured at the expiry of the period.

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  Amount of Payment:-
The amount of payment depends upon the value of loss
occurred due to the particular insured risk provided insurance is there up
to that amount. In life insurance, the purpose is not to make good the
financial loss suffered. The insurer promises to pay a fixed sum on the
happening of an event.
If the event or the contingency takes place, the payment does fall
due if the policy is valid and in force at the time of the event, like
property insurance, the dependents will not be required to prove the
occurring of loss and the amount of loss. It is immaterial in life insurance
what was the amount of loss at the time of contingency. But in the
property and general insurances, the amount of loss as well as the
happening of loss, are required to be proved.

 Large Number of Insured Persons:-

To spread the loss immediately, smoothly and cheaply, large
number of persons should be insured. The co-operation of a small number
of persons may also be insurance but it will be limited to smaller area.
The cost of insurance to each member may be higher. So, it may be
unmarketable.
Therefore, to make the insurance cheaper, it is essential to insure
large number of persons or property because the lesser would be cost of
insurance and so, the lower would be premium. In past years, tariff
associations or mutual fire insurance associations were found to share the
loss at cheaper rate. In order to function successfully, the insurance
should be joined by a large number of persons.

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  Insurance is not a gambling:-
The insurance serves indirectly to increase the productivity of
the community by eliminating worry and increasing initiative. The
uncertainty is changed into certainty by insuring property and life because
the insurer promises to pay a definite sum at damage or death.
From a family and business point of view all lives possess an
economic value which may at any time be snuffed out by death, and it is
as reasonable to ensure against the loss of this value as it is to protect
oneself against the loss of property. In the absence of insurance, the
property owners could at best practice only some form of self-insurance,
which may not give him absolute certainty.
Similarly, in absence of life insurance, saving requires time; but death
may occur at any time and the property, and family may remain
unprotected. Thus, the family is protected against losses on death and
damage with the help of insurance.
Failure of insurance amounts gambling because the uncertainty
of loss is always looming. In fact, the insurance is just the opposite of
gambling. In gambling, by bidding the person exposes himself to risk of
losing, in the insurance; the insured is always opposed to risk, and will
suffer loss if he is not insured.
By getting insured his life and property, he protects himself
against the risk of loss. In fact, if he does not get his property or life
insured he is gambling with his life on property.

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 Insurance is not Charity:-
Charity is given without consideration but insurance is not
possible without premium. It provides security and safety to an
individual and to the society although it is a kind of business because
in consideration of premium it guarantees the payment of loss. It is a
profession because it provides adequate sources at the time of
disasters only by charging a nominal premium for the service.

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 TYPES OF INSURANCE

Life insurance:-
Descendant's family receives financial benefits. Life insurances also offer
paid proceeds to the beneficiary.

Automobile insurance:-
Usually automobile insurances cover damages and legal financial
expenditures of the automobile driver.

Health insurance:-
Health insurance cover the expenditures associated to treatment and
medical expenditures.

Credit insurance:-
Borrowers often fail to repay debts,loans and mortgages due to certain
unavoidable circumstances,credit insurances can be of great help during
such crisis.

Property insurance:-
Property protection insurance providesprotection from risks associated to
theft,fire,floods etc.

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This type of insurance can be further classified into
specialized forms as follows:-

Fire Insurance
Earthquake Insurance
Flood Insurance
Home Insurance
Boiler Insurance

FUNCTIONS OF INSURANCE
The functions of insurance can be studied into two parts:
(i) Primary Functions
(ii) Secondary Functions.

 Primary Functions:-
1. Insurance provides certainty:
Insurance Provides certainty of payment at the uncertainty of loss.
The uncertainty of loss can be reduced by better planning and
administration. But, the insurance relieves the person from such difficult
task. Moreover, if the subject matters are not adequate, the self-
provision may prove costlier. There are different types of uncertainty in a

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risk. The risk will occur or not, when will occur, how much loss will be
there.
In other words, there are uncertainty of happening of time and
amount of loss. Insurance removes all these uncertainty and the assured
is given certainty of payment of loss. The insurer charges premium for
providing the said certainty.
2. Insurance provides protection:-
The main function of the insurance is to provide protection against the
probable chances of loss. The time and amount of loss are uncertain and
at the happening of risk, the person will suffer loss in absence of
insurance. The insurance guarantees the payment of loss and thus
protects the assured from sufferings. The insurance cannot cheek the
happening of risk but can provide for losses at the happening of the risk.
3. Risk-Sharing:-
The risk is uncertain, and therefore, the loss arising from the risk is also
uncertain. When risk takes place, the loss is shared by all the persons
who are exposed to the risk. The risk sharing in ancient time was done
only at time of damage or death, but today, on the basis of probability of
risk, the share is obtained from each and every insured in the shape of
premium without which protection is not guaranteed by the insurer.

 Secondary Functions:-
Besides the above primary functions, the insurance works for the
following functions:
1. Prevention of loss:-
The insurance joins hands with those institutions which are engaged in
preventing the losses of the assured and so more saving is possible which

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will assist in reducing the premium. Lesser premium invites more
business and more business causes lesser share to the assured. So again
premium is reduced to, which will stimulate more business and more
protection to the masses. Therefore, the insurance assist financially to the
health organization, fire brigade, educational institution and other
organizations which are engaged in preventing the losses of the masses
from death or damage.
2. It provides Capital:-
The insurance provides capital to the society. The accumulated funds are
invested in productive channel. The dearth of capital of the society is
minimized to a greater extent with the help of investment of insurance.
The industry, the business & the individual are benefited by the
investment & loans of the insurers.
3. It improves Efficiency:-
The insurance eliminates worries and miseries of losses at death and
destruction of property. The care-free person can devote his body & soul
together for better achievement. It improves not only his efficiency, but
the efficiencies of the masses are also advanced.
4. It helps Economic Progress:-
The insurance by protecting the society from huge losses of damage,
destruction and death. Provides an initiative to work hard for the
betterment of the masses. The next factor of economic progress, the
capital, is also immensely provided by the masses. The property, the
valuable assets, and the man the machine & the society cannot lose much
at the disaster.

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13
 INSURANCE IN INDIA
Currently, a US$41 billion industry, India is the world's fifth largest life
insurance market and growing at a rapid pace of 32-34% annually as per
Life InsuranceCouncil studies.
India insurance is a flourishing industry, with several national and
international players competing and growing at rapid rates. Thanks to
reforms and the easing of policy regulations, the Indian insurance sector
been allowed to flourish, and as Indians become more familiar with
different insurance products, this growth can only increase, with the period
from 2010 - 2015 projected to be the 'Golden Age' for the Indian insurance
industry.

HISTORY

The Indian Constitution has a framework within which ample

provisionsexist for the protection, development and welfare of children.
Thereare a wide range of laws that guarantee children their rights
andentitlements as provided in the Constitution and in the UNConvention.
It was during the 50s decade that the UN Declaration of theRights of the
Child was adopted by the UN General Assembly. ThisDeclaration was
accepted by the Government of India. As part of thevarious Five Year
Plans, numerous programs have been launched by the
Government aimed at providing services to children in the areas ofhealth,
nutrition and education.

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In 1974, the Government of Indiaadopted a National Policy for Children,
declaring the nation'schildren as `supremely important assets'.This policy
lays downrecommendations for a comprehensive health programs,
supplementarynutrition for mothers and children, nutrition education for
mothers,free and compulsory education for all children up to the age of
14,non-formal preschool education, promotion of physical education
andrecreational activities, special consideration for the children ofweaker
sections of the population like the scheduled castes and theschedule tribes,
prevention of exploitation of children and specialfacilities for children with
handicaps. The policy provided for aNational Children's Board to act as a
forum to plan, review andcoordinate the various services directed toward
children. The Board was first set up in 1974.The Department of Women
and Child Developmentwas set up in the Ministry of Human Resource
Development in 1985. TheDepartment, besides ICDS, implements several
other programs,undertakes advocacy and inter-sectoral monitoring catering
to theneeds of women and children. In pursuance of this, the
Departmentformulated a National Plan of Action for Children in 1992.
TheGovernment of India ratified the Convention on the Rights of the
Childon 12 November 1992.By ratifying the Convention on the Rights of
the Child, the Governments obligated "to review National
andStatelegislation and bring it in line with provisions of
theConvention".The Convention revalidates the rights guaranteed
tochildren by theConstitution of India, and is, therefore, a powerfulweapon
to combat forces that deny these rights.The Ministry of Womenand Child
Development has the nodal responsibility of coordinating
theimplementation of the Convention. Since subjects covered under
theArticles of the Convention fall within the purview of

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variousdepartments/ ministries of the Government, the Inter-
MinisterialCommittee set up in the Ministry with representatives from
theconcerned sections monitor the implementation of the Convention,
attheprovincial level. The State Governments have to assimilate - in
letterand spirit - the articles of the Convention on the Rights of the
Childinto their State Plans of Action for Children.A number of schemes
forthe welfare and development of children have been strengthened
andrefined with a view to ensuring children their economic, political
andsocial rights. The Convention has been translated into most of
theregional languages for dissemination to the masses.

CHILD PLAN
The policy is in two stages:-
 Covering the period from the date of commencement of the policy to
the deferred date.
 Covering the period from the deferred date to the date on which the
policy emerges as a claim either by death or on maturity.

Child plan is a plan which enables a parent or a legal guardian or a relative

of the child to provide a sum for the child by way of a very low
premium.

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 WHY CHILD INSURANCE
Planning does not necessarily mean about what you wish your child would
grow up to be, or have certain characteristics, but it also essentially means
you as a responsible parent having various obligations to fulfill that would
help him to grow better in this world.
 To provide good Education (Graduation as well as Post Graduate).
 Secures the child’s future in case of any unfortunate event.
 Marriage.
 Seed capital for business.

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 Child plans come in two broad variants

 TRADITIONAL PLAN
 ULIP’S
TRADITIONAL CHILD PLANS:-

Traditional plans invest a major portion of their money in debt instruments

like corporate bonds and government securities (as specified by the
regulator). It carries relatively lower risk since it is invested mainly in
corporate bonds and government securities. The bonuses are stable and
give the parent considerable comfort knowing roughly how much he can
expect. Regular endowment plans are suited for parents with a low risk
appetite.

UNIT LINKED INSURANCE PLANS (ULIPS):-

ULIPs can invest across equity and debt markets in varying proportions.
Parents with some risk appetite can opt for a ULIP child plan that invests
across equity and debt markets. The reason why ULIP child plans can
prove to be significant is because over the long-term (15-20 years), equities
can add considerably to the corpus you plan to build for your child's needs.

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Equities are best placed to beat inflation over the long term. However, to
achieve this, one must invest wisely.

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 CHILD POLICY PROVIDED BY LIC

JEEVAN ANURAG

LIC JEEVAN ANURAG:-

LIC JEEVAN ANURAG Plan (Table 168) is a plan designed

specifically to take care of your child’s education needs. In this plan,
you get an Assured Benefit and Death Benefit. On death of the Life
Insured, the Sum Assured is paid immediately to the nominee and all
future premiums are waived off, but the policy continues. Payment of
20% of the Basic Sum Assured at the start of every year during last 3
policy years before maturity, and on maturity the remaining 40% of the
Sum Assured along with the bonus would also be paid, irrespective of
whether the life insured is alive or not.

Features of LIC JEEVAN ANURAG :-

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• Double benefit plan with both Survival and Death benefits
• 20 % of Sum assured will be paid in the last 3 policy years.
• 40 % of Sum assured with Bonus will be paid on maturity.
• In case of death of the life assured, a Sum assured will be paid
immediately and the policy continues with future premiums waived.

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LIC JEEVAN ANURAG Eligibility Conditions :
Minimum Maximum
Sum Assured (in Rs.) 50000 No Limit
Policy Terms (in years) 10 25
Premium Payment

Term (in years) Policy Term - 3

Entry Age of Life Insured 20 60
Age of Maturity - 70
Payment Modes Single, Yearly, Half-yearly, Quarterly,
Monthly and SSS

Benefits of LIC JEEVAN ANURAG :

Maturity Return –

20% of Sum assured will be paid on the last 3 years of policy term
40 % of Sum assured with Bonus will be paid on policy maturity.

Death Benefit –

In case of death of the Life Insured, the nominee would get the Sum
Assured immediately. The future premiums would be waived and the
policy will continue.
Maturity benefit will be given irrespective of either life insured survives
or not.

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Income Tax Benefit –

Available under Section 80 C for premiums paid and Section 10 (10D)

or Maturity returns.

Loan on Policy - Not Available

Housing Loan Surity - Not Available

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 CDA ENDOWMENT VESTING AT 21
CDA ENDOWMENT VESTING AT 21:

LIC Children Deferred Endowment Assurance Plan Vesting

at 21

LIC CDA Plan Vesting at 21 is a child insurance policy such that the
premium is paid till the child reaches 21 years of age and then child
becomes the owner of the policy. If the child dies within the policy
tenure after risk commencement, then the Sum Assured along with
Guaranteed Additions are paid and the policy is terminated.

Key Features of LIC CDA Plan Vesting at 21:-

This plan can be done by the child’s parents or grandparents or any

near relative.

There are 2 stages of this plan- the Deferment Period and the period
after the Deferred Date

Risk starts on the Deferred Date, i.e. 21 years of the Life Insured in
this policy.

No Medical Tests are required where the Deferment Period is 10

years or more.

Loyalty or Terminal Bonus is payable on death or maturity.

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 An Additional Premium Waiver Benefit rider can be taken along with
this plan.

Benefits you get from LIC’s CDA Plan Vesting at 21:-

Death Benefit –
 If the Life Insured, i.e. the Child dies after the Deferment Date, then
Sum Assured + Bonuses are paid.
 If the Life Insured, i.e. the Child dies before the Deferment Date, the
sum of premiums are paid back.
 If the proposer, i.e. Parent or Grand Parent or Near Relative dies
before the Deferment Date, the premium payment must be continued.
 However if Premium Waiver Benefit has been opted for, then the
insurer would pay the premium on behalf of the deceased parent.

Maturity Benefit –

 Sum Assured + All Bonuses are payable in a lumpsum.

Income Tax Benefit –

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

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Eligibility in LIC’s CDA Plan Vesting at 21:-
Minimum Maximum
Sum Assured (in Rs.) 50,000 1 Crore
Policy Term (in years) 13 50
Premium Payment
Term (in years)
Entry Age of Life
0 17
Insured (Child)
Age at Maturity (in
30 60
years)
Single premium (in Rs.) NA

Additional Features and Benefits of LIC CDA Plan Vesting at

21:-

Riders - There are 2 riders available with this plan:

1. Premium Waiver Benefit Rider.

2. Accidental Benefit Rider.

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Surrender The Policy –
 Surrender of policy is allowed only after completion of 3 years or
more.
 The Guaranteed Surrender Value before the Deferred Date is 90% of
the premiums paid excluding the premiums paid during the first year.
After the Deferred Date,
(i) If deferment period is less than 10 years: 90% of the premiums paid
before the deferment date excluding the premiums for the first year
plus 30% of premiums paid after the deferred date.
(ii) If deferment period is 10 years or more: 90% of a cash option plus
30% of premiums paid after the deferred date.

Loan Against Your Policy – Loan in not available under this plan.

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 CDA Endowment Vesting At 18
CDA Endowment Vesting At 18

LIC Children’s Deferred Endowment Assurance Plan Vesting at 18:-

LIC’s CDA Plan Vesting at 18 is a child policy such that the premium is
paid till the child reaches 18 years of age and then child becomes the
owner of the policy. If the child dies within the policy tenure after risk
commencement, then the Sum Assured along with Guaranteed
Additions are paid and the policy is terminated.

Key Features of LIC’s CDA Plan Vesting at 18:

grandparents or any
near relative.
- the Deferment Period and the period
after the Deferred Date
Risk starts on the Deferred Date, i.e. 18 years of the Life Insured in
this policy.
No Medical Tests are required where the Deferment Period is 10
years or more.
Loyalty or Terminal Bonus is payable on death or maturity.
An Additional Premium Waiver Benefit rider can be taken along with
this plan.

Benefits get from LIC’s CDA Plan Vesting at 18:-

Death Benefit –

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  If the Life Insured, i.e. the Child dies after the Deferment Date, then
Sum Assured + Bonuses are paid.
 If the Life Insured, i.e. the Child dies before the Deferment Date, the
sum of premiums are paid back.
 If the proposer, i.e. Parent or Grand Parent or Near Relative dies
before the Deferment Date, the premium payment must be continued.
However if Premium Waiver Benefit has been opted for, then the
insurer would pay the premium on behalf of the deceased parent.

Maturity Benefit – Sum Assured + All Bonuses are payable in a lumpsum.

Income Tax Benefit –

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

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Eligibility in LIC’s CDA Plan Vesting at 18:-
Minimum Maximum
Sum Assured (in Rs.) 50,000 1 Crore
Policy Term (in years) 11 50
Premium Payment Term (in
years)
Entry Age of Life Insured
0 14
(Child)
Age at Maturity 30 60
Single premium (in Rs.) NA
Payment modes Yearly, Half-yearly, Quarterly

Additional Features and Benefits of LIC’s CDA Plan Vesting

at 18:-

Riders- There are 2 riders available with this plan:

1. Premium Waiver Benefit rider

2. Accidental Benefit.

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Surrender The Policy –
 Surrender of policy is allowed only after completion of 3 years or
more.
 The Guaranteed Surrender Value before the Deferred Date is 90% of
the premiums paid excluding the premiums paid during the first year.
After the Deferred Date,
 If deferment period is less than 10 years: 90% of the premiums paid
before the deferment date excluding the premiums for the first year
plus 30% of premiums paid after the deferred date.
 If deferment period is 10 years or more: 90% of a cash option plus
30% of premiums paid after the deferred date.

Loan Against Your Policy – Loan in not available under this plan.

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 LIC JEEVAN KISHORE

LIC JEEVAN KISHORE

LIC JEEVAN KISHORE (Table 102) is an endowment assurance
plan that can be purchased by either the parent or grandparent for a
child. Under this LIC policy, the risk cover starts either after 2 years
of the beginning of the policy or after 7 years of age of the child
assured whichever is later. Sum assured with bonus will be paid on
policy maturity. The proposer can further secure his child’s future by
opting for Premium Waiver Benefit rider, such that if he dies before
the policy matures, then the future premiums would be waived.

Features of LIC JEEVAN KISHORE:-

Risk on a child’s life commences after 2 policy years or the child

attains 7 years of age, whichever is later.

On Maturity the Life Insured or his nominee would receive the

Sum Assured + Bonus.

There are additional riders like Premium Waiver Benefit which can
be availed by the proposer and Accidental Death Benefit rider that
can be availed by the child after he is 18 years old.

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LIC JEEVAN KISHORE Eligibility Conditions :
Minimum Maximum
Sum Assured (in Rs.) 50,000 40,00,000
Policy Term (in years) 15 35
Premium Payment
Equal to Policy Term
Term(in years)
Entry Age of Life
0 12
Insured
Age at Maturity 20 45
Payment modes Yearly, Half-yearly and Quarterly

Benefits of LIC JEEVAN KISHORE:-

Maturity Return –
Sum assured with Bonus will be paid on policy maturity.

Death Benefit –
 On the death of the child after the commencement of risk, the
nominee
Would get the Sum assured with Bonus.
 If the child expires before the commencement of risk, the
nominee will get only the premiums paid.

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Income Tax Benefit –
Available under Section 80 C for premiums paid and Section 10
(10D) for Maturity returns.

Loan on Policy - Not Available

Housing Loan Surety - Not Available

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 CHILD CAREER PLAN

CHILD CAREER PLAN

LIC Child Career Plan (Table 184) provides funds at regular yearly
intervals for professional or higher education and start-in-life in the
form of 6 money back installments commencing from minimum age of
18 years. So your child will get money when they really need it. Under
Child’s Career Plan, the premium need not be paid for the last 5 years of
the policy term. Maturity benefit will be paid back in the last 6 years of
the policy term. 30% of Sum assured with Vested Bonus will be paid in
the 1st of the 6 years. It will be followed by 15 % of Sum assured in the
next 4 years. At the end of the policy term, 15 % of Sum assured with
Terminal Bonus will be paid.

Features of LIC Child Career Plan :

 The Risk cover on the child extends to 7 years after the maturity of
the policy. The risk starts from the age of 5 years of the child.
 The maturity benefit will be paid for the last 6 years of the policy
term. Vested Bonus will be paid with 1st year of maturity benefit.
Final additional Bonus will be paid with the last year maturity
benefit.

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LIC Child Career Plan Eligibility Conditions:
Minimum Maximum
Sum Assured (in Rs.) 1,00,000 1 Crore
Policy Term (in years) 11 27
Premium Payment
Policy term - 5
Term(in years)
Entry Age of Life
0 12
Insured
Age at Maturity 23 27
Payment modes Yearly, Half-yearly, Quarterly and SSS

Benefits of LIC Child Career Plan :

Maturity Return –

Maturity benefit will be paid for the last 6 of the policy years.
 30 % of Sum assured with Vested Bonus will be paid on 1st of
6 years.
 15 % of Sum assured will be paid for the next 4 years.
 15 % of Sum assured with Final Additional Bonus will be paid
on policy maturity.

Death Benefit –

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 On the death of the child after the commencement of risk, the
nominee would get the Sum assured with Bonus.
 However if the child expires before the commencement of risk, the
nominee will get only the premiums paid with 3 % p.a. compounded
interest on it If the child expires after receiving the maturity benefit,
Sum assured will be paid.

Income Tax Benefit –

Available under Section 80 C for premiums paid and Section 10

(10D) for Maturity returns.

Loan on Policy - Not Available

Housing Loan Surity-Not Available

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 JEEVAN ANKUR
LIC JEEVAN ANKUR:-
LIC JEEVAN ANKUR (Table 807) is a child benefit endowment
plan. This plan is specially designed to meet the Child's future
requirements either the parent is alive or not. If you are a parent of a
child of below 17 yrs old, then JEEVAN ANKUR is the best policy
you can take. In this plan, the parent is The life insured and the child
should be the nominee. In this plan, the premium needs to be paid till
the end of the policy term. The Sum assured with the Bonus will be
paid to the child at the end of the policy term irrespective of whether
the parent is alive or not.
If the parent dies within the policy tenure, Sum assured will be paid
as immediate death benefit. From then, 10 % of the Sum assured will
be paid to the child every year as income benefit and future
premiums are waived i.e. No need to pay any premium after the death
of the life insured. At the end of the policy tenure, Sum assured with
the accured bonus will be paid to the child as maturity benefit.

38
Features of LIC JEEVAN ANKUR:-
 In this plan, the parent life will be insured and the child shall be the
nominee.
 Sum assured with Loyalty Additions will be paid on policy maturity.
On the death of life insured within the policy term :
 Sum assured will be immediately paid to the child.
Future premiums are waived. So no premium needs to be paid after
that.
 10% of Sum assured will be paid to the child every year, starting
from the next year of parent's expiry.
 Sum assured with Loyalty Addition (Bonus) will be paid at the end
of the policy term.

LIC JEEVAN ANKUR Eligibility Conditions :-

Minimum Maximum
Sum Assured (in Rs.) 1,00,000 No Limit
Policy Term (in years) 18 25
Premium Payment
Equal to Policy term
Term(in years)
Entry Age of Life
18 50
Insured
Entry Age of Child 0 17
Age at Maturity - 75
Payment modes Single, Yearly, Half-yearly, Quarterly and SSS

39
 Benefits of LIC JEEVAN ANKUR:-

Maturity Return –

Sum assured with Loyalty additions (Bonus) will be paid irrespective

of the life insured is alive or not.

Death Benefit –

On death of the life insured ie., the Parent, Sum assured will be paid to
the child immediately. Then 10 % of Sum assured will be paid to the
child on every policy anniversary till the policy matures.

Income Tax Benefit – Available under Section 80 C for premiums paid

and Section 10 (10D) for Maturity returns.

Loan on Policy - Not Available

Housing Loan Surety-Not Available

40
 KOMAL JEEVAN
LIC KOMAL JEEVAN:-

KOMAL JEEVAN (Table 159) is a children's Money back plan in

which the maturity returns will be paid after the child attains 18, 20 , 22,
24 and 26 yrs. This plan can be bought by any of the parents or
grandparent of the child. In most cases, Father would be the proposer. If
mother has her own income, then mother can also propose the policy.
This policy can also be gifted by uncles , grandparents or elder brothers
and sisters. But in these cases, either the mother or father should be the
proposer. Here, the premium needs to be paid only till the child attains
18 yrs old. There is a guaranteed addition of Rs.75 per 1000 sum
assured per year.

Features of LIC KOMAL JEEVAN:-

 Money back child plan with guaranteed addition of Rs.75 per 1000
S.A.

 Premium payment stops immediately after the child attains 18 years

of age.

 Risk coverage commences after 2 years from the commencement of

the policy and the child should have completed 7 years of age.

 An optional Premium Waiver Benefit can be opted with some extra

cost.

41
 LIC KOMAL JEEVAN Eligibility Conditions :-
Minimum Maximum
Sum Assured (in Rs.) 1,00,000 25,00,000
Policy Term (in
26 - Age of Child
years)
Premium Payment
18 - Age of Child
Term(in years)
Entry Age of Life
0 10
Insured
Age at Maturity 26
Single, Yearly, Half-yearly, Quarterly and
Payment modes
SSS

Returns of LIC KOMAL JEEVAN :-

Maturity Return:-
o 20% of Sum assured at 18 years of age
o 20 % of Sum assured at 20 years of age
o 30 % of Sum assured at 22 years of age
o 30 % of Sum assured at 24 years of age
o Guaranteed Additions with Loyalty additions will be paid at
26 yrs of age

42
Death Benefit:-
 On the death of the child after the commencement of risk, the
nominee would get the Sum assured with Guaranteed and
Loyalty additions without deducting any earlier payments
made.
 If the child expires before the commencement of risk, the
nominee will get only the premiums paid.

Income Tax Benefit:-

Available under Section 80 C for premiums paid and Section 10
(10D) for Maturity returns.

Loan on Policy: - Not Available

Housing Loan Surety: - Not Available

43
Marriage endowment or educational annuity plan
Marriage Endowment / Education Annuity Plan (Plan
No. 90):-
This is an endowment plan for children. The purpose of this policy is
to arrange for child’s marriage or higher education. This policy helps
parents to fulfill their objective of child’s marriage / higher education
even if they are not alive. The maturity amount under this policy can
be taken lump-sum or in 10 installments of six months each. This is
an insurance plan on parent’s life where child is the beneficiary or
nominee.

Features of LIC Marriage endowment or educational

annuity plan
 Lowest premium among plans for children

 Inbuilt Premium Waiver Benefit (PWB)

 Double Accidental Benefit

 Option to get maturity returns in 10 installments of six

months each or in lump-sum

 Double Tax Benefit

 Loan can be taken against the policy @9% interest

44
LIC Marriage endowment or educational annuity plan
Eligibility Conditions
Minimum age at entry 18 years
Maximum age at entry 60 years
Minimum Term 5 years
Maximum Term 25 years
Maximum age at maturity 70 years
Minimum sum assured Rs 50,000.00
Maximum sum assured No higher limit

Double Tax Benefit-

U/S 80 C: Premiums paid under this plan are eligible for tax Rebate u/s
80C

U/S 10(D): Maturity Returns / Death claim amount is also tax free u/s 10
(D)

Possible Events during policy duration On Death-

 If the policy holder dies during the policy term, all future premiums
will be waived off and the policy will continue as usual. The
maturity returns will be paid to the nominee on completion of the
policy term.
 On Accidental Death In case, the policy holder dies due to an
accident, the accidental sum assured will be immediately given to

45
 the nominee and all future premiums will be waived off. The policy
will still continue as usual. The maturity returns will be paid to the
nominee at end of the policy term.
 On Maturity the nominee will get the Sum Assured along with the
accrued bonuses. The maturity amount can be taken lump-sum or in
10 installments of six months each.

Possible Events-

On Death-

If Mr. Sandeep dies during the policy term, all future premiums will be
waived off and the policy will continue as usual. At the end of the
policy term, his nominee will receive the sum assured along with the
accrued bonuses.

On Accidental Death-

In case, Mr. Sandeep dies due to an accident, his nominee will receive the
accidental sum assured (Rs 2,00,000.00) immediately and all future
premiums will be waived off. The policy will continue as usual. At the
end of the policy term his nominee will receive the sum assured along
with the accrued bonuses.

On Maturity-

If Mr. Sandeep survives till the policy end date, he will receive the sum
assured along with the accrued bonuses.

46
 JEEVAN CHHAYA

LIC JEEVAN CHHAYA:-

LIC JEEVAN CHHAYA (Table 103) is a Money back child
endowment plan, that is meant to meet the requirements of the child
either the parent is alive or not. This policy can also be taken by
bachelors. In this plan, the maturity benefit will be paid to the
nominee on the last 4 years of the policy term irrespective of whether
the life insured is alive or If the life insured dies within the policy
tenure, Sum assured will be paid as immediate death benefit. Future
premiums are waived i.e., No need to pay any premium after the
death of the life insured. 25 % of Sum assured will be paid on the
last 4 years of the policy term. Bonus will be paid in the last year
when the policy ends.

Features of LIC JEEVAN CHHAYA :-

 25 % of Sum assured will be paid on the last 4 years of the
policy term irrespective of either the life insured survives or
not.
 On the death of life insured within the policy term :
 Sum assured will be immediately paid to the nominee.
 Future premiums are waived. So no premium needs to be paid
after that.
 25 % of Sum assured will be paid to the nominee on last 4
years of policy term.

47
  Loyalty Addition (Bonus) will be paid at the end of the policy
term.

LIC JEEVAN CHHAYA Eligibility Conditions :-

Minimum Maximum
Sum Assured (in Rs.) 50,000 No Limit
Policy Term (in years) 18 25
Premium Payment
Equal to Policy term
Term(in years)
Entry Age of Life
18 47
Insured
Age at Maturity - 65
Yearly, Half-yearly, Quarterly, Monthly and
Payment modes
SSS

Benefits of LIC JEEVAN CHHAYA :-

Maturity Return:-

25 % of Sum assured will be paid on last 4 policy years. Bonus will be paid
on the last year of policy irrespective of the life insured is survives or
not.

48
Death Benefit:-

On death of the life insured, Sum assured will be paid to the nominee
immediately. The policy will continue and maturity benefits will be
paid.

Income Tax Benefit:-

Available under Section 80 C for premiums paid and Section 10 (10D) for
Maturity returns.

Loan on Policy:-Available

Housing Loan Surety:-Available

49
 Child future Plan

LIC Child Future Plan:-

LIC Child Future Plan (Table 185) is a money back Endowment plan
that provides funds at regular yearly intervals for professional or
higher education and start-in-life in the form of 6 money back
installments. Under Child’s Future Plan, the premium need not be
paid for the last 5 years of the policy term. Maturity benefit will be
paid back in the last 6 years of the policy term. 25 % of Sum assured
will be paid in the 1st of the 6 years. It will be followed by 10 % of
Sum assured in the next 4 years. At the end of the policy term, 50 %
of Sum assured with Vested Bonus and Final Additional Bonus will
be paid.

Features of LIC Child Future Plan :-

 The Risk cover on the child extends to 7 years after the
maturity of the policy. The risk starts from the age of 5 years
of the child.

 The maturity benefit will be paid for the last 6 years of the
policy term. Vested Bonus with Final additional Bonus will be
paid with the last year maturity benefit.

50
LIC Child Future Plan Eligibility Conditions :-
Minimum Maximum
Sum Assured (in Rs.) 1,00,000 1 Core
Policy Term (in years) 11 27
Premium Payment
Policy term – 5
Term(in years)
Entry Age of Life
0 12
Insured
Age at Maturity 23 27
Payment modes Yearly, Half-yearly, Quarterly and SSS

Benefits of LIC Child Future Plan :-

Maturity Return:-

Maturity benefit will be paid for the last 6 of the policy years.

 25 % of Sum assured will be paid on 1st of 6 years

 10 % of Sum assured will be paid for the next 4 years.
 50 % of Sum assured with Vested Bonus & Final Additional
Bonus will be paid on policy maturity.

51
Death Benefit:-

 On the death of the child after the commencement of risk, the

nominee would get the Sum assured with Bonus.
 However if the child expires before the commencement of risk, the
nominee will get only the premiums paid with 3 % p.a. compounded
interest on it.
 If the child expires after receiving the maturity benefit, Sum assured
will be paid.

Income Tax Benefit:-

Available under Section 80 C for premiums paid and Section 10 (10D) for
Maturity returns.

Loan on Policy:-Not Available

Housing Loan Surity:-Not Available

52
53
 CASE STUDY

Life Insurance Corporation of India (LIC) is an Indian state-

ownedinsurance group and investment company headquartered
in Mumbai. It is the largest insurance company in India with an
estimated asset value of 1560481.84 crore (US$250 billion). As of
2013 it had total life fund of Rs.1433103.14 crore with total value of
policies sold of 367.82 lakh that year. The company was founded in
1956 when the Parliament of India passed the Life Insurance of India
Act that nationalised the private insurance industry in India. Over 245
insurance companies and provident societies were merged to create the
state owned Life Insurance Corporation.

History

The Oriental Life Insurance Company, the first company in India

offering life insurance coverage, was established in Calcutta in 1818 by
BipinBehariDasgupta and others. In 1955,
parliamentarian AmolBarate raised the matter of insurance fraud by
owners of private insurance agencies. In the ensuing investigations, one
of India's wealthiest businessmen, SachinDevkekar, owner of the Times
of India newspaper, was sent to prison for two years. Eventually,

54
 the Parliament of India passed the Life Insurance of India Act on June
19, 1956 creating the Life Insurance Corporation of India, which started
operating in September of that year. It consolidated the life insurance
business of 245 private life insurers and other entities offering life
insurance services, this consisted of 154 life insurance companies, 16
foreign companies and 75 provident companies. The nationalization of
the life insurance business in India was a result of the Industrial Policy
Resolution of 1956, which had created a policy framework for
extending state control over at least seventeen sectors of the economy,
including the life insurance.

Today, the LIC had 8 zonal offices, around 109 divisional offices, 2,048
branches and 992 satellite offices and corporate offices; it also has 54
customer zones and 25 metro-area service hubs located in different
cities and towns of India. It also has a network of 1,337,064 individual
agents, 242 Corporate Agents, 79 Referral Agents, 98 Brokers and 42
Banks for soliciting life insurance business from the public.

Agency

LIC had 12, 78, 234 agents as on 31 March 2012, out of which the
number of active agents was 12,14,111 (95%).

LIC Child Insurance Plans helps you accumulate finances to provision

for your child’s future and help you plan your child’s future in advance
so that you don’t fall short of finances when you need them the
most. LIC offers 10 variants of child insurance plans to meet your
financial needs for your children’s dreams and aspirations.

55
 JEEVAN ANURAG:

A participating child plan designed to meet your children’s

educational requirement. This plan can be taken on the parent’s life
and sum assured is given immediately on the death of the life assured
during the term of the policy.

 JEEVAN KISHORE:

This is a child insurance plan that can be purchased either by the

parent or grandparents. It is an endowment assurance plan for
children of less than 12 years of age.

 JEEVAN CHHAYA:

A child plan where financial protection is given against death during

the term of the plan. It is a participating endowment assurance plan.

 KOMAL JEEVAN:

Is a Money Back Plan which can be bought by the parent or

grandparents for their child from the age of 0-10years. This plan
gives financial protection against death during the duration of the
plan with periodic payments on survival at specified durations.

 Child Future Plan:

A education plan where the future needs like education, marriage and
other requirements are taken care of. This plan provides a benefit

56
 which not only takes care of the risk cover of the child during the
policy but also after 7 years of the policy being expired.

 Child Career Plan:

A child insurance plan that provides the risk cover on the life of child
during the policy term as well as 7 years after the policy has expired.
There are also Survival benefits given to the life assured at the end of
a specific duration.

 Child Fortune Plan:

It is unit linked child insurance plan which offers long term capital
appreciation.

 Children's Deferred Endowment (CDA) vesting at 21:

This children insurance plan is designed to enable a parent, legal

guardian or any near relative of the child to provide insurance cover
on the life of the child.

 CDA Endowment vesting at 18:

This is a child insurance plans designed to enable a parent , legal

guardian or any near relative of the child to provide insurance cover
on the life of the child.

 Marriage Endowment Or Educational Annuity Plan:

57
This is an participating Endowment Assurance plan that provides for
benefits on or from the selected maturity date to meet the
Marriage/Educational expenses of the named child. LIC child
insurance plans can be compared and help you ensure that your
children’s future is secure and prosperous and select the best child
insurance plan for you.

58
 INFORMATION COLLECTED BY
CONDUCTING CUSTOMER SURVEY

Quality of Service Provided By LIC

EXCELLENT
GOOD
FAIR
BAD
EXTREMELY BAD
NO IDEA

Out of 25 respondents 28% respondents felt that quality of

service provided by LIC is Excellent, 48% felt that quality is
Good and 24% said that the quality provided by LIC is Fair.

59
 PEOPLE AWARENESS ABOUT CHILD POLICY

YES

NO

Out of 25 respondents 72% of the people are aware

about child policy provided by LIC and 28% people are
not aware.

60
 PURCHASE POLICY
90

80

70

60

50

PURCHASE POLICY
40

30

20

10

0
0 0.5 1 1.5 2 2.5

According to Survey it came to know that 76% people

purchased the child policy and remaining did not felt the
need of any type of child policy.

61
 NAME OF THE CO. TAKEN CHILD POLICY

60

50

40

30

20

10

0
LIC TATA AIG SBI BHARTI AXA BAJAJ NONE
INSURANCE ALLIANZ
CO.

According to the survey it is found that around 60% of

the people took the policy from LIC, 4% from TATA
AIG, 5% purchased the policy from SBI INSURANCE
CO.,6% took the policy from BHARTI AXA, 4% from
BAJAJ ALLIANZ and 22 % did not purchased any type
of child policy.

62
 NEED OF CHILD POLICY

70

60

50

40

30

20

10

Out of 25 respondents 64% of them need child policy

for their child’s education, and 32% for future and 32%
of the people need for their child marriage and 28% of
the people felt that for an investing and 24% of the
people invested in child policy as a protection to their
child.

63
 RATING OF CHILD POLICY

60

40

20
RATING OF CHILD POLICY
0

Out of 25 respondent 28% of the people rate the child

policy as excellent, 48% of the people felt that it is good
and 24% of the people rate the child policy as fair.

64
 SATISFIED WITH LIC POLICY

0-25%
25-50%
50-75%
75-100%

Out of 25 respondent 44% people were very highly

satisfied, 24% people were highly satisfied, 16% were
not much satisfied.

65
66
 FINDINGS

 LIC is the largest insurance company in India.

 Insurance provides security against the risks.
 From this project, it is come to know that, there are various
types of insurance like life insurance, automobile insurance,
health insurance, credit insurance, property insurance, fire
insurance, etc.
 Insurance provides certainty of payment at the uncertainty
of loss.
 Insurance provides protection & claim against risk.
 Department formulated a national plan of action for children
in 1992.
 The LIC provides various types of child policy.
 The child policy helps to child by providing finance for their
education, health, marriage, safety, etc. for their bright
future.
 Child insurance plans helps to accumulate finance for child
future.

67
 SUGGETION

 There is a need for insurers to undertake a demand audit in

order to understand what the policyholder wants and needs.
 Insurance companies should go for innovating strategies and
bring more products and improve the distribution channels
as per the area of sales.
 Child plan should also provide the loan facility.
 Child plan should also provide the housing loan surity
facility.
 The death benefit should be increased to 25% of the sum
assured.

68
 Conclusion

 Child life insurance comes in several forms and is used to insure the
life of a child.
 It may also be used to help a child who develops a medical condition
in childhood to obtain life insurance at a later point, though this
varies with the policy.
 There are many claims about child life insurance and it’s important
to understand the different types.
 Some insurance companies claim that child life insurance protects
your child’s future.
 This really depends on the policy. Some policies are whole life
insurance, which means that a child would be able to continue to get
insurance from that company when he reaches a certain age, usually
at age 18.
 Child policy of LIC is of various types according to the needs of the
customers
 LIC policies have different excellent features which is very
beneficial to the customers.
 Child policies should be purchased and specially of LIC for securing
our money and childs future.

69
WEBLIOGRAPHY

Search Engines:

http://www.licpolizy.com

https://www.licindia.in

http://www.myinsuranceclub.com/

https://www.google.co.in

Websites Referred:-

 http://www.licpolizy.com/JeevanAnurag.aspx
 http://www.myinsuranceclub.com/
 https://www.licindia.in/children_need_001_benefits.htm

70
 Annexure

CUSTOMER SURVEY
NAME:

GENDER: AGE:

QUALIFICATION:

OCCUPATION:

1. How do you rate the quality of service provided by LIC?

Excellent Good
Fair Bad
Extremely Bad No Idea

2. Are you aware about the various child plans offered by

Insurance Companies?

Yes No

3. What is your plan for your child future?

4. You have purchased any type of policy?

Yes No

5. If you have purchase then which company?

71
6. What are the features of the policy?

7. What is the term of policy?

0-3 1-5 0-5

1-15 0-20 Any Other

8. What is the need of child policy?

Education Future Marriage

Investment Protection Any Other

9. What are the benefits of the policy to you & your child?

10. How will you rate the Child Policy?

Excellent Good

Fair Bad

Extremely Bad No Idea

11. How much you are satisfied with the LIC policy?

0-25% 25-50%

50-75% 75-100%

72