Study LIC as Financial Institution

Study of LIC as a Financial Institution
FINANCIAL INSTITUTION
INTRODUCTION;The need for setting aside adequate long term funding to finance industrial development was felt when India embarked on its model of planned growth with ambitious growth targets. It was perceived that the banks would not be able to set aside such quantum of long term funding as they were mainly financed by short-term deposits. Moreover, specialized financial institutions would be able to develop expertise in project financing, which was lacking among the banks. The banks were to concentrate on working capital financing. National and state financial institutions were set up to provide such funding to large, medium and small industry. Further a number of specialized institutions were also set up to take care of specific areas or sectors. These institutions were provided access to low cost long-term funds from the banking system for this purpose. The specialized financial institutions mainly act as refinancing institutions in those particular sectors. Banks and financial institutions in case of large loans generally resort to collective lending. Collective funding takes the form of consortium lending or credit syndication. Both types of funding are similar with small differences. One of the main differences being the terms and conditions under which the loan is sanctioned. In consortium lending the terms and conditions are the same for all participating institutions whereas in the case of credit syndication each participating institution can stipulate its own terms and conditions Financial Institution are institutions which collects funds from the public and places them in financial assets, such as deposits, loans, and bonds, rather than tangible property.
DEFINATION;-
Reserve Bank of India Act, 1934 Section 45-I of the RBI Act, defines financial institution as under: I
"Financial Institution" means any non banking institution which carries on as its business non-banking or part of its business any of the following activities, namely:(a) The financing, whether by way of making loans or advances or otherwise, of any he activity other than its own; (b) The acquisition of shares, stock, bonds, debentures or securities issued by a he government or local authority or other marketable securities of a like nature; (c) Letting or delivering of any goods to a hirer under a hire purchase agreement as etting hire-purchase defined in clause (c ) of section 2 of the Hire Purchase Act, 1972; ause Hire-Purchase (d) The carrying on of any class of insurance business he
(e) Managing, conducting or supervising, as foreman, agent or in any other capacity, of chit or kuries as defined in any law which is for the time being in force in any State, or any business, which is similar thereto; (f) Collecting, for any purpose or under any scheme or arrangement by whatever name called monies in lump sum or otherwise, by way of subscriptions or by sale of units, or other instruments or in any other manner and awarding prizes or gifts, whether in cash or kind, or disbursing monies in any other way, to persons from whom monies are collected or to any other person. But does not include any institution, which carries on as its principal business,(a) agricultural operations; or (bb) industrial activity; or; (b) the purchase or sale of any goods (other than securities) or the providing of any services; or (c) the purchase, construction or sale of immovable property, so however, that no portion of the income of the institution is derive from the financing of purchases, constructions or sales of immovable property by other persons; As per Section 45-I(f) of the RBI act, "non-banking financial company" means:(i) a financial institution which is a company; (ii) a non banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending Tiny manner; (iii) such other non-banking institution or class of such institutions, as the bank may, with the previous approval of the Central Government and by notification in the Official Gazette, specify."
TYPES OF FINANCIAL INSTITUTION Financial institutions in India are divided in two categories. The first type refers to the regulatory institutions and the second type refers to the intermediaries. The regulators are assigned with the job of governing all the divisions of the Indian financial system. These regulatory institutions are responsible for maintaining the transparency and the national interest in the operations of the institutions under their supervision. The regulatory bodies of the financial institutions in India are as follows:

Reserve Bank of India (RBI) Securities and Exchange Board of India (SEBI) Central Board of Direct Taxes (CBDT) Central Board of Excise & Customs
Apart from the Regulatory bodies, there are the Intermediaries that include the banking and non-banking financial institutions. Some of the specialized financial institutions in India are as follows:

Unit Trust of India (UTI) Industrial Development Bank of India (IDBI) Industrial Investment Bank of India Export - Import Bank of India (EXIM Bank) National Bank for Agriculture and Rural Development (NABARD) Life Insurance Corporation of India (LIC) General Insurance Corporation of India (GIC)
Apart from the banking financial institutions, there are a number of specialized financial institutions in India that have been incorporated for a definite purpose. These institutions include the insurance companies, the housing finance companies, mutual funds, merchant banks, credit reporting and debt collection companies and many more.
Apart from these, there are several other financial institutions that are existing in the country. These are the stock brokers and sub-brokers, portfolio managers, investment advisors, underwriters, foreign institutional investors and many more.
ROLE OF FINANCIAL INSTITUTIONS IN ECONOMY Financial Institutions play very significant role in the economy. First and foremost is in the form of catering to the need of credit for all the sections of society. The modern economies in the world have developed primarily by making best use of the credit availability in their systems. An efficient banking system must cater to the needs of high end investors by making available high amounts of capital for big projects in the industrial, infrastructure and service sectors. At the same time, the medium and small ventures must also have credit available to them for new investment and expansion of the existing units. Rural sector in a country like India can grow only if cheaper credit is available to the farmers for their short and medium term needs.
Credit availability for infrastructure sector is also extremely important. The success of any financial system can be fathomed by finding out the availability of reliable and adequate credit for infrastructure projects. Fortunately, during the past about one decade there has been increased participation of the private sector in infrastructure projects.
The banks and the financial institutions also cater to another important need of the society i.e. mopping up small savings at reasonable rates with several options. The common man has the option to park his savings under a few alternatives, including the small savings schemes introduced by the government from time to time and in bank deposits in the form of savings accounts, recurring deposits and time deposits. Another option is to invest in the stocks or mutual funds.
In addition to the above traditional role, the banks and the financial institutions also perform certain new-age functions which could not be thought of a couple of decades ago. The facility of internet banking enables a consumer to access and operate his bank account without actually visiting the bank premises. The facility of ATMs and the credit/debit cards has revolutionized the choices available with the customers. The banks also serve as alternative gateways for making payments on account of income tax and
online payment of various bills like the telephone, electricity and tax. The bank customers can also invest their funds in various stocks or mutual funds straight from their bank accounts. In the modern day economy, where people have no time to make these payments by standing in queue, the service provided by the banks is commendable.
While the commercial banks cater to the banking needs of the people in the cities and towns, there is another category of banks that looks after the credit and banking needs of the people living in the rural areas, particularly the farmers. Regional Rural Banks (RRBs) have been sponsored by many commercial banks in several States. These banks, along with the cooperative banks, take care of the farmer-specific needs of credit and other banking facilities.
Till a few years ago, the government largely patronized the small savings schemes in which not only the interest rates were higher, but the income tax rebates and incentives were also in plenty. The bank deposits, on the other hand, did not entail such benefits. As a result, the small savings were the first choice of the investors. But for the last few years the trend has been reversed. The small savings, the bank deposits and the mutual funds have been brought at par for the purpose of incentives under the income tax. Moreover, the interest rates in the small savings schemes are no longer higher than those offered by the banks.
Banks today are free to determine their interest rates within the given limits prescribed by the RBI. It is now easier for the banks to open new branches. But the banking sector reforms are still not complete. A lot more is required to be done to revamp the public sector banks. Mergers and amalgamation is the next measure on the agenda of the government. The government is also preparing to disinvest some of its equity from the PSU banks. The option of allowing foreign direct investment beyond 50 per cent in the Indian banking sector has also been under consideration. The role of the banks has been important, but it is going to be even more important in the future.
RISKS OF FINANCIAL INSTITUTIONS The practice and theory of risk management for financial institutions has changed dramatically over the last twenty years. A plethora of new financial instruments has become available for trading and hedging purposes. Financial institutions also have become much more resourceful in taking advantage of differences in regulatory requirements across countries and across types of institutions. With all of these changes, financial institutions that face financial difficulties now often do so in ways that are hard to understand in the context of traditional models of bank runs. Further, new types of financial institutions, such as hedge funds, have become markedly more important. Regulators have attempted to respond to financial innovation with more flexible capital requirements that make greater use of the risk-management models of financial institutions, and with more risk-focused supervision. These changes in financial institutions and in the financial system as a whole mean that many theories of financial institutions have become materially incomplete and that our current understanding is deficient. The goal of the NBER's Working Group on the Risks of Financial Institutions is to improve our understanding of these risks and how they can be measured and managed with new techniques and new financial instruments; how they are affected by new risk management technologies and new financial instruments; how regulations and capital requirements affect these risks; how the risks differ across types of institutions; and whether the risks threaten the financial system. The Group will meet several times a year to discuss new research of interest and to receive input from industry participants and regulators.
The story of insurance is probably as old as the story of mankind. The same instinct that story 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. 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 business force companies with total business-in-force as Rs.298 crore in 1938. During the mushrooming business force 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 non life 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, it was much later on the 19th of January, 1956, that life insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian companies and 75 provident were operating in India non Indian at the time of nationalization. Nationalization was accomplished in two stages; initially stages 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. From then to now, LIC has crossed many milestones and has set unprecedented performance records in various aspects of life insurance business. The same motives which inspired our forefathers to bring insurance into existence in this country inspire us at LIC to take this message of protection to light the lamps of security in as many homes as possible and to help the people in providing security to their families. 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 (Nationalisation) Act, 1972 nationalised 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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The Life Insurance Corporation of India (LIC) (Hindi: ) 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 13.25 trillion (US$268.71 billion). It was founded in 1956 with the merger of 243 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 113 divisional offices located in different parts of India, around 3500 servicing offices including 2048 branches, 54 Customer Zones, 25 Metro Area Service Hubs and a number of Satellite Offices located in different cities and towns of India and has a network of 13,37,064 individual agents, 242 Corporate Agents, 79 Referral Agents, 98 Brokers and 42 Banks (as on 31.3.2011) for soliciting life insurance business from the public. The slogan of LIC is "Yogakshemam Vahamyaham" - Your welfare is our responsibility. The slogan of LIC is "Zindagi ke saath bhi, Zindagi ke baad bhi" ( , ) which means "during life and after life".
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NATIONALIZATION:In 1955, parliamentarian Amol Barate raised the matter of insurance fraud by owners of private insurance companies. In the ensuing investigations, one of India's wealthiest businessmen, Ram Kishan Dalmia, owner of the Times of India newspaper, was sent to prison for two years. Eventually, the Parliament of India passed the Life Insurance of India Act on 1956-06-19, and the Life Insurance Corporation of India was created on 1956-09-01, by consolidating the life insurance business of 245 private life insurers and other entities offering life insurance services. 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.
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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.
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
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Mission: "Explore and enhance the quality of life of people through financial security by providing products and services of aspired attributes with competitive returns, and by rendering resources for economic development." Vision: "A trans-nationally competitive financial conglomerate of significance to societies and Pride of India."
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LIFE INSURANCE CORPORATION OF INDIA
Type Industry Founded Headquarters Key people
Government owned corporation Insurance 1st September 1956 Mumbai, India D. K. Mehrotra, T.S.Vijayan(chairman), Thomas Mathew, Nihar Ranjan Guha, R Gopalan, Yogesh Lohia, S. Sridhar, and A.K.Dasgupta (D)
Products
Life Insurance Pensions Mutual funds
Total assets Owner(s) Employees Subsidiaries
13.25 trillion (us$295.48 billion) Government Of India 115,966 (2010) LIC housing finance limited ,LIC(Lanka)ltd LIC cards services limited , LIC(international)BSC(c) LIC Nomura mutual fund
Website
www.licindia.in
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BOARD OF DIRECTORS Members On The Board Of The Corporation
Shri D.K. Mehrotra Charge (Current-in-Charge & CHAIRMAN, LIC )
Shri T. S. Vijayan (Managing Director, LIC )
Shri Thomas Mathew T. (Managing Director, LIC )
Shri A.K. Dasgupta (Managing Director, LIC )
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Shri D.K. Mittal (Secretary, Department of Financial Services, Ministry of Finance, Govt. of India.)
Shri Yogesh Lohiya (Chairman Cum Managing Director, GIC of India)
Shri M.V. Tanksale (Chairman & Managing Director, Central Bank of India)
Shri Monis R. Kidwai Lt. General Arvind Mahajan (Retd.) Shri Anup Prakash Garg Shri Amardeep Singh Cheema Shri Ashok Singh Shri K.S. Sampath Shri Sanjay Jain
Shri D.K. Mehrotra (Current-in-Charge & CHAIRMAN, LIC )
Shri T. S. Vijayan (Managing Director, LIC )
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INTERNATIONAL OPERATIONS / ASSOCIATESS LIC has always acknowledged the need to expand. Our expanding efforts have been consistent and are evident though our associations given below for your reference. INTERNATIONAL OPERATIONS / ASSOCIATES INTERNATIONAL OPERATIONS
LIC Fiji LIC Mauritius LIC United Kingdom LIC Representative Office, Singapore LIC (International) B.S.C (C), Bahrain LIC (Nepal) Ltd LIC (Lanka) Ltd Saudi Indian Company for Co-op. Insurance, KSA. Kenindia Assurance Co. Ltd., Kenya. LIC Co-ordinating Office in India
ASSOCIATES LIC HFL Financial Services Ltd LIC Housing Finance Ltd. LICHFL Care Homes Ltd. LIC Mutual Fund AMC Ltd. LIC Cards Services Ltd. LIC Pension Fund Limited
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PRIVACY POLICY LIC reserves its right to correct any part of the said content at any time as and when required at its sole discretion. The content of this website shall not be displayed or printed in any form in part or whole without the prior written approval of LIC. The information contents provided on this site cannot be copied, modified, uploaded, downloaded, published or republished, transmitted or otherwise distributed for commercial purposes without prior and explicit permission from LIC. Reproduction of any information or material provided on this website, with or without any modification, is prohibited unless, with prior permission of LIC, and shall amount to violation of copyright and would be deemed an illegal act. You are requested to note that Insurance is a subject matter of solicitation and the information, tools and planners contained in the site, www.licindia.in are meant for your general information only and not to be used for deciding on your insurance requirements. You are specifically advised to contact one of our Agents for any of your particular insurance needs. The Privacy Policy governs the use of this website (www.licindia.in) of Life Insurance Corporation of India (LIC). LIC reserve its right to select the user of this website and take decisions as to whether to permit or not to permit any person to use services provided on this website. LIC is committed to protecting your privacy and working towards offering you a powerful, safe, online experience. To avail some of the services offered by us, you need to sign up by giving simple details that personally identify you. We need this minimal information to operate the online services and encourage you to update this information as and when there are any changes. When you do this through easily navigable clicks, you help us stay in touch with you always.
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www.licindia.in does not collect personal information about individuals except when such individuals specifically provide such information on a voluntary basis. This can be in several ways including for example, through registration for contests, the registration process for subscription sites or services and in connection with content submissions, community postings (e.g., message boards), suggestions, and voting/polling activities. Personal information on individual users of www.licindia.in will not be sold or otherwise transferred to unaffiliated third parties unless otherwise stated at the time of collection or with the approval of the user as the case may be. LIC treats your personal information or your use of the service as private and confidential and does not check, edit or reveal it to any third parties except where it believes in good faith, such action is necessary to comply with the applicable legal and regulatory processes or to protect and defend the rights of other users or to enforce the terms of service which are binding on all the users of www.licindia.in. Except where specifically agreed or necessary for operational or regulatory reasons, LIC will not send you any unsolicited information. If the user does not opt out, LIC may use any e-mail addresses of users to send occasional e-mails pertaining to information on product and services. The user can nevertheless unsubscribe from receipt of such e-mails by following instructions therein or by communicating accordingly to www. licindia.in. LIC may collect unnamed statistics, which do not personally identify you. LIC reserves the right to perform statistical analyses of user behavior and characteristics in order to measure interest in and use of the various areas of the site and to inform advertisers of such information as well as the number of users that have been exposed to or clicked on their advertising banners. We will provide only aggregated data from these analyses to third parties. LIC may provide specific services to users to post messages, e-mails, information, participate in chat sessions, news groups and other affinity group activities on the site and off the site. During such activities, you may provide your personal information beyond
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what has been given in your personal profile. www.licindia.in Privacy Policy excludes information transmitted through these activities. While LIC encourages you to actively participate in such activities, it advises you to be careful in sharing your personal information and to respect the privacy of its other users. www.licindia.in offer links to other sites for which LIC is not responsible either for their standards of public order and decency or for their personal data protection policy or the use that could be made of such data. When you access another website through a hypertext link, you are accepting that this access is at your own risk. Consequently, LIC cannot accept responsibility for any direct or indirect damages that may result from your access to another site connected by a hypertext link. We would also draw your attention to the use of public forums where you may be asked to give your identity or e-mail address. This information then enters the public domain and may be used by a third party using the service. E-mail messages sent to LIC over the Internet cannot be guaranteed to be completely secure. The integrity of such messages cannot be guaranteed on the Internet and LIC will not be responsible for any damages incurred by users due to messages sent or received by them to and from LIC. While every care has been taken in preparing the information and materials contained in this site, such information and materials are provided to you "as is" without warranty of any kind either express or implied. LIC does not warranty the adequacy of the information made available. In particular, no warranty regarding non-infringement, security, accuracy, fitness for a particular purpose or freedom from computer virus is given in conjunction with such information and materials. The information, material, advices, suggestions, illustrations notifications, circulars etc. are collectively stated "the content" in this website. If the said content contains any mistakes, omissions, inaccuracies and typographical errors, etc. LIC assumes no
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responsibility thereof. LIC makes no warranty or representation regarding any content provided through this website and disclaims its liabilities in respect thereof. Any action on your part on the basis of the said content is at your own risk and responsibility.
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KNOW ABOUT YOUR LIFE INSURANCE Life insurance in India made its debut well over 100 years ago. In our country, which is one of the most populated in the world, the prominence of insurance is not as widely understood, as it ought to be. What follows is an attempt to acquaint readers with some of the concepts of life insurance, with special reference to LIC. It should, however, be clearly understood that the following content is by no means an exhaustive description of the terms and conditions of an LIC policy or its benefits or privileges. For more details, please contact our branch or divisional office. Any LIC Agent will be glad to help you choose the life insurance plan to meet your needs and render policy servicing.
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.
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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 civilizations partial solution to the problems caused by death. Life insurance, in short, is concerned with two hazards that stand across the lifepath of every person: 1. 2. That of dying prematurely leaving a dependent family to fend for itself. That of living till old age without visible means of support.
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CHARACTRISTICS OF LIFE INSURANCE 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. 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.
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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 policyholders state of health, the proponent's income and other relevant factors are considered by the Corporation.
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GUIDELINES Admission Of Age: Age is the main basis of calculation of premium under life insurance policies. The following are accepted as evidence of age:
Certified extract from Municipal or Local Bodys records made at the time of birth.
Certificate of Baptism or Certified Extract from Family Bible, if it contains age or date of birth.
Certified Extract from School or College records, if age or date of birth is stated therein.
Certified Extract from Service Register in the case of Govt. employees and employees of Quasi-Govt. Institutions or
Passport issued by the Passport Authorities in India.
Payment of Premium:
By cash, local cheque (subject to realization of cheque), Demand Draft at Branch Office.
The DD and cheques or Money Order may be sent by post. You can pay your premiums at any of our Branches as 99% of our Branches are networked.
Many Banks do accept standing instructions to remit the premiums. So by providing a standing instruction to your Bank to debit your account for the premium amount and send it vide a bankers cheque to LIC, on the due dates and months mentioned on your policy bond.
Through Internet : Payment of premiums can be made through Internet through Service Providers viz. HDFC Bank, ICICI Bank, Times of Money, Bill Junction,
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UTI Bank, Bank of Punjab, Citibank, Corporation Bank, Federal Bank and Bill Desk.
Premium payment can also be made through ATMs of Corporation Bank and UTI Bank.
Premium payment can also be made through Electronic Clearing Service (ECS) which has been launched at Mumbai, Hyderabad, Chennai, Kolkata, New Delhi, Kanpur, Bangalore, Vijaywada, Patna, Jaipur, Chandigarh, Trivandrum, Ahmadabad, Pune, Goa and Nagpur, Secunderabad & Visakhapatnam. A policyholder having an account in any Bank which is a Member of the local Clearing House can opt for ECS debit to pay premiums. The policyholders wishing to use this system would have to fill up a Mandate Form available at our Branches and get it certified by the Bank. The certified Mandate Forms are to be submitted to our Branches. Policy can be anywhere in India.
Days Of Grace:
Policyholder should pay the premiums on due dates. However, a grace period of one month but not less than 30 days will be allowed for payment of yearly/halfyearly/quarterly premiums and 15 days for monthly premiums.
When the days of grace expire on a Sunday or a public holiday, the premium may be paid on the following working day to keep the policy in force.
If the premium is not paid before the expiry of the days of grace, the policy lapses.
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Revival Of Lapsed Policy:
If the policy has lapsed, it can be revived during the life time of the life assured, within a period of five years from the date of the first unpaid premium but before the date of maturity subject to certain conditions.
The Corporation offers three convenient schemes of revival viz., Ordinary Revival, Special Revival and Installment Revival. Policies can also be revived under Loan-cum-Revival and SB-cum-Revival schemes.
Request for revival may be made to the Branch Office servicing the policy.
Change Of Address And Transfer Of Policy Records:
The policyholder should immediately intimate the change of his/her address to the Branch Office servicing the policy. The correct address facilitates better service and quicker settlement of claims.
Policy records can also be transferred from one Branch Office to another for servicing, as requested by the policyholder.
Loss Of Policy Document:
The Policy Document is an evidence of the contract between the Insurer and the Insured. Hence the policyholder should preserve the Policy Bond till the contracted amount under it is settled.
Loss of the Policy Document should be immediately intimated to the Branch Office where it is serviced.
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Loans:
Loans are granted on policies to the extent of 90% of Surrender Value of the policies which are in force and 85% of the Surrender Value in case of policies which are paid-up, inclusive of the cash value of bonus. The rate of interest charged at present is 9% p.a. payable half-yearly.
Loans are not granted for a period shorter than six months. The Conditions and Privileges printed on the back of the Policy Bond states whether a particular policy is with or without the loan facility.
Relief To Policyholders:
The Corporation generally allows concessions on payment of premiums, settlement of claims, issue of duplicate policies, etc when the policyholder are affected by natural calamities such as droughts, cyclones, floods, earthquakes, etc.
Nomination:
Nomination is a right conferred on the holder of a Policy of Life Assurance on his own life to appoint a person/s to receive policy moneys in the event of the policy becoming a claim by the assureds death. The Nominee does not get any other benefit except to receive the policy moneys on the death of the Life Assured. A nomination may be changed or cancelled by the life assured whenever he likes without the consent of the Nominee.
Ensure nomination exists in the policy for easy settlement of claims.
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Assignment:
Assignment means transfer of rights, title and interest. When an assignment is executed, all rights, title and interest in respect of the property assigned are immediately transferred to the Assignee/s and the Assignees become the owners of the policy subject to any lawful condition made in the assignment.
Assignment can be either conditional or absolute. On assignment (other than to LIC), Nomination automatically stands cancelled. Hence, when such a policy is reassigned, the policyholder will have to make a fresh nomination to avoid delay in settlement of claim.
Survival Benefit/Maturity Claims:

LIC settles survival benefit/maturity claims on or before the due date. Policy holders are intimated well in advance by the Branch Office which services the policy regarding the payment, and the necessary Discharge Voucher is also sent for execution by the assured. In case the policyholder does not get any intimation from the Branch Office concerned, he/she should contact them, quoting the Policy Number.
Survival Benefit payment up to Rs.60,000/- are settled without insisting for Policy Bond and Discharge Voucher.
Death Claims:
If the life assured dies during the term of the policy, death claim arises. The death of the policyholder should be immediately intimated in writing to the Branch Office where the policy is serviced along with the following particulars
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1. The No./s of the policy or policies The name of the policyholder 2. Death Certificate issued by concerned Authority 3. The date of death 4. The cause of death and 5. Claimants relationship with the deceased
On receipt of the intimation of death, necessary claim forms are sent by the Branch Office for completion along with instructions regarding the procedure to be followed by the claimant.
The claims which have arisen after a period of three years are treated as non-early claims and settled within 30 days from the date of receipt of all requirements.
The claims that have arisen within a period of two years from the date of commencement of the policy are treated as early claims and investigation is compulsory in such cases.
The claim is usually payable to the nominee/assignee or the legal heirs, as the case may be. However, if the deceased policyholder has not nominated/assigned the policy or if he/she has not made a suitable provision regarding the policy moneys by way of a Will, the claim is payable to the holder of a Succession Certificate or some such evidence of title from a Court of Law.
The Corporation grants claims concessions under certain Plans whereby payment of full sum assured is made, subject to the deduction of unpaid premiums with interest till the date of death and unpaid premiums falling due before the next anniversary of the policy, in the event of the death of the life assured within a period of six months or one year from the date of the first unpaid premium, provided premiums have been paid for at least three years and five years respectively.
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Claim Review Committee:
The Corporation settles a large number of Death Claims every year. Only in case of fraudulent suppression of material information is the liability repudiated. This is to ensure that claims are not paid to fraudulent persons at the cost of honest policyholders. The number of Death Claims repudiated is, however, very small. Even in these cases, an opportunity is given to the claimant to make a representation for consideration by the Review Committees of the Zonal office and the Central Office. As a result of such review, depending on the merits of each case, appropriate decisions are taken. The Claims Review Committees of the Central and Zonal Offices have among their Members, a retired High Court/District Court Judge. This has helped providing transparency and confidence in our operations and has resulted in greater satisfaction among claimants, policyholders and public.
Insurance Ombudsman:
The Grievance Redressal Machinery has been further expanded with the appointment of Insurance Ombudsman at different centers by the Government of India. At present there are 12 centres operating all over the country.
Following type of complaints fall within the purview of the Ombudsman
a)Any partial or total repudiation of claims by an insurer; b) Any dispute in regard to premiums paid if payable in terms of the policy; c) Any dispute on the legal construction of the policies in so far as such disputes relate to claims; d) Delay in settlement of claims; e) Non-issue of any insurance document to customers after receipt of premium.
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Policyholder can approach the Insurance Ombudsman for the redressal of their complaints free of cost.
Initiatives In Policy Servicing Areas:
All 2048 Branches of LIC are fully computerized covering all policy servicing aspects to give prompt computerized services from new policy introduction, acceptance of renewal premium, revivals, loans, etc to final claims settlement.
Green Channel facility has been introduced for the speedy completion of proposals.
Payment of premiums can be made through internet through service providers, viz., HDFC Bank, ICICI Bank, Times of money, Bill Junction, UTI Bank, Bank of Punjab, Citi Bank, Corporation Bank, Federal Bank and Billdesk.
Grievance Redressal Machinery:
A machinery for redressal of policyholders grievances exist in all the offices of the Corporation. These are headed by designated Officers who are available at their respective Offices every Monday between 2.30 pm and 4.30 pm. except holidays. Policyholder can approach these officers to get their grievances redressed.
The Designated Officers at the various offices of the Corporation are : At Branch Office Sr./Branch Manager
At Divisional Office Marketing Manager At Zonal Office Regional Manager At Central Office Executive Director
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HOW TO CHOOSE LIFE INSURANCE? There are various life insurance companies operating in India, every day a new company is planning to set up its operations in India. India is the 2nd largest country in the world population wise (1,210,193,422 as on March 31, 2011) and only 30% of the population is insured There are 23 life insurance companies operation in India as on March 31, 2011, including LIC OF INDIA . All 22 pvt. life insurance companies started their operation after year 2000. IRDA is the insurance regulator came into existence in the year 2000. There is always confusion among new life insurance customers about their plans as mentioned above there are 23 insurance companies operating in India with more than 200 life insurance products. In the busy life, people have very less time to do research and analysis about these life insurance products and they buy life insurance policies blindly as suggested by the company representatives or life insurance advisors near them. There are various points to be considered while buying life insurance products, some of them are listed below: What is the claim ratio of the life insurance company? You are buying life insurance policy to cover your family for unforeseen unfavorable future financial circumstances, but what if after buying life insurance policy your goal does not meet. LIC OF INDIA is settling maximum claims 99% , average of rest 22 life insurance companies are settling only less 72%.
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What are the bonus rates declared by the company in last financial year? Life insurance companies declare their bonus every year, before buying the product please do consider the bonus how much maturity will come to you and ask your advisor to calculate it as per bonus declared by the company in last year. LIC OF INDIA has maximum bonus rates in entire life insurance industry. What is the profit of the life insurance company? Life insurance Companies are going and coming, this process continues but you and your family has to stay. What is the guarantee that at the time of maturity the company will stay? Please do consider its profit and its balance sheet for better security to your family and its future. LIC OF INDIA has declared total profit of Rs 17,000 crores last year, whereas hardly any private insurer company exits which have declared profit even 1000 crores.
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PLANS OF LIFE INSURANCE CORPORATION CHILDREN PLANS CHILD CAREER PLAN JEEVAN ANURAG JEEVAN KISHORE KOMALJEEVAN JEEVJANCHHAYA CHILD FUTURE PLAN
PLANS FOR HANDICAPPED JEEVAN AADHAR JEEVAN VISHWAS
ENDOWMENT ASSURANCE PLANCE THE ENDOWMENT ASSURANCE POLICY JEEVAN MITRA(DOUBLE COVER ENDOWMENT PLAN) JEEVAN ANAND
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PLANS FOR HIGH WORTH INDIVIDUALS JEEVAN SHREE-I JEEVAN PRAMUKH
MONEY BACK PLANS THE MONEY BACK POLICY - 20 YEARS THE MONEY BACK POLICY - 25 YEARS JEEVAN SURABHI - 15 YEARS JEEVAN SURABHI - 20 YEARS JEEVAN SURABHI - 25 YEARS BIMA BACHAT
SPECIAL MONEYBACK PLAN FOR WOMENS JEEVANBHARATI - I
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JOINT LIFE PLAN JEEVAN SAATHI PLUS JEEVAN SATH
WHOLE LIFE PLANS THE WHOLE LIFE POLICY THE WHOLE LIFE POLICY- LIMITED PAYMENT THE WHOLE LIFE POLICY- SINGLE PREMIUM JEEVAN ANAND JEEVAN TARANG
TERM ASSURANCE PLANS TWO YEAR TEMPORARY ASSURANCE POLICY THE CONVERTIBLE TERM ASSURANCE POLICY ANMOL JEEVAN - I AMULYA J EEVAN - I
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PENSION PLANS PENSION PLUS JEEVAN NIDHI NEW JEEVAN DHARA NEW JEEVAN SURAKSHA JEEVAN AKSHAY
MICRO INSURANCE PLANS JEEVAN MADHUR JEEVAN MANGAL
HEALTH PLAN
HEALTH PROTECTION PLUS
GOLDEN JUBILEE PLAN
NEW BIMA GOLD
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GROUP SCHEME
GROUP GR-ATUITY SCHEME
GROUP SUPER ANNUATION SCHEME
GROUP SAVINGS LINKED INSURANCE SCHEME
GROUP LEAVE ENCASHMENT SCHEME
GROUP MORTGAGE REDEMPTION ASSURANCE SCHEME
GROUP CRITICAL ILLNESS RIDER
SOCIAL SECURITY SCHEME
JANASHREE BIMA YOJANA (JBY)
SHIKSHA SAHAYOG YOJANA
AAM ADMI BIMA YOJANA
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WITHDRAWN PLANS
JEEVAN NISCHAY
MARKET PLUS I
WEALTH PLUS
PROFIT PLUS
JEEVAN AASTHA
JEEVAN VARSHA
SAMRIDHI PLUS
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NET ASSET VALUE
NAV FOR THE DATE : 01/12/2011 Plan Name(Number) Fund SFIN No. Launch Date Face NAV as Repurchase Sale Value on date Value Value
BIMA PLUS (140)
Launch Date:02/02/2001 38.4388 53.9663 31.7636
Balanced ULIF002020201LICBMA+BAL512 10.00 38.4388 36.5169 Risk Secured ULIF003020201LICBMA+RSK512 10.00 53.9663 51.2679 ULIF001020201LICBMA+SEC512 10.00 31.7636 30.1754 Launch Date:04/03/2005 10.00 16.8017 16.8017 10.00 14.8028 14.8028
FUTURE PLUS (172) Balanced ULIF003040305LICFUT+BAL512 Bond Growth Income ULIF001040305LICFUT+BND512
16.8017 14.8028 22.0140 16.2092
ULIF004040305LICFUT+GRW512 10.00 22.0140 22.0140 ULIF002040305LICFUT+INC512 10.00 16.2092 16.2092 Launch Date:18/10/2005 10.00 14.8780 14.8780 10.00 14.8589 14.8589
JEEVAN PLUS (173) Balanced ULIF003181005LICJVN+BAL512 Bond Growth Secured ULIF001181005LICJVN+BND512
14.8780 14.8589 21.0333 14.7867
ULIF004181005LICJVN+GRW512 10.00 21.0333 21.0333 ULIF002181005LICJVN+SEC512 10.00 14.7867 14.7867 Launch Date:20/12/2006
MONEY PLUS (180)
Balanced ULIF003201206LICMNY+BAL512 10.00 13.1735 13.1735 Bond ULIF001201206LICMNY+BND512 10.00 14.4084 14.4084
13.1735 14.4084
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Growth Secured
ULIF004201206LICMNY+GRW512 10.00 10.9477 10.9477 ULIF002201206LICMNY+SEC512 10.00 13.4408 13.4408 Launch Date:05/07/2006
10.9477 13.4408
MARKET PLUS (181)
Balanced ULIF003050706LICMKT+BAL512 10.00 14.0970 14.0970 Bond Growth Secured ULIF001050706LICMKT+BND512 10.00 15.3990 15.3990 ULIF004050706LICMKT+GRW512 10.00 13.8172 13.8172 ULIF002050706LICMKT+SEC512 10.00 14.4125 14.4125 Launch Date:23/08/2007 10.00 11.3716 11.3716 10.00 13.5217 13.5217
14.0970 15.3990 13.8172 14.4125
FORTUNE PLUS (187) Balanced ULIF003230807LICFTN+BAL512 Bond Growth Secured ULIF001230807LICFTN+BND512
11.3716 13.5217 10.7525 13.4117
ULIF004230807LICFTN+GRW512 10.00 10.7525 10.7525 ULIF002230807LICFTN+SEC512 10.00 13.4117 13.4117 Launch Date:23/08/2007 10.00 13.7345 13.7345 10.00 14.0565 14.0565 10.00 10.2755 10.2755 10.00 13.0164 13.0164 Launch Date:17/06/2008
PROFIT PLUS (188) Balanced ULIF003230807LICPFT+BAL512 Bond Growth Secured ULIF001230807LICPFT+BND512 ULIF004230807LICPFT+GRW512 ULIF002230807LICPFT+SEC512
13.7345 14.0565 10.2755 13.0164
MARKET PLUS - I (191)
Balanced ULIF003170608LICMK1+BAL512 10.00 11.2891 11.2891 Bond Growth Secured ULIF001170608LICMK1+BND512 10.00 12.8252 12.8252 ULIF004170608LICMK1+GRW512 10.00 12.5414 12.5414 ULIF002170608LICMK1+SEC512 10.00 11.4453 11.4453 Launch Date:22/05/2008
11.2891 12.8252 12.5414 11.4453
MONEY PLUS - I (193)
Balanced ULIF003220508LICMY1+BAL512 10.00 13.9526 13.9526
13.9526
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Bond Growth Secured
ULIF001220508LICMY1+BND512 10.00 13.6626 13.6626 ULIF004220508LICMY1+GRW512 10.00 13.1083 13.1083 ULIF002220508LICMY1+SEC512 10.00 14.5766 14.5766 Launch Date:01/11/2008 10.00 14.0521 14.0521 10.00 11.9397 11.9397
13.6626 13.1083 14.5766
CHILD FORTUNE PLUS (194) Balanced ULIF003011108LICCHF+BAL512 Bond Growth Secured ULIF001011108LICCHF+BND512
14.0521 11.9397 14.1800 15.4233
ULIF004011108LICCHF+GRW512 10.00 14.1800 14.1800 ULIF002011108LICCHF+SEC512 10.00 15.4233 15.4233 Launch Date:29/06/2009 10.00 9.7281 9.7281 10.00 11.4002 11.4002 10.00 10.3765 10.3765 10.00 10.2202 10.2202 Launch Date:09/02/2010
JEEVAN SAATHI PLUS (197) Balanced ULIF003290609LICJST+BAL512 Bond Growth Secured ULIF001290609LICJST+BND512 ULIF004290609LICJST+GRW512 ULIF002290609LICJST+SEC512
9.7281 11.4002 10.3765 10.2202
WEALTH PLUS (801) Wealth Plus
ULIF001090210LICWLT+FND512 10.00 9.1737 9.1737 Launch Date:20/09/2010 10.00 9.4987 9.4987
9.1737
ENDOWMENT PLUS (802) Balanced ULIF003200910LICEND+BAL512 Bond Growth Secured
9.4987 10.8662 9.4600 9.6456
ULIF001200910LICEND+BND512 10.00 10.8662 10.8662 ULIF004200910LICEND+GRW512 10.00 9.4600 9.4600 ULIF002200910LICEND+SEC512 10.00 9.6456 9.6456 Launch Date:02/09/2010 10.00 10.8052 10.8052 10.00 9.8967 9.8967
PENSION PLUS (803) Debt Mixed ULIF001020910LICPEN+DBT512 ULIF002020910LICPEN+MIX512
10.8052 9.8967
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SAMRIDHI PLUS (804) Samridhi Plus
Launch Date:25/02/2011 9.6804
ULIF001250211LICSMD+FND512 10.00 9.6804 9.6804 Launch Date:04/02/2008 10.00 11.7083 11.7083 Launch Date:29/04/2009
HEALTH PLUS (901) Health Plus ULIF001040208LICHLT+FND512
11.7083
HEALTH PROTECTION PLUS (902) Health Protection ULIF001290409LICHPR+FND512 Plus
10.00 11.1264 11.1264
11.1264
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INFORMATION TECHNOLOGY AND LIC LIC has been one of the pioneering organizations in India who introduced the leverage of Information Technology in servicing and in their business. Data pertaining to almost 10 crore policies is being held on computers in LIC. We have gone in for relevant and appropriate technology over the years. 1964 saw the introduction of computers in LIC. Unit Record Machines introduced in late 1950s were phased out in 1980s and replaced by Microprocessors based computers in Branch and Divisional Offices for Back Office Computerization. Standardization of Hardware and Software commenced in 1990s. Standard Computer Packages were developed and implemented for Ordinary and Salary Savings Scheme (SSS) Policies.
FRONT END OPERATIONS
With a view to enhancing customer responsiveness and services, in July 1995, LIC started a drive of On Line Service to Policyholders and Agents through Computer. This on line service enabled policyholders to receive immediate policy status report, prompt acceptance of their premium and get Revival Quotation, Loan Quotation on demand. Incorporating change of address can be done on line. Quicker completion of proposals and dispatch of policy documents have become a reality. All our 2048 branches across the country have been covered under front-end operations. Thus all our 100 divisional offices have achieved the distinction of 100% branch computerization. New payment related Modules pertaining to both ordinary & SSS policies have been added to the Front End Package catering to Loan, Claims and Development Officers Appraisal. All these modules help to reduce time-lag and ensure accuracy.
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METRO AREA NETWORK A Metropolitan Area Network, connecting 74 branches in Mumbai was commissioned in November, 1997, enabling policyholders in Mumbai to pay their Premium or get their Status Report, Surrender Value Quotation, Loan Quotation etc. from ANY Branch in the city. The System has been working successfully. More than 10,000 transactions are carried out over this Network on any given working day. Such Networks have been implemented in other cities also.
WIDE AREA NETWORK
All 8 Zonal Offices and all the MAN (METROPOLITIAN AREA NETWORK) centres are connected through a Wide Area Network (WAN). This will enable a customer to view his policy data and pay premium from any branch of any MAN city. As at November 2005, we have 91 centers in India with more than 2035 branches networked under WAN.
INTERACTIVE VOICE RESPONSE SYSTEMS (IVRS)
IVRS has already been made functional in 59 centers all over the country. This would enable customers to ring up LIC and receive information (e.g. next premium due, Status, Loan Amount, and Maturity payment due, Accumulated Bonus etc.) about their policies on the telephone. This information could also be faxed on demand to the customer.
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LIC ON THE INTERNET Our Internet site is an information bank. We have displayed information about LIC & its offices. Efforts are on to upgrade our web site to make it dynamic and interactive. The addresses/e-mail Ids of your Zonal Offices, Zonal Training Centers, Management Development Center, Overseas Branches, Divisional Offices and also all Branch Offices with a view to speed up the communication process.
PAYMENT OF PREMIUM AND POLICY STATUS ON INTERNET LIC has given its policyholders a unique facility to pay premiums through Internet absolutely free and also view their policy details on Internet premium payments. There are 11 service providers with whom L I C has signed the agreement to provide this service. (You have to register for these services) INFORMATION KIOSKS We have set up 150 Interactive Touch screen based Multimedia KIOSKS in prime locations in metros and some major cities for dissemination information to general public on our products and services. These KIOSKS are enable to provide policy details and accept premium payments.
INFO CENTRES We have also set up 8 call centres, manned by skilled employees to provide you with information about our Products, Policy Services, Branch addresses and other organizational information.
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WHY LIC IS TRUSTED BRAND OF INDIA?

As a government of India owned Company, LIC is 51 + years old in the field of life insurance and money management. LIC's Life Fund size as on day is more than Rs 5 Lakh Thousand Crores! Any LIC policyholder or the nominee will vouch for the best claims settlement from LIC. Perhaps, this is the only institution where you as a policyholder are virtually chased till such time your claim cheques is handed over to you! LIC has won `NDTV Profit Leadership Award 2007 under Life Insurance Category', `Outlook Money Award 2007 as the best Life Insurer', `CNBC Awaaz Consumer Award 2007 as the best Life Insurance Company', `Golden
Peacock Award for excellence in Corporate Governance 2007', `Web 18 Genius of the Web Award 2007 and many more'. LIC adjudged No.1 Trusted Service Brand for the 4th successive year by ET Brand Equity Survey. LIC has been adjudged Super brand India for 2004-06 and Reader's Digest `Trusted Brand' Asia 2007. This is the only corporation that is catering to more than 190 million satisfied policyholders in India and abroad. This is one of the very few institutions that pay ex- gratia interest on pending maturity claims! More than 2050 LIC branches all over India are connected together to serve you. You can pay your premium anywhere in the country During its long existence, LIC has kept on updating its portfolio by bringing in new plans depending on public requirement. More than 50 of them are most popular and can be customized to meet any of your requirements. LIC ULIPs have become extremely popular due to the returns they offer. Money Plus- latest LIC Unit Linked Plan is a case in point.
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All LIC Plans come with Sovereign Guarantee i.e., government of India Guarantee regarding repayment. In fact, as of now, only LIC plans enjoy this government Guarantee. Beneficiary for this Sovereign Guarantee is you and you alone as the policyholder/ would-be policyholder. All LIC plans are characterized by low premium, high life insurance coverage and a vast package of benefits offered by them. Add to this package, section 80C benefit and section 10(10D) benefit on the maturity proceeds, you will find investment on LIC plans one of the most coveted investment options available to you. Premium paid under Key-Man Insurance plan is a recognized business expense under section 37(I) of the Income-Tax Act. For companies making profits, this is a very good incentive indeed. Through Employer-Employee Insurance scheme, you can recognize the worth of your most valuable employees whose absence you can ill afford to loose. Entire contribution to LIC Group Gratuity Scheme is a recognized business expense in the hands of the employer. In addition, through this scheme, the employer can transfer his gratuity liability to the corporation and fund the same under cash accumulation scheme. The most popular among all the companies. LIC is declaring quite an impressive bonus (profits) on all its with-profits policies every year. Extra attraction under LIC Bonus is (a) it is calculated every year on the insured amount and not on the premium paid and (b) entire bonus received along with insured amount either by you on maturity of your policy (ies) or by your nominee in your absence during the currency of your policy (ies) is free from income-tax under section 10(10D) of the Income-tax Act.
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On most of the LIC plans, you can borrow to take care of your immediate monetary requirements. None of the policy benefits get affected as a result of borrowings. In fact, policy loans offer one of the most attractive investment opportunities. You can pay your premium 3 years in advance at 5% discount. Chief attractions of this advance payment of premium are (a) there is no possibility of your overlooking your premium payment and getting your policy(ies) lapsed wherever you are in the world and (b) you will be earning 5% tax-free interest on the unutilized portion of the amount left with LIC after apportioning the regular installment. Most of the LIC plans come with Riders to take care of Total and Permanent Disablement due to Accident and some of the most dread diseases that may result in loss of income. LIC pension plans that guarantee you life pension are extremely popular. You can park your hard earned money safely with the corporation and enjoy pension as long as you are alive. Due to these reasons and lot more, LIC should be your obvious choice for all your life insurance requirements. LIC is Indias most trusted brand, INSURING LIVES AND ENSURING SMILES from more than 50 Years. SUPER BRAND & MOST TRUSTED SERVICE
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AWARDS WON BY LIC
INDY's Silver Award for best Corporate Film
World Brand Congress Award
OUTLOOK MONEY -- NDTV PROFIT AWARD 2009 in " BEST LIFE INSURER CATEGORY
NDTV PROFIT BUSSINESS LEADERSHIP, AWARDS 2009
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CNBC AWAAZ CONSUMER AWARD 2009 for " Most preferred insurance company "
ASIA PACIFIC HRM Congress, 2009 Award for INNOVATIVE HR PRACTICES
Brand Equity Most Trusted Brand 2009 Top in Insurance Category
Golden Peacock Innovative Product / Service Award - 2009
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Loyalty Award - 2009
Reader's Digest Trusted Brand Award, 2009
CNBC Awaaz Consumer Awards 2008
NDTV Profit Business Leadership Award 2008
INDY's Silver Award for Best Corporate Film
NASCOM IT USER Award 2008
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Business Super brand India 2009
ASIA BRAND CONGRESS BRAND LEADERSHIP AWARD, 2008
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STRENGTHS . 1.GOVERNMENT GUARANTEE LIC is owned by the government and therefore it is the only company besides the PPF that has the sovereign guarantee of the govt. of India. It is a different story that today LIC has become so powerful that the govt. leans on LIC every time that the Stock Market crashes. Imagine having an Asset base of over Rs 6 Lac Crore. . Thats a 14 digit number! No company in India can boast of such figures. Mind boggling. 2.BRAND IMAGE LIC is the only Life Insurance Company making profits. Most of the Private Insurers including the self proclaimed market leaders like ICICI and Bajaj Allianz are booking heavy losses. Also LIC has good customer service which has differentiated it from other its competitors . 3. CLAIM SETTLEMENT When it comes to paying claims, again LIC is Number One with the claims settlement ratio of more than 99%. Private Insurers cannot match LICs ability on claims settlement. 4. LARGEST SALES FORCE LIC has the worlds largest sales force, over 13 lac agents and now universities in western countries are trying to study how a company managed to appoint such a large sales force. A sales force of over 1 million! Truly a remarkable achievement 5.LARGE PRODUCT RANGE LIC has the largest product range for the customers. LIC's Insurance Plans are policies that talk to you individually and give you the most suitable options that can fit your requirement.
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WEAKNESS LETHARGIC STAFF The Administrative staff in LIC is in deep slumber. Try writing a complaint to them and they wont even bother to reply back. If you ask the Branch Manager for the complaints book, he probably wont have it in place. If an Agent complains against any staff, then the Agent is black listed and next time onwards his work is not done.
INEFFECTIVE LEADERSHIP As I earlier said, LIC is lacking in Effective Leadership in recent times. Managers having designations like Marketing Manager or Sales Manager do not have the capability to motivate an audience at a meeting. Yes this is true even in a city like Mumbai. Even the senior level managers cannot make effective presentations or design a sales strategy. Their only mantra at an Agents meeting is "Friends, bring more policies!. If you ask them how to bring more policies, they wont know. 2) MEDIOCRE TOP BOSSES The top management or bosses are mediocre. They are lacking exceptional quality or
ability to manage efficiently. This leads to ineffective management in the industry.
4) SLOW DECISION MAKING PROCESS There is very slow decision making process and internal problems between top management and lower cadre staff. The staff do not act fast to the complainta n actions.
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OPPORTUNITIES: Emergence of a huge middle income consumer market in the country. People becoming more aware and demanding so there is scope for a whole lot of innovative products. Pension markets, health insurance and large real estate portfolio. Todays human life becomes full uncertain, so they prefer protection against the risk. Therefore they prefer life insurance. This is the opportunity for the life insurance sector. Easy accesses to development in the more advance market provide further opportunity to upgrade their working. Technological, financial or specific area based avenues of absorbing improved system are also now more easily available. To enter into rural market where customer awareness about insurance is low by effective and efficient marketing strategies. To sell insurance products through electronic Medias. Growing population: the growth in the population (approximately 1.7%) is very high. It is said that one Australia is added in our country every year. Thus potential customers for the life insurance industry. It has become an opportunity or the life insurance industry. India has traditionally been a highly savings oriented country. Needless to say, if the insurance market is properly tapped, it is possible to raise life insurance premium as a percentage of GDP from its existing level. Thus, it has become an opportunity for the life insurance industry
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THREATS: Private entrants are naturally targeting the profitable and more lucrative segments, by providing better service, new products and flexibility. They are targeting the bigger corporate the other clients in the well established metropolitan center. These new entrants succeeded in eating share of the existing entities. This creates threat among rival firms itself. Interest rate of P.F and bank saving create threat to insurance sector. All other saving is obviously the threat for life insurance sector. Increasing intensity of competition among industry rivals-may cause squeeze (fall) on profit margins. Consumers education- consumers are more and more confused because the market players are offering large number of product range. As at present the awareness level is not much, it is only because the education level is only 62 %( in which only 10% are well educated). Fraud in insurance sector: the major problem fraud, which affects the life insurance sector. The flight of talent to new entrants is already in evidence, and could be on the rise for some time to come. Retaining qualified and competent executives will be considerable challenges for existing companies. One very serious danger that the government on units is likely to face is that even if at some point of time, the government does decide to disinvest a portion of its equity; they may not be fully free from government interference. They could face a peculiar problem that although paper and in terms of legal definition they would not be public sector units. In effects, their working could be no different from what it was before their ownership pattern change.
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PORTER FIVE COMPETITIVE FORCES FOR INSURANCE INDUSTRY Competitive Force: Michael Porter has identified five forces that determine the intrinsic long-run profit attractiveness of a market or market segment. Industry competitors Potential entrants. Substitutes. Buyers. Suppliers.
Threat of Intense Segment Rivalry: A segment like insurance sector which is very attractive because, it is in the growing stage of the life cycle, and these makes this segment attractive but on the other hand it already contains aggressive competitors such as: Bajaj Alliances ICICI Prudential Life Insurance. HDFC. Franklin Templeton. Reliance. Unit trust Of India. Etc.
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The numbers of Competitors are more but the potential in the Insurances sectors that makes this Sector attractive to most of the financial companies. So, for that reason LIC have a tuff competition with other competitors in this segment and secondly LIC had an experience of more than 20 years of this segment but on the other hand the company like, ICICI PRU had good experience of this market. So for LIC there is threat mainly with the ICICI PRU. And in future this can lead to frequent price wars, advertising battles and new-product introductions and will make it expensive to compete. But overall this segment is very attractive.
Threat of new entrants: Segments attractiveness varies with the height of its entry and exit barriers.If we look from this angle then this segment is moderate because the entry barriers are high for the foreign companies, because of the restriction imposed by the Indian government on them, such as, they can have a maximum of 26% stage in the company and secondly the companies should have certain amount of money with them as mention by the govt. and the exit barriers are low. This means that few new firms can enter into the industry and poor-performing firms can easily exit and for this reason, this segment is more attractive for the companies.
Threat of substitute Product: When we considers on the substitute products, this segment is unattractive because there are many actual and potential substitutes for the product of LIC and all the competitors have almost similar product or plans, but they mainly differ in the service point of view.
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Threat of Buyers growing Bargaining Power: This segment is unattractive because the buyers possess strong or growing bargaining powers such as: The buyers switching cost is low in the financial investment sectors. The product is undifferentiated because most of the companies in the insurance
sector provide almost same policies and investment plans.
Threat of Suppliers Growing Powers: In this segment, the suppliers bargaining power is more, because banks and CA are the easiest and the important channel to reach the client and for that reason they have the strong bargaining power.
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D K MEHROTRA APPOINTED LIC'S INTERIM CHAIRMAN LIC'S (BUSINESS STANDARD, Mumbai May 27, 2011) STANDARD Dinesh Kumar Mehrotra, one of LIC's managing directors was today Mehrotra, appointed interim chairman of the country's largest insurer. D K Mehrotra, managing director of the Life Insurance Corporation of India will, in addition to his duties as managing director, hold current charge of the post of chairman of the corporation for a period of three months or till further orders, whichever is earlier, the insurer said in a release. The uncertainty over LIC's top job arose when former chairman TS Vijayan was denied LIC's an extension after his term came to an end on May 2. He was then appointed a managing director, a post he held before being elevated to the post of chairman in 2006. After Vijayans term as chairman ended, the government gave R K Singh, additional secretary chairman in the finance ministry, the additional charge of chairman. The government had formed a committee, headed by R Gopalan, secretary, department of economic affairs of the finance ministry, to select the next chairman. lect Mehrotra, who joined LIC as a direct recruit in 1977, was executive director for international operations before becoming a managing director in July 2005. He was also a contender for the chairman's post in 2006. The three other managing directors of LIC are managing TS Vijayan, Thomas Mathew and AK Dasgupta. In 2010-11, LIC accounted for Rs 86,445 crore of the of Rs 125,826 crore collected by 11, the industry, by selling new policies. LIC is the largest institutional investor in the country, managing assets worth more than Rs 12 lakh crore aging
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LIC MARKET SHARE RISES TO 77 PERCENT IN 2010 2010-11 (ECONOMIC TIMES, August 3, 2011) ECONOMIC TIMES
NEW DELHI: The market share of the government run Life Insurance Corporation of government-run India (LIC), in terms of number of policies in the country, rose to 76.92 percent in 2010 201011 from 73.02 percent in the previous year. When taking into consideration just the first year premium, LIC's market share rose to 68.70 percent in 2010 2010-11 from 64.86 percent in 2009-10, Namo Narain Meena , 10, Me Minister of State for Finance The public sector behemoth, which has government backing for all its policies, has registered growth in its market share for the second consecutive year despite increasing number of private players entering into the business. bu "The market share of LIC has been increasing consistently during the last two years,"
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LIC OF INDIA INCREASES BONUS AFTER 2 YEARS (LIC HELPLINE, September 3, 2011 ) After a gap of two years, Life Insurance Corporation of India (LIC) has raised bonus by up to 15 per cent for 2010-11. The countrys largest life insurer, which reported a 10.3 per cent rise in net actuarial surplus at Rs 22,716 crore for 2010-11, compared to Rs 20,586 crore in the previous year, allocated Rs 21,580 crore for paying annual bonus to policyholders. The bonus rates have gone up after a gap of two years. We will be providing higher bonus rates under seven plans like Jeevan Anand, Jeevan Tarang, Jeevan Madhur, Child Future Plan, Jeevan Shree I, Jeevan Bharti I and Jeevan Pramukh. This apart, we have also brought in seven other plans under loyalty additions, a LIC spokesperson told reporters. In the traditional plans category, which accounts for more than 60 per cent of its incremental sales, the insurer will launch cheaper products, in line with the rates offered by private insurance companies. Currently, our traditional plans are costlier than offered by the competition. So, we will come out with plans with competitive rates, he said. In 2010-11, LIC collected Rs 86,444.7 crore by selling new policies, 22 per cent more than Rs 70,891.5 crore garnered in the previous corresponding period. Total investment in debt and equities stood at Rs 2,00,000 crore and the solvency margins improved to 154.07 per cent from 153.96 per cent
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LIFE INSURANCE PREMIUM COLLECTION DOWN 2% (FINANCIAL EXPRESS, Tuesday, November 22, 2011)
Mumbai: The life insurance industry reported 2 per cent dip in premium collections to Rs 1,22,661 crore in the first half of this fiscal because of fall in new business. Total premium collected by the life insurance industry stood at Rs 1,25,179 crore during April-September 2010-11, according to the Life Insurance Council. "The fall in total premium is due to the drop in new business premium collection," it said. The total new business premium for the industry has decreased 21 per cent year-on-year to Rs 49,046 crore from Rs 62,362 crore. The decline was on account of low sales of unit-linked products, especially individual pension segment, which has fallen drastically this year to 1.2 per cent from an average of 26 per cent for the earlier two years for the same period. "It is evident from the data that voluntary contribution from retail investors under individual pension segment has dried up," said S B Mathur, Secretary...General, Life Insurance Council. According to the council, the life insurance industry, however, has added more than5,400 direct employees and 26,000 new agents as compared to last quarter. Overall, the outlook for the remaining six months this fiscal appears to be better in viewof lack luster performance of the industry in the first half. However, companies need to introduce new products at regular intervals to sustain theinterest of the consumers, the council said. In September, IRDA had asked insurance companies not to mechanically reject claims on technical grounds, like delay in filing claim documents. IRDA has issued these directives following complaints that claims are being rejected on grounds of delay in intimation and submission of documents to insurer
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IRDA ASKS LIC TO SETTLE DEATH CLAIMS WITHIN 6 MONTHS. (INDIAN EXPRESS, November 29, 2011, )
NEW DELHI: To ensure prompt settlement of claims, IRDA has asked Life Insurance Corporation of India (LIC) to complete all claims-related investigations within the stipulated time-frame of six months. "The Authority advises the LIC to expeditiously complete all the claim investigations within the stipulated time frame and also put in place effective systems to settle the claims promptly," the IRDA said. The Insurance Regulatory and Development Authority (IRDA) said that while examining the documents submitted by LIC it found there were 300 cases as on March 2010 where investigations were pending beyond six months. "Despite huge number of death claims being handled by LIC, there is still scope for LIC to improve the claim settlement performance and adhere to provisions of regulations," IRDA said. The IRDA Regulations warrant an insurance company to complete investigation within of death claims in 6 months from the date of lodging of claims. Further, a life insurer has to pay or dispute the claim giving reasons for the same within 30 days of receipt of all relevant papers.
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LIC MAY BE ASKED TO PICK UP GOVERNMENT STAKE IN PUBLIC SECTOR UNITS. (Money life Digital Team , December 01, 2011 )
The move is part of the governments efforts to raise Rs40,000 crore through disinvestment in state-owned companies, as envisaged in the Budget: New Delhi: The finance ministry is likely to ask countrys largest insurer LIC (Life Insurance Corporation of India) to buy 5%-10% of government stake in public sector undertakings (PSUs) as part of the exercise to raise Rs40,000 crore through disinvestment, reports PTI. LIC would be asked to pick only small portion (5%-10%) in some PSUs, finance ministry sources told PTI. The cash-rich LIC had earlier said that it has earmarked over Rs40,000 crore for investment in equities in public and private sector companies in the current fiscal. LIC is the largest domestic institutional investor in the Indian market. The government has fixed a mammoth Rs40,000 crore disinvestment target for the current fiscal. However, with eight months over, it has only been able to mop up Rs1,145 crore. In order to meet the target, the government is mulling innovative measures, like buyback and cross-holding. Under the buyback mode, the government can raise money by selling its equity in the company to the concerned PSU itself.
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The Department of Disinvestment (DoD) has already floated a Cabinet note which seeks to ask cash rich companies to buy back shares in PSU peers. The government has been thinking of raising funds through the buyback route as it has not been able to raise money through sale of equity in public sector units on account of uncertainty in the stock markets. Such companies may be asked to buy back about 5% equity from the shareholders. Under the current regulations, market regulator Securities and Exchange Board of India (SEBI) allows companies to buy back their own equity from shareholders
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LIC TO FLOAT FIRST INFRA DEBT FUND

(FINANCIAL EXPRESS, Saturday, Dec 03, 2011 )
New Delhi: Life Insurance Corporation of India (LIC) along with Srei Infrastructure Finance will float the country's first infrastructure debt fund (IDF), under a government scheme aimed at boosting investments in sectors like roads, seaports, airports and power. The IDF scheme was announced in Budget this year. In June, SEBI came out with norms for these funds to be set up through the mutual funds route. Recently, the RBI laid down the guidelines for infra debt funds as NBFCs. A senior official told FE that the government was keen to set up the first IDF by January. LIC is in talks with SEBI to get the approval for a debt fund, which will be a mutual fund, the official said. Hemant Kanoria, CMD, Srei confirmed the development. Kanoria said, Recently, Srei has got an in-principal approval from SEBI to set up a mutual fund. The market regulator has approved the trustees and we are keen to set up the debt fund as early as possible. The company is yet to finalize its investment plan as the discussions are still at a initial stage. Sources in the finance ministry, said LIC is keen to become part of IDF as it has not been able to meet its investment target of 15 % of its total income in the infrastructure sector due to the lack of high rated paper. As per norms of the Insurance Regulatory and Development Authority (IRDA), insurers are allowed to invest only in AAA and AA rated debt papers in the infrastructure sector. So, IDF becomes a logical choice for the organization. In case of IDFs through mutual fund route, the bonds issued will have the facility of credit enhancement inherent in Public Private Partnership (PPP) projects. Such IDFs would refinance PPP projects after their construction is completed and they have
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successfully operated for at least one year. Such projects would involve a lower level of risk and a higher credit rating, making them viable for insurance companies. As per the norms, insurers have to invest minimum 15% of their total income in infrastructure which can be going up to 50%. But LIC has been able to invest only 12% in infrastructure. This regulation applies to traditional portfolios and LIC has the highest traditional portfolio as its 60% income comes from traditional products. The requirement of infrastructure in the 12th Plan has been pegged at $1 trillion. An IDF may be set up either as a trust or company. While the trust-based IDF (Mutual Fund) would be regulated by SEBI, an IDF set up as a company (NBFC) would be regulated by RBI.
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GLOSSARY
Accident An event or occurrence causing damage/injury to an entity, and is unforeseen and unintended. Accident Benefit Provides for payment of an additional benefit equal to the sum assured in installments on permanent total disability and waiver of subsequent premiums payable under the policy. Age Limits Stipulated minimum and maximum ages below and above which the company will not accept applications or may not renew policies. Agent An insurance company representative licensed by the state who solicits, negotiates or effects contracts of insurance, and provides service to the policyholder for the insurer. Annuity Plans These plans provide for a "pension" (or a mix of a lumpsum amount and a pension) to be paid to the policy holder or his spouse. In the event of death of both of them during the policy period, a lumpsum amount is provided for the next of kin. Application Form
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Supplied by the insurance company, usually filled in by the agent and medical examiner (if applicable) on the basis of information received from the applicant. It is signed by the applicant and is part of the insurance policy if it is issued.
Assignment Assignment means legal transference. A method by which the policy holder can person on his interest to another person. An assignment can be made by an endorsement on the policy document or as a separate deed. Assignment can be of two types Conditional absolute Beneficiary The person(s) or entity (ies) (e.g. corporation, trust, etc.) named in the policy as the recipient of insurance proceeds upon the death of the insured. Business Insurance A policy which primarily provides coverage of benefits to a business as contrasted to an individual. It is issued to indemnify a business for the loss of services of a key employee or a partner who becomes disabled. Cancelable A contract of health insurance that may be cancelled during the policy term by the insurer or insured.
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Coinsurance 1) A provision under which an insured who carries less than the stipulated percentage of insurance to value, will receive a loss payment that is limited to the same ratio which the amount of insurance bears to the amount required; 2) a policy provision frequently found in medical insurance, by which the insured person and the insurer share the covered losses under a policy in a specified ratio, i.e., 80 per cent by the insurer and 20 per cent by the insured.
Coverage The scope of protection provided under a contract of insurance; any of several risks covered by a policy. Days Of Grace Policy holders are expected to pay premium on due dates. A period is 15-30 days is allowed as grace to make payment of premium; such period is days of grace. Deferment Period Period between the date of subscription to an insurance-cum-pension policy and the time at which the first installment of pension is received. Such policies generally prescribe a minimum and maximum limit on the deferment period.
Depreciation A decrease in the value of property over a period of time due to wear and tear or obsolescence. Depreciation is used to determine the actual cash value of property at time of loss.
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Double/Triple Cover Plans These offers to the beneficiaries double/triple the sum assured on death of life assured during the term of the policy. On survival to the date of maturity, the basic sum assured is paid to the assured. These are low-premium plans, most useful for situations such as housing. Embezzlement Fraudulent use or taking of another's property or money which has been entrusted to one's care. Excess and Surplus Insurance 1) Insurance to cover losses above a certain amount, with losses below that amount usually covered by a regular policy. (2) Insurance to cover an unusual or one-time risk, e.g., damage to a musician's hands or the multiple perils of a convention, for which coverage is unavailable in the normal market. Exclusions Specific conditions or circumstances for which the policy will not provide benefits. Facultative Reinsurance A type of reinsurance in which the reinsurer can accept or reject any risk presented by an insurance company seeking reinsurance. Fiduciary A person who holds something in trust for another.
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Fire Insurance Coverage for losses caused by fire and lightning, plus resultant damage caused by smoke and water. Flood insurance Coverage against loss resulting from the flood peril, available at low cost under a program developed by the Central government.
Franchise Insurance A form of insurance in which individual policies are issued to the employees of a common employer or the members of an association under an arrangement by which the employer or association agrees to collect the premium and remit them to the insurer.
Guaranteed Insurance Sum (GIS) A lump sum purchase price is given to purchase future pensions under the Jeevan Akshay Plan of Life Insurance Corporation of India. This amount is referred to as GIS. The monthly pension that is payable one month after payment of first premium is calculated on the basis of the age at entry. Gross Insurance Value Element (GIVE) The amount payable on the deferred date under Jeevan Dhara Life of Life Insurance Corporation of India. An annuity of 1% of the GIVE is payable per month after the deferment period. And the entire GIVE is payable on death after deferment period.
Indemnity Legal principle that specifies an insured should not collect more than the actual cash value of a loss but should be restored to approximately the same financial position as existed before the loss.
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Insurable Interest A condition in which the person applying for insurance and the person who is to receive the policy benefit will suffer an emotional or financial loss, if any untouched event occurs. Without insurable interest, an insurance contract is invalid.
Insurability All conditions pertaining to individuals that affect their health, susceptibility to injury and life expectancy; an individual's risk profile. Insurance Social device for minimizing risk of uncertainty regarding loss by spreading the risk over a large enough number of similar exposures to predict the individual chance of loss. Insured The person whose life is covered by a policy of insurance. Lapsed Policy A policy which has terminated and is no longer in force due to non-payment of the premium due
Loyalty Additions The loyalty addition is given upon the maturity of the policy, and not before. It's a small percentage of the sum assured. Broadly speaking, loyalty addition is the difference between the performance, of the insurance company and the guaranteed additions. It is LICs effort to further share its surplus after valuation with the policy holders, as LIC is a non-profit organization.
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Life Assured The person whose life is insured by an individual life policy is called life assured. Maturity The date upon which the face amount of a life insurance policy, if not previously invoked due to the contingency covered (death), is paid to the policyholder. Maturity Claim The Payment to the policy holder at the end of the stipulated term of the policy is called maturity claim. Misrepresentation Act of making, issuing, circulating or causing to be issued or circulated an estimate, an illustration, a circular or a statement of any kind that does not represent the correct policy terms, dividends or share of surplus or the name or title for any policy or class of policies that does not in fact reflect its true nature. Moral Hazard Risk depends on the need for insurance, state of health, personal habits standard of living and income of insured peson. Moral hazard is the risk factors that affect the decision of the insurance company to accept the risk. Nomination An act by which the policy holders authorizes another person to receive the policy moneys. The person so authorized is called Nominee.
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Non-cancelable policies Such policies stay in effect regardless of whatever that might happen and as long as the premium is paid from time to time Premium The payment, or one of the regular periodic payments, that a policy holder makes to an insurer in exchange for the insurer's obligation to pay benefits upon the occurrence of the contractually-specified contingency (e.g., death). Reinstatement The restoration of a lapsed policy to in-force status. Reinstatement can only occur after the expiration of the grace period. The company may require evidence of insurability (and, if health status has changed, deny reinstatement), and will always require payment of the total amount of past due premium. Risk The obligation assumed by the insurer when it issues a policy. The spreading of risk across a broad base of the population, adjusted for statistical probability, and the protection against catastrophic loss, is the entire purpose of insurance. For risk assumption purposes, death is viewed as a contingency. That is, although death is certain, its timing is unknown. The process of evaluating and selecting risk is known as underwriting. Sub Standard Risk Person who is considered an under-average or impaired insurance risk because of physical condition, family or personal history of disease, occupation, residence in unhealthy climate or dangerous habits.
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Surrender Value The value payable to the policy holder in the event of his deciding to terminate the policy before the maturity of the policy. Survival Benefit The payment of sum assured to the incured person which has become due by installments under a money back policy. Vesting Age The age at which the receipt of pension starts in an insurance-cum-pension plan.
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Q1) Which insurance company you are aware of?
80% P E R C E N T A G E 70% 60% 50% 40% 30% 20% 10% 0% LIC ICICI HDFC OTHERS
INSURANCE COMPANIES
After analyzing the data it is found that 70% of people are aware about LIC and people are very less aware about ICICI, HDFC and other insurance companies. This states that LIC has created a good image in the minds of people and has earned a good market share. ICICI, HDFC and other brands lack in creating awareness among the people about their plans.LIC is a brand of which maximum people are aware of as the best life insurance company.
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Q2) Are you have insured? IF YES with which company?
70% P E R C E N T A G E 60% 50% 40% 30% 20% 10% 0% LIC ICICI HDFC OTHERS
INSURANCE COMPANIES
After analyzing the above data it is found that maximum numbers of people are insured. This states that people nowadays feel the need of insurance as one of their basic needs. The data also shows that LIC has maximum number of policy holders that is about 60% than other private companies like ICICI, HDFC and others.
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Q3) which company gives better returns? returns
INSURANCE COMPANIES
After analyzing the above data it is found that when it comes to providing better returns LIC occupies the top position. People are more satisfied by the returns provided by LIC which accounts to 70% than other insurance companies such as ICICI , HDFC and others.
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Q4) According to you at the time of claim settlement which company is ing better?
70% P E R C E N T A G E 60% 50% 40% 30% 20% 10% 0% LIC ICICI HDFC OTHERS
INSURANCE COMPANIES
After analyzing the above data it is found that LIC is good at the time of claim settlement .About 65% of people are satisfied by the claim settlement system of LIC and only 10 % to 15% of people agree to the claim settlement of other insurance companies like ICICI ,HDFC and others others.
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Q5) Which is the most trusted company? hich company
INSURANCE COMPANIES
After analyzing the above data it is found that people trust LIC more than other insurance companies.LIC has created a good companies.LIC image in the market than other insurance companies. Around 75% people trust LIC as the best insurance company.
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ow Q6) How do you rate the quality of services of Private Insurance Companies?
60% 50% 40% 30% 20% 10% 0% EXCELLENT GOOD SATISFACTORY BAD
After analyzing the above data it is found that in terms of services provided by private insurance companies 55% of people have rated it excellent , 30 % as good , 10 % satisfactory and only 5 % bad. This states that people are more impressed by the services provided by Private companies.
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Q7) How do you r ow rate the quality of services of LIC?
60% 50% 40% 30% 20% 10% 0% EXCELLENT GOOD SATISFACTORY BAD
After analyzing the above data it is found that people have rated LIC only 50 % as excellent 25% good 15 % satisfactory and 10 % bad. This data shows that LIC needs to improve its quality of service as compared to Private Insurance Companies. ompanies.
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Q8) How will u rate PVT CO. in following terms terms?
70% P E R C E N T A G E 60% 50% 40% 30% 20% 10% 0% HIGH RETURNS SECURITY TAX BENEFITS FACTORS FLEXIBLE
After analyzing the above data it is found that in case of Private Insurance Companies people have rated the nsurance various factors such as high returns, security, tax benefit and flexibility as 60% , 50%, 45%and 55 % respectively.
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Q9) How will u rate LIC in following terms?
80% P E R C E N T A G E 70% 60% 50% 40% 30% 20% 10% 0% HIGH RETURNS SECURITY TAX BENEFITS FACTORS FLEXIBLE
After analyzing the above data it is found that people have rated hav the factors LIC that is high returns , security, tax benefit and flexibility as 70% , 50%, 55% and 60% respectively. This when compared to the Private Insurance Companies is a good sign .this ompanies . shows that LIC is good when these factors are compared t that of to Private Insurance Companies. nsurance
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Q10) Which company has better schemes? hich
80% P E R C E N T A G E 70% 60% 50% 40% 30% 20% 10% 0% LIC INSURANCE COMPANIES PVT.CO.
After analyzing the above data it is found that LIC has better schemes as compared to Private Insurance Companies. LIC provides a wide range of products suiting various needs of the individual. Thus LIC rated high by the people.
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CONCLUSION
Many people argue that LIC has not been able to penetrate the market as it has insured only 15% of the population. My point is, in a poor country like India where there are so many people living below the poverty line, so many people who die of starvation, so many people who dont have access to basic medication, so many people who dont have basic necessities of life like food, shelter, education and clothing. Will such a person first feed his children or buy Insurance? Lets not forget that a majority of the Indian population is poor and a substantial percentage is living below the poverty line. At a personal level I feel that LIC has done a satisfactory job of insuring people. Today LIC is not just Insurance Company, LIC is a Movement, LIC is a Cult, LIC is a Religion. Imagine 13 lac agents and 1 lac employees serving 25 crore policyholders in India. You cannot deny that LIC has become the way of life in India. Daily you can hear someone or the other talking of LIC in local trains, at fish markets, at restaurants, on News Channels, in your own offices, etc. Thus finally concluding I would say LIFE INSURANCE CORPORATION OF INDIA (LIC) to gain more market share and to increase more customer satisfaction should utilize its strengths and opportunities and overcome its weakness and threats. Also LIC has vast market and very firm grip on its traditional customers and monopoly of life insurance products.
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NEWSPAPERS:-
ECONOMIC TIMES FINANCIAL EXPRESS TIMES OF INDIA
INTERNET:-_
www.business-standard.com/
http://economictimes.indiatimes.com/
www.financialexpress.com/ www.licindia.in/ http://www.moneylife.in/
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QUESTIONNAIRE
Q1) WHICH INSURANCE COMPANY YOU ARE AWARE OF? LIC PRIVATE CO.
Q2) ARE YOU HAVE INSURED? IF YES WITH WHICH COMPANY? LIC ICICI HDFC OTHERS
Q3) WHICH COMPANY GIVES BETTER RETURNS? LIC ICICI HDFC OTHERS
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Q4) ACCORDING TO YOU AT THE TIME OF CLAIM SETTLEMENT WHICH COMPANY IS BETTER? LIC ICICI HDFC OTHERS
Q5) WHICH IS THE MOST TRUSTED COMPANY? LIC ICICI HDFC OTHERS
Q6) HOW DO YOU RATE THE QUALITY OF SERVICES OF PRIVATE COMPANIES? EXCELLENT GOOD SATISFACTORY BAD
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Q7) HOW DO YOU RATE THE QUALITY OF SERVICES OF LIC? EXCELLENT GOOD SATISFACTORY BAD
Q8) HOW WILL U RATE PVT CO. IN FOLLOWING TERMS? HIGH RETURNS SECURITY TAX BENEFIT FLEXIBLE
Q9) HOW WILL U RATE LIC IN FOLLOWING TERMS ?

HIGH RETURNS SECURITY TAX BENEFIT FLEXIBLE
Q10) WHICH COMPANY HAS BETTER SCHEMES?
LIC PRIVATE CO.
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Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Maximize mobilization of people's savings by making insurance-linked savings adequately attractive.

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

LIFE INSURANCE CORPORATION OF INDIA

Type Industry Founded Headquarters Key people

Life Insurance Pensions Mutual funds

Total assets Owner(s) Employees Subsidiaries

Study of LIC as a Financial Institution

BOARD OF DIRECTORS Members On The Board Of The Corporation

Shri D.K. Mehrotra Charge (Current-in-Charge & CHAIRMAN, LIC )

Shri T. S. Vijayan (Managing Director, LIC )

Shri Thomas Mathew T. (Managing Director, LIC )

Shri A.K. Dasgupta (Managing Director, LIC )

Study of LIC as a Financial Institution

Shri Yogesh Lohiya (Chairman Cum Managing Director, GIC of India)

Shri D.K. Mehrotra (Current-in-Charge & CHAIRMAN, LIC )

Shri T. S. Vijayan (Managing Director, LIC )

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

CHARACTRISTICS OF LIFE INSURANCE Contract of Insurance:

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Passport issued by the Passport Authorities in India.

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Revival Of Lapsed Policy:

Change Of Address And Transfer Of Policy Records:

Loss Of Policy Document:

Study of LIC as a Financial Institution

Ensure nomination exists in the policy for easy settlement of claims.

Study of LIC as a Financial Institution

Survival Benefit/Maturity Claims:

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Claim Review Committee:

Following type of complaints fall within the purview of the Ombudsman

Study of LIC as a Financial Institution

Initiatives In Policy Servicing Areas:

Grievance Redressal Machinery:

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

Study of LIC as a Financial Institution

PLANS FOR HANDICAPPED JEEVAN AADHAR JEEVAN VISHWAS