The document discusses the history and profile of Life Insurance Corporation of India (LIC). It outlines key milestones such as the establishment of the first life insurance company in India in 1818 and the nationalization of life insurance and formation of LIC in 1956. LIC began as a government corporation with 5 zones, 33 divisions and 212 branches and has since expanded significantly to over 2000 branches across India. It remains the largest life insurer in India.
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PROJECT REPORT
ON
CAMPARATIVE STUDY LIFE INSURANCE CORPORATION OF
INDIA
SUBMITTED IN PARTIAL FULFILLMENT FOR
UNDER THE GUIDANCE OF
SUBMITTED BY:
INSTITUTE
Affiliated to
2. STUDENT DECLARATION
This is to certify that the project titled ‘CAMPARATIVE STUDY OF
LIFE INSURANCE CORPORATION OF INDIA’ under the guidance of
‘Professor Name’ has been completed and submitted in partial fulfillment of
the requirement for the award of degree of Bachelor of Business
Administration at Maharaja Agrasen Institute of Management Studies, Delhi
. This is an original piece of work & I have not submitted it earlier
elsewhere.
Student Name
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 2
3. GUIDE CERTIFICATE
This is to certify that the project titled CAMPARATIVE STUDY OF
LIFE INSURANCE CORPORATION OF INDIA is an academic work
done by “Student Name” submitted in the partial fulfillment of the
requirement for the award of the degree of Bachelor Of Business
Administration from Maharaja Agrasen Institute of Management Studies,
Delhi, under my guidance & direction. To the best of my knowledge and
belief the data & information presented by him/her in the project has not
been submitted earlier.
Faculty
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 3
4. ACKNOWLEDGEMENT
I am highly obliged to Professor Name (project guide) for her constant and
excellent guidance and also her valuable support without whom this project
report could not be successfully completed. I am also thankful to my friends,
my parents, brother-sister for helping me in the completion of this project
report.
Signature
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 4
5. INDEX
Table of Content
CHAPTER-1 7
Introduction
CHAPTER -2 11
Company Profile
CHAPTER -3 30
Research Methodology
CHAPTER-4 34
Policies and Plans
CHAPTER -5 70
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 5
7. EXECUTIVE SUMMARY
Insurance is the most familiar word or phrase used in today’s life. Insurance
companies are those institutes that provide various types of facility and
services in term of there plans and policies to the consumers. The following
project has been made on one of the largest company in insurance sector in
India which is owned by government which is “CAMPARATIVE STUDY
OF LIFE INSURANCE CORPORATION OF INDIA”. The following
project makes an analysis of the products of LIC. The brief summary of each
chapter is discussed as follows:-
CHAPTER-1
It consist of information of the industrial profile of the life insurance sector
i.e. when and how does this sector emerges and how it contributes to the
economy,
CHAPTER-2
Chapter 2 includes company profile of LIC i.e. how and when it is formed,
which were the companies that merges and form LIC, its milestones, its
objectives, mission and vision, what is life insurance, board of directors, a
brief on the subsidiaries. It also includes awards and achievements by LIC.
CHAPTER-3
Purpose of the study for which it is conducted, objective while conducting
the study and methodology which consist of the medians used and the tools
used to complete the study.
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 7
8. CHAPTER-4
It includes some of the products offered by LIC, net asset value of the
products, tax benefits to its policy holders categorized according to their age.
It also shows the relationship of LIC with information technology.
CHAPTER-5
This chapter includes the findings and analysis retrieved after the study of the
of the project.
CHAPTER-6
Chapter 6 consists of the conclusion arrived after analyzing and findings
from the study.
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 8
10. INSURANCE COMPANIES IN INDIA
In India, Insurance is a national matter, in which life and general insurance is
yet a booming sector with huge possibilities for different global companies,
as life insurance premiums account to 2.5% and general insurance premiums
account to 0.65% of India's GDP. The Indian Insurance sector has gone
through several phases and changes, especially after 1999, when the Govt. of
India opened up the insurance sector for private companies to solicit
insurance by passing Insurance Regulatory and Development Authority
(IRDA) Bill, allowing FDI up to 26%. Since then, the Insurance sector in
India is considered as a flourishing market amongst global insurance
companies. However, the largest life insurance company in India is still
owned by the government.
The history of Insurance in India dates back to 1818, when Oriental Life
Insurance Company was established by Europeans in Kolkata to cater to their
requirements. Nevertheless, there was discrimination among the life of
foreigners and Indians, as higher premiums were charged from the latter. In
1870, Indians took a sigh of relief when Bombay Mutual Life Assurance
Society, the first Indian insurance company covered Indian lives at normal
rates. Onset of the 20th century brought a drastic change in the Insurance
sector.
In 1912, the Govt. of India passed two acts - the Life Insurance Companies
Act, and the Provident Fund Act - to regulate the insurance business.
National Insurance Company Ltd, founded in 1906, is the oldest existing
insurance company in India. Earlier, the Insurance sector had only two state
insurers - Life Insurers i.e. Life Insurance Corporation of India (LIC), and
General Insurers i.e. General Insurance Corporation of India (GIC). In
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 10
11. December 2000, these subsidiaries were de-linked from parent company and
were declared independent insurance companies: Oriental Insurance
Company Limited, New India Assurance Company Limited, National
Insurance Company Limited and United India Insurance Company Limited.
With an annual growth rate of 15-20% and the largest number of life
insurance policies in force, the potential of the Indian insurance industry is
huge. Total value of the Indian insurance market (2004-05) is estimated at
Rs. 450 billion (US$10 billion).
The life insurance industry in India grew by an impressive 36%, with
premium income from new business at Rs. 253.43 billion during the fiscal
year 2004-2005, braving stiff competition from private insurers. This report,
"Indian Insurance Industry: New Avenues for Growth 2012", finds that the
market share of the state behemoth, LIC, has clocked 21.87% growth in
business at Rs.197.86 billion by selling 2.4 billion new policies in 2004-05.
But this was still not enough to arrest the fall in its market share, as private
players grew by 129% to mop up Rs. 55.57 billion in 2004-05 from Rs. 24.29
billion in 2003-04.
Though the total volume of LIC's business increased in the fiscal year (2004-
2005) compared to the previous one, its market share came down from 87.04
to 78.07%. The 14 private insurers increased their market share from about
13% to about 22% in a year's time. The figures for the first two months of the
fiscal year 2005-06 also speak of the growing share of the private insurers.
The share of LIC for this period has further come down to 75 percent, while
the private players have grabbed over 24 percent.
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 11
12. There are presently 12 general insurance companies with four public sector
companies and eight private insurers and private insurance companies
collectively have a 10% share of the non-life insurance market.
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 12
14. COMPANY PROFILE
The story of insurance is probably as old as the story of mankind. The same
instinct that prompts modern businessmen today to secure themselves against
loss and disaster existed in primitive men also. They too sought to avert the
evil consequences of fire and flood and loss of life and were willing to make
some sort of sacrifice in order to achieve security. Though the concept of
insurance is largely a development of the recent past, particularly after the
industrial era – past few centuries – yet its beginnings date back almost 6000
years.
Life Insurance in its modern form came to India from England in the year
1818. Oriental Life Insurance Company started by Europeans in Calcutta was
the first life insurance company on Indian Soil. All the insurance companies
established during that period were brought up with the purpose of looking
after the needs of European community and Indian natives were not being
insured by these companies. However, later with the efforts of eminent
people like Babu Muttylal Seal, the foreign life insurance companies started
insuring Indian lives. But Indian lives were being treated as sub-standard
lives and heavy extra premiums were being charged on them. Bombay
Mutual Life Assurance Society heralded the birth of first Indian life
insurance company in the year 1870, and covered Indian lives at normal
rates. Starting as Indian enterprise with highly patriotic motives, insurance
companies came into existence to carry the message of insurance and social
security through insurance to various sectors of society. Bharat Insurance
Company (1896) was also one of such companies inspired by nationalism.
The Swadeshi movement of 1905-1907 gave rise to more insurance
companies. The United India in Madras, National Indian and National
Insurance in Calcutta and the Co-operative Assurance at Lahore were
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 14
15. established in 1906. In 1907, Hindustan Co-operative Insurance Company
took its birth in one of the rooms of the Jorasanko, house of the great poet
Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance
and Swadeshi Life (later Bombay Life) were some of the companies
established during the same period. Prior to 1912 India had no legislation to
regulate insurance business. In the year 1912, the Life Insurance Companies
Act, and the Provident Fund Act were passed. The Life Insurance Companies
Act, 1912 made it necessary that the premium rate tables and periodical
valuations of companies should be certified by an actuary. But the Act
discriminated between foreign and Indian companies on many accounts,
putting the Indian companies at a disadvantage.
The first two decades of the twentieth century saw lot of growth in insurance
business. From 44 companies with total business-in-force as Rs.22.44 crore,
it rose to 176 companies with total business-in-force as Rs.298 crore in 1938.
During the mushrooming of insurance companies many financially unsound
concerns were also floated which failed miserably. The Insurance Act 1938
was the first legislation governing not only life insurance but also non-life
insurance to provide strict state control over insurance business. The demand
for nationalization of life insurance industry was made repeatedly in the past
but it gathered momentum in 1944 when a bill to amend the Life Insurance
Act 1938 was introduced in the Legislative Assembly. However, 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 at the time of
nationalization. Nationalization was accomplished in two stages; initially the
management of the companies was taken over by means of an Ordinance,
and later, the ownership too by means of a comprehensive bill. The
Parliament of India passed the Life Insurance Corporation Act on the 19th of
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 15
16. June 1956, and the Life Insurance Corporation of India was created on 1st
September, 1956, with the objective of spreading life insurance much more
widely and in particular to the rural areas with a view to reach all insurable
persons in the country, providing them adequate financial cover at a
reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart
from its corporate office in the year 1956. Since life insurance contracts are
long term contracts and during the currency of the policy it requires a variety
of services need was felt in the later years to expand the operations and place
a branch office at each district headquarter. Re-organization of LIC took
place and large numbers of new branch offices were opened. As a result of
re-organization servicing functions were transferred to the branches, and
branches were made accounting units. It worked wonders with the
performance of the corporation. It may be seen that from about 200.00 crores
of New Business in 1957 the corporation crossed 1000.00 crores only in the
year 1969-70, and it took another 10 years for LIC to cross 2000.00 crore
mark of new business. But with re-organization happening in the early
eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on
new policies.
Today LIC functions with 2048 fully computerized branch offices, 100
divisional offices, 7 zonal offices and the corporate office. LIC’s Wide Area
Network covers 100 divisional offices and connects all the branches through
a Metro Area Network. LIC has tied up with some Banks and Service
providers to offer on-line premium collection facility in selected cities. LIC’s
ECS and ATM premium payment facility is an addition to customer
convenience. Apart from on-line Kiosks and IVRS, Info Centers have been
commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad,
Kolkata, New Delhi, Pune and many other cities. With a vision of providing
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 16
17. easy access to its policyholders, LIC has launched its SATELLITE
SAMPARK offices. The satellite offices are smaller, leaner and closer to the
customer. The digitalized records of the satellite offices will facilitate
anywhere servicing and many other conveniences in the future.
LIC continues to be the dominant life insurer even in the liberalized scenario
of Indian insurance and is moving fast on a new growth trajectory surpassing
its own past records. LIC has issued over one crore policies during the
current year. It has crossed the milestone of issuing 1,01,32,955 new policies
by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the
corresponding period of the previous year.
From then to now, LIC has crossed many milestones and has set
unprecedented performance records in various aspects of life insurance
business. The same motives which inspired our 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.
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 17
18. 1928: The Indian Insurance Companies Act enacted to enable the
government to collect statistical information about both life and non-life
insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act
with the objective of protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies are taken over
by the central government and nationalized. LIC formed by an Act of
Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore
from the Government of India.
The General insurance business in India, on the other hand, can trace its roots
to the Triton Insurance Company Ltd., the first general insurance company
established in the year 1850 in Calcutta by the British.
Some of the important milestones in the general insurance business in India
are:
1907: The Indian Mercantile Insurance Ltd. set up, the first company to
transact all classes of general insurance business.
1957: General Insurance Council, a wing of the Insurance Association of
India, frames a code of conduct for ensuring fair conduct and sound business
practices.
1968: The Insurance Act amended to regulate investments and set minimum
solvency margins and the Tariff Advisory Committee set up.
1972: The General Insurance Business (Nationalization) Act, 1972
nationalized the general insurance business in India with effect from 1st
January 1973.
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 18
19. 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.
LIC SUBSIDIARIES
Unlike provisions for private players in the insurance sector, the LIC Act
provides for setting up subsidiaries through policy holders fund. It is due to
the LIC act that LIC of India has a number of subsidiaries which help it in
leveraging its potential to the maximum, providing an enhanced set of
diversified services to its customers. These subsidiaries include LIC
International, LIC Nepal, LIC Lanka, LIC Housing Finance and LIC Mutual
Fund.
LIC INERNATIONAL
This is a joint venture offshore company promoted by LIC which
commenced operations in July, 1989 with the objectives of offering US$
denominated policies to cater to the insurance needs of NRIs and providing
insurance services to holders of LIC policies currently residing in the Gulf.
LIC International operates in all GCC countries.
LIC NEPAL
A joint venture company formed in 2001 with the Vishal Group of
Industries, Nepal.
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 19
20. LIC LANKA
A joint venture company formed in 2003 with the Bartleet Group of
Companies, Sri Lanka.
LIC HOUSING FINANCE LTD.
The Company is recognized by National Housing Bank and listed on the
National Stock Exchange (NSE) & Bombay Stock Exchange Limited (BSE).
LIC Housing Finance Ltd. is one of the largest Housing Finance Company in
India. Incorporated on 19th June 1989 under the Companies Act, 1956, the
company was promoted by LIC of India and went public in the year 1994. Its
main objective is to provide long term finance for construction or purchase of
houses or apartments. It has a Dubai office.
LIC MUTUL FUND LTD.
Life Insurance Corporation of India set up LIC Mutual Fund on 19th June
1989 and contributed Rs. 2 Crores towards the corpus of the Fund. LIC
Mutual Fund was constituted as a Trust in accordance with the provisions of
the Indian Trust Act, 1882.
There are some other subsidiaries of LIC which are
1. LIC Mutual Fund Asset Management Company Ltd.
2. LIC HFL Care Homes Ltd.
3. LICHFL Asset Management Company Private Limited.
4. LICHFL Trustee Company Private Limited.
5. LICHFL Financial Services Limited, etc.
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 20
21. WHAT IS LIFE INSURANCE?
Life insurance is a contract that pledges payment of an amount to the person
assured (or his nominee) on the happening of the event insured against.
The contract is valid for payment of the insured amount during:
• The date of maturity, or
• Specified dates at periodic intervals, or
• Unfortunate death, if it occurs earlier.
Among other things, the contract also provides for the payment of premium
periodically to the Corporation by the policyholder. Life insurance is
universally acknowledged to be an institution, which eliminates 'risk',
substituting certainty for uncertainty and comes to the timely aid of the
family in the unfortunate event of death of the breadwinner.
By and large, life insurance is civilization’s partial solution to the problems
caused by death. Life insurance, in short, is concerned with two hazards that
stand across the life-path of every person:
1. That of dying prematurely leaves a dependent family to fend for itself.
2. That of living till old age without visible means of support.
Life Insurance Vs. Other Savings
Contract of Insurance:
A contract of insurance is a contract of utmost good faith technically known
as uberrima fides. The doctrine of disclosing all material facts is embodied in
this important principle, which applies to all forms of insurance.
At the time of taking a policy, policyholder should ensure that all questions
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 21
22. 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.
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
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 22
23. the assured in effect pays a lower premium for insurance than otherwise.
Money When You Need It:
A policy that has a suitable insurance plan or a combination of different
plans can be effectively used to meet certain monetary needs that may arise
from time-to-time. Children's education, start-in-life or marriage provision or
even periodical needs for cash over a stretch of time can be less stressful with
the help of these policies.
Alternatively, policy money can be made available at the time of one's
retirement from service and used for any specific purpose, such as, purchase
of a house or for other investments. Also, loans are granted to policyholders
for house building or for purchase of flats (subject to certain conditions).
Who Can Buy A Policy?
Any person who has attained majority and is eligible to enter into a valid
contract can insure himself/herself and those in whom he/she has insurable
interest.
Policies can also be taken, subject to certain conditions, on the life of one's
spouse or children. While underwriting proposals, certain factors such as the
policyholder’s state of health, the proponent's income and other relevant
factors are considered by the Corporation.
Insurance For Women
Prior to nationalization (1956), many private insurance companies would
offer insurance to female lives with some extra premium or on restrictive
conditions. However, after nationalization of life insurance, the terms under
which life insurance is granted to female lives have been reviewed from
time-to-time.
At present, women who work and earn an income are treated at par with
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 23
24. men. In other cases, a restrictive clause is imposed, only if the age of the
female is up to 30 years and if she does not have an income attracting
Income Tax.
Medical And Non-Medical Schemes
Life insurance is normally offered after a medical examination of the life to
be assured. However, to facilitate greater spread of insurance and also to
avoid inconvenience, LIC has been extending insurance cover without any
medical examination, subject to certain conditions.
With Profit And Without Profit Plans
An insurance policy can be 'with' or 'without' profit. In the former, bonuses
disclosed, if any, after periodical valuations are allotted to the policy and are
payable along with the contracted amount.
In 'without' profit plan the contracted amount is paid without any addition.
The premium rate charged for a 'with' profit policy is therefore higher than
for a 'without' profit policy.
Keyman Insurance
Keyman insurance is taken by a business firm on the life of key employee(s)
to protect the firm against financial losses, which may occur due to the
premature demise of the Keyman.
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 24
25. 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.
MISSION/VISSION
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 25
26. MISSION
"Explore and enhance the quality of life of people through financial security
by providing products and services of aspired attributes with competitive
returns, and by rendering resources for economic development."
VISSION
"A trans-nationally competitive financial conglomerate of significance to
societies and Pride of India."
BOARD OF DIRECTORS
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 26
27. Members on the Board of the Corporation
1. Chairman: Shri. T.S. Vijayan
2. Managing Director: Shri. D.K. Mehrotra
3. Managing Director: Shri. Thomas Mathew T.
4. Managing Director: Shri. A.K. Dasgupta
5. Finance Secretary: Shri. Ashok Chawla (Ministry of Finance, Govt. of
India)
6. Additional Secretary: Shri. G.C. Chaturvedi (Department of Financial
Services, Ministry of Finance, Govt. of India.)
7. Chairman cum Managing Director: Shri. Yogesh Lohiya (GIC of India)
8. Chairman & Managing Director: Shri. T.C. Venkat Subramanian
(Export Import Bank of India)
9. Dr. Sooranad Rajashekhran
10. Shri. Monis R. Kidwai
AWARDS AND ACHIVEMENTS
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 27
28. Brand Equity Most Trusted Brand
2009 Top in Insurance Category
Golden Peacock Innovative
Product / Service Award – 2009
Loyalty Awards - 2009
Readers Digest Trusted Brand
Award 2009 in the Platinum
category
CNBC Awaaz Consumer Awards
2008
NDTV Profit Business Leadership
Award 2008
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 28
29. INDY's Silver Award for Best
Corporate Film
INDY's Silver Award for Best in
House Magazine
IT USER 2008 NASCOM Selected Business Super brand
India 2008
ASIA BRAND CONGRESS
BRAND LEADERSHIP AWARD
2008
Pitch Award -" Rank 1 " India's
Top 50 service Brands
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 29
30. Loyalty Awards 2008 - Insurance
Sector
SKOCH Challengers Award 2008
for Jeevan Madhur
Readers Digest Trusted Brand
Award 2008 in the Platinum
category.
Golden Peacock Award for
Excellence in Corporate
Governance
Web 18 Genius of the web awards
2007
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 30
32. RESEARCH
METHODOLOGY
PURPOSE OF THE STUDY
The purpose behind the study of ‘CAMPARATIVE STUDY OF LIFE
INSURANCE CORPORATION OF INDIA’ is to understand the
companies’ background as well as the nature of the various products offered
over many years in India. Purpose is to study the products and their benefits
to customers. This gives a brief idea of the nature of products of the
company.
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 32
33. OBJECTIVES OF THE STUDY
The objectives behind the study of the plans and policies of
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION
OF INDIA’ are:
1. To impart knowledge about the history and objectives of the company and
also its different subsidiaries.
2. To aware the readers about the different plans and policies provided by
LIC, there value and benefits to its customers.
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 33
34. METHODOLOGY
DATA COLLECTION:
All the information provided on ‘CAMPARATIVE STUDY OF LIFE
INSURANCE CORPORATION OF INDIA’ in the project report has
been collected through secondary resources. No survey has been conducted
to collect information for the study. Therefore only secondary data is used in
the study.
STATICAL TOOLS:
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 34
35. Secondary resources used in the study for information collection is internet
and magazines. Magazines & websites have been used and the information
retrieved from these sources is then gathered in this project. Other tools used
in the study which are used in the preparation of the project after collecting
information are:
1. MS Word
2. MS Excel
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 35
36. CHAPTER-4
POLICIES
POLICIES (SCHEMES)
Life Insurance Corporation of India provides number of products to its
costumers. LIC differentiated their policies into five different types which
are:
1. Insurance Plans
2. Pension Plans
3. Unit Plans
4. Special Plans
5. Group Scheme
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 36
37. INSURANCE PLANS
As individuals it is inherent to differ. Each individual’s insurance needs
and requirements are different from that of the others. LICs Insurance
Plans are policies that talk to you individually and give you the most
suitable options that can fit your requirement.
Jeevan Anurag Komal Jeevan
CDA Endowment Vesting
At 21 Marriage Endowment Or
Educational Annuity PlanCDA Endowment Vesting
At 18
Jeevan Kishore Jeevan Chhaya
Child Career Plan Child Future Plan
Child Fortune Plus
Jeevan Aadhar
Jeevan Vishwas
The Endowment Assurance Policy
The Endowment Assurance Policy-Limited Payment
Jeevan Mitra(Double Cover Endowment Plan)
Jeevan Mitra(Triple Cover Endowment Plan)
Jeevan Anand
New Janaraksha Plan
Jeevan Amrit
Jeevan Shree-I
Jeevan Pramukh
The Money Back Policy-20 Years
The Money Back Policy-25 Years
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 37
38. Jeevan Surabhi-15 Years
Jeevan Surabhi-20 Years
Jeevan Surabhi-25 Years
Bima Bachat
Jeevan Bharati - I
The Whole Life Policy
The Whole Life Policy- Limited Payment
The Whole Life Policy- Single Premium
Jeevan Anand
Jeevan Tarang
Two Year Temporary Assurance Policy
The Convertible Term Assurance Policy
Anmol Jeevan-I
Amulya Jeevan-I
Jeevan Saathi Plus
Jeevan Saathi
Mortgage Redemption
PENSION PLANS
Pension Plans are Individual Plans that gaze into your future and foresee financial
stability during your old age. These policies are most suited for senior citizens and
those planning a secure future, so that you never give up on the best things in life.
Jeevan Nidhi
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 38
39. Jeevan Akshay-VI
New Jeevan Dhara-I
New Jeevan Suraksha-I
UNIT PLANS
Unit plans are investment plans for those who realize the worth of hard-
earned money. These plans help you see your savings yield rich benefits
and help you save tax even if you don't have consistent income.
Market Plus I
Profit Plus
Fortune Plus
Money Plus-I
Child Fortune Plus
SPCIAL PLANS
LIC’s Special Plans are not plans but opportunities that knock on your door
once in a lifetime. These plans are a perfect blend of insurance, investment
and a lifetime of happiness!
New Bima Gold
Health Protection Plus
Health Plus
Bima Nivesh 2005
Jeevan Saral
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 39
40. Jeevan Madhur
GROUP SCHEME
Group Insurance Scheme is life insurance protection to groups of people.
This scheme is ideal for employers, associations, societies etc. and allows
you to enjoy group benefits at really low costs.
Group LIC's Superannuation Plus
Group Term Insurance Schemes
Group Insurance Scheme in Lieu Of EDLI
Group Gratuity Scheme
Group Super Annuation Scheme
Group Savings Linked Insurance Scheme
Group Leave Encashment Scheme
Group Mortgage Redemption Assurance Scheme
Gratuity Plus
Group Critical Illness Rider
JanaShree Bima Yojana (JBY)
Shiksha Sahayog Yojana
Aam Admi Bima Yojana
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 40
Jeevan Mangal
41. PRODUCTS BY LIC
INSURANCE PLANS
1. Jeevan Anand
Features
Product summary:
This plan is a combination of Endowment Assurance and Whole Life plans.
It provides financial protection against death throughout the lifetime of the
life assured with the provision of payment of a lump sum at the end of the
selected term in case of his survival.
Premium:
Premiums are payable yearly, half-yearly, quarterly, monthly or through
salary deductions as opted by you throughout the selected term of the policy
or till earlier death.
Bonuses:
This is a with-profit plan and participates in the profits of the Corporation’s
life insurance business. It gets a share of the profits in the form of bonuses.
Simple Reversionary Bonuses are declared per thousand Sum Assured
annually at the end of each financial year. Once declared, they form part of
the guaranteed benefits of the plan. Bonuses will be added during the
selected term or till death, if it occurs earlier. Final (Additional) Bonus may
also be payable provided the policy has run for certain minimum period
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 41
42. Benefits
Benefits in case of death during the selected term:
The Sum Assured along with the vested bonuses is payable on death in a
lump sum.
Benefits in case of survival to the end of selected term:
The Sum Assured along with the vested bonuses is payable in a lump sum on
survival to the end of the term. An additional Sum Assured is payable on
death thereafter.
Accident Benefit:
An additional Sum Assured (subject to a limit of Rs.5 lakh) is payable in a
lump sum on death due to accident up to age 70 of life assured. In case of
permanent disability of the life assured due to accident this additional Sum
assured is payable in installments.
Supplementary/Extra Benefits:
These are the optional benefits that can be added to your basic plan for extra
protection/option. An additional premium is required to be paid for these
benefits.
Surrender Value:
Buying a life insurance contract is a long-term commitment. However,
surrender values are available on the plan on earlier termination of the
contract.
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 42
43. Guaranteed Surrender Value:
The policy may be surrendered after it has been in force for 3 years or more.
The guaranteed surrender value is 30% of the basic premiums paid excluding
the first year’s premium. Any extra premium(s) paid and premium(s) towards
Accident Benefit are also excluded.
Corporation’s policy on surrenders:
In practice, the Corporation will pay a Special Surrender Value – which is
either equal to or more than the Guaranteed Surrender Value. The benefit
payable on surrender reflects the discounted value of the reduced claim
amount that would be payable on death or at maturity. This value will depend
on the duration for which premiums have been paid and the policy duration
at the date of surrender. In some circumstances, in case of early termination
of the policy, the surrender value payable may be less than the total premium
paid.
2. Jeevan Shree-I
Product summary:
This is an Endowment Assurance plan offering the choice of many
convenient premiums paying terms. It provides financial protection against
death throughout the term of plan with the payment of maturity amount on
survival to the end of the policy term.
Premiums:
Premiums are payable yearly, half-yearly, quarterly or through Salary
deductions, as opted by you, throughout the premium paying term or till
earlier death. Alternatively premium may be paid in one lump sum (Single
premium).
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 43
44. Guaranteed Additions:
The policy provides for the Guaranteed Additions at the rate of Rs. 50/- per
thousand Sum Assured for each completed year for first five years of the
policy. The Guaranteed Additions are payable along with the Basic Sum
Assured at the time of claim.
Bonuses:
The policy participates in the profits of the Corporation’s life insurance
business from the 6th year onwards. It will get a share of the profits in the
form of bonuses. Simple Reversionary Bonuses will be declared per
thousand Basic Sum Assured annually at the end of each financial year. Once
declared, they will form part of the guaranteed benefits of the plan.
Benefits
Death Benefit:
The Sum Assured along with guaranteed additions and vested bonuses, if
any, is payable in a lump sum on death of the life assured during the policy
term.
Maturity Benefit:
The Sum Assured along with guaranteed additions and reversionary bonuses,
if any is payable in a lump sum on survival to the end of the policy term.
Supplementary/Extra Benefits:
These are the optional benefits that can be added to your basic plan for extra
protection/option. An additional premium is required to be paid for these
benefits.
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 44
45. Surrender Value:
Buying a life insurance contract is a long-term commitment. However,
surrender value is available on the plan on earlier termination of the contract.
Guaranteed Surrender Value:
The policy may be surrendered after it has been in force for 3 years or more.
The guaranteed surrender value is 30% of the basic premiums paid excluding
the first year’s premium. In case of a single premium policy the guaranteed
surrender value is 90% of the single premium paid excluding any extra
premium.
Corporation’s policy on surrenders:
In practice, the Corporation will pay a Special Surrender Value – which is
either equal to or more than the Guaranteed Surrender Value. The benefit
payable on surrender reflects the discounted value of the reduced claim
amount that would be payable on death or at maturity. This value will depend
on the duration for which premiums have been paid and the policy duration
at the date of surrender. In some circumstances, in case of early termination
of the policy, the surrender value payable may be less than the total premium
paid.
3. Bima Bachat
What is Bima Bachat?
LIC’s Bima Bachat is a money-back policy which offers financial security
and assurance to the policy holder and his family. Bima Bachat requires the
policy holder to pay only one premium. The amount paid for the premium
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 45
46. depends on the duration of the policy taken and life insurance is available till
the date of maturity.
What other benefits do I receive during the specified duration of the
policy?
For a term of 9 years: The policy holder will receive 15% of the sum assured
at the end of every 3rd and 6th policy year.
For a term 12 years: The policy holder will receive 15% of the sum assured
at the end of every 3rd, 6th and 9th policy year.
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 46
47. For a term 15 years: The policy holder will receive15% of the sum assured at
the end of every 3rd, 6th, 9th and 12th policy year.
What additional benefits do I get upon maturity?
If the policy holder outlives the duration of the policy, at the time of
maturity, a single premium payment (excluding extra premium) is made
along with loyalty additions, if any.
How much insurance do I get?
The policy holder is insured for an amount equal to the sum assured.
What about the installment received already?
The insurance cover is irrespective of the installments received.
When am I eligible for the guaranteed surrender value?
The guaranteed surrender value is available only after completion of at least
one policy year. This value is equal to 90 % of the single premium paid
(excluding extra premium).
What other benefits does this insurance cover offer?
Bima Bachat is the only money-back policy that offers a loan facility. The
rate of interest for this will be determined from time to time by the
corporation. Presently the rate of interest is 9% p.a. payable half-yearly.
It also offers other benefits like the 15 day cooling off period, grace period
and revival.
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 47
48. Who is eligible for the policy? Are there other conditions or restrictions?
The following are the requirements that one needs to be aware of before
applying for this policy:
· The person applying for the policy should have completed 15 years and
should not be older than 66 years.
· The policy will mature when the person is 75 years old.
· There is a choice of three terms to choose from (9, 12 and 15 years) for the
policy depending on the age and requirement of the applicant.
· The minimum sum that needs to be assured is Rs 20,000/- and there is no
limit on the amount that can be assured.
· It is important to note that the sum assured should be in multiples of Rs
5000/- only.
· The policy requires the holder to pay a single premium.
Premium payment
Single Premium
The sample premium rates are as under: -
Age Annual Premium per 1000 SA
9 12 15
15 716.40 771.35 804.00
20 717.20 771.85 804.40
25 717.55 772.25 804.95
30 718.45 773.35 806.10
35 721.05 775.75 808.55
40 725.80 780.25 812.95
45 734.10 787.60 819.60
50 746.60 797.90 828.95
55 762.65 811.95 841.75
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 48
49. 60 784.80 831.30 859.35
65 816.25 - -
What incentives do I get for a higher sum assured?
Let’s take an example of a 30 year old with a Bima Bachat policy for 12
years. If the sum assured is Rs 45,000 then he has to pay a premium of Rs
34800.75. But for a sum assured amount of Rs 50,000 he will have to pay a
premium of Rs 36734.13 only, thus getting a 5% rebate in premium.
Refer to the table below for other rebate percentages:
Less than Rs. 50,000 NIL
Rs. 50,000 and Less than Rs.1
lakh
5%
Rs. 1 lakh and Less than Rs.2
lakh
7%
Rs. 2 lakh and above 8%
4. The Convertible Term Assurance Policy
Features
This plan of assurance is designed to meet the needs of those who are
initially unable to pay the larger premium required for a Whole Life or
Endowment Assurance Policy, but hope to be able to pay for such a policy in
the near future.
This plan would be found useful also in cases where it is desired to leave the
final decision as to the plan to a later date when, perhaps a better choice
could be made.
Suitable For:
For all people with earned income under Category I and unearned incomes
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 49
50. under Category II, basically Standard and sub-Standard lives attracting EMR
classes I and II.
Benefits
Survival Benefit - Not Applicable
Death Benefit - the sum assured is payable only in the event of death
of the Life Assured before the expiry of the specified term.
Plan parameters
Minimum Maximum
Entry age 20 (nearer birthday) 50
Sum assured (Rs.) 50,000 1,00,00,000
Term (years) 5 7
Mode of Payment
Maximum premium
paying period
Policy loan
available
Yearly, Half-
yearly, Quarterly,
Monthly, Salary
Saving Scheme
55 years No
PENSION PLANS
1. New Jeevan Dhara-I
Features
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 50
51. Product summary:
These are Deferred Annuity plans that allow the policyholder to make
provision for regular income after the selected term.
Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through
Salary deduction, as opted by you, throughout the term of the policy or till
earlier death. Alternatively, the premium may be paid in one lump sum
(single premium).
Tax Benefits:
Tax relief under Section 80ccc is available on premiums paid under New
Jeevan Suraksha I (Table No.147). The premiums paid under New Jeevan
Dhara I (Table No.148) qualify for tax relief under Section 88.
Bonuses:
These are with-profit plans and participate in the profits of the Corporation’s
annuity / pension business. Policies get a share of the profits in the form of
bonuses. Simple Reversionary Bonuses are declared per thousand Sum
Assured annually at the end of each financial year. Once declared, they form
part of the guaranteed benefits of the plan. Final (Additional) Bonuses may
also be payable provided policy has run for a certain minimum period.
Benefits
Death Benefit:
On death of the Life Assured during the term of the policy the basic
premiums paid, excluding any rider premiums or extra premiums, up to the
date of death accumulated with interest at such rates as decided by the
Corporation will be payable to the nominee. Currently, the interest rate is
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 51
52. 3%, 4% or 5 % if the death occurs within the first 10 years, 20 years or
thereafter respectively.
Maturity Benefit:
At maturity the policyholder can encash up to a maximum 25% of the
maturity proceeds as a tax-free lump sum. The balance should be
compulsorily converted to an annuity at the rates applicable at the time of
maturity of the policy. The policyholder has the choice of opting for any one
of 5 annuity options. The annuity options available are:
(i) annuity payable for remainder of life
(ii) annuity payable for life with guaranteed period of 5, 10, 15 or 20 years
(iii) Joint life and last survivor annuity to the annuitant and his/ her spouse
under which annuity payable to the spouse on death of the purchaser will be
50% of that payable to the annuitant
(iv) Life annuity with a return of purchase price on death of the annuitant
(v) Life annuity increasing at a simple rate of 3% per annum
Supplementary/Extra Benefits:
These are the optional benefits that can be added to your basic plan for extra
protection/option. An additional premium is required to be paid for these
benefits.
Surrender Value:
Buying a life insurance contract is a long-term commitment. However,
surrender value is available on the plan on earlier termination of the contract.
Guaranteed Surrender Value:
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 52
53. The policy may be surrendered after it has been in force for 2 years or more
but before the vesting date. The guaranteed surrender value is 90% of the
basic premiums paid excluding the first year’s premium. In case of a single
premium policy the guaranteed surrender value is allowed after 2 years from
the date of commencement of the policy.
Corporation’s policy on surrenders:
In practice, the company will pay a Special Surrender Value – which is equal
to or higher than the Guaranteed Surrender Value. The benefit payable on
surrender reflects the discounted value of the reduced claim amount that
would be payable on death or at maturity. This value will depend on the
duration for which premiums have been paid and the policy duration at the
date of surrender. In some circumstances, in case of early termination of the
policy, the surrender value payable may be less than the total premium paid.
UNIT PLANS-I
1. Market plus-I
This is a unit linked pension plan wherein the pension is payable after a
specified period. Four types of investment Funds namely Bond, Secured,
Balanced and Growth Fund are offered. Though primarily a Pension product,
the plan has many attractive features and options which make it an ideal
Retirement solution for the future.
BENEFITS
A) - On Vesting:
On vesting of the policy, the Fund Value will be utilized to provide a
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 53
54. pension based on the then prevailing Annuity rates. An option to commute
up to one third of the payable benefit in a lump sum is available.
B) On Death:
In event of the unfortunate death of the policy holder the Fund Value along
with the Riders, if any, will be payable in a lump sum or as a pension.
OPTIONS
Three attractive benefits, viz. - Life Cover, Accident Benefit and Critical
Illness Benefit are available as options or riders. Life option is available
within certain limits depending on the age at entry of the life assured. The
other options are available to all proposers who have opted for Life Cover.
The quantum of the risk covers can also be reduced; subject to the minimum
limits, once a year. A policy can be taken without any of the riders also.
REVIVAL
An attractive feature of the plan is that provided the premiums have been
paid for a minimum period of three years, all the riders under the policy will
continue for a period of two years from the due date of first unpaid premium
by deduction of relevant charges from the policy fund. This period of two
years is called the “Revival Period”. Further, if premiums have been paid for
a minimum period of three years, revival can be effected merely by paying
the arrears of premium, within the Revival Period.
PAYMENT OF PREMIUMS
Premiums can be paid in a lump sum (single premium) and also by monthly
(ECS), quarterly, half-yearly and yearly modes.
CHANGE IN FUND TYPE (SWITCH)
The plan also allows a policy holder to switch from one type of fund to
another up to four times a year, free of charge.
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 54
55. OTHER FEAUTRES
There will be no spread between the Bid and Offer price. The Net Asset
Value (NAV) will be declared on a daily basis. Additional premium in
multiples of Rs.1,000 can be paid without any limit at anytime during the
term of policy.
SPECIAL PLANS
1. Bima Nivesh
Features
Bima Nivesh 2005 is a plan with compound rate of guaranteed additions and
loyalty additions. This is the revised version of our popular Bima Nivesh
Plan 2004 and is introduced to meet the overwhelming demand for a single
premium plan from our customers. It is a single premium, ideal investment
plan for those who have no regular income but good periodical income. Bima
Nivesh 2005 is available for terms 5 and 10 years. The guaranteed surrender
value is payable after the policy has run for at least one year. Term
Assurance Rider is also available by payment of a single premium at the
option of the proposer.
Benefits
Guaranteed Additions: Guaranteed additions at the compound rate of
Rs.50 per thousand Sum Assured per annum for the policy with term of 5
years and at the compound rate of Rs.55 per thousand Sum Assured per
annum for the policy with term of 10 years.
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 55
56. Loyalty Addition: Depending upon the Corporation's experience with
regard to mortality, interest and expenses and based on term of the policy,
Loyalty addition, if any, may be declared by the corporation and paid on
maturity.
Maturity Benefit: The Basic Sum Assured along with compounded
Guaranteed Additions will be payable. Loyalty addition, if any, will also be
added to this benefit.
Payment on death: In case of the unfortunate death of the Life Assured
during the term of the policy, Sum Assured along with the accrued
guaranteed additions will be payable.
Surrender Value: Surrender value is payable after the policy has run at
least for one year.
Riders: Term Assurance rider is available.
Eligibility conditions and other restrictions
For the Main Plan Term Assurance Option
Min. Age at entry
13 years
completed
18 years completed
Max. Age at
entry
70 years 50 years
Max. Maturity
Age
75 years 60 years
Policy Term 5 yrs. and 10 yrs Same as main plan
Sum Assured Rs.25,000. Min. Sum Assured -
Rs.1,00,000/-
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 56
57. Maximum – No
limit.
Max. Sum Assured - An
amount up to the basic Sum
Assured for Term Assurance
subject to a maximum of Rs.25
lakh overall Option limit, under
all policies of the life assured.
Premium Rates:
Single Premium rates for Rs.1000 Sum Assured are Rs.995 for 5 years term
and Rs. 976 for 10 years term;
The Term Rider Premium depends on the age nearer birthday and the term of
the policy.
REBATES
1% of basic premium on the premium in excess of Rs.50,000.
Rs.500 plus 1.5% of basic premium on the premium in excess of
Rs.1,00,000.
LOAN
Loan will be available to the policyholders under this plan within the
Surrender Value.
GROUP SCHEME
1. Group Term Insurance Scheme
A) Nature of the Scheme:
Group (term) Insurance Scheme is meant to provide life insurance protection
to groups of people. Administration of the scheme is on group basis and cost
is low. Under Group (Term) Insurance Scheme, life insurance cover is
allowed to all the members of a group subject to some simple insurability
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 57
58. conditions without insisting upon any medical evidence. Scheme offers
covers only on death and there is no maturity value at the end of the term.
B) Premium Chargeable:
Group (Term) Insurance Scheme is at present offered under One Year
Renewable Group term assurance plan (OYRGTA). Every year on Annual
Renewal date LIC charges the premium depending upon the changes in size
and age distribution of the age group.
C) Different Schemes:
Group (term) Insurance Scheme has a number of varieties. The Scheme may
provide for a uniform cover to all members of the group or graded covers for
different categories of members, cover for all amounts of outstanding
housing loans or vehicle advances, or some other benefits (e.g., life cover to
supplement pension or PF benefits in case of death). The schemes may have
add-ons like Double Accident Benefit, Critical Illness Benefit, Disability
benefit etc.
D) General Features of various Group Insurance Schemes:
1. PREMIUM:
The premium under such scheme may be wholly paid by the employer or the
Nodal Agency. However, the scheme may be contributory i.e. the members
may also contribute.
2. DOUBLE ACCIDENT BENEFIT:
Double Accident Benefit, i.e. payment of double the sum assured on death
due to accident (without permanent disability benefit), may be allowed under
Group Insurance Schemes for an extra premium.
3. ELIGIBILITY:
For Group Insurance Scheme in lieu of EDLIS the insurability condition is
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 58
59. that should be a member of the Provident Fund Scheme of the employer. For
other GI Schemes of employer-employee groups the insurability condition is
that the member should not be absent on ground of sickness on the entry
date.
4. ADMINISTRATION OF THE SCHEME:
At the commencement and thereafter on each Annual Renewal Date, the
Group Policyholder will have to send all the member's data (and particulars
of the new entrants from time to time) to the P & GS unit of LIC. Detailed
OYRGTA premium calculation will be made on each Annual Renewal Date.
2. Janashree Bima Yojana (JBY)
Features
The objective of the scheme is to provide life insurance protection to the
rural and urban poor persons below poverty line and marginally above the
poverty line.
ELIGIBILITY:
A person who is
*Aged between 18 and 59 years.
*Below or marginally above poverty line
*A member of any of the approved vocation/occupation groups
NODAL AGENCY:
A State Government Department which is concerned with the welfare of any
such vocation/occupation group, a Welfare Fund/ Society, Village
Panchayat,NGO,Self-Help Group,etc.
MINIMUM MEMBERSHIP SIZE:
Twenty five.
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 59
60. FORMS FOR JANASHREE BIMA YOJANA
1. Claim form & discharge receipt under JBY (Annexure A)
2. Application for scholarship under Shiksha Sahayog Yojana (Proforma A)
3. List of students eligible for scholarship under Shiksha Sahayog Yojana
(Proforma B)
4. Certificate of utilization ( Proforma C )
Benefits
In the events of
*Death (other than by accident) of the member, an amount of Rs.30,000/- is
payable.
*death/total permanent disability, due to accident, an amount of Rs.75,000/-
is payable.
*Permanent partial disability, due to accident, an amount of Rs.37,500/- is
payable.
PREMIUM:
*The premium under the scheme is Rs.200/-per annum per member. *50% of
the premium i.e. Rs.100/- will be contributed by the member and/or Nodal
Agency/State Government.
*Balance 50% will be borne by the Social Security Fund.
APPROVED VOCATION & OCCUPATIONAL GROUPS:
A) The group that can be covered are like workers in -
(i) Foodstuffs like khandsari
(ii) Textile
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 60
61. (iii) Manufacture of wood products
(iv) Manufacture of paper products
(v) Manufacture of leather products
(vi) Printing
(vii) Rubber and coal products
(viii) Chemical products like candle manufacture
(ix) Mineral products like earthen toys manufacture
(x) Fire cracker's workers
(xi)Construction workers .
B) The occupational groups are :
Beedi workers, Brick Kiln Workers(Jalandhar),Carpenters, Cobblers,
Fisherman, Hamals, Handicraft Artisans, Handloom Weavers, Handloom and
Khadi Weavers, Lady Tailors, Leather and Tannery Workers, Papad Workers
attached to 'SEWA', Physically Handicapped self- Employed Persons,
Primary Milk Producers, Rickshaw Pullers/ Auto Drivers, Safai
Karmacharis, Salt Growers, Tendu Leaf Collectors, Scheme for the Urban
Poor, Forest Workers, Sericulture, Toddy Tappers, Powerloom Workers,
Scheme for Women in Remote Rural Hilly Areas.
PLAN’S NAV
The net asset value of different schemes of life insurance Corporation of
India for the insured’s is as follows:
NAV TABLE
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 61
62. ‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 62
NAV'S AS ON DATE 21.08.2009
EFFECTIV
E FOR 21.08.2009
BASIC
UNIT
VALUE
NAV AS
ON DATE
REPURC
HASE
VALUE
SALE
VALUE
BIMA PLUS (140)
DATE
OF
LAUNC
H
02.02.200
1
SECURED FUND 10 27.1060 25.7507 27.1060
BALANCED FUND 10 32.4856 30.8613 32.4856
RISK FUND 10 44.2874 42.0730 44.2874
FUTURE PLUS
(172)
DATE
OF
LAUNC
H
04.03.200
5
BOND FUND 10 13.1779 13.1779 13.1779
INCOME FUND 10 15.0405 15.0405 15.0405
BALANCED FUND 10 15.6018 15.6018 15.6018
GROWTH FUND 10 19.5666 19.5666 19.5666
JEEVAN PLUS
(173)
DATE
OF
LAUNC
H
63. TAX BENEFITS
The aggregate amount of deduction under all the relevant sections viz.
section 80C, section 80CCC and section 80CCD shall not, exceed Rs.1 Lakh.
1) Deduction from Income for payment of Premium (Sec. 80C).
(a) Life Insurance premia:
The insurance premia paid for a policy is eligible for deduction. The
premium paid should not be in excess of 20% of capital sum assured.
(b) Contribution to Deferred Annuity Plans:
The premia paid for a Deferred Annuity; provided such contract does not
contain a provision to exercise an option by the insured to received a cash
payment in lieu of the payment of annuity is eligible for deduction.
(c) Contribution to Pension/Annuity Plans:
Contribution to New Jeevan Dhara-I and New Jeevan Akshay-V Schemes of
LIC are qualified for rebate under this section.
2) Income tax exemption on Maturity/Death Claims proceeds under
Section 10(10D)
All the benefits payable under a Life Insurance policy are tax free. However
in cases the premium paid in excess of 20% of the capital sum assured within
a year, benefits paid excess of premiums will be taxable. The benefits from a
key man Insurance policy and any sum received under Sec 80DD, Sub-
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 63
5
BOND FUND 10 13.1729 13.1729 13.1729
SECURED FUND 10 13.3119 13.3119 13.3119
BALANCED FUND 10 13.6167 13.6167 13.6167
GROWTH FUND 10 18.1556 18.1556 18.1556
MONEY PLUS
(180)
DATE
OF
LAUNC
H
20.12.200
6
BOND FUND 10 12.4484 12.4484 12.4484
SECURED FUND 10 11.8804 11.8804 11.8804
BALANCED FUND 10 11.6570 11.6570 11.6570
GROWTH FUND 10 10.3939 10.3939 10.3939
MARKET PLUS
(181)
DATE
OF
LAUNC
H
05.07.200
6
BOND FUND 10 13.6993 13.6993 13.6993
SECURED FUND 10 12.8744 12.8744 12.8744
BALANCED FUND 10 12.5608 12.5608 12.5608
GROWTH FUND 10 12.9723 12.9723 12.9723
FORTUNE PLUS
(187)
DATE
OF
LAUNC
H
23.08.200
64. section (3) are also taxable.
3) Jeevan Nidhi Plan & New Jeevan Suraksha - I Plan (U/s. 80CCC)
Amounts paid from the taxable income to premiums of the above
annuity are deductible.
4) Deduction under section 80D Medical Premium paid for a Health
Insurance policy is deductible to the extent of Rs. 15000 for an assessee
and/or his family members’ policy/s. A separate exemption to the extent
of Rs. 15,000 for premiums paid for an assessee’s parent is also
available. If any one or both of the parents are Senior citizens, then an
enhanced exemption limit of Rs. 20,000 is available. Section 80D also
covers payment of premium exclusively for Critical Illness Rider.
5) Jeevan Aadhar Plan (Sec.80DD)
Premium paid for LIC’s Jeevan Aadhar Plan (for the maintenance of an
handicapped dependent) is eligible for deduction from the total income to the
extent of Rs.50,000 and to the extent of Rs.75,000/- where handicapped
dependent is suffering from specified severe disability.
6) Exemption in respect of commutation of pension under Jeevan
Suraksha & Jeevan Nidhi Plans. (Section 10(10A):
A payment received by way of commutation of pension from Jeevan
Suraksha & Jeevan Nidhi Annuity plans is exempt from tax
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 64
7
BOND FUND 10 12.0380 12.0380 12.0380
SECURED FUND 10 11.2592 11.2592 11.2592
BALANCED FUND 10 10.6514 10.6514 10.6514
GROWTH FUND 10 10.1676 10.1676 10.1676
PROFIT PLUS
(188)
DATE
OF
LAUNC
H
23.08.200
7
BOND FUND 10 12.3288 12.3288 12.3288
SECURED FUND 10 10.9779 10.9779 10.9779
BALANCED FUND 10 11.2509 11.2509 11.2509
GROWTH FUND 10 10.0311 10.0311 10.0311
GRATUITY PLUS
DATE
OF
LAUNC
H
16.06.200
9
BOND FUND 10
12.7382 12.7382 12.7382
INCOME FUND 10 13.2628 13.2628 13.2628
BALANCED FUND 10 13.0738 13.0738 13.0738
GROWTH FUND 10
12.4845 12.4845 12.4845
HEALTH PLUS
(901)
DATE
OF
LAUNC
H
04.02.200
65. CHAPTER-5
FINDINGS
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 65
HEALTH PLUS
FUND
10
10.8430 10.8430 10.8430
MONEY PLUS - I
(193)
DATE
OF
LAUNC
H
22.05.200
8
BOND FUND 10 12.3170 12.3170 12.3170
SECURED FUND 10 13.0599 13.0599 13.0599
BALANCED FUND 10 12.9187 12.9187 12.9187
GROWTH FUND 10 12.1823 12.1823 12.1823
MARKET PLUS-I
(191)
DATE
OF
LAUNC
H
17.06.200
8
BOND FUND 10 11.3897 11.3897 11.3897
SECURED FUND 10 11.3512 11.3512 11.3512
BALANCED FUND 10 11.5772 11.5772 11.5772
GROWTH FUND 10 12.0021 12.0021 12.0021
CHILD FORTUNE
PLUS (194)
DATE
OF
LAUNC
H
01.11.200
8
BOND FUND 10 10.5292 10.5292 10.5292
SECURED FUND 10 12.8276 12.8276 12.8276
66. FINDINGS
Findings: After completing the study following points can be drawn:
1. It has one of the single distribution networks amongst government
insurance players.
2. LIC has many numbers of insurance policies and plans having flexible to
meet the customers’ requirement and expectation.
3. LIC entered the market with aggressive marketing and supported by after
sale services with the help of technology.
4. All LIC Plans come with Sovereign Guarantee i.e., Government of India
Guarantee regarding repayment. Infact, as of now, only LIC plans enjoy this
Government Guarantee.
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 66
BALANCED FUND 10 12.6842 12.6842 12.6842
GROWTH FUND 10 13.3527 13.3527 13.3527
HEALTH
PROTECTION
PLUS (902)
DATE
OF
LAUNC
H
29.04.200
9
HEALTH
PROTECTION PLUS
FUND
10
10.1429 10.1429 10.1429
JEEVAN SAATHI
PLUS (197)
DATE
OF
LAUNC
H-
29.06.200
9.
BOND FUND
10
10.0376 10.0376 10.0376
SECURED FUND
10
10.0152 10.0152 10.0152
BALANCED FUND
10
10.0091 10.0091 10.0091
GROWTH FUND 10
10.0439 10.0439 10.0439
# Subject to Market risk ; Not guaranteed
# Past performance may not indicate future performance
68. CONCLUSION
After completing the project it is concluded that LIC develop its various
plans and policies, flexible in nature, according to the requirements of its
targeted market or customers and is thus beneficial to its customers in
various ways. The most important benefit it provides to its customers is that
it is a government owned company. This lead to increase in the satisfaction
level of its customer that is why LIC has more than 200 million
policyholders which is equal to the fourth largest country in world. Therefore
it is not only beneficial but better than other insurance companies not only
regarding its product but also its services.
‘CAMPARATIVE STUDY OF LIFE INSURANCE CORPORATION OF INDIA’ Page 68
69. BIBLIOGRAPHY
Information and data used in the project has been collected from the
following sources:-
1. www.licindia.com
2. www.licmutual.com
3. www.lichousing.com
4. www.wikipedia.org
5. www.reportbuyer.com
6. Outlook Money Magazine
12th
August 2009, 09 September 2009
7. Money Today Magazine
11 June 2009, September 2009
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