A

PROJECT REPORT
ON
CONSUMER PERCEPTION TOWARDS LIC PRODUCTS
FOR

LIC OF INDIA
REPORT SUBMITTED IN PARTIAL
FULFILLMENT OF 2 YEARS FULL TIME
COURSE OF MBA
GBTU LUCKNOW
Session : 2013-14

BUNDELKHAND INSTITUTE OF ENGINEERING &

TECHNOLOGY, JHANSI
SUBMITTED TO :

SUBMITTED BY :

DR. SUMAN YADAV

HEAD OF THE DEPARTMENT

SANJAY RAJPOOT
III SEM. (MBA)

(MBA)

ROLL NO. 1204370045

DECLARATION
I, SANJAY RAJPUT, hereby declared that the research work presented in this report entitled
THE CONSUMER PERCEPTION TOWARDS LIC PRODUCTS for the fulfillment of the award of
Master in Business Administration (M.B.A.) from Gautam Buddh Technical University (G.B.T.U.),
Lucknow is based on my work during the summer training in the LIC ALIGARH REGION The
project embodies the result of original work and studies carried out by me and the contents of the
project do not form he basis for the award of any other degree to me or to anybody else.

Date: 05/09/2013

( SANJAY RAJPUT )
MBA (3rd semester)
Roll No. (1204370045)

ACKNOWLEDGEMENT
Without a proper combination of inspection and perspiration, its not easy to
achieve anything. There is always a sense of gratitude, which we express to others
for the help and the needy services they render during the different phases of our
lives. We too would like to do it as we really wish to express my gratitude toward
all those who have been helpful to me directly or indirectly during the development
of this project.
We would like to thankHR ManagerMr. S.P.SINGH who was always there to help
and guide us when we needed help. His perceptive criticism kept us working to
make this project more full proof. We are thankful to his for his encouraging and
valuable support. Working under him was an extremely knowledgeable and
enriching experience for us. We are very thankful to him for all the value addition
and enhancement done to us.

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.
Why We Need Insurance:
Life insurance is a contact by which you can protect yourself against specific uncertainties by
paying a premium over a period. Since each one of us during our lives are faced with numerous
risks-falling health, financial losses, accident and even fatalities.

Protection
You need life insurance to be there and protect the people you love, making sure that your family
has a means to look after itself after you are gone. It is a thoughtful business concept designed to
protect the economic value of a human life for the benefit of those financially dependent on him.

Retirement
Life insurance makes sure that you have regular income after you retire and helps you maintain
your standard of living. It can ensure that your post-retirement years are spent in peace and
comfort.

 Savings and Investments

Insurance is a means to Save and Invest. Your periodic premiums are like Savings and you are
assured of a lump sum amount on maturity. A policy can come in handy at the time of your
childs education or marriage! Besides, it can be used as supplemental retirement income.

Tax Benefits
Life insurance is one of the best tax saving options today. Your tax can be saved twice on a life
insurance policy-once when

HISTORY &
BACKGROUND
OF LIC

The story of insurance is probably as old as the story of mankind. The same instinct
that prompts modern businessmen today to secure themselves against loss and disaster
existed in primitive men also. They too sought to avert the evil consequences of fire
and flood and loss of life and were willing to make some sort of sacrifice in order to
achieve security. Though the concept of insurance is largely a development of the
recent past, particularly after the industrial era past few centuries yet its
beginnings date back almost 6000 years.
Life Insurance in its modern form came to India from England in the year 1818.
Oriental Life Insurance Company started by Europeans in Calcutta was the first life
insurance company on Indian Soil. All the insurance companies established during
that period were brought up with the purpose of looking after the needs of European
community and Indian natives were not being insured by these companies. However,
later with the efforts of eminent people like Babu Muttylal Seal, the foreign life
insurance companies started insuring Indian lives. But Indian lives were being treated
as sub-standard lives and heavy extra premiums were being charged on them. Bombay
Mutual Life Assurance Society heralded the birth of first Indian life insurance
company in the year 1870, and covered Indian lives at normal rates. Starting as Indian
enterprise with highly patriotic motives, insurance companies came into existence to
carry the message of insurance and social security through insurance to various
sectors of society. Bharat Insurance Company (1896) was also one of such companies
inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise to more
insurance companies. The United India in Madras, National Indian and National
Insurance in Calcutta and the Co-operative Assurance at Lahore were established in
1906. In 1907, Hindustan Co-operative Insurance Company took its birth in one of the
rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The
Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were
some of the companies established during the same period. Prior to 1912 India had no

legislation to regulate insurance business. In the year 1912, the Life Insurance
Companies Act, and the Provident Fund Act were passed. The Life Insurance
Companies Act, 1912 made it necessary that the premium rate tables and periodical
valuations of companies should be certified by an actuary. But the Act discriminated
between foreign and Indian companies on many accounts, putting the Indian
companies at a disadvantage.
The first two decades of the twentieth century saw lot of growth in insurance business.
From 44 companies with total business-in-force as Rs.22.44 crore, it rose to 176
companies with total business-in-force as Rs.298 crore in 1938. During the
mushrooming of insurance companies many financially unsound concerns were also
floated which failed miserably. The Insurance Act 1938 was the first legislation
governing not only life insurance but also non-life insurance to provide strict state
control over insurance business. The demand for nationalization of life insurance
industry was made repeatedly in the past but it gathered momentum in 1944 when a
bill to amend the Life Insurance Act 1938 was introduced in the Legislative
Assembly. However, it was much later on the 19th of January, 1956, that life
insurance in India was nationalized. About 154 Indian insurance companies, 16 nonIndian companies and 75 provident were operating in India at the time of
nationalization. Nationalization was accomplished in two stages; initially the
management of the companies was taken over by means of an Ordinance, and later,
the ownership too by means of a comprehensive bill. The Parliament of India passed
the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance
Corporation of India was created on 1st September, 1956, with the objective of
spreading life insurance much more widely and in particular to the rural areas with a
view to reach all insurable persons in the country, providing them adequate financial
cover at a reasonable cost.

LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its
corporate office in the year 1956. Since life insurance contracts are long term
contracts and during the currency of the policy it requires a variety of services need
was felt in the later years to expand the operations and place a branch office at each
district headquarter. re-organization of LIC took place and large numbers of new
branch offices were opened. As a result of re-organisation 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-organisation 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. LICs 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. LICs ECS and ATM premium payment facility is
an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info
Centres have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai,
Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of
providing easy access to its policyholders, LIC has launched its SATELLITE
SAMPARK offices. The satellite offices are smaller, leaner and closer to the
customer. The digitalized records of the satellite offices will facilitate anywhere
servicing and many other conveniences in the future.
LIC continues to be the dominant life insurer even in the liberalized scenario of Indian
insurance and is moving fast on a new growth trajectory surpassing its own past

records. LIC has issued over one crore policies during the current year. It has crossed
the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy
growth rate of 16.67% over the corresponding period of the previous year.
From then to now, LIC has crossed many milestones and has set unprecedented
performance records in various aspects of life insurance business. The same motives
which inspired our 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.

OBJECTIVE 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.

MISSON & VISION

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."

SERVICE LINES OF
THE COMPNAY

INSURANCE PLANS
As individuals it is inherent to differ. Each individuals 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.

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

UNIT PLANS
Unit plans are investment plans for those who realise 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.

SPECIAL PLANS
LICs 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!

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.

WITHDRAWN PLAN

KEY EXECUTIVES

Members On The Board Of The Corporation

Shri S.K.ROY

(Chairman)

Shri. Sushobhan sarkar

(Managing Director - LIC)

Shri. S.K. Mainak

(Managing Director

Shri. Namo Narain meena

(Finance Secretary, Ministry of Finance, Govt. o,

Ministry of Finance, Govt. of India.)

Shri Rajiv Takru

(Chairman cum Managing Director, GIC of India)

Shri. Thomas Mathew (Chairman & Managing Director. )

MAJOR PLAYERS
OF THE INDUSTRY

Life Insurance Companies

Sl.

Insurers

Foreign Partners

No.
1.

2.

Regn.

Date of

Year of

No.

Registration

Operation

101

23.10.2000

2000-01

HDFC Standard Life

Standard Life

Insurance Co. Ltd.

Assurance, UK

Max New York Life

New York Life, USA

104

15.11.2000

2000-01

Prudential , UK

105

24.11.2000

2000-01

Om Kotak Life Insurance

Old Mutual, South

107

10.01.2001

2001-02

Co. Ltd.

Africa

Birla Sun Life Insurance

Sun Life, Canada

109

31.01.2001

2000-01

Tata-AIG Life Insurance

American International

110

12.02.2001

2000-01

Co. Ltd.

Assurance Co., USA

SBI Life Insurance Co.

BNP Paribas

111

29.03.2001

2001-02

Ltd.

Assurance SA, France

ING Vysya Life Insurance

ING Insurance

114

02.08.2001

2001-02

Co. Ltd.

International B.V.,

Allianz, Germany

116

03.08.2001

2001-02

Metlife India Insurance Co.

Metlife International

117

06.08.2001

2001-02

Ltd.

Holdings Ltd., USA

Reliance Life Insurance

---

121

03.01.2002

2001-02

Insurance Co. Ltd.

3.

ICICI-Prudential Life
Insurance Co. Ltd.

4.

5.

Co. Ltd.
6.

7.

8.

Netherlands
9.

Allianz Bajaj Life

Insurance Co. Ltd.

10.

11.

Co. Ltd. (Earlier AMP

Sanmar Life Insurance
Company from 3.1.02 to

Sl.

Insurers

Foreign Partners

Regn.

Date of

Year of

No.

Registration

Operation

122

14.05.2002

2002-03

---

127

06.02.2004

2004-05

Sanlam, South Africa

128

17.11.2005

2005-06

AXA Holdings, France

130

14.07.2006

2006-07

Future Generali India Life

Pantaloon Retail Ltd.;

133

04.09.2007

2007-08

Insurance Company Ltd.

Sain Marketing

Fortis, Netherlands

135

19.12.2007

2007-08

HSBC, UK

136

08.05.2008

2008-09

Religare, Netherlands

138

27.06.2008

2008-09

DLF Pramerica Life

Prudential of America,

140

27.06.2008

2008-09

Insurance Co. Ltd.

USA

No.
29.9.05)

12.

AVIVA

Aviva International
Holdings Ltd., UK

13.

Sahara Life Insurance Co.

Ltd.

14.

Shriram Life Insurance Co.

Ltd.

15.

Bharti AXA Life Insurance

Co. Ltd.

16.

Network Pvt. Ltd.

(SMNPL), Generali,
Italy
17.

IDBI Fortis Life Insurance

Company Ltd.

18.

Canara HSBC OBC Life

Insurance Company Ltd.

19.

Aegon Religare Life

Insurance Company Ltd.

20.

21.

Life Insurance Corporation

of India

512

NUMBER OF LIFE INSURANCE OFFICES-COMPANY WISE

(As on 31st March)
Insurer
Aviva
Bajaj Allianz
Bharti Axa
Birla Sunlife
Future Generali

2008

2007

2006

2005

2004

2003

2002

2001

213

140

110

50

22

12

1007

877

567

153

49

33

17

77

16

538

148

97

53

41

29

19

HDFC Std

569

448

150

90

26

18

ICICI Pru

1958

583

175

109

69

29

14

IDBI Fortis

ING Vysya

265

183

68

38

26

16

Kotak Mahindra

151

75

46

43

39

28

Max NewYork

194

118

84

64

33

23

15

94

53

43

35

16

745

159

157

80

48

35

17

33

33

18

18

SBI Life

200

138

46

31

19

10

Shriram

53

12

11

Tata AIG

283

89

72

40

26

13

Private Total

6391

3072

1645

804

416

254

116

13

LIC

2522

2301

2220

2197

2196

2191

2190

2186

MetLife
Reliance Life
Sahara

Industry Total

8913

5373

3865

3001

2612

2445

2306

MAJOR
COMPETITIORS

2199

BAJAJ ALLIANZ
Bajaj Allianz Life Insurance is a union between Allianz SE, one of the largest
Insurance Company and Bajaj Finserv.
Allianz SE is a leading insurance conglomerate globally and one of the largest asset
managers in the world, managing assets worth over a Trillion (Over INR. 55, 00,000
Crores). Allianz SE has over 115 years of financial experience and is present in over
70 countries around the world.
At Bajaj Allianz Life Insurance, customer delight is our guiding principle. Our
business philosophy is to ensure excellent insurance and investment solutions by
offering customised products, supported by the best technology.

Accelerated Growth
Fiscal Year
2001-2002(6 mths)
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008

No. of policies sold

21,37
1,15,965
1,86,443
2,88,189
7,81,685
20,79,217
37,44,742

New Business in FY
Rs.
7 cr.
Rs. 63.3 cr.
Rs. 180 cr.
Rs. 857 cr.
Rs. 2,717 cr.
Rs. 4,302 cr.
Rs. 6,674 cr.

ICICI PRUDENTIAL
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank one of India's foremost financial services companies-and Prudential plc - a leading
international financial services group headquartered in the United Kingdom. Total
capital infusion stands at Rs. 47.80 billion, with ICICI Bank holding a stake of
74% and Prudential plc holding 26%.
We began our operations in December 2000 after receiving approval from
Insurance Regulatory Development Authority (IRDA). Today, our nation-wide
team comprises of 2074 branches (inclusive of 1,116 micro-offices), over 225,000
advisors; and 7 bancassurance partners.
ICICI Prudential is the first life insurer in India to receive a National Insurer
Financial Strength rating of AAA (Ind) from Fitch ratings. For three years in a
row, ICICI Prudential has been voted as India's Most Trusted Private Life Insurer,
by The Economic Times - AC Nielsen ORG Marg survey of 'Most Trusted
Brands'. As we grow our distribution, product range and customer base, we
continue to tirelessly uphold our commitment to deliver world-class financial
solutions to customers all over India.

SWOT ANALYSIS OF
THE COMPANY

The SWOT analysis involves an in depth study of the strength and weakness of the
provided
organization and it also provides information to the promoter, consultant, other
agencies and helps in long
term viability of the project.

Strength :
1. It is the oldest and most well experienced player having a Pan India presence.
2. LIC has a strong and very well developed distribution network.
3. It is having a huge consumer base and is evolved as one of the most powerful
brands of the country.
4. It has a large product portfolio and claim settlement is easier to get.
5. It has the advantage of government guarantee is accompanied with it.
6. Largest insurance Company in the world in Customer Base (23 crore
customers)
7. No.1 insurance company in the world in terms of agency (about 1.1 Million
agents)
8. LIC is No.1 insurer in the world in Volume & Sold around 3.75 Cr.Policies in
2007-2008.
9. 2nd Biggest Real Estate Owner next to Indian Railways.
10.LIC is one of the Highest income tax playing Organization. For Financial Year
2007-08, LIC has paid advance Tax Rs.2627. 14 Cr. & Service Tax Rs.1292.
15 Cr.
11.Has Highest insurance Professionals ( Club Member agents )
12.Only 4 countries in the world have more population that LIC`s policy holders.

13. No.1 insurance Company in the world in terms of claims paid.

14. LIC Settles 2.21 claims per second, LIC settled 139 lakhs claims during the year
2007-2008.
15. Prompt settlement of claims (97% maturity claim settled on or before due date)
16. One of the Lowest outstanding Claim Ratio in the world ( Maturity+S B Claim0.07%)
Advanced Technology-For better Customer Service
1. Computerized and networked 2048 branch offices and 159 satellite offices
throughout the country.
2. Use of High Tech-WAN,LAN,IVRS & EDMS
3. LIC is second largest PC user in the country.
4. EDMS to make LIC a paperless office- Enabling Policy servicing & payments
through all branchs in the country.
5. Premium Payment Facility extended through networked 2048 branches, ECS, ATM's
through internet, online portals, collecting bank (Axis Bank), AP online, through
SMS, through selected agents, Now LIC Premium can also be paid through.
6. "Suvidha info Serve KIOSKS" all over India.
7. Policy Holder's Portal allow on line access to policy status and other details.
8. Info centre set up in 12 cities for customers to interact easily. Dial-1251 for details.
9. 45 interactive Voice Response System (IVRS) centers all over the country to provide

information on policy servicing. Facility is available 24 7, Facility can be availed on

following phone Nos. 1251 OR 020-25514248.

Social Strength
LIC - an institution builder promoting many financial and insurance institutes like
NSE, NCDEX, LIC Mutual Fund, Stock Holding Corporation of India, National
insurance Academy, insurance institute of India etc.
LIC has foreign operations in Mauritius, Fiji and London and has joint
venture operating in Sri lanka, Nepal, Bahrain & Saudi Arabia. New offices will be
hortly oprned in Australia, USA&Canada.
LIC is known as "Pension Provider" of the country.
1st Pension company in India is floated by LIC as "LIC Pension Fund Ltd" on 21st
Nov 2007.
First to create waves in micro insurance sector by insuring people below the poverty
line. In year 2007-2008, 8.54 lac policies sold through "Jeevan Madhur"Plan.
Widest range of plans (about 48) for every need of the customer of 0 to 79 years of
age.
Biggest Portfolio of Group insurance schemes available.
"Jeevan Saral" one of the product of LIC got "Best innovation product " award from
I.R.D.A.
LIC has covered lick Risk of 1.13 crore citizens through "AAM ADMI BIMA
YOJANA" & " JANASHREE BIMA YOJANA".
Very Unique Salary saving Portfolio.
Highest Number of Corporate Clients in Group insurance Scheme.

 Expending Distribution Channel through Bancassurances, Corporate Agencies,

Broker ship & Chief Life insurarance Advisor (CLIA).
New East - Central Zonal Office opened at patina to caterto the needs of states of
Bihar, Jharkhand and Orissa. 5 new Divisional offices were also opened in 2007-08.
Pune D.O.was splited in 2 divisions, viz Pune Division (i)
and Pune Division (ii).

"Golden Jubilee Foundations" established for undertaking charitable activities like

education, health, relief of poverty etc.

People's Money for People's Welfare

LIC invested more than 11,630 crores, in infrastructure sector is Rs.56,691crores
In socially oriented sector like water, drainage & housing etc, LIC has invested
Rs.5,635 crores during 2007-08 & total investment in this sector is Rs.32,321 crores.
Total investment in Social Sector Rs.89,000 Crs.
Different incentive schemes for villages, Schools and Banks under Bima Gram, Bima
School and Bima Banks.
Total investment in Nation Building Activities is 5,76,000 Crs.

Financial Strengths
LIC's investment income in 2007-08 was Rs.40,655 crores. Out of Total income of
Rs, 1,76,559.28 Crs.

 Total Assets of the corporation as on 31.3.07 were Rs. 6,74,514.78 Crs.

Largest institutional investor in Share Market. On an average Rs.100 crore invested
every day. During theyear 2007 LIC earned the profit Rs.10,000 Crs. from the Sale of
Equity.
Largest Financial institutional investor both Equity market & Term House.

Weakness :
Its employees and other staff are lethargic and least motivated to render prompt

and sincerecustomer service.

After sales customer grievance redressal mechanism is inefficient.
Agents not taking into account the needs of people and promote policies having
high commissions only.
Very slow decision making process and internal problems between top
management and lower cadre staff.
The top management or bosses are mediocre and there is large scale corruption in
main office.
The development officers and agents who are the foundation pillars of LIC are not
provided with extra funds and powers to promote its products aggressively.

Opportunity :
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
innovativeproducts.
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.
So, that insurance companies working efficiently and fast service.
Increased economic activities: increase in the economic activity has become the
opportunity for the life insurance sector. The activity such as development in the
automobile industry, development in the shipping industry. The growth in the
GDP shows the opportunity for this industry. The growth rate expected this year
7-7.5%. So this is also one of the opportunities for the life insurance sector.
Uncovered market:
The Indian insurance market is the one of the least markets in the world. India
has a population 1044.15 million out of which only 77.7 million have a life insurance
policy. Almost 300 million people in the country can afford to buy life insurance but

of this only 20 % have an insurance cover. Thus there lies a big opportunity for the
life insurance industry. No doubt lots of marketing and promotional efforts have to be
done for trapping the uncovered portion of the huge market. Indias insurance has
long way to catch up with the rest of the world. According to the institute of charted
financial analyst of India. India is the 23rd largest insurance market in the world.
India accounts for just 0.4% of the global insurance market which is very low. the
ratios of premium to GDP for India stands at only 3% against 5.2% in US ,6.5%in
UK.
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.
Natural calamities: natural calamities taking place now days have created a
concern for life insurance among the public. Because of natural calamities like
earthquake, flood, and cyclone people have become conscious about benefits
and need of insurance. Thus through a calamity it has become a considerably big
opportunity for the industry.
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
for the life insurance industry.
The lack of comprehensive social security system combined with a willingness

to save means that Indian people demand for pension products will be large.
Thus, it has become an opportunity for 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.
To use Internet and e-commerce technologies to dramatically cut the costs
and/or to pursue new sales-growth opportunities. With the help of technology it
has become easy for the companies to reach the customer quickly, easily,
efficiently and in a better way. Also the companies can cut down the cost of
operation up to considerable level. Thus technology has thrown lots of
opportunity for the company.
Liberalized government policy toward insurance sector: the government has
liberalized the government policy in the life insurance sector. Now a day role of
government has changed. Due to liberalized policy of government the country is
benefited in earning foreign inflows: the domestic company can also collaborate
with foreign country and can create synergy. Thus there is great opportunity for
those who can trap it. Exist the option of joint venture& alliance etc. for
companies to create Synergy, value as well as competitive capabilities for the
firms.

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.
Decreased in bank rate: the decreased bank rate is the biggest threat for the life
insurance sector. Fluctuation in the bank rate makes big difference for the life
insurance industry. It has become threats for the life insurance industry.

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. This could be genuine threats
since they would be competing with units which are free from such artificial and
unnecessary restrictions.
The new units, equipped with state of arts equipment and innovative procedure
would have an in-built edge over the erstwhile public sector units, which until
recently had no such opportunity and incentives. Due to possible negative impact
on employment, there were no serious efforts at updating technology and
equipment. The resultant inadequate investment in infrastructure could lead to
their lagging behind in the race.

MARKET SEGMENT OF
LIC

The policies of LIC covers the age group 0-70 can avail the services of LIC. It
means LIC has very vast market segment, children, youngster, working,
married, old people.

INSURANCE PLANS
As individuals it is inherent to differ. Each individuals 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
CDA Endowment Vesting At 21
CDA Endowment Vesting At 18
Jeevan Kishore
Child Career Plan
Child Fortune Plus

Komal Jeevan
Marriage Endowment Or
Educational Annuity Plan
Jeevan Chhaya
Child Future Plan

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
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

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
Jeevan Akshay-VI
New Jeevan Dhara-I
New Jeevan Suraksha-I

USP OF THE
COMPANY

FUTURE OF THE
COMPANY

FINDINGS AND
CONCLUSIONS

FINDINGS & CONCLUSIONS:

LIC is the giant of the insurance sector. The overall size of LIC is much more than
that of all private insurance companies. Private insurers are in expansion mode and
are increasing their size but are still much behind LIC. Total premium deposits in
LIC is much higher than the private insurance companies. Total premium of LIC in
FY 07-08 was 149789 crores which three times more than that of private insurance
companies.
Income of LIC is much greater than private insurance companies. Last year total
income from investments of LIC was 48244.14 crores which was nearly equal to the
total income of the all private insurance companies. By this we can imagine how big
the LIC is.
Size of balance sheet of private insurance companies are lagging much behind LIC.
Balance sheet of LIC is seven times bigger than that of private insurance companies.
If we see the total number of policies issued by LIC and private insurance companies,
we find that there is a huge gap between them. No doubt that LIC is a well established
player in the field of insurance and many private companies have just started their
business. Hence it is obvious that LIC is having large number of policyholders.
Number of branches of private insurance companies is increasing as the new players
are entering in this market. Also the established players are in expansion phase and
hence are expanding there business. There are many private insurance companies and
hence there total number of branches has gone past LIC in the last financial year. But
offices of private insurance companies are mostly in urban areas and still it is LIC

which covers most of the area.

Hence we see that LIC is leading when it comes to size. It is giant in insurance
sector having huge network and customer base.
We see that due to excellent service quality and attractive offers private insurance
companies have started getting a number of customers. They are growing rapidly.
Though LIC is also increasing its customer base but private insurance companies are
moving at a fast pace.
Though the income of private insurance companies is negligible when compared with
LIC but then also the pace with which they are increasing their income is tremendous.
Private insurance companies are expanding their business and will certainly going to
give a tough competition to LIC in the coming days.
LIC is certainly having a large customer base. Private insurance companies are not
having that much number of customer base but they are increasing it rapidly. They
have registered a decent growth of 104.64 % in number of new policies in the year
2006-07. Last year also their growth rate was 67.4 %.
64

LIC, being the oldest player in the existing insurance market, has the biggest market
share of 73.9 % which was 87.3% five years earlier. We see that private insurance
companies are penetrating in the customer base of LIC.
Overall we can see that private insurance companies are giving a tough
competition to the LIC and will certainly create a good business for themselves
in the coming days.

There are many new entrants in this sector. There are many private insurance
companies who have reported loss in this and previous years. This is the main reason
why private insurance companies lag behind LIC in case of business per branch.
There is a big difference between them.
Same is the case when it comes to income per branch. LIC is much ahead of private
insurance companies in this field. They are undoubted champions in insurance when it
comes to profit earning.
New business is increasingly going towards private insurance companies but still the
customer base of LIC is very strong. In issuing new policies per branch also, they are
ahead of private insurance companies though not by very large margin.
Customer base of LIC is very strong and still business per branch, profit per
branch or premium per branch, they are leading much ahead of private
insurance companies.
LIC has not shown their good concern when the matter of grievance handling comes.
Private insurance companies are far ahead in this matter. LIC has just resolved 25%
cases in the last five years while private insurance companies have resolved nearly
70% cases. This is a matter from where customer shift starts. We have seen the rapid
increase in customer base of private insurance companies which can be very much
affected by this factor.
Overall we have seen that still LIC is very famous but private insurance companies are
growing at exceptionally fast pace. Private companies show due concern in grievance
management and brings innovative schemes to attract the customers. Right now they

are giving good competition to LIC and very soon they will give very tough competition
to Life Corporation of India.

GLOSSERY
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 sum assured in
instalments 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
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 seperate 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.
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.
Convertible Whole Life Policy
A mix of "whole life policy" and "endowment policy", it provides for very low
insurance premiums with maximum risk cover while the life assured is just beginning
his working career, and the possibiliy of converting the policy to an "endowment"
policy after five years of commencement.
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 apy 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 instalment 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.
Double/Triple Cover Plans
These offer 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.
Endowment Policy
The assured has to pay an annual premium which is determined on the basis of the
assured's age at entry and the term of the policy. The insured amount is payable either
at the end of specified number of years or upon the death of the insured person,
whichever is earlier.
Excess And Surplus Insurance
1) Insurance to cover losses above a certain amount, with losses below that amount
usually

covered

by

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.
Family Insurance.
A life insurance policy providing insurance on all or several family members in one
contract, generally whole life insurance on the principal breadwinner and small
amounts of term insurance on the other spouse and children, including those born after
the policy is issued
Fiduciary
A person who holds something in trust for another.
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 programme 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 annutiy of 1% of the GIVE is payable per month after the
deferment period. And the entire GIVE is payable on death after deferment period.

Group Life Insurance

Life insurance usually without medical examination, on a group of people under a
master policy. It is typically issued to an employer for the benefit of employees, or to
members of an association, for example a professional membership group. The
individual members of the group hold certificates as evidence of their insurance
Guaranteed Policies
These are policies where the payment stays fixed.

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.
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.

Joint Life Endowment Assurance Plans

The sum assured ( plus any accrued bonuses) under this type of policy is payable on
the end of the endowment term or on the first death of the two lives assured,

whichever is earlier. Typically (though not a necessity) taken out by a couple, a

variation is available for couples only. In this case, the sum assured will be payable on
first death and then again on the second death (along with all vested bonuses) if both
deaths occur during the term of the policy. If one or both lives survive to the maturity
date, the sum assured along with all vested bonuses will be payable on maturity date.
Premiums during this plan cease on the first death or the expiry of the selected term,
whichever is earlier. Another variation provides for annuity to both/surviving spouse,
or a lumpsum amount to the legal heirs.

Keyman Insurance Policy

A life insurance policy taken by a person on the life of another person who is or was
his employee/connected to his business in any manner whatsoever.

Lapsed Policy
A policy which has terminated and is no longer in force due to non-payment of the
premium due
Limited Payment Life Policy
Premiums need to be paid only for a certain number of years or until death if it occurs
within this period. Proceeds of the policy are granted to the beneficiaries whenever
death of the policy holder occurs. Again, this policy can also be of the "with profits "
or "without profits" type.
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.

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.
Money Back Policy
Unlike endowment plans, in money back policies, the policy holder gets periodic
"survivance payments" during the term of the policy and a lumpsum amount on
surviving its term. In the event of death during the term of the policy, the beneficiary
gets the full sum assured, without any deductions for the amounts paid till date, and no
further premiums are required to be paid.These type of policies are very popular, since
they can be tailored to get large amounts at specific periods as per the needs of the
policy holder.
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 affects the
decesion of the insurance company to accept the risk.

Nomination

An act by which the policy holders authorises another person to receive the policy
moneys. The person so authorised is called Nominee.
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).
Premium Back Term Insurance Plans
These provide for refund of all the premiums paid, in the event of th life assured
surviving to the end of the policy term. The total sum assured is paid to the
beneficiaries in the event death occurs during the policy term.

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.

Salary Saving Scheme

This scheme provides for payment of premiums by money deduction from the salary
of the employees by one employer.
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.
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
instalments under a money back policy.

Vesting Age
The age at which the receipt of pension starts in an insurance-cum-pension plan.

Whole Life Policy

Premiums are paid throughout the life time of life assured . This can be with profits or
without profits ( A "with profit" policy is eligible for various bonuses declared by LIC
every year, while a "without profits" policy does not have this privilege )
With-Profit policy
Policies entitled to bonus, which is paid at the time of claim-death or maturity one
with-profit policies.
Without-Profit policy
These policies are not entitled to particiapte in bonuses.

REFRENCES
Data on Indian Insurance from http://www.irdaindia.org
Different statistics from http://www.rbi.org.in
Journals published by Insurance Regulatory & Development Authority.
Management of financial institutions by R.M. Srivastava
http://www.businesstoday.com
http://www.businessworld.com
http://www.economictimes.com
Different Survey on Insurance sector conducted by IIRC.
Profile of Indian Insurance Companies by IRDA.
www.licindia.co.in
www.sbilife.co.in/

www.tata-aig-life.com

www.bharti-axalife.com/

www.hdfcinsurance.com/

www.reliancelife.co.in/

www.bajajallianz.com/

www.metlife.co.in/
www.birlasunlife.com/

http://www.finance.indiamart.com