INDEX

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TOPIC

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ACKNOWLEGMENT.
EXECUTIVE SUMMARY.
RESEARCH METHODOLOGY.
INTRODUCTION.
HISTORY OF INSURANCE IN INDIA.
WHAT IS LIFE INSURANCE?
COMPANY PROFILE- LIC OF INDIA
LIC SUBSIDIARIES
OBJECTIVES OF LIC
MISSION/VISSION
BOARD OF DIRECTORS
AWARDS AND ACHIEVEMENTS
POLICIES(SCHEMES)
PROCUTS BY LIC

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3
4
5
6
10
14
20
22
23
24
25
28
32

15
16
17
18
19

INSURANCE PLANS
PENSION PLANS
UNIT PLANS
SPEACIAL PLANS
GROUP SCHEME
HEALTH PLAN

TAX BENEFITS.
56YRS OF NATION BUILDING LIC PRIDE OF
INIDA
ARTICLES
CONCLUSION
BIBLIOGRAPHY

53
55
58
61
62

ACKNOWLEGDEMENT
If words are considered to be signs of gratitude then let these words convey
the very same my sincere gratitude to LIFE INSURANCE CORPORATION
OF INDIA for providing me with necessary directions on doing this project to
the best of my abilities.
I am highly indebted to Mr. Ramkumar executive director of the bank who
helped me connect with Mr. Sohandeep Singh, who has provided me with
the necessary information and also for the support extended out to me in
the completion of this report and his valuable suggestion and comments on
bringing out this report in the best way possible.
I also thank Prof. MEENA DESAI who has sincerely supported me with the
valuable insights into the completion of this project.
I am grateful to all my friends who have helped me in the successful
completion of this project.

EXECUTIVE SUMMARY
Insurance is the most familiar word or phrase used in todays 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 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:-

RESEARCH OBJECTIVE

This project gives the brief background of the sector.

To more about the company .
Brief about the products .
LICs 56years of serving the insurance sector.

INTRODUCTION
What is an insurance?
Insurance is a term in law and economics. It is something people buy to
protect themselves from losing money. People who buy insurance pay what is
called a premium (often paid every month) and promise to be careful (which is
called a "duty of care"). In exchange for this, if something bad happens to the
person or thing that is insured, the company that sold the insurance will pay
money back. (However, there are some times when the company will not have
to pay money back, such as if the person was not careful.)
There are different kinds of insurance. One kind is called "fire insurance". It
pays people if their property catches on fire and burns down. Another kind is
called "life insurance", which pays somebody else (called the "beneficiary")
money if the person who has life insurance dies or becomes seriously ill.
Actuaries are the people who figure out how much the premium should be.
They balance how much the insurer might have to pay out against the chances
of having to pay out. If an actuary thinks that there is a big chance that the
company will have to pay out, he will make the premium higher.

HISTORY OF INSURANCE IN INDIA

In India, insurance has a deep-rooted history. It finds mention in the writings
of Manu ( Manusmrithi ), Yagnavalkya ( Dharmasastra ) and Kautilya
( Arthasastra ). The writings talk in terms of pooling of resources that could be
re-distributed in times of calamities such as fire, floods, epidemics and famine.
This was probably a pre-cursor to modern day insurance. Ancient Indian
history has preserved the earliest traces of insurance in the form of marine
trade loans and carriers contracts. Insurance in India has evolved over time
heavily drawing from other countries, England in particular.
1818 saw the advent of life insurance business in India with the
establishment of the Oriental Life Insurance Company in Calcutta. This
Company however failed in 1834. In 1829, the Madras Equitable had begun
transacting life insurance business in the Madras Presidency. 1870 saw the
enactment of the British Insurance Act and in the last three decades of the
nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire of
India (1897) were started in the Bombay Residency. This era, however, was
dominated by foreign insurance offices which did good business in India,
namely Albert Life Assurance, Royal Insurance, Liverpool and London Globe
Insurance and the Indian offices were up for hard competition from the foreign
companies.
In 1914, the Government of India started publishing returns of Insurance
Companies in India. The Indian Life Assurance Companies Act, 1912 was the
first statutory measure to regulate life business. In 1928, the Indian Insurance
Companies Act was enacted to enable the Government to collect statistical
6

information about both life and non-life business transacted in India by Indian
and foreign insurers including provident insurance societies. In 1938, with a
view to protecting the interest of the Insurance public, the earlier legislation
was consolidated and amended by the Insurance Act, 1938 with
comprehensive provisions for effective control over the activities of insurers.
The Insurance Amendment Act of 1950 abolished Principal Agencies.
However, there were a large number of insurance companies and the level of
competition was high. There were also allegations of unfair trade practices.
The Government of India, therefore, decided to nationalize insurance business.
An Ordinance was issued on 19th January, 1956 nationalising the Life
Insurance sector and Life Insurance Corporation came into existence in the
same year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75
provident societies245 Indian and foreign insurers in all. The LIC had
monopoly till the late 90s when the Insurance sector was reopened to the
private sector.
The history of general insurance dates back to the Industrial Revolution in
the west and the consequent growth of sea-faring trade and commerce in the
17th century. It came to India as a legacy of British occupation. General
Insurance in India has its roots in the establishment of Triton Insurance
Company Ltd., in the year 1850 in Calcutta by the British. In 1907, the Indian
Mercantile Insurance Ltd, was set up. This was the first company to transact
all classes of general insurance business.
1957 saw the formation of the General Insurance Council, a wing of the
Insurance Associaton of India. The General Insurance Council framed a code
of conduct for ensuring fair conduct and sound business practices.

In 1968, the Insurance Act was amended to regulate investments and set
minimum solvency margins. The Tariff Advisory Committee was also set up
then.
In 1972 with the passing of the General Insurance Business
(Nationalisation) Act, general insurance business was nationalized with effect
from 1st January, 1973. 107 insurers were amalgamated and grouped into four
companies, namely National Insurance Company Ltd., the New India
Assurance Company Ltd., the Oriental Insurance Company Ltd and the United
India Insurance Company Ltd. The General Insurance Corporation of India
was incorporated as a company in 1971 and it commence business on January
1sst 1973.
This millennium has seen insurance come a full circle in a journey
extending to nearly 200 years. The process of re-opening of the sector had
begun in the early 1990s and the last decade and more has seen it been opened
up substantially. In 1993, the Government set up a committee under the
chairmanship of RN Malhotra, former Governor of RBI, to propose
recommendations for reforms in the insurance sector.The objective was to
complement the reforms initiated in the financial sector. The committee
submitted its report in 1994 wherein , among other things, it recommended
that the private sector be permitted to enter the insurance industry. They stated
that foreign companies be allowed to enter by floating Indian companies,
preferably a joint venture with Indian partners.
Following the recommendations of the Malhotra Committee report, in
1999, the Insurance Regulatory and Development Authority (IRDA) was
constituted as an autonomous body to regulate and develop the insurance
industry. The IRDA was incorporated as a statutory body in April, 2000. The
key objectives of the IRDA include promotion of competition so as to enhance
8

customer satisfaction through increased consumer choice and lower premiums,

while ensuring the financial security of the insurance market.
The IRDA opened up the market in August 2000 with the invitation for
application for registrations. Foreign companies were allowed ownership of up
to 26%. The Authority has the power to frame regulations under Section 114A
of the Insurance Act, 1938 and has from 2000 onwards framed various
regulations ranging from registration of companies for carrying on insurance
business to protection of policyholders interests.
In December, 2000, the subsidiaries of the General Insurance Corporation
of India were restructured as independent companies and at the same time GIC
was converted into a national re-insurer. Parliament passed a bill de-linking
the four subsidiaries from GIC in July, 2002.
Today there are 27 general insurance companies including the ECGC and
Agriculture Insurance Corporation of India and 24 life insurance companies
operating in the country.
The insurance sector is a colossal one and is growing at a speedy rate of 1520%. Together with banking services, insurance services add about 7% to the
countrys GDP. A well-developed and evolved insurance sector is a boon for
economic development as it provides long- term funds for infrastructure
development at the same time strengthening the risk taking ability of the
country.

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 civilizations 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.

10

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 in
the proposal form are correctly answered. Any misrepresentation, nondisclosure 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
11

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 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
12

for house building or for purchase of flats (subject to certain conditions).

Who Can Buy A Policy?
Any person who has attained majority and is eligible to enter into a valid
contract can insure himself/herself and those in whom he/she has insurable
interest.
Policies can also be taken, subject to certain conditions, on the life of one's
spouse or children. While underwriting proposals, certain factors such as the
policyholders state of health, the proponent's income and other relevant
factors

are considered by the Corporation.

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 timeto-time.
At present, women who work and earn an income are treated at par with 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.
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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.

COMPANY PROFILE
LIC LIFE INSURACE CORPORATION OF INDIA

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.

14

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,
15

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 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
16

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 reorganization 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. 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 Centers 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.

17

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.
1928: The Indian Insurance Companies Act enacted to enable the government
to collect statistical information about both life and non-life insurance
businesses.

18

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.

107 insurers amalgamated and grouped into four companies viz. the National
Insurance Company Ltd., the New India Assurance Company Ltd., the
19

Oriental Insurance Company Ltd. and the United India Insurance Company
Ltd. GIC incorporated as a company.

LIC SUBSIDIARIES

20

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.
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
21

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.

OBJECTIVES OF LIC

22

 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.

23

MISSION/VISSION
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."

24

BOARD OF DIRECTORS
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

25

AWARDS AND ACHIVEMENTS

Brand

Equity

Most

Trusted Golden

Brand 2009 Top in Insurance Product

Category

Peacock
/

Service

Innovative
Award

2009

Readers Digest Trusted Brand

Loyalty Awards - 2009

Award 2009 in the Platinum

category

CNBC Awaaz Consumer Awards NDTV

2008

Profit

Business

Leadership Award 2008

26

INDY's Silver Award for Best INDY's Silver Award for Best
Corporate Film

in House Magazine

IT USER 2008 NASCOM

Selected

Business

Super

brand India 2008

ASIA BRAND CONGRESS BRAND Pitch Award -" Rank 1 " India's
LEADERSHIP AWARD 2008

Top 50 service Brands

27

Loyalty

Awards

Insurance Sector

2008

- SKOCH

Challengers

2008 for Jeevan Madhur

Readers Digest Trusted Brand Golden

Peacock

Award 2008 in the Platinum Excellence

category.

Award

in

Award

for

Corporate

Governance

Web 18 Genius of the web awards 2007

28

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
INSURANCE PLANS
As individuals it is inherent to differ. Each individual's insurance needs and
requirements are different from that of the others. LIC's Insurance Plans are
policies that talk to you individually and give you the most suitable options
that can fit your requirement.
ENDOWMENT PLAN
Single Premium Endowment Plan.
New Endowment Plan.
New Jeevan Anand.
MONEY BACK PLANS
LICS New Money BACK PLAN 20 yrs
LICS New Money BACK PLAN- 25yrs
LICs New Bima Bachat.
TERM ASSURANCE PLANS
LICs Anmol Jeevan II
LICs Amulya Jeevan II
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
29

on the best things in life.

Jeevan Akshay VI
LICs new Jeevan Nidhi.

UNIT PLANS
Unit plans are investment plans for those who realize the worth of hardearned 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

30

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 SCHEME
Group Term Insurance Schemes.
Group Insurance Scheme in lieu of EDLI.
Group Gratuity Scheme.
Group Savings Linked Insurance Scheme.
Group Leave Encashment Scheme.
Group Mortgage Redemption Assurance Scheme.
Group Critical Illness Rider.
WITHDRAWN PLANS

Jeevan Nischay
Wealth Plus
Jeevan Aastha
Money Plus-I
Jeevan Varsha
Fortune Plus
Health Plus
Pension Plus
New Jeevan Dhara-I
Jeevan Vriddhi
Jeevan Sugam
Mortgage Redemption
CDA Endowment Vesting At 21
CDA Endowment Vesting At 18
The Whole Life Policy- Limited
Payment
Jeevan Arogya
The Whole Life Policy
Jeevan Pramukh
Anmol Jeevan-I
Jeevan Amrit
Jeevan Bharthi-I
The Money Back Policy-25 Years
Jeevan Surabhi-15 Years
Jeevan Anurag

Market Plus I
Profit Plus

Child Fortune Plus

Jeevan Saathi Plus
Samridhi Plus
Jeevan Nidhi
New Jeevan Suraksha-I
Jeevan Vaibhav (Single Premium Endowment Assuranc
Two Year Temporary Assurance
Policy
Flexi Plus

Health Protection Plus

Bima Account 1
Bima Account 2
Jeevan Mitra(Double Cover Endowment Plan)
New Jeevan Nidhi
Jeevan Surabhi-25 Years
Jeevan Surabhi-20 Years
Jeevan Mitra(Triple Cover Endowment Plan)
The Whole Life Policy- Single
Premium
Komal Jeevan
31

Child Career Plan

Jeevan Kishore

Child Future Plan

Jeevan Chhaya
Educational Annuity
Plan
Jeevan Shree-I
The Endowment Assurance Policy - Limited Payment
The Money Back Policy - 20 Years
The Endowment Assurance Policy
Bima Bachat
Jeevan Vishwas
New Bima Gold
Jeevan Saral
Jeevan Mangal
Jeevan Mangal

Marriage Endowment
Jeevan Saathi
Jeevan Ankur
New Janaraksha Plan
Jeevan Tarang
Jeevan Anand
Jeevan Aadhar
Endowment Plus
Bima Nivesh 2005
Jeevan Deep
Jeevan Madhur
Amulya Jeevan-I

HEALTH PLANS
Jeevan Arogya .

MICRO INSURANCE PLAN

LICS New Jeevan Mangal.

PRODUCTS BY LIC
32

INSURANCE PLANS

1. New Jeevan Anand

Features
Product summary:

LIC's New Jeevan Anand Plan is a participating non-linked plan which offers
an attractive combination of protection and savings. This combination
provides financial protection against death throughout the lifetime of the
policyholder with the provision of payment of lumpsum at the end of the
selected policy term in case of his/her survival. This plan also takes care of
liquidity needs through its loan facility.
1. Benefits: Death benefit : Provided all due premiums have been paid, the
following death benefit shall be paid: On Death during the policy term:
Death benefit, defined as sum of Sum Assured on Death and vested Simple
Reversionary Bonuses and Final Additional bonus, if any, shall be payable.
Where, Sum Assured on Death is defined as higher of 125% of Basic Sum
Assured or 10 times of annualised premium. This death benefit shall not be
less than 105% of all the premiums paid as on date of death. The premiums
mentioned above exclude service tax, extra premium and rider premiums, if
any. On death of policyholder at any time after policy term: Basic Sum
Assured Benefits payable at the end of Policy Term: Basic Sum Assured,
along with vested Simple Reversionary Bonuses and Final Additional Bonus,
if any, shall be payable in lump sum on survival to the end of the policy term
provided all due premiums have been paid.
Participation in Profits : The policy shall participate in profits of the
Corporation and shall be entitled to receive Simple Reversionary Bonuses
declared as per the experience of the Corporation during policy term provided
the policy is in full force. Final (Additional) Bonus may also be declared
under the plan in the year when the policy results into death claim during the

33

policy term or due for the survival benefit payment provided the policy is in
full force and has run for certain minimum term.
2. Optional Benefit:
LICs Accidental Death and Disability Benefit Rider: LICs Accidental
Death and Disability Benefit Rider is available as an optional rider by
payment of additional premium during the policy term. In case of accidental
death during the policy term, Accident Benefit Sum Assured will be payable
as lumpsum along with the death benefit under the basic plan. In case of
accidental permanent disability arising due to accident (within 180 days from
the date of accident), an amount equal to the Accident Benefit Sum Assured
will be paid in equal monthly installments spread over 10 years and future
premiums for Accident Benefit Sum Assured as well as premiums for the
portion of Basic Sum Assured which is equal to Accident Benefit Sum
Assured under the policy, shall be waived.

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).
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.
34

Bonuses:
The policy participates in the profits of the Corporations 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.

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 years premium. In case of a single premium
policy the guaranteed surrender value is 90% of the single premium paid
excluding

any

extra

premium.

Corporations 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.
35

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.

LICS NEW BHIMA BACHAT:

LICs New Bima Bachat is a participating non-linked savings cum protection
plan, where premium is paid in lump sum at the outset of the policy. It is a
money-back plan which provides financial protection against death during the
policy term with the provision of payment of survival benefits at specified
durations during the policy term. In addition, on maturity, the single premium
shall be returned along with Loyalty Addition, if any. This plan also takes care
of liquidity needs through its loan facility.
a) BENEFITS: Death benefit: On death during the first five policy years:
Sum Assured.On death after completion of five policy years: Sum Assured
along with Loyalty Addition, if any.
b)Survival Benefits: Payable as given below in case of Life Assured
surviving to the end of the specified durations:For policy term 9 years: 15%
of the Sum Assured at the end of each of 3rd & 6th policy yearFor policy
term 12 years: 15% of the Sum Assured at the end of each of 3rd, 6th & 9th
policy year For policy term 15 years: 15% of the Sum Assured at the end of
each of 3rd, 6th, 9th & 12th policy year
c) Maturity Benefit: Payment of Single Premium (excluding taxes and extra
premium, if any) along with Loyalty Addition, if any, in case of Life Assured
surviving to the end of the policy term.
d) Loyalty Addition Depending upon the Corporations experience the
policies shall be participate in the profits and shall be eligible for Loyalty
36

Addition. The Loyalty Addition, if any, is payable on death after completion of

five policy years and on policyholder surviving to maturity, at such rate and on
such terms as may be declared by the Corporation.

PENSION PLANS
1. LICs NEW JEEVAN ANAND
LICs New Jeevan Nidhi Plan is a conventional with profits pension plan with
a combination of protection and saving features. This plan provides for death
cover during the deferment period and offers annuity on survival to the date of
vesting.
1.

Benefits:

a.

Benefit on Vesting: Provided the policy is in full force, on vesting an amount

equal to the Basic Sum Assured along with accrued Guaranteed Additions,
vested Simple Reversionary bonuses and Final Additional bonus, if any, shall
be made available to the Life Assured.

The following options shall be available to the Life Assured for utilization of
the benefit amount.
1.

To purchase an immediate annuity

The Life Assured shall have a choice to commute the amount available on
vesting to the extent allowed under Income Tax Act. The entire amount
available on vesting or the balance amount after commutation, as the case may
be, shall be utilized to purchase immediate annuity at the then prevailing
annuity rates. Commutation shall only be allowed provided the balance
amount is sufficient to purchase a minimum amount of annuity as per the
provisions of section 4 of Insurance Act, 1938.
37

In case the total benefit amount is insufficient to purchase the minimum

amount of annuity, then the said amount shall be paid as a lump sum to the
Life assured.
The annuity shall only be purchased from Life Insurance Corporation of India.
or
1.

To purchase a new Single Premium deferred pension product from Life

Insurance Corporation of India
Under this option the entire proceeds available on vesting shall be utilized to
purchase a single premium deferred pension product provided the policyholder
satisfies the eligibility criteria for purchasing single premium deferred pension
product.
The Life Assured will have to intimate his / her intention to go for a particular
option available on the date of vesting atleast six months prior to the date of
vesting.

b.

Death Benefit:
Death during first five policy years: Provided the policy is in full force, Basic
Sum Assured along with accrued Guaranteed Addition shall be paid as lump
sum or in the form of an annuity or partly in lump sum and balance in the form
of an annuity to the nominee.
Death after first five policy years: Provided the policy is in full force, Basic
Sum Assured along with accrued Guaranteed Addition, Simple Reversionary
and Final Additional Bonus, if any, shall be paid as lump sum or in the form of
an annuity or partly in lump sum and balance in the form of an annuity to the
nominee.
In any case, provided all due premiums have been paid, the total death benefit
at any time shall not be less than 105% of the total premiums paid (excluding
taxes, extra premium and rider premium, if any).
38

The amount of annuity will depend on the payable lump sum and the then
prevailing immediate annuity rates.
c.

Guaranteed Additions: The policy provides for Guaranteed Additions @

Rs.50/- per thousand Basic Sum Assured for each completed year, for the first
five years.

d.

Participation in profits: Provided the policy is in full force, depending upon

the Corporations experience the policies shall participate in profits from 6th
year onwards for a Simple Reversionary Bonus at such rate and on such terms
as may be declared by the Corporation.
Final (Additional) Bonus may also be declared under the policy in the year
when the policy results into a claim either by way of death or on vesting,
provided the policy has run for certain minimum term.

1.

Optional Benefit:

LICs Accidental Death and Disability Benefit Rider: LICs Accidental

Death and Disability Benefit Rider is available as an optional rider by
payment of additional premium under regular premium policies. In case of
accidental death, the Accident Benefit Sum Assured will be payable as
lumpsum along with the death benefit under the basic plan. In case of
accidental disability arising due to accident (within 180 days from the date of
accident), an amount equal to the Accident Benefit Sum Assured will be paid
in equal monthly instalments spread over 10 years and future premiums for
Accident Benefit Sum Assured as well as premiums for the portion of Basic
Sum Assured which is equal to Accident Benefit Sum Assured under the
policy, shall be waived. If the policy becomes a claim either by way of death
or the policy vests before the expiry of the said period of 10 years, the
disability benefit instalments which have not fallen due will be paid in lump
39

sum.
The Accident Benefit Sum Assured may be opted for an amount upto the Basic
Sum Assured subject to minimum of Rs. 1,00,000 and maximum of Rs. 50
lakh (under individual as well as group policies with LIC of India). This
benefit will be available only till the vesting age.

UNIT PLANS
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 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.
40

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.
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.

41

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.
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.
42

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
Max.

Age

at

entry
Max.

Maturity

Age
Policy Term

13

years

completed

18 years completed

70 years

50 years

75 years

60 years

5 yrs. and 10 yrs

Same as main plan

Min.

Sum

Assured

Rs.1,00,000/Rs.25,000.
Sum Assured

Max. Sum Assured - An amount

Maximum No up to the basic Sum Assured for

Term Assurance subject to a
limit.
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;
43

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.

44

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 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
45

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 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. For all non-employer-employee
Group Schemes the basic insurability condition is that the member
should be in good health on the date of entry.
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.

46

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.
FORMS FOR JANASHREE BIMA YOJANA1. 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)
47

4. Certificate of utilisation ( Proforma C )

BENEFIT ENHANCED
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
(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 earthern toys manufacture
48

(x) Fire cracker's workers

(xi)Construction workers
(xii)Other related cottage industries to be identified by Nodal Agencies and
other groups as identified by the Nodal Agency and approved by LIC.
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.

49

HEALTH PLAN
JEEVAN AROGYA:
LIC's Jeevan Arogya is a unique non-participating non-linked plan which
provides health insurance cover against certain specified health risks and
provides you with timely support in case of medical emergencies and helps you
and your family remain financially independent in difficult times.
Health has been a major concern on everybodys mind, including yours. In
these days of skyrocketing medical expenses, when a family member is ill, it is
a traumatic time for the rest of the family. As a caring person, you do not want
to let any unfortunate incident to affect your plans for you and your family. So
why let any medical emergencies shatter your peace of mind.
LICs Jeevan Arogya gives you:
Valuable financial protection in case of hospitalisation, surgery etc
Increasing Health cover every year
Lump sum benefit irrespective of actual medical costs
No claim benefit
Flexible benefit limit to choose from
50

Flexible premium payment options

Very easy to choose your plan
Choose the level of Health cover you need
Step 1
Step 2

Work out the premium payable along with our Representative

Step 1: Choose the level of Health cover you need:

You can choose the amount of Initial Daily Benefit (i.e. the daily Hospital Cash
Benefit applicable in the first year of the policy) as per your need from out of
the following choices:
` 2000 per day

` 3000 per day

` 4000 per day

` 1000 per day

This is the amount that will be payable to you in the event of hospitalisation in
the first year on a per day basis. The Major Surgical Benefit that you will be
covered for will be 100 times the Initial Daily Benefit you have chosen. Thus
the initial Major Surgical Benefit Sum Assured will be ` 1 lakh, 2 lakh, 3 lakh,
4 lakh respectively. Other benefits such as Day Care Procedure Benefit, Other
Surgical Benefit and Premium waiver Benefit (PWB) mentioned below shall
also be payable depending upon the daily Hospital Cash Benefit chosen.
Step 2: Work out the premium payable along with our representativeYour
premium will depend on your age, gender, the Health cover option you have
chosen, whether you are Principal Insured or other insured life and the mode of
payment.

Tables below give an indicative annual premium, payable yearly, for all health
benefits corresponding to an Initial Daily Benefit of ` 1000 per day, for some of
the ages in respect of various lives that can be covered under a single policy:

51

PRINCIPAL INSURED (Male)

Premium (`)
Age at entry
20

1922.65

30

2242.90

40

2799.70

50

3768.00

SPOUSE (Female) / PARENT (of PI/Spouse) (Female)

Premium (`)
Age at entry
20

1393.15

30

1730.65

40

2240.60

50

2849.10

CHILD
Premium (`)
Age at entry
0

792.00

794.75

10

812.35

15

870.75

(Premiums indicated are exclusive of Service Tax)

Who can be insured?You (as Principal Insured (PI)), your spouse, your
children, your parents and parents of your spouse can all be insured under one
52

policy. Quite a relief isnt it, to have all insured under one policy! The
minimum and maximum age at entry is as under:
Minimum age at

Maximum age at entry

entry
Self / spouse

18 years

65 years (last birthday)

Parents / parents-in-law

18 years

75 (last birthday)

Children

91 days

17 years (last birthday)

How long are each insured under this policy? Each of the insured are
covered for Health risks up to age (80). Children are insured up to age 25 years.

53

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
54

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, Subsection (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 assessees 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 LICs 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.

55

56 years of Nation building

LIC the pride of India
On 1st September 2012, LIC completes 56 years of its glorious and
purposeful existence. It was on this day in the year 1956, that LIC of India
came into being with the government of India nationalizing the life insurance
business through an ordinance on 19th January 1956. Ever since 1956, LIC has
progressed from strength to strength. In the process, it has fulfilled its
objectives and has been immensely contributing to the nation building
activities. Today, LIC is an Institution of national importance and operates at a
very large scale and efficiency. It has created a significant value for its
customers and dominates the life insurance industry in our country. LIC has
institutionalized a culture of Trust within its organization which is the basis for
its extraordinary success. LIC has grown today to be the premiere public
sector financial institution and the pride of India.
LIC has invested Rs. 8,19,835 crores as on 31.3.2012 in central/state
government securities, power generation, road transport, water supply, housing
and other social activities. LIC has played a very important role in nation
building. LICs contribution to the Five Year Plans has been commendable. It
contributed Rs. 184 crore to the second Five Year Plan (1956-61), Rs. 3,
94,779 to tenth Five Year Plan (2002-2007) and Rs.7,04,151 Crores to the
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eleventh Five Year Plan (2007-2012. The most amazing aspect is that around
25% of internal borrowings of the central government are met by LIC every
year. On an initial investment of Rs.5 crores in the year 1956 by the Union
Government, its share of the valuation surplus of 5% for the year 2011-12
worked out to be Rs. 1281.23 Crore. With an investment of just Rs.5 crore, till
this fiscal year end, the government received a cumulative dividend of Rs.
11,376.10 Crore which is unimaginable in any other institution. The
Government of India has entrusted several social security schemes to LIC.
Over 1.63 crore landless households under Aam Aadmi Bima Yojana till date
are covered by LIC. Taking up the cause of financial inclusion, over 57.76 lac
people have been insured under LICs Micro insurance schemes. As a part of
Corporate Social Responsibility, the Golden Jubilee Foundation has been
dedicated to the cause of promoting education, health and to provide relief to
the people who are poor. So far LIC has sanctioned more than 140 projects
worth Rs.18.06 crores, across the country. LIC Golden Jubilee Scholarship
Scheme provides scholarship to economically weaker sections of the society
to pursue higher education. Every year 1000 deserving students are given
scholarship

under this scheme dedicated towards nation building; LIC is one of the
strongest pillars of Indias social and economic structure.
Ever since the opening up of the insurance sector in the year 2000, LIC is
performing marvelously dominating the insurance market. The public sector
LIC has surprised the critics with a very strong performance.
The Compounded Annual Growth Rate (CAGR) of LIC during the last ten
years has jumped to 30.24% from 15.23% since inception. LICs total policies
have risen from 10.12 Croresin to 34 Crores in conventional business along
57

with 10.45 crores of customer base in group business. LICs Life fund has
grown from 1.54 lakh crore to 12.83 lakh crore. LICs asset base has grown
from 1.60 lac crore to 14.17 lakh crore by September 2012. The new business
premium has gone up from Rs.5930 Crore to Rs. 81515 Crore. Total Premium
Income has increased from Rs.27489 Crore to 202802.90 Crore. Thus, through
this amazing performance, LIC has retained its domination over the market.
It is holding on to a market share of 81 percent in number of policies and 74
percent in new business premium. The LIC has also an impressive share of
87.4% in the total assets under management. Insurance is a promise which
needs to be fulfilled on the happening of an eventuality. LIC settles 99.86% of
the claims which is a world record. The track record of the private insurance
companies on settlement of claims is abysmally low. In spite of such a strong
performance, it is surprising to note that the rating agencies to facilitate the
entry of foreign capital to access the domestic savings of the Indian people, are
trying to arm twist by down grading the investment rating of LIC ironically
quoting that LIC is exposed to investments in government securities.
The performance of private insurance companies even after a decade of
operation is not encouraging. Out of the 23 private insurance companies, 16
have reported operating losses and majority of them are yet to break even. The
private insurance companies sell more than 90% of their policies in ULIPs
where the returns are dependent on the vagaries of the volatile stock market.
According to the government, the public sector LIC has dominated the
investment in infrastructure development by accounting for more than 94%
where as the private companies are unable to invest for infrastructure
development of our country.
In spite of the sterling performance by the Life Insurance Corporation of
India, the government, under pressure from the international finance capital, is
making attempts to weaken the public sector. The Insurance Laws
(amendment) bill 2008 which seeks to increase the FDI cap in insurance from
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26% to 49% is a pointer in this direction. More Over, the hurdles created by
IRDA with regard to clearing new plans, in recruitment of agents, suspending
group superannuation scheme (P&GS) etc are all the hindrances which LIC is
able to successfully overcome till now.

ARTICLES
1.

LIC turns 56 today; sells 367 lakh policies

in one year India's largest domestic institutional investor, Life Insurance
Corporation of India (LIC), which turns 56 year old today, sold a
whopping 357 lakh policies last year, a commanding 80.9% market
share of new policies issues.

India's largest domestic institutional investor, Life Insurance Corporation of

India (LIC), which turns 56 year old today, sold a whopping 357 lakh policies
last year, a commanding 80.9% market share of new policies issues. Its total
first year premium income was pegged at more than Rs 81514.49 crore
including Rs 38955.06 crore of premium through Pension and Group schemes
i.e. 71.36 % of the market share. In pension and group schemes, new lives
insured were 284.12 lakhs under conventional business and 94.44 lakh lives
under social security schemes. In the year 2011-12, 185.7 lakh claims
amounting to Rs 66022.82 crore were settled. Nearly 93.19% of total maturity
claims were settled on or before the date of maturity and 94.34% of non-early
death claims were settled within 15 days of intimation. The outstanding
maturity claims ratio is as low as 0.5% and the outstanding death claim ratio is
1.22%. Total payments to policyholders aggregated to Rs. 112,911.82 crore.
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LIC has launched a new micro insurance product 'Jeevan Deep' on today. This
is an endowment assurance with an added feature of guaranteed additions
along with provision of Loyalty addition. An immediate annuity product is
available for 'on-line buy'.

2. LIC also keeps the economy healthy.

BUSINESS TODAY
Edition:August 21, 2011

As a home loan officer with a private sector bank, Yatindra Pathak says he has
often heard people say: "Mere pass ICICI ka hi LIC hai" (I have ICICI's LIC).
LIC, or the Life Insurance Corporation of India, is practically synonymous
with insurance in the country. And with good reason: despite 22 private
entrants into the industry since it was liberalised in 2000, LIC has the lion's
share.
At Rs 86,445 crore, it notched up an overwhelming 69 per cent share of first
premiums in 2010/11 - nearly 22 per cent more than in the previous year. By
contrast, private insurers garnered a cumulative Rs 39,831 crore, which
worked out to an annual growth of 2.56 per cent.
The sailing has not been all smooth, though. In 2009/10, 75 per cent of LIC's
new business came through unit-linked insurance policies, or ULIPs. But
regulators questioned the governance of these products. The Securities
Exchange Board of India wanted to oversee them because of their high
investment component, and the Insurance Regulatory and Development
Authority wanted to continue overseeing them as they did, after all, provide
insurance.
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The insurance regulator framed stringent norms for ULIPs. "The entire sales
focus has now moved to non-ULIP products," says an LIC official who asked
not to be named. With lower advisor commissions and ULIP sales, new
business premiums for the industry as a whole shrank 12 per cent in AprilMay 2011 compared to the previous year. Business dropped eight per cent for
LIC, and 23 per cent for private insurers.
LIC's nationwide sales force of 1.34 million advisors is just one of its
strengths.
"The government guarantee gives it the edge on private players," says the head
of a private insurer. Of course, the guarantee does not come free. LIC is
among India's largest institutional investors, and the biggest participant in state
and public sector bond issues. Its i nvestments in 2009/10 were Rs 10.96
trillion, of which roughly 92 per cent was in securities, and 7.75 per cent was
in loans. In 2009/10, LIC paid Rs 3,625 crore in taxes, and another Rs 1,030
crore was the government's five per cent share of LIC's life fund valuation
surplus. So LIC not only insures lives, but also helps keep the economy
healthy.

LIC is the industry leader, with a 69 per cent market share in 2010/11

Compared to 2.6 per cent annual growth in first-year premiums for private
insurers, LIC recorded growth of nearly 22 per cent in 2010/11

LIC has the largest sales force of 1.34 million advisors, as of March 2010

LIC's 13.1 per cent expense ratio (including advisor commission) is lowest in
the world

With total investments of Rs 10.96 trillion, LIC was India's largest

institutional investor as of March 2010.

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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.

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