Role of Lic in Insurance Industry

ROLE OF LIC IN INSURANCE INDUSTRY
KARAN C. HARCHANDANI
HPGD/JL15/4154
SPECIALIZATION: BANKING, INVESTMENT & INSURANCE
WEINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT &

RESEARCH
YEAR OF SUBMISSION: JUNE, 2018
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UNDERTAKING BY CANDIDATE
I declare that project work entitled “ ROLE OF LIC IN INSURANCE INDUSTRY” is my

own work conducted as part of my syllabus.
I further declare that project work presented has been prepared personally by me & it is not
sourced from any outside agency. I understand that, any such malpractice will have very
serious consequences & my admission to the program will be cancelled without any refund of
fees.
I am also aware that, I may face legal action, if I follow such malpractice.
________________________________
Signature of Candidate
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TABLE OF CONTENTS
1. INTRODUCTION …………………………………………………………………
4
2. CONSTITUTION OF THE CORPORATION …………………………………….
7
3. CAPITAL OF THE CORPORATION …………………………………………….
7
4. SPECIAL FEATURES OF LIFE INSURANCE CORPORATION ………………
7
5. POWERS OF THE CORPORATION ……………………………………………..
8
6. THE HISTORICAL BACKGROUND OF INSURANCE …………………………
9
7. LIFE INSURANCE – A BIRD EYE VIEW ……………………………………….
10
8. IMPORTANT OPERATIONAL TERMS OF LIC ………………………………...
12
9. OBJECTIVES OF LIC …….……...………………………………………………..
16
10. TYPES OF POLICIES ……………………………………………………………
18
10.1 TERM INSURANCE POLICY ………………………………………………
18
10.2 WHOLE LIFE POLICY ………………………………………………………
18
10.3 ENDOWMENT POLICY ……………………………………………………..
18
10.4 MONEY BACK POLICY ……………………………………………………..
19
10.5 ANNUITIES AND PENSION ………………………………………………...
19
11. DEPARTMENTAL DETAILS IN LIC ……………………………………………
20
12. VARIOUS INSURANCE PLANS OF LIC FOR INDIVIDUALS …………..……
23
13. PRE-INDEPENDENCE SCENARIO ……………………………………………..
26
14. INTERNATIONAL LIFE INSURANCE SCENARIO …………………………...
26
15. NATIONALIZATION OF LIFE INSURANCE (1956) …………………………..
28
16. AN OVERVIEW OF INSURANCE BUSINESS IN INDIA ……………………...
29
17. LIST OF LIFE INSURERS ………………………….…………………………….
30
3
18. LIFE INSURANCE PROCESS FLOW …………………………………………...
31
19. INSURANCE INDUSTRY IN INDIA ……………………………………………
33
20. MARKET SHARE OF INDIAN INSURANCE INDUSTRY ……………………
34
21. KANO MODEL OF CUSTOMER SATISFACTION RELATED WITH LIC …...
34
22. PRODUCTS AND SERVICES IN LIC ………………………………………….
36
23. INSURANCE PLANS IN LIC …………………………………………………….
40
24. PERFORMANCE OF LIC OF INDIA- A REVIEW ……………………………..
41
25. FACTORS AFFECTING LIFE INSURANCE POLICY …………………………
43
26. SWOT ANALYSIS …..……………………………………………………………
44
27. CHALLENGES FACING THE INSURANCE INDUSTRY FOR FUTURE GROWTH … 47
28. GROWTH PERFORMANCE INDICATORS OF LIFE INSURANCE COMPANY IN INDIA …
48
29. FDI POLICY IN INDIAN LIFE INSURANCE INDUSTRY ……………………
67
30. INVESTMENT POLICY OF LIC OF INDIA ……………………………………
67
31. AREAS OF FUTURE GROWTH ………………………………………………..
68
32. REVIEW OF THE COMMITTEE ON REFORMS IN THE INSURANCE SECTOR …
69
33. INSURANCE REGULATORY DEVELOPMENT AUTHORITY (IRDA) …….
71
34. IMPACT OF LPG ON LIC ……………………………………………………..
72
35. PROGRESS OF LIC IN THE POST LPG ERA …………………………………
73
36. IMPACT OF INFORMATION TECHNOLOGY ON LIFE INSURANCE SECTOR …. 74
37. RECENT AWARD AND ACHIEVEMENT OF LIC …………………………… 76
38. LIFE INSURANCE CORPORATION VISION AND MISSION ………………
78
1. INTRODUCTION:
The Life Insurance Corporation of India popularly known as “LIC of India”
was incorporated on September 1, 1956 by nationalizing 245 Indian as well as foreign
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companies. It wasestablished 52 years ago with a view to provide an insurance cover against
various risk in life. The luminaries who spearheaded this move at that time visualized an
entity that will provide life insurance to Indians, especially the vast rural people, at an
economical cost and channel the savings for the betterment of the nation. It is the largest life
insurance company in India and also the countries largest investor. It is fully owned by the
Government of India and headquarter is Mumbai. Today LIC function with 2048 full
computerized branch offices, 100 divisional offices, 7 Zonal offices and the corporate office.
LIC’s wide area. Network cover 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 online 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 vision of providing easy
access to its policyholders, LIC has launched its SATELLITE SAMPARK offices. The
digitalized record of the satellite offices will facilitate anywhere to serve and other
convenience
in the future. LIC has crossed many milestones and has set unprecedented performance
records in various aspect 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.
Insurance means managing risk. For instance, in life insurance segment, the
insurance company tries to manage mortality (death) rates among the wide array of clients.
The
insurance company works in a manner by collecting premiums from policy holders, investing
the money, and then reimbursing this same money once the person passes away or the policy
matures. The greater the probability for a person to have a shorter life span than the average
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mark, the higher premium that person has to pay. The case is the same for all other types of
insurance, including automobile, health and property. Ownership of insurance companies is of
two types are - Shareholder ownership and Policyholder ownership.
Life Insurance Corporation of India is perhaps India’s largest financial

institution. It came into existence when a large number of life insurance companies were
taken
over by Government of India. The nationalization of private insurance companies started a
new
era of insurance business i.e. LIC of India. In its early years, being a monopoly public sector
company, it did not face any competition. After opening the sector to private players, LIC of
India faced some competition.
The growth of the insurance sector in India has been phenomenal. The
insurance
industry has undergone a massive change over the last few years and the metamorphosis has
been noteworthy. There are numerous private and government insurance companies in India
that have become synonymous with the term insurance over the years. Offering a diversified
product portfolio and excellent services the many insurance companies in India have managed
to make their way into almost every Indian household.
With the rapid growth of the Indian Insurance industry, in particularly serving
a
Middle Class that is growing on both size and wealth every year, it is hardly surprising that
Indian insurance companies are growing, and playing an increasingly important role in the
nation's financial services industry. This increasing market is creating considerable
competition
among Indian insurance companies in an industry that 20 years ago was relatively small.
Customers buy life insurance with great hope and aspirations. In India endowment products
which club savings with life protection are the most popular variety with savings. People
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purchase life insurance to provide for crucial long term needs such as kids’ higher education
and marriages, retirement, house building, life style or to leave behind an estate for the heirs.
Life insurance is what that protects your family in your absence. Life insurance
policies provide a certain amount of money to your family in case something happens to you.
These come as a great financial relief during the hour of needs. There are a number of
insurance
companies in India that offer life insurance policies to its customers. The top insurance
policies
in India also act as flexible money-saving scheme. There are a number of life insurance
policies
available in India. Different policies come with different features. The coverage amount and
policy term also vary. There are several popular insurance companies that offer top life
insurance policies in India. Before going for any life insurance policies, compare various
policies offered by the top insurance companies
The nationalization of life insurance aims at widening the channels of public

savings. It is an important step towards mobilizing savings more effectively than heretofore,
to
forces to finance national plans. Nationalized Insurance is designed to bring to the door of
even
the humblest citizen, wherever he may be, the benefits of this social service, to ensure
complete
security of the funds collected by way of premiums and to utilize profitably such funds for
nation building activities. The corporation which was mainly transacting insurance on
individual lives, later on started doing insurance business on group basis under its pension and
group scheme portfolio.
LIC offers policies to various groups such as employees, professionals, co-

operatives etc. During 1989, the corporation diversified its activities in many directions LIC
mutual fund was set up as a separate trust with a view of providing easy accessibility of
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investment area including stock market in the country to one and all especially the small
investors in rural and semi urban areas. The corporation branched LIC housing Finance
limited
on 19th June 1989. At its subsidiary along with UTI, IFCI, and ICICI with a view to making a
greater trust in the housing field by providing long term Finance to help realize the objectives
of the national housing policy. An off-shore company, LIC was incorporated in Bahrain in
July
1989 to transact life insurance business amongst non-resident Indian in Middle East
Countries.
2. CONSTITUTION OF THE CORPORATION

The Central Government shall appoint the member of the corporation
Which shall not exceed 15 in number. One of the members shall be appointed by the central
Govenment as the Chairman. Before appointing a person to be a member, the Central
Government shall satisfy itself the person will have no such financial or other interest as is
likely to affect prejudicially the exercise performed by him.
3. CAPITAL OF THE CORPORATION

The corporation has a capital of Rs.5 crores entirely subscribed by the central
Government. The central Government may on the recommendation of the corporation
reduce the capital to the extent and in such manner as the Government may determine
4. SPECIAL FEATURES OF LIFE INSURANCE CORPORATION

1. Lower premium and higher bonus than other private insurer.
2. More life risk cover through term rider
3. Maximum accident benefit as compared to other insurances.
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4. Additional in built accident benefit in special policies like New Jana Raksha and
Jeevan Anand are above the normal limit.
5. More than 40 attractive plans of assurances to choose from LIC.
6. Major percentage of the funds are invested in Government securities and thus more
secured.
5. POWERS OF THE CORPORATION

1. To carry on capital redemption business, annuity and reinsurance business.
2. To take all such steps as are necessary or expedient for the protection and
realization of its investment, including the taking over and administering any
property offered as security for the investment until a suitable opportunity
arises for its disposal.
3. To acquire, hold and dispose of any property for the purpose of its business.
4. To transfer the whole or any part of the life insurance business carried on
outside India to any other person or persons if it is expedient to any other.
5. To advance or lend money upon the security of any movable or immovable
property or otherwise.
6. To borrow or raise money in such manner and upon such security as the
corporation many think fit.
7. To carry on any other business which may seem to the corporation to the
capture of being conveniently carried on in connection with its business and

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calculate directly or indirectly to render profitable business of the corporation.
8. To do all such things as may be incidental or conducive to the proper exercise
of any of the powers of the corporation.
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6. THE HISTORICAL BACKGROUND OF INSURANCE:
The roots of insurance dates back to Babylonia, where traders were encouraged
to assume the risks of the caravan trade through loans that were repaid with interest only after
the goods had arrived safely. In Europe, with the growth of towns and trade, the medieval
guilds
undertook to protect their members from loss by fire and shipwreck and to provide decent
burial
and support in sickness and poverty.
By the middle of the 14th century, as evidenced by the earliest known

insurance
contract Geneva 1347, marine insurance was practically universal among the maritime nations
of Europe. In London, Lloyd’s coffee house 1688 was a place where merchants, ship owners
and underwriters met to transact business. By the end of the 18th century, Lloyd’s had
progressed into one of the first modern insurance companies. In 1693, the astronomer
Edmond
Halley constructed the first mortality table, based on the statistical laws of mortality and
compound interest.
The table which was corrected in the year 1756 by Joseph Dodson made it
possible to scale premium rate to age: previously the rate has been same for all the ages.
Insurance business was developed rapidly with the growth of British commerce in the 17th
and
18th Century. Prior to the formation of corporations which devoted solely to the business of
writing insurance, polices were signed by a number of individuals, each of whom wrote his
name and the amount of risk he was assuming underneath the insurance proposal. The first
stock companies to engage in insurance were chartered in England in 1720 and the First
insurance company in the American colonies was founded at Charleston in 1973.
In 1759, the Presbyterian synod of Philadelphia sponsored the first life

insurance
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corporation in America for the benefit of Presbyterian ministers and their independents. Thus,
based upon the nature of the risk coverage, insurance business can be classified into long term
i.e., life and general or non life insurance.
7. LIFE INSURANCE – A BIRD EYE VIEW:

The business of life insurance in its existing form entered into India from the
United Kingdom (UK) with the establishment of a Oriental Life Insurance Company, a British
firm in Calcutta in 1818 and followed by Bombay Life Insurance Company in 1823, the
Madras
Equitable Life Insurance Society in 1829 and Oriental Government Security Life Insurance
Company in 1874. But, the Indian lives were treated as sub-standard and charged an extra
premium of 15% to 20%.
Bombay Mutual Life Assurance Society, an Indian insurer which came into
existence in 1870 was the first Indian Life Insurance Company to cover Indian lives at normal
rates. Bharat Insurance Company 1856 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 Calcutta.

The Indian Mercantile, General Assurance and Swadeshi Life were some of the companies
established during the same period. Prior to 1912, no legislation existed to regulate insurance
business. In the year 1912, the Life insurance Companies Act and Provident Fund Act were
passed. The first two decades of the 20th century saw a lot of growth in insurance business.
From 44 companies with total business in force at Rs.22.44 crores, it rose to 176 companies
with total business in force as Rs.298 crores in 1938.
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The insurance Act 1938 was the first legislation Act governing not only life
insurance but also non life insurance to provide strict state control over the insurance
business.
The demand for nationalization of life insurance industry arises. Hence, the life insurance in
India was nationalized during 19th January 1956. About 154 Indian insurance companies, 16
non Indian companies and 75 provident were operating in India at the time of nationalization.
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 has 5 zonal offices, 33 divisional offices and 212
branch offices apart from its corporate office in the year 1956.
Due to variety of services required, the need was felt to expand the operations
and place a branch office at each district headquarters. Hence, large number of branches was
opened. It may be seen that from about 200 crores of new business in 1957 the corporation
crossed 1000 crores only in the year 1969-70 and it took another 10 years for LIC to cross
2000
crores mark for new business. In 1985-86, LIC had crossed 7000 crores Sum Assured on new
policies. At present, LIC functions with 2048 fully computerized branch offices, 109
divisional
offices,8 zonal offices and the corporate office. 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
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scenario of Indian insurance and is moving fast on a new growth trajectory surpassing its own
past records. LIC has issued over one crore polices during the current year. It has crossed the
milestone of issuing 1,01,32,955 new polices by 15th October 2005, posting a healthy growth
rate of 16.67% over the corresponding period of the previous year. From then and now, LIC
has crossed many milestones and has set unprecedented performance records in various
aspects
of life insurance business.
8. IMPORTANT OPERATIONAL TERMS OF LIC
(I) WHAT IS LIFE INSURANCE?

Life Insurance is a way of transferring the risk attached with your life to the
insurer. In other words, life insurance is a policy bought from a life insurance company,
which
provides financial stability to a family after a member’s death, usually the bread winner of the
family. Its function is to help beneficiaries financially after the owner of the policy dies. If the
policy owner dies while the contract is in force, the insurance company pays a specified sum
of
money free of income tax to the person or persons you name as beneficiaries. The cash benefit
helps provide for the family’s future needs as well, including college education of children
and
spouse’s retirement needs.
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
i. The date of maturity, or
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ii. Specified dates at periodic intervals, or
iii. Unfortunate death, if it occurs earlier
(II) WHY WE NEED INSURANCE?

Why do we need Life Insurance? Consider this. Under any circumstances, the
loss of a loved one is a traumatic experience. But, if your family is also left without sufficient
money to meet basic living needs or prepare for future goals, they will have to cope with a
financial crisis at the same time. If faced with a financial crunch, your family might have to
move to a less desirable home, cut back on the quality of life, your children might have to
abandon higher studies plans. Your family might even be forced to go into debt simply to pay
the expenses, like medical bills, that result from your death. I hope that by now you realize
that
the lack of sufficient life insurance coverage when a loved one dies can have devastating
consequences for a family consequences that can last for years. Hope now you get why we
need
life insurance Life insurance is a contact by which you can protect yourself against specific
uncertainties by paying a premium over a period. Since each of us during our life faces with
numerous risks falling health, financial losses, accident and even fatalities.
(III) 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.
(IV) RETIREMENT
Life insurance makes sure that you have regular income after you retire and
helps
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you maintain standard of living. It can ensure that your postretirement years are spent in peace
and comfort.
(V) 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 child’s education or marriage! Besides, it can be used as supplemental
retirement income.
(VI) 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 you pay your premiums and once when you
receive
maturity benefits. Money saved is money earned.
(VII) MYTHS OF INSURANCE

i) Insurance is just meant for saving tax.
ii) Insurance does not give good returns.
iii) Insurance products are not flexible.
(VIII) 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.
(IX) PREMIUM
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Premium is the consideration that the policyholder has to pay in order to secure
the benefits offered by the insurance policy. It can be looked upon as the price of the
insurance
policy. It may be a one-time payment or periodical payment (Monthly Quarterly, Half yearly,
Yearly). A default in premium can endanger the continuance of the policy. If that happens, the
policy will be treated as lapsed and the expected benefits.
(X) CLAIMS
A claim is the demand that the insurer should redeem the promise made in the
contract. The insurer has then to perform his part of the contract i.e. settle the claims, after
satisfying himself that all the conditions and requirements for settlement of claim have been
complied with.
(XI) 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.
Assurance is the coverage of risk on the happening of an event, which will happen during the
period of insurance.
Insurer is the company, which covers the risk under a policy of insurance.
Insured is the person on whose life the risk is covered.
Proposer is the person who seeks the insurance on the life proposed for
Insurance.
Proposal is the offer document filled and signed by the proposer indicting interalia the past &
present health of the life to be assured, the amount for which he desires to have the life to be
insured, the period for which he wants to have the insurance and the specified plan.
Plan of insurance is the scheme offering specified benefits. Different plans are offered by the
insurer to suit the varying need of the insuring public.Term is the period (no. of years) for
which
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the risk on the risk on the life assured will be covered.
Sum assured is the amount payable on the happening of the even specified in the policy
during
the term of the policy.
Survival benefit is the amount (a fixed percentage of sum assured) payable under certain
plans
on the life assured surviving the period specified in the policy.
Policy is the document issued by the insurer specifying the sum assured, plan, term, the
benefits
payable under the policy and the conditions and privileges of the policy. It is an evidence of
the
contract of life insurance.
Tabular premium is the amount of premium per thousand sum assured indicated in the table
of
rates for various plans and for different ages and terms.
Maturity claim is the payment of amount by the insurer on the life assured surviving the term
specified in the policy.
First Premium Receipt is the document issued by the insurer, as a prelude to the issue of the
policy to indicate that he has accepted the risk on the life proposed for insurance.
Date of commencement (DOC) is the date month and year from which the risk commences
under a policy.
Days Of Grace is Policy holders are expected to pay premium on due dates. a period is 15-30
days is allowed as grace to make payment of premium; such period is days of grace.
Due date is the date on which the installment premium to be paid under the policy falls due.
Nomination is the facility available under a life insurance policy to enable the insurer to pay
the benefits available under the policy to the nominated person on the death of the life
assured.
Assignment is the transfer of rights under the policy.
Non- Medical scheme proposals submitted for life insurance will be considered for
acceptance
without medical examination by the authorized medical examiner.
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Medical Scheme proposals submitted for life insurance will be considered only on the
strength
of the Medical Report submitted by the authorized medical examiner of the insurer.
Bonus is additions made to the sum assured under with profit policies as at the end of each
financial year as a result of an investigation made by an actuary into the working of the life
insurance company.
With profit policies; is which are entitled to have a share of the surplus arrived at as a result
of
the investigation mentioned above.
Without profit policies; is which are not entitled to have a share of the surplus.
Surrender; premature termination of the contract of life insurance by the life assured. A
policy
can be surrendered if there full years premiums have been paid. The amount paid on surrender
is called surrender value.
Rider; is additional benefits granted by insurers under a standard plan of insurance by
payment
of additional premium by the insured. Insures offer rider such as increased death cover (term
insurance), Medical insurance (providing relief for certain serious aliments or for undergoing
certain major operation) and accident cover. IRDA has stipulated that the premium collected
for these extra benefits (riders) should not exceeds 30% of the tabular premium.
9. OBJECTIVES OF LIC:
Following are the objectives of LIC:
1. 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.
2. Maximize mobilization of people's savings by making insurance-linked savings
19
adequately attractive.
3. 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.
4. Conduct business with utmost economy and with the full realization that the moneys
belong to the policyholders.
5. Act as trustees of the insured public in their individual and collective capacities.
6. Meet the various life insurance needs of the community that would arise in the
changing
social and economic environment.
7. Involve all people working in the corporation to the best of their capabilities in
furthering the interests of the insured public by providing efficient service with
courtesy.
8. 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 Objectives.
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10. TYPES OF POLICIES
The Researcher, found the different types of Life Insurance Plans in the
market.
As we know that Life Insurance is important for everyone to protect family incase of their
demise the insured money will save their family for educating their children and marriage etc.
According to your needs, one can choose Life Insurance Scheme of any form.
10.1 TERM INSURANCE POLICY

This policy is pure risk cover with the insured amount will be paid only if the
policy holder dies in the period of policy time. The intention of this policy is to protect the
policy holder’s family incase of death. For example, a person who takes term policy of
Rs.500000 for 20 years, if he dies before 20 years then his family will get the insured amount.
If he survive after 20 years then he will not get any amount from the insurance company. It is
the reason why term policies are very low cost. So, this type of policy is not suitable for
savings
or investment.
10.2 WHOLE LIFE POLICY

As the name itself says, the policy holder has to pay the premium for whole life
till his death. This policy doesn’t address any other needs of the policy holder. Because of
these
reasons this kind of policy is not very popular or insurance company not suggesting to take
this
policy.
10.3 ENDOWMENT POLICY

It is the most popular Life Insurance Plans among other types of policies. This
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policy combines risk cover with the savings and investment. If the policy holder dies during
the
policy time, he will get the assured amount. Even if he survives he will receive the assured
amount. The advantage of this policy is if the policy holder survives after the completion of
policy tenure, he receives assured amount plus additional benefits like Bonus, etc. In this kind
of policy, policy holder receives huge amount while completing the tenure. In addition to the
basic policy, insurers offer various benefits such as double endowment and marriage/
education
endowment plans. The cost of such a policy is slightly higher but worth its value.
10.4 MONEY BACK POLICY

Money Back Policy is to provide money on the occasions when the policy
holder
needs for his personal life. The occasions may be marriage, education, etc. Money will be
paid
back to the policy holder with the specified duration. If the policy holder dies before the
policy
term, the sum assured will be given to his family. A portion of the sum assured is payable at
regular intervals. On survival the remainder of the sum assured is payable.
10.5 ANNUITIES AND PENSION

An annuity is a series of periodic payments. An annuity contract is an
insurance
policy, under which the annuity provider (insurer) agrees to pay the purchaser of annuity
(annuitant) a series of regular periodical payments for a fixed period or during someone's
lifetime. In an annuity, the insurer agrees to pay the insured a stipulated sum of money
periodically. The purpose of an annuity is to protect against risk as well as provide money in
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the form of pension at regular intervals. Over the years, insurers have added various features
to
basic insurance policies in order to address specific needs of a cross section of people.
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11. DEPARTMENTAL DETAILS IN LIC
The organization having a such a huge size has to have a well defined
hierarchical structure and LIC is not an exception to this fact. A well defined proper
organization structure with officials with exact knowledge of their duties is a must for an
organization to prosper. LIC has a vast network offices across the country and abroad so it has
defined and maintained its organizational structure in the following way. LIC has its main
central head office at ‘Yogaakshema’ Jeevan bima marg at Mumbai. Then it is followed by
eight zonal offices namely central zone, eastern zone, east central zone, northern zone, north
central zone, southern zone, south central zone, western zone respectively. After these eight
zonal offices there are several divisional offices under each zonal office and these divisional
offices are mostly in each big city. At last comes the branch office and there are several
branch
offices under each divisional office. At all the branch offices there is a branch manager and
several departments and the major function of these branch offices is sales and servicing of
the
policies. In a branch office the top most is a branch manager and under his control seven
different departments with each of these departments functioning independently to each other.
These seven departments are as follows.
24
ZONAL OFFICE
DIVISIONAL OFFICE
BRANCH OFFICE
OFFICE
SERVICE
DEPARTMENT
SALES
DEPARTMENT
POLICY
NEW SERVICE
BUSINESS DEPARTMENT
DEPARTMENT
ACCOUNTS
DEPARTMENT
MICRO
DEPARTMENT
CLAIM
DEPATMENT
25
Sales Department
This department is mainly concerned with the sale of new policies and is
headed
by Assistant Branch Manager Sales (ABMS). The internal agent of LIC is the Development
Officer who has the job of communicating and training the Free Lancing agents. It is the
development officer who continuously encourages the agents to get new business and the
income, performance and commission through policy selling comes under the jurisdiction of
this department.
New Business Department

This department performance the very important function of underwriting new
policies which are sent to it for authentication. It checks that all the information provided by
the customer is true and the proposal form and all other details and proofs are legal. After
scrutinizing the new policy it issues the first premium receipts (FPR) and then issues the
policy
bond. If anything is found insufficient the proposal form is sent back to the sales department
to
correct the mistake and again submit it.
Policy Service Department

After the policy bond is issued, the case is passed on to this department to look
after sales service of the policy. It takes care of the premium dates and if the policy is lapsed
then its revival is done by this department. Also if any loan is required by the customer
against
his/her policy then its approval has to be given from the policy service department only.
Accounts Department
It is responsible for processing of all the cheques and loans which come to it.
The details regarding financial aspects are covered under this department.
26
Claims Department
All types of claims i.e. survival benefit claim, maturity claim and death claim
are settled by this department. In case of death claim if death occurs after three years then no
investigation is involved in the settlement process and if it occurs before three years then
proper
investigation is done and the claim is considered to be an early claim case.
Micro Department
This department has all important function of co-ordinating with each
department. Each day’s business is collected and its four copies are made and one copy is sent
to the divisional office, second is submitted to the branch manager, third remains with the in
charge of micro department and fourth in the branch office.
Office Service Department

This department takes care of all miscellaneous tasks of office and dispatch of
cheques, loans etc come under the responsibility of this department.
12. VARIOUS INSURANCE PLANS OF LIC FOR INDIVIDUALS:

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.
1. Jeevan Arogya Plan.
2. Endowment Plus.
27
3. Children Plans:
 Jeevan Anurag.
 Komal Jeevan.
 Jeevan Kishor.
 Jeevan Chhaya.
 Child Career Plan.
 Child Future Plan.
4. Education Annuity Plan.
5. Jeevan Aadhar.
6. Jeevan Vishwas.
7. The Endowment Assurance Policy.
8. Jeevan Mitra.
9. Jeevan Anand.
10. New Janraksha Plan.
11. Jeevan Amreet.
12. Money Back Plans.
13. Jeevan Surbhi.
14. Beema Bachat.
15. Samridhi Plus.
16. Pension Plus.
17. Jeevan Madhur.
18. Jeevan Mangal.
28
19. Group Schemes.
Following are the details of Anmol Jeevan Policy

ANMOL JEEVAN POLICY
PRODUCT NAME ANMOL JEEVAN

REGULAR PREMIUM
Coverage Amount 10,00,000
Minimum Policy Term 5 years
Maximum Policy Term 25 years
Minimum Entry Age 18 years
Maximum Entry Age 55 years
Maximum Exit Age 65 years
29
Premium Frequency Options Yearly/Half-yearly
13. PRE-INDEPENDENCE SCENARIO:

Pioneering efforts of reformers and social workers like Raja Ram mohan Ray,
Dwarakanath Tagore, Ramatam Lahiri, Rustomji Cowasji and other led to entry of Indians in
insurance business. First Indian insurance company under the name “Bombay Life Insurance
Society” started its operation in 1870, and started covering Indian lives at standard rates. Later
“Oriental Government. Security Life Insurance Company”, was established in 1874, with Sir
Phirozshah Mehta as one of its founder directors and later emerged as a leading Indian
insurance
company under the name “Bombay Life Assurance Society” started its operations in 1870.
With the patriotic fervor of Non-Corporation Movement (1919) and Civil

Disobedience Movement (1929), number of Indian companies entered the insurance area.
Eminent figures in political area like Mahatma Gandhi and Pandit Nehru openly encouraged
Indians to enter the fray. In 1914 there were only 44 companies; by 1940 this number grew to
195. Business in force during this period grew from Rs.22.44 crores to Rs.304.03 crores
(1628381 polices). Life fund steadily grew from Rs.6.36 crores to Rs.62.41 crores. In 1938,
the
insurance business was heavily regulated by enactment of insurance Act 1938(based on draft
bill presented by Sir N.N.Sarcar in Legislative Assembly in January 1937). From here
onwards
the growth of life insurance was quite steady except for a setback in 1947-48 due to aftermath
of partition of Indian. In 1948, there were 209 insurances, with 712.76 crores business in
force
under 3,016, 000 policies. The life fund by then grew to 150.39 crores.
30
14. INTERNATIONAL LIFE INSURANCE SCENARIO:
The beginning of insurance services may be traced back to 14th century in Italy
when ship carrying good were covered under poles apart. The logical and orderly beginning
of
insurance took place in UK at Lloyds Coffee house at Tower street London. Although the
Insurance Industry has grown rapidly in insurance developed economics its growth in
developing countries has neither been satisfactory nor in tandem with the growth of other
sector
of the economy. The 12 most industrialized countries in the world still account’s extremely
low
and surprising fact is that the Indian Insurance Industry has been lagging behind even
amongst
the developing countries of the world.
As Insurance constitutes one of the major segments of financial segment of

financial market the nature and pattern controls in country are shaped by its political and
economic philosophy economic and social compulsions and pressure from invested groups
and
past experience est. Based upon these factors different countries have evolved their own
regulatory mechanism being applicable to insurance to promote free and healthy competition
amongst them, while other have encouraged self control system to greater role being assigned
to actuaries, auditors, professionals etc. Insurance services in UK grew as early as in 16th
century; the sector was practically without government control and intervention till 1870
when
Life Insurance Act was passed. The act did not impose any restriction on the sector but simply
made it Obligatory on the companies engaged in insurance business to disclose their financial
and other the details to the people and get finance evaluated by an actuary. Some of the
important development in the insurance sector. After the post war period in UK are mentioned
as under
31
 Excessive competition for business led to decline of premium rates.
 Return on investment in stocks market promoted cash flow basis for development of
general insurance business.
 Formation of captives pools self-insurance scheme supported by global reinsure
promoted shift from conventional to non conventional insurance system.
 Concentration of business in limited number of mega size companies’ medium size

and
small companies could not withstand the practice of competition and had to survive on
limited volumes of business from their market sources.

USA being the most developed and refined economy of the world primarily depends
upon
the private players for insurance business with a regulatory framework encouraging and
insuring free competition among the participants .Japan has one of the most developed
insurance sector in the world. The density is as high US dolor 3896 and penetration is 11.87
percent. The entire business is regulated under Insurance Business low, 1995. For obtaining a
license to conduct insurance business, the minimum capital requirement is Japanese Yen 3o
Million. The notable feature of japans Insurance industry is the consternation of Business with
limited number of large size companies. The accession of WTO Chinese Insurance market
was
opened to foreign insurer relaxing regulations and operational limitations. Chinese market
was
partially opened to foreign insurance companies in 1992. American International group (AIG)
was the first company to establish but under the strict regulation. China life Insurance
company
(CLIC) was the market leader in the life insurance segment with a market share of 45 percent.
Due to the problem of increasing market share of foreign players Chinese government was
forced to nationalize the insurance business, as result of this people Insurance company of
China established in 1949 PICC was formed by combining few domestic players and all
foreign
32
players were shown the exit door form Chinese insurance market. The Insurance law of 1995
was the first real attempt for growing the insurance industry.
15. NATIONALIZATION OF LIFE INSURANCE (1956):

Despite the mushroom growth of many insurance companies per capita
insurance in Indian was merely Rs.8.00 in 1944, besides some companies were indulging in
malpractices, and a number of companies went into liquidation. Big industry houses were
controlling the insurance and banking business resulting in inters looking of funds between
banks and insurance companies. This shook the faith of insuring public in insurance
companies
as custodians of their savings and security. The nation under the leadership of Pandit
Jawarberlal Nehru was moving towards socialistic pattern of society with the main aim of
spreading of life insurance to rural areas and to channelize huge funds accumulated by life
insurance companies to nation building activities. The Government of India nationalized the
life insurance industry in January 1956 by merging about 250 life insurance companies and
forming Life Insurance Corporation of India (LIC), which started functioning from
01.09.1956.
16. AN OVERVIEW OF INSURANCE BUSINESS IN INDIA:
Insurance business is divided into four classes:
a) Life Insurance
b) Fire
c) Marine
d) Miscellaneous Insurance.
Life insurers undertake the Life Insurance business; general insurers handle the rest. The
business of insurance essentially means defraying risks attached to an activity (including life)
and sharing the risks between various entities, both persons and organizations. Insurance
companies are important players in financial markets as they collect and invest large amounts
of premium in various investment instruments. Insurance offers the following benefits:
33
 Protection to investors
 Accumulation of savings
 Channeling these savings into sectors needing huge long-term investments.
Insurance companies receive a steady cash stream of premium or contributions to pension

plans.
Their cash flows are determined on the basis of various actuary studies and models. Since
their
liabilities are long-term or contingent in nature, their investments are also long-term and they
are able to maintain a healthy liquidity position. Since they offer more than the return on
savings in the shape of life cover to the investors, the rate of return guaranteed on their
insurance
policies is relatively low. Consequently, the need to seek high rates of return on their
investments is also low. Since the risk factor in the insurance business is quite high, insurance
companies usually invest in relatively safer bets such as bonds of GOI, PSUs, state
governments, local bodies, corporate houses and mortgages of long-term nature. Lately,
insurance companies have also ventured into pension schemes and mutual funds. Life
insurance
constitutes the major share of insurance business. Life insurance depends upon the laws of
mortality. Life has to end sooner or later and the claim in respect of life is certain. On the
other
hand, in case of general insurance, there may never be any claim and the amount cannot be
ascertained in advance. Hence, life insurance, besides providing a cover for life of individuals,
also serves as a good source of savings for the beneficiaries. The life insurance market in
India
presents several striking features, which appear, for the most part, to be necessary
concomitants
of the underdeveloped nature of the country’s economy. Existences of a large number of life
insurance sellers and the narrowness of the life insurance market have been the characteristics
peculiar to India. The volume of life insurance business annually sold on the Indian life
insurance market came on an average to about Rs 160 crore. Most of these policies were sold
during the phase of private enterprise, by Indian organizations termed insurers by the Indian
34
Insurance Act.
17. LIST OF LIFE INSURERS: (AS OF 2008)

Apart from Life Insurance Corporation, the public sector life insurer, there are
22 other private sector life insurers, most of them joint ventures between Indian groups and
global insurance giants.
LIFE INSURER IN PUBLIC SECTOR:

1. Life Insurance Corporation of India
LIFE INSURERS IN PRIVATE SECTOR:

1. AEGON Religare Life Insurance
2. Aviva Life Insurance
3. Bajaj Allianz Life
4. Bharti AXA Life Insurance Co Ltd
5. Birla Sunlife
6. Canara Hsbc Oriental Bank Of Commerce Life Insurance
7. DLF Pramerica Life Insurance
8. Future Generali Life Insurance Co Ltd
9. HDFC Standard Life
10. ICICI Prudential Life Insurance
11. IDBI Fortis Life Insurance
12. India First Life insurance company limited
13. ING Vysya Life Insurance
14. Kotak Life Insurance
15. Max New York Life Insurance
35
16. Metlife India Life Insurance
17. Reliance Life Insurance Company Limited - Formerly known as AMP Sanmar LIC
18. Sahara Life Insurance
19. SBI Life Insurance
20. Shriram Life Insurance
21. Star Union Dia-ichi Life Insurance Co. Ltd
22. Tata AIG Life
These are few companies on the list. The total life insurance market can be
judged in terms of 2 parameters- premium collected and number of new policies underwritten.
It can be seen that market share of more than 70 per cent is with LIC. Life insurance policy in
India is growing rapidly ever since the sector opened up for the private and foreign players.
The
industry is in the throes of competitive market forces. Unlike several industries like
telecommunication and oil industry, insurance is not a high capital cost industry. This
industry
is build up on a good will and on access of distribution network.
18. LIFE INSURANCE PROCESS FLOW:

The simplest life insurance business cycle looks like this:
 The client approaches the insurer through an agent with a proposal containing his
personal details, income details, medical history, products, sum assured, term and
premium amount. The agent who brings this proposal is termed as a servicing agent
for
the proposal.
 The proposal will go through various stages of approval and risk evaluation by the
Central Processing Centre of the Insurance Company. Upon final approval, a legal
36
agreement, termed as policy, between the insurer and the client is prepared whereby
the
insurer covers the client for the sum assured. The client is also entitled for some
additional benefits, if any, depending on the features of the product taken in the
policy.
The base agent gets a commission for the policy.
 The client pays a premium at regular intervals. These subsequent premiums are termed
as renewal premiums. The base agent gets a commission on the renewal premium also.
 The client may come back with some alterations to the policy viz. increase/decrease in
sum assured, increase/decrease of the term of policy etc. The insurer will make the
relevant changes to the policy and will issue endorsements stating the alterations made
and their effect on the policy.
 During the term of the policy, the client can submit claims. The insurer makes
payment
against the claim after verification. Depending on the type of claim the policy is either
terminated or is kept in force.
At the end of the term of the policy, the client gets the sum assured as part of the maturity
benefit under life insurance policies. In addition to this the client will get the maturity
bonus
and any other benefits depending on the product feature.
19. INSURANCE INDUSTRY IN INDIA:

The following are the highlights of insurance industries in India.
37
 Reaching Out To Customers: No doubt, the customer profile in the insurance
industry is changing with the introduction of large number of divergent
intermediaries such as brokers, corporate agents, and banc assurance. The industry
now deals with customers who know what they want and when, and are more
demanding in terms of better service and speedier responses. With the industry all
set to move to a de-tariffed regime by 2007, there will be considerable

improvement
in customer service levels, product innovation and newer standards of

underwriting.
 Intense Competition: In a de-tariffed environment, competition will manifest itself
in prices, products, underwriting criteria, innovative sales methods and
creditworthiness. Insurance companies will vie with each other to capture market
share through better pricing and client segmentation. The battle has so far been
fought in the big urban cities, but in the next few years, increased competition will
drive insurers to rural and semi-urban markets.
 Global Standards: While the world is eyeing India for growth and expansion,
Indian
companies are becoming increasingly world class. Take the case of LIC, which has
set its sight on becoming a major global player following a Rs. 280-crore
investment
from the Indian government. The year 2005 was a testing phase for the general
insurance industry with a series of catastrophes hitting the Indian sub-continent.
However, with robust reinsurance programmes in place, insurers have successfully
managed to tide over the crisis without any adverse impact on their balance sheets.
38
With life insurance premiums being just 2.5 per cent of GDP and general
insurance
premiums being 0.65 per cent of GDP, the opportunities in the Indian market place
is immense. The next five years will be challenging but those that can build scale
and market share will survive and prosper.
20. MARKET SHARE OF INDIAN INSURANCE INDUSTRY:

The introduction of private players in the industry has added value to the
industry. The initiatives taken by the private players are very competitive and have given
immense competition to the on time monopoly of the market LIC.Since the advent of the
private
players in the market the industry has seen new and innovative steps taken by the players in
this
sector. The new players have improved the service quality of the insurance. As a result LIC
down the years have seen the declining phase in its career. The market share was distributed
among the private players. Though LIC still holds the 75 per cent of the insurance sector but
the upcoming natures of these private players are enough to give more competition to LIC in
the near future. LIC market share has decreased from 95 per cent (2002-03) to 81 per cent
(2004-05).
21. KANO MODEL OF CUSTOMER SATISFACTION RELATED WITH LIC

The Kano et al. (1996) model of customer satisfaction classifies product
attributes based on how they are perceived by customers and their effect on customer
satisfaction (Kano, Seraku et al., 1996). According to the model, there are three types of
product
attributes that fulfill customer satisfaction to a different degree
1. Basic or expected attributes,
39
2. Performance or spoken attributes,
3. Surprise and delight attributes.
A competitive product meets basic expected attributes, maximizes performances attributes,

and
includes as many “excitement” attributes as financially feasible. In the model, the customer
strives to move away from having unfulfilled requirements and being dissatisfied
KANO MODEL OF CUSTOMER SATISFICATION RELATED WITH LIC
The basic or expected attributes (lower curve in the model) are basic attributes,
which customers taken for granted and they are so obvious that they are not worth
mentioning.
While the presence of these attributes is not taken into account, their absence is very
dissatisfying.
40
The performance or spoken attributes (the central line of the model) are those
expressed by customers when asked what they want from the product. Depending on the level
of their fulfillment by a product or a service these requirements can satisfy or dissatisfy
consumers.
The surprise and delight attributes (upper curve in the model) lay beyond
customer’s expectations. If they are present they excite the customer, but their absence
does not dissatisfy, as customers do not expect them. A successful combination of expected
and exciting attributes provides a company with an opportunity to achieve competitive
advantage. A successful company will correctly identify the requirements and attributes and
use them to document raw data, user characteristics, and important service or product
attributes.
To make information about the identified requirements about attributes understandable and
useful for designers, a so-called Quality Function Deployment (QFD) approach is often being
used. The goal of QFD is to assure that the product development process meets and exceeds
customers’ needs and wants and those customers requirements are propagated throughout the
life cycle of the product. The approach uses a number of matrices, which help translating
customer requirements into engineering or design parameters, specifying product features,
manufacturing operations and specific instructions and controls. QFD allows for the
minimizing of errors and the maximizing of product quality for customers. The approach is
probably the only existing quality system with such strong orientation to customer
satisfaction. LIC applied the above said approach definitely none of one against life insurance
Corporation of India.
22. PRODUCTS AND SERVICES IN LIC

LIC has eight zonal offices and 105 divisional offices located in different parts
of India. It compromises of 2,048 branches and employs over 10, 02, 149 agents for soliciting
life insurance business from public.
41
LIC has extended its activities in 12 countries from outside India, primarily to
cater to the insurance needs of non-resident Indians. LIC aims at strengthening its relationship
with its vast customers base by providing value added service such as credit cards and
offering
premium payment facility to the policyholders. It is the largest insurance player in India and
its
objective is to channelize its funds for the benefit of the community at large. It enjoys a near
monopoly power in the solicitation and sale of life insurance policies in India. The
corporation
has major business houses as clients, under the group business of India. It has more than
1,18,000 corporate clients covering more than 3,15,00,000 members.
Apart from the corporate group insurance business the pension& group
schemes is responsible for ‘Aam Aadmi Bima Yojna’,a social security schemes for the rural
landless households under the aegis of the Government of India. LIC has been investing a
major portion of its funds in socially-oriented sectors with a view to reach every insurable
person in the country and provide adequate financial cover against death at a reasonable cost.
Another goal is to mobilize people’s savings adequately attractive. LIC has recently tied up
with Policybazaar.com an insurance portal that enables the consumers to get detailed
information on the policy. It is one of the leading online non-life and life insurance aggregator
to sell its policy Jeevan Aastha on the internet.
42
CUSTOMER SATISFICATION REGARDING PRODUCT & SERVICES
We are committed to customers’ satisfaction and, hence have customers

oriented
approach. This attitude envelops the entire organization and influences every function. We
emphasize on delivering superior quality products, premium packaging, competitive rates and
on-schedule delivery.
43
SERVICE QUALITY OF LIC
“A conceptual model of service quality and its implications for future

research”.
The historic and landmark research, shown in figure above with the dimensions of service
quality, is based on their study of several different service categories: appliance repair, retail
banking, long distance telephone service, securities brokerage, and credit card companies.
They
identified five principal dimensions that customers use to judge service quality reliability,
responsiveness, assurance, empathy, and tangibles.
44
23. INSURANCE PLANS IN LIC:
The following insurance plans are on offer. They provide the most
suitable options that can fit customer’s requirement.
45
24. PERFORMANCE OF LIC OF INDIA- A REVIEW
The number of new policies marketed grew from 14.69 lakhs in 1961 to 2.18
croress in 2004-05 and the sum assured under this business rose to high of Rs.1,79,886.66
croress in 2004-05 from Rs.336.67 croress in 1957. The total funds of the corporation also
grew from Rs.702.80 cr. in 1961 to Rs.4,16,910.36 cr. in 2004-05. Investments, which were
Rs.329.74 cr in 1957 rose to a high of Rs.4,13,800.95 cr in 2007-08, all of which gets
deployed for the development of the nation. The LIC has huge investible funds and the main
source comes from the premiums collected from the policy holders.
The Corporation invests funds in various states, industries and also in various
other countries. The LIC, while investing its fund, has to consider various factors and forces
such as safety, liquidity and productivity of fund with various other regulatory bindings in
terms of investment norms, asset- liability management etc. In short, the LIC has to make its
investments within the ambit of these bindings as a result, the corporation is not in apposition
to pursue a prudent investment policy due to which its investment income may come under
pressure. Adding fuel to the fire, the falling interest rate would also adversely affect the
46
investment performance of the Corporation. Still at present LIC continues to be the dominant
life insurer even in the post-liberalization phase of the Indian insurance industry.
The average premium growth rate so far has been 20%. With the targeted
Rs.1,75,000 crores total premium by the end of current fiscal, The life insurance giant has got
a market share about 75%.The corporation has crossed many milestones and has set
unprecedented performance records in various aspects of life insurance business. The state-
owned corporation is targeting a business of over Rs.3,00,000 crores by2011-12. The life
insurance major expects its assets size to grow about Rs.6,00,000cr or 75% in the next three
years. In the current fiscal year, the company has recruited about two lakhs insurance agent
across the country, which is more than double of the 90,000 agents hired in the previous
fiscal. It has also hired 4,500 development officers in the current fiscal year and 5,000 new
officers could be hired in the next fiscal.
It has bagged various awards which include Loyalty Award 2009, Golden
Peacock Innovative Product/Service Award 2009, Readers Digest Trusted Brand Award 2008
in the Platinum Category, CNBC ‘Awaaz’ Consumer Awards 2008 and NDTV Profit
Business Leadership Award 2008.
Economic Times Brand Equity Survey rated LIC as the No.1 service brand of
the country for the 5th consecutive year. In the chart below is shown the market share of LIC
and private in terms of total premium collected.
47
25. FACTORS AFFECTING LIFE INSURANCE POLICY
Life Insurance policy is a contract between the insurance company and the
insured or the policy holder. The objective of buying a best life insurance policy in India is to
cover you adequately so that in case of your death, your beneficiary still manages to maintain
the same lifestyle. The death benefit can also help pay off debts or overcome the contribution
of your earnings.
But nevertheless, buying a good life insurance policy covering your needs
appropriately is absolutely dependent on you. You have to be very clear about what is dear to
you and what you want to cover. If you are the only bread winner in the family then your goal
should be to cover yourself adequately or if there are other members like your spouse
contributing to the earnings, get you and your spouse a good cover sufficient to protect
your family in times of crisis.
Many people look at life insurance policies critically, but it is the only financial
support one can expect in critical times. This is also the reason we pay premium year after
year to avail its service. Factors that predominantly affect your life insurance policy are:
1. Age - The younger you are the premium will be cheap. The moments you get old the
premium tend to rise. This is because the older you get you are more prone to risks than the
younger people. An insurance company does this slotting as per the mortality chart available
to them.
2. Sex - The studies has revealed that women folks live longer than men. Thus the premium of
a man's life insurance policy is always on the higher side than that of a woman. The
researches have justified early death of man because of stressful life they lead, the pressure of
being the bread winner, etc.
3. Occupation - If you are a pilot the premium of your policy will definitely be high because
your job involves high risk. And the insurance companies charge you for covering the risk. If
you are a teacher you are working in a low risk zone so your premium will be lower.
48
4. Health - Health is often the most important factor, followed by age and sex which affects
your life insurance policy. Someone with poor health will have to pay a very high premium,
or even be uninsurable. Poor health raises the rates for life insurance policy because it
decreases the number of years you are likely to pay premiums and increases the risk of paying
a claim early.
5. Lifestyle - If you lead a lavish life then your premium to be paid will obviously be on the
higher side. To enable your beneficiary to maintain the same grand lifestyle, you have to
cover yourself exponentially.
26. SWOT ANALYSIS

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.
1. It is the oldest and most well experienced player having a Plan India presence.
2. LIC has a strong and very well developed distribution network.
3. It is has consumer base and 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.
49
1. Its employees and other staff are lethargic and least motivated to render prompt and sincere
customer service.
2. After sales customer grievance redressal mechanism is inefficient.
3. Agents not taking into account the needs of people and promote policies having high
commissions only.
4. Very slow decision making and internal problems between top management and lower
cadre staff.
5. The top management or boss are mediocre and there is large scale corruption in main
office.
6. 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.
50
1. Emergency of a huge concern over average income consumers of market in the country
2. People becoming more aware and demanding so there is scope for a whole lot of innovative
products.
3. Pension markets, health insurance and large real estate portfolio.
1. There is too much internal discord.

2. Entry of new private players in industry.
3. Red-tapism is very much persistent.
51
27. CHALLENGES FACING THE INSURANCE INDUSTRY FOR FUTURE
GROWTH
“growing profit in a mature business such as insurance requires
reducing costs”.
To separate themselves from the competition, some insurance companies have

responded by changing the game. They develop their core processes to extend their
capabilities. They provide customers with instant online and comparative quotes, Web-based
documentation and faster claims processing, and are bundling products according to
customers’ needs. The key to bringing in more business, improving the service to the business
you already have and improving your core capabilities is to bring people, departments and
systems together that were previously disconnected. Insurance companies need to help
providers, underwriters, business partners and agents share information and capitalize on
opportunities to better serve customers. Products must be flexible and interchangeable, the
process necessary to deliver must be integrated, and the technologies that support must
support the free flow of information.
52
28. GROWTH PERFORMANCE INDICATORS OF LIFE INSURANCE COMPANY
IN INDIA:
Growth of Life Insurance New Business in India. (2000-01 to 2009-10).
Note:- Base year amount Rs.196.65 =100%
53
Growth of Life Insurance New Business in India (2000-01 to 2009-10)
The above Table shows the growth of LIC during the year 2000-01 to 2009-10
in new business number of policies. Under the new business categories the number of policies
rose from 196.65 lakh in 2000-01 to 388 lakh in the year 2009-10. The highest growth
performance shown in the year 2009-10 i.e. 197.30 per cent. During the year The LIC shows
the growth by 197.30 per cent.
54
Total Premium Received By LIC. (Rs. In Crores)
Note:- Base year amount Rs.34890.02 crores = 100%
55
Total Premium Received By LIC. (Rs. In Crores)
The above Table shows the total premium received by LIC during the year
2000-01 to 2009-10. The total premium received in the year 2000-01 rose from 34,890.02
crores to 1,85,985 crores in the year 2009-10. The growth performance shown during the
study period was that of 533.06 per cent. During the study period The LIC shows the growth
by more than five times in premium.
56
Growth of Premium of New Business of Life Insurance India (2000-01 to 2009-10).
(Rs. In Crores)
Note:- Base year amount rs.9,700.98 crores = 100%
57
Growth of Premium of New Business of Life Insurance India (2000-01 to 2009-10).
Premium income is the second major source of income of life insurance

industry. The above table reveal that total premium earned by life insurance industry during
the year 2000-01 to 2009-10. Under the premium received by new business categories the
amount of premium rose from 9,700.98 crores in 2000-01 to 67,135.31 crores in the year
2009-10. The highest growth performance showed in the year 2009-10. During the year The
LIC shows the growth in premium by 692.05 per cent.
58
Investment of Life Insurance Corporations. (Rs. In Crores)
Note:- Base year amount Rs.193283 crores = 100%
59
Investment of Life Insurance Corporations. (Rs. In Crores)
The above Table shows that the investment of LIC during the year 2000-01 to
2009-10. The investment made by LIC in the year Rs. 1.93 Lakh Crores were increased up to
Rs. 10.45 Lakh Crores in the year 2009-10. The growth index shows the number as 100 in
2000-01 increased up to 541 in the year 2009-10. During the study period incensement in the
investment of LIC shows more than five times growth.
60
Investment income (ROI) of LIC in India. (Rs. In Crores)
Note:- Base year amount rs.316 crores = 100%
61
Investment income (ROI) of LIC in India. (Rs. In Crores)
The above Table shows the income of LIC from investments during the year
2000-01 to 2009-10. The LIC received income from investment in the year 2000-01 Rs. 316
crores was increased up to Rs. 1,12,425 crores in the year 2009-10. The growth index shows
the income of LIC with equal to 100 points in the year 2000-01 was increased up to 35,577
points in the year 2009-10.
62
Operating Expenses of LIC. (Rs. In Crores)
Note:- Base year amount Rs.3706.56 crores = 100%
63
Operating Expenses of LIC. (Rs. In Crores)
The above Table shows the operating expenses of LIC during the year 2000-01
to 2009-10. The operating expenses of LIC increased from Rs. 3,706.56 Crore in the year
2000-01 to Rs. 12,245.82 crores in the year 2009-10. The growth index shows the operating
expenses of LIC was rose from 100 points in the year 2000-01 to 330.38 points in the year
2009-10.
64
Total Assets of LIC. (Rs. in Crore)
65
Total Assets of LIC. (Rs. in Crore)
Total Assets of LIC during the year 2000-01 to 2009-10 are shown in Table.
The total assets of LIC rose from Rs. 500 crores in the year 2000-01 to 3, 12,299 crores in the
year 2009-10. The growth index number shows the 100 points in the year 2000-01 increased
up to 62,460 in the year 2009-10 the growth rate in assets is very high of LIC during the study
period.
66
Profit/Loss of LIC. (Rs. In Crore)
67
Profit/Loss of LIC. (Rs. In Crore)
The above Table shows the growth in profit of LIC during the year 2000-01 to
2009-10. The profit earned by LIC in the 2000-01 was Rs. 317 (100) crores were increased up
to 1,061 Crore (334.70) crores in the year 2009-10. The growth percentage shows more than
three times growth i.e. 100 points to 335 points during the study period.
68
Growth Performance during the year 2009-10:
The insurance industry in India has changed rapidly in the challenging
economic environment throughout the world. In the current scenario, Indian insurance
companies have become competitive in nature and are providing appropriate distribution
channels to get the maximum benefit and serve customers in manifold ways. Indian Insurance
industry has big opportunity to expand, given the large population and untapped potential.
The insurance market in India has witnessed dynamic changes including entry of a number of
global insurers. Saturation of markets in many developed economies has made the Indian
market even more attractive for global insurance majors. The Insurance Regulatory and
Development Authority regulate and develop the insurance sector in India through calibrated
policy initiatives.
The life insurance industry witnessed a steady growth in 2009-10 financial

year, with an 18 per cent increase in total premium received during the year to Rs 2,61,025
crore over the previous fiscal. The industry had collected premium worth Rs 2,21,791 crore in
the previous fiscal. According to the council's data, new business premium jumped 25 per
cent to Rs 1,09,213 crore in FY'10 from Rs 87,006 crore last year, while renewal premium of
the industry grew by 13 per cent to Rs 1,51,812 crore. Life insurance companies have been
adhering to rural and social sector obligation by covering more than 1.93 crore lives in social
sector in FY 2008-09. Life companies have also sold more than 2.8 crore policies in rural
areas in FY'08 and FY'09. Besides, up to the 2009-10 fiscal, life insurance firms opened more
than 11,927 branches, 70 per cent of which are in semi-urban or rural areas. The total assets
held by life Insurance industry stood at about Rs 12,90,000 crore as on March 31, 2010.
Considering the above factors, life insurance industry has become one of the main
contributors towards the country's long-term infrastructure growth.
The life insurance sector of India has added up to 4.1 per cent of the GDP in
2009; a considerable growth was recorded since the time the sector was openedfor the private
companies. The contribution in FDI by the life insurance segment was recorded at US $ 1.3
69
billion, even though the government is likely to increase the FDI cap limit from 26 per cent to
49 per cent. The year 2009-10 also saw private sector insurance company, Aviva
LifeInsurance establishing nine unit-linked plans, in line with the recent IRDA guidelines
featuring enhanced and higher internal rate of return (IRRs). As per the data provided by the
IRDA, the businesses of the life insurance companies had a growth of 22 per cent at US$ 12
billion in April-November 2009-10, in comparison to the US$ 9.8 billion during the same
period last year. Such a huge sale of single premium policies led the industry to record a raise
of 53.25 per cent in November 2009 alone.
With the registration of India First Life Insurance Company Limited, a joint
stake life insurance company encouraged by Bank of Baroda and Andhra Bank of India and
Legal & General Middle East Limited, UK, the total number of life insurer’s registration with
the Insurance Regulatory Development Authority (IRDA) has increased to 23. According to
industry body, Life Insurance Council, The life insurance industry had earlier been anticipated
to grow by 15 per cent in the year 2009 - 10 and surpass the US$ 54.1 billion mark in total
premium income by March-end. This growth in premium income includes new business as
well as renewals, driven by increasing awareness on the value of getting insured. The US$ 41-
billion Indian insurance industry made a grand return with better performances in the April-
November 2009 period. Life insurance in India recorded the first year premium (inclusive of
Single Premium) segment accounting to US$ 24 billion.
70
Performance of LIC in 2009-10:
Performance of LIC in the year 2009-10 shows in details in the above table.
The table shows that the growth rate in new policy is recorded by 8.21 per cent, growth in
first premium by 21.63 per cent, Total premium growth rate is 18.32 per cent, total income
increased by 49.15 per cent and the growth recorded in total assets is 31.88 per cent with
compared to 2008-09.
71
29. FDI POLICY IN INDIAN LIFE INSURANCE INDUSTRY:
The LIC is still the major company in the life insurance sector but with such an
emergence of the private companies, providing a range of moneymaking policies and
investment chances for people from all walks of life the situation is fast changing. The Unit
Linked Investment Plans (ULIP) offering life cover as well as scope for savings and
investment deserves extra acknowledgement in this issue. Furthermore, with minimum lock-
in period of three years such plans are subjected to avoid miss usage of important tax benefits.
30. INVESTMENT POLICY OF LIC OF INDIA:

According to section 19 (2) of the LIC Act, 1956, the LIC constituted an
investment committee for the purpose of advising it in matters relating to the investment of its
funds. The Corporation, in accordance with powers vested in it by section 49 of the LIC Act,
frames regulations, which were published in the Official Gazette after the approval of the
Central Government. The constitution of the Investment Committee is dealt with in regulation
22, while regulation 24 stipulates that the Investment Committee will advise the Corporation
on matters referred to it relating to the investment of its funds. According to rules approved
regarding investment of funds, the executive director of Investments, under instructions from
the chairman, was empowered to invest funds of the LIC up to a maximum of Rs 50 lakh in
respect of Government and approved securities and Rs five lakh in the case of debentures and
ordinary or preference shares. Further, no single scrip was to be more than Rs 2.5 lakh in the
case of debentures and Rs one lakh in the case of ordinary and preference shares. It was also
authorized to make investments in foreign countries to the extent of Rs 25 lakh.under this, the
Corporation had to invest 25 percent of the controlled fund in Government securities, a
further sum equal to not less than 25 percent in Government securities or other approved
securities and not more than 15 percent in other investments. This amounts to around 35
percent of the controlled fund being held in approved investments, and defined in section 27
A of the Act.
72
In 1974, the investment policy of the LIC was revised, as recommended
by an informal group headed by the Governor of the Reserve Bank of India. According to the
revised policy, the LIC had to invest not less than 75 percent of the controlled fund in Central
Government marketable securities, Central and State Government securities and in socially
oriented projects, including house building by policyholders. Of this 75 percent, not less than
50 percent could be invested in Central and State Government securities and Government
guaranteed.
31. AREAS OF FUTURE GROWTH:

 Life Insurance: The traditional life insurance business for the LIC has been a little
more than a savings policy. Term life (where the insurance company pays a
predetermined amount if the policyholder dies within a given time but it pays
nothing if the policyholder does not die) has accounted for less than 2 per cent of
the insurance premium of the LIC. For the new life insurance companies, term life
policies would be the main line of business.
 Health Insurance: Health insurance expenditure in India is roughly 6 per cent of
GDP, much higher than most other countries with the same level of economic
development. Of that, 4.7 per cent is private and the rest is public. What is even
more striking is that 4.5 per cent are out of pocket expenditure. There has been an
almost total failure of the public health care system in India. This creates an
opportunity for the new insurance companies. Thus, private insurance companies
will be able to sell health insurance to a vast number of families who would like to
have health care cover but do not have it.
73
 Pension: The pension system in India is in its infancy. There are generally three
forms of plans: provident funds, gratuities and pension funds. Most of the pension
schemes are confined to government employees. The vast majority of workers are
in the informal sector. As a result, most workers do not have any retirement
benefits to fall back on after retirement. Total assets of all the pension plans in
India amount to less than USD 40 billion. Therefore, there is a huge scope for the
development of pension funds in India. The finance minister of India has
repeatedly asserted that a Latin American style reform of the privatized pension
system in India would be welcome. Given all the pros and cons,it is not clear
whether such a wholesale privatization would really benefit India or not.
32. REVIEW OF THE COMMITTEE ON REFORMS IN THE INSURANCE

SECTOR:
The Government set up a committee under the chairmanship of R N Malhotra
to propose recommendations for reforms in the insurance sector. The progress of the
nationalized life insurance business had to be judged by the rate of its progress towards the
realization of the goals it set for itself. In 1974, the Administrative Reforms Commission of
the Government put forward certain recommendations in pursuance of which the LIC
formulated its objectives.
 To spread life insurance much more 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, at a reasonable cost, adequate
financial cover against death.

74
 To maximize mobilization of people’s savings by making insurance linked savings
adequately attractive.
 To bear in mind, in the investment of funds, the primary obligation is 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.
 To conduct business with utmost economy and with the full realization that the
moneys belong to the policyholders.
 To act as trustees of the insured public in their individual and collective capacities.
 To meet the various life insurance needs of the community that would arise in the
changing social and economic environment.
 To involve all people working in the Corporation to the best of their capability in
furthering the interest of the insured public by providing efficient service with
courtesy.
 To 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 objectives.
Keeping in view these objectives, the committee stated that LIC had achieved several of the
objectives of nationalization; but at the same time, it pointed out several negative constraints.
Following the recommendations of the Malhotra Committee Report, in 1999, the Insurance
Regulatory and Development Authority (IRDA) was constituted as an autonomous body to
75
regulate and develop the insurance industry. The key objectives of IRDA were to promote
competition so as to enhance customer satisfaction through increased consumer choice and
lower premiums, while ensuring the financial security of the insurance market. The IRDA
opened the market in August 2000 with the invitation for application for registrations. Foreign
companies were allowed ownership of up to 26 per cent. Companies were required to submit
business plans detailing the proposed capital structure, the nature of business they planned to
carry out and their plans for selling insurance to the rural and social sectors. Even prior to the
IRDA Act, a number of multinational insurance companies had begun exploring the
possibility of setting up operation in India in anticipation of the deregulation of the industry.
The first step was generally finding a local partner and working towards signing a
Memorandum of Understanding. Certain Indian companies were also keen to enter the
insurance market and were themselves seeking international partners. At present, there are
13 companies in the life insurance business and another 13 in the general insurance business
operating in the country.
33. INSURANCE REGULATORY DEVELOPMENT AUTHORITY (IRDA):

In spite of phenomenal progress of LIC of India, especially in the 80s, the
government and public at large were not quite satisfied with it. By signing GATT accord, the
government of India committed to opening of insurance sector to private sector – to local and
global operators. A committee under the chairmanship of late R. N. Malhotra was appointed
by the government to look into all the aspects of insurance industry in India. The committee
too, opined that in its about 40 years of existence, LIC had been able to insure only 22
percentage of the insurable population. A moot reason may be the lack of competition.
Further, the monopoly has resulted in lack of sensitivity to the policy holders. There is a
greater scope for product innovation and service improvement. The committee recommended
a number of measures to revamp LIC of India, GIC of India and its four subsidiaries. It also
recommended allowing outside insurance companies to operate in India with an Indian
partner. After a great deal of discussion, finally the Lok Sabha has enacted the Insurance
76
Regulatory and Development Authority Act, 1999. In terms of the act, the Insurance
Regulatory and Development Authority is being set-up to regulate and develop the insurance
industry by opening it up to the private sector. Foreign insurance companies can enter into the
insurance sector in India only with an Indian partner, as a joint-venture, with a capital
contribution up to a maximum of 26 percentage of the capital in the joint-venture.
34. IMPACT OF LPG ON LIC:

Insurance is an integral part of national economy and a strong pillar of
financial market. Therefore, waves of globalization have also deeply influenced the insurance
market worldwide. Financial Market Globalization has also been strongly supported by
Globalization of Insurance. With the increase in Trade, Direct Investment and Portfolio
Investment, there has been an ever growing demand for Insurance services particularly in the
emerging markets. Globalization of Insurance market, as a part of the overall process of
liberalization in emerging and other countries enabled the foreign insurance companies to
enter in those countries and benefited both. There are several benefits to the countries
allowing foreign insurance companies to operate in their countries which can be broadly
classified into Economy related, and Insurance marked related.
The Indian life insurance industry has its own origin and history, since its
inception. It has passed through many obstacles, hindrances to attain the present status. The
income earning capacity of an individual citizen of a nation and the eagerness and awareness
of the general public are the two key determinants of the growth of any insurance industry.
For that they should provide wider and mass-employment opportunities and sound
educational system. Moreover, the general public must be inculcated with more knowledge,
awareness and importance about life insurance, and these steps help to boost the growth of
insurance industries. In this Indian context, the insurance habit among the general public
during the independence decade was quite rare and in the following decades, it slowly got
increased. There was a remarkable improvement in the Indian insurance industry soon after
77
the acceptance and adaptation of Liberalization, Privatization, and Globalization (LPG) in the
year 1991. After 1991 the Indian life insurance industry has geared up in all respects, as well
as it is being forced to face a lot of healthy competition from many national as well as
international private insurance players. The fall in the savings rate and increased competition
in the primary market and particularly the aggressive mobilization by the Mutual Fund posed
serious challenges before LIC.
The initiative taken by the Government to open up the insurance sector in 1999
was backed by the setting up of IRDA to regulate the insurance business. The Government, at
the time of nationalization, could have done the same. Instead of barring private initiative
completely, it could have set up a regulatory body to monitor the insurance business. This
would have taken care of the problem of speculative investments by the private companies.
Hence, in the light of the above, a partial nationalization of the sector would probably have
been a better option, with the private companies existing side by side thus keeping the
element of competition alive. It would have also served the objective of the Government of
reaching out to the masses of all strata and income groups.
35. PROGRESS OF LIC IN THE POST LPG ERA:

In the post LPG period, the Life Insurance Industry of India witnessed a
marvelous growth and touched its historical height. So many factors have collectively
contributed for this remarkable achievement. In this tenure, the LIC of India introduced many
phenomenal business strategies by way of offering colorful schemes and products. The reason
for these kinds of extraordinary effect was only because of the stiff competition emerging by
the private insurance players. The private insurance companies are offering plenty of new
attractive schemes and products to get meaningful share in the insurance market. However,
the LIC of India has the powerful network and it is launching attractive advertisements in the
regular interval to create great awareness among the general public. Simultaneously, the
private life insurance companies are also taking much pain to cover-up the major populations
78
(inventors) under their boundary, for that they are sponsoring series of effective awareness
Programmes through many attractive advertisements. This healthy competition motivated the
general public to go in favour of more investments in insurance. While comparing the
efficiency and progressiveness of life insurance business in pre and post LPG arena, the
Indian Life Insurance Industries are achieving a magnificent growth.
36. IMPACT OF INFORMATION TECHNOLOGY ON LIFE INSURANCE SECTOR:

There is an evolutionary change in the technology that has revolutionized the
entire insurance sector. Insurance industry is a data-rich industry, and thus, there is a need to
use the data for trend analysis and personalization. With increased competition among
insurers, service has become a key issue. Moreover, customers are getting increasingly
sophisticated and tech-savvy. People today don’t want to accept the current value
propositions, they want personalized interactions and they look for more and more features
and add ones and better service.
The insurance companies today must meet the need of the hour for more and
more personalized approach for handling the customer. Today managing the customer
intelligently is very critical for the insurer especially in the very competitive environment.
Companies need to apply different set of rules and treatment strategies to different customer
segments. However, to personalize interactions, insurers are required to capture customer
information in an integrated system. With the explosion of Website and greater access to
direct product or policy information, there is a need to developing better techniques to give
customers a truly personalized experience. Personalization helps organizations to reach their
customers with more impact and to generate new revenue through cross selling and up selling
activities. To ensure that the customers are receiving personalized information, many
organizations are incorporating knowledge database-repositories of content that typically
include a search engine and let the customers locate the all document and information related
to their queries of request for services. Customers can hereby use the knowledge database to
79
manage their products or the company information and invoices, claim records, and histories
of the service inquiry. These products also may be able to learn from the customer’s previous
knowledge database and to use their information when determining the relevance to the
customers search request.
The introduction of new economic policy and consequent financial sector

reforms has brought number of changes in Insurance sector. This sector hitherto owned by the
life insurance corporation of India and other General Insurance Companies of the Government
of India have been opened to private partners. The formation of IRDA partnership with
insurance business and banking business and the introduction of micro insurance have given
new thrust to this sector. All these trends have increased the competition both in life and non
life insurance business which resulted in more choice for consumers. These trends need in
depth analysis and documentation for policy formulation and future direction. The book has
the following objectives To create out the historical development of insurance sector. To
analyze the trends in insurance sector before and after the privatization. To analyze the
business performance of insurance companies in public private and cooperative sectors. To
analyze the trends in banc-assurance. It is hoped that this edited book will fulfill the
requirements of students and executives in insurance education.
80
37. RECENT AWARD AND ACHIEVEMENT OF LIC
81
1. Readers Digest Trusted Brand Award 2008 in the Platinum category
2. CNBC Awaaz Consumer Awards 2008
3. Golden Peacock Innovative Product / Service Award – 2009
4. Loyalty Award 2009
5. ET Brand Equity Award for Top Brand in Insurance Category
6. Outlook Money Award for Best Life Insurer
7. AIMA High Performance Award
8. Readers Digest Trusted Brand
9. Power Brand Award
10. Global Youth Marketing Award for Most preferred Life Insurance Company
11. Shoppers & Consumers Insight Award
12. MY FM Stars of Industry Award for Excellence in Life Insurance
13. World Brand Congress Award for Brand Excellence
14. World HRD Congress Award for Innovative HR practices
15. ABCI Award for House Magazine Yogakshema
16. INDY's Gold Award for House Magazine Yogakshema
82
38. LIFE INSURANCE CORPORATION VISION AND MISSION
Vision
“To emerge as a transnational competitive financial conglomerate of
significance to societies and be the pride of India”.
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.
83

Role of Lic in Insurance Industry

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ROLE OF LIC IN INSURANCE INDUSTRY

WEINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT &

I declare that project work entitled “ ROLE OF LIC IN INSURANCE INDUSTRY” is my

Life Insurance Corporation of India is perhaps India’s largest financial

The nationalization of life insurance aims at widening the channels of public

LIC offers policies to various groups such as employees, professionals, co-

2. CONSTITUTION OF THE CORPORATION

3. CAPITAL OF THE CORPORATION

4. SPECIAL FEATURES OF LIFE INSURANCE CORPORATION

2. More life risk cover through term rider

3. Maximum accident benefit as compared to other insurances.

5. More than 40 attractive plans of assurances to choose from LIC.

5. POWERS OF THE CORPORATION

property offered as security for the investment until a suitable opportunity

arises for its disposal.

outside India to any other person or persons if it is expedient to any other.

5. To advance or lend money upon the security of any movable or immovable

corporation many think fit.

capture of being conveniently carried on in connection with its business and

8. To do all such things as may be incidental or conducive to the proper exercise

of any of the powers of the corporation.

By the middle of the 14th century, as evidenced by the earliest known

In 1759, the Presbyterian synod of Philadelphia sponsored the first life

7. LIFE INSURANCE – A BIRD EYE VIEW:

In 1907, Hindustan Co-operative Insurance Company took its birth in Calcutta.

8. IMPORTANT OPERATIONAL TERMS OF LIC

(I) WHAT IS LIFE INSURANCE?

Life insurance is a contract that pledges payment of an amount to the person

iii. Unfortunate death, if it occurs earlier

(II) WHY WE NEED INSURANCE?

(V) SAVINGS AND INVESTMENTS

(VI) TAX BENEFITS

(VII) MYTHS OF INSURANCE

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

community as a whole, keeping in view national priorities and obligations of attractive

belong to the policyholders.

social and economic environment.

achievement of Corporate Objectives.

10.1 TERM INSURANCE POLICY

10.2 WHOLE LIFE POLICY

10.3 ENDOWMENT POLICY

10.4 MONEY BACK POLICY

10.5 ANNUITIES AND PENSION

New Business Department

Policy Service Department

Office Service Department

12. VARIOUS INSURANCE PLANS OF LIC FOR INDIVIDUALS:

1. Jeevan Arogya Plan.

 Child Career Plan.

 Child Future Plan.

4. Education Annuity Plan.

7. The Endowment Assurance Policy.

10. New Janraksha Plan.

11. Jeevan Amreet.

12. Money Back Plans.

13. Jeevan Surbhi.

14. Beema Bachat.

15. Samridhi Plus.

16. Pension Plus.

17. Jeevan Madhur.

18. Jeevan Mangal.

Following are the details of Anmol Jeevan Policy