INDEX

   

 

Executive Summary i

CHAPTER-1 1

Introduction

CHAPTER -2 4

Company Profile

CHAPTER -3 21

Research Methodology

CHAPTER-4 25

Policies and Plans

CHAPTER -5 53

Findings

CHAPTER -6 55

Conclusion

 

BIBLIOGRAPHY 57

 

EXECUTIVE SUMMARY

0

Insurance is the most familiar word or phrase used in today’s life. Insurance

companies are those institutes that provide various types of facility and services in

term of there plans and policies to the consumers. The following project has been

made on one of the largest company in insurance sector in India which is owned by

government which is “LIFE INSURANCE CORPORATION OF INDIA”. The

following project makes an analysis of the products of LIC. The brief summary of

each chapter is discussed as follows:-

CHAPTER-1

It consist of information of the industrial profile of the life insurance sector i.e. when

and how does this sector emerges and how it contributes to the economy,

CHAPTER-2

Chapter 2 includes company profile of LIC i.e. how and when it is formed, which

were the companies that merges and form LIC, its milestones, its objectives, mission

and vision, what is life insurance, board of directors, a brief on the subsidiaries. It

also includes awards and achievements by LIC.

CHAPTER-3

Purpose of the study for which it is conducted, objective while conducting the study

and methodology which consist of the medians used and the tools used to complete

the study.

CHAPTER-4

It includes some of the products offered by LIC, net asset value of the products, tax

benefits to its policy holders categorized according to their age. It also shows the

relationship of LIC with information technology.

CHAPTER-5

1

This chapter includes the findings and analysis retrieved after the study of the of the

project.

CHAPTER-6

Chapter 6 consists of the conclusion arrived after analyzing and findings from the

study.

CHAPTER-1

INRODUCTION

2

INSURANCE COMPANIES IN INDIA

In India, Insurance is a national matter, in which life and general insurance is yet a

booming sector with huge possibilities for different global companies, as life

insurance premiums account to 2.5% and general insurance premiums account to

0.65% of India's GDP. The Indian Insurance sector has gone through several phases

and changes, especially after 1999, when the Govt. of India opened up the insurance

sector for private companies to solicit insurance by passing Insurance Regulatory and

Development Authority (IRDA) Bill, allowing FDI up to 26%. Since then, the

Insurance sector in India is considered as a flourishing market amongst global

insurance companies. However, the largest life insurance company in India is still

owned by the government.

The history of Insurance in India dates back to 1818, when Oriental Life Insurance

Company was established by Europeans in Kolkata to cater to their requirements.

Nevertheless, there was discrimination among the life of foreigners and Indians, as

higher premiums were charged from the latter. In 1870, Indians took a sigh of relief

when Bombay Mutual Life Assurance Society, the first Indian insurance company

covered Indian lives at normal rates. Onset of the 20th century brought a drastic

change in the Insurance sector.

In 1912, the Govt. of India passed two acts - the Life Insurance Companies Act, and

the Provident Fund Act - to regulate the insurance business. National Insurance

Company Ltd, founded in 1906, is the oldest existing insurance company in India.

Earlier, the Insurance sector had only two state insurers - Life Insurers i.e. Life

Insurance Corporation of India (LIC), and General Insurers i.e. General Insurance

Corporation of India (GIC). In December 2000, these subsidiaries were de-linked

from parent company and were declared independent insurance companies: Oriental

Insurance Company Limited, New India Assurance Company Limited, National

Insurance Company Limited and United India Insurance Company Limited.

CHAPTER-2

3

COMPANY PROFILE

Life Insurance in its modern form came to India from England in the year 1818.

Oriental Life Insurance Company started by Europeans in Calcutta was the first life

insurance company on Indian Soil. All the insurance companies established during

that period were brought up with the purpose of looking after the needs of European

community and Indian natives were not being insured by these companies. However,

later with the efforts of eminent people like Babu Muttylal Seal, the foreign life

insurance companies started insuring Indian lives. But Indian lives were being treated

as sub-standard lives and heavy extra premiums were being charged on them.

Bombay Mutual Life Assurance Society heralded the birth of first Indian life

insurance company in the year 1870, and covered Indian lives at normal rates.

Starting as Indian enterprise with highly patriotic motives, insurance companies came

into existence to carry the message of insurance and social security through insurance

to various sectors of society. Bharat Insurance Company (1896) was also one of such

companies inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise

to more insurance companies. The United India in Madras, National Indian and

National Insurance in Calcutta and the Co-operative Assurance at Lahore were

established in 1906. In 1907, Hindustan Co-operative Insurance Company took its

birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath

Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life

(later Bombay Life) were some of the companies established during the same period.

Prior to 1912 India had no legislation to regulate insurance business. In the year 1912,

the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life

Insurance Companies Act, 1912 made it necessary that the premium rate tables and

periodical valuations of companies should be certified by an actuary. But the Act

discriminated between foreign and Indian companies on many accounts, putting the

Indian companies at a disadvantage.

From then to now, LIC has crossed many milestones and has set unprecedented

performance records in various aspects of life insurance business. The same motives

which inspired our forefathers to bring insurance into existence in this country inspire

us at LIC to take this message of protection to light the lamps of security in as many

homes as possible and to help the people in providing security to their families.

4

Some of the important milestones in the life insurance business in India are:

1818: Oriental Life Insurance Company, the first life insurance company on Indian

soil started functioning.

1870: Bombay Mutual Life Assurance Society, the first Indian life insurance

company started its business.

1912: The Indian Life Assurance Companies Act enacted as the first statute to

regulate the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to

collect statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the Insurance Act with the

objective of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies are taken over by the

central government and nationalized. LIC formed by an Act of Parliament, viz. LIC

Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.

The General insurance business in India, on the other hand, can trace its roots to the

Triton Insurance Company Ltd., the first general insurance company established in

the year 1850 in Calcutta by the British.

Some of the important milestones in the general insurance business in India are:

1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all

classes of general insurance business.

1957: General Insurance Council, a wing of the Insurance Association of India,

frames a code of conduct for ensuring fair conduct and sound business practices.

1968: The Insurance Act amended to regulate investments and set minimum solvency

margins and the Tariff Advisory Committee set up.

5

1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the

general insurance business in India with effect from 1st January 1973.

107 insurers amalgamated and grouped into four companies’ viz. the National

Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental

Insurance Company Ltd. and the United India Insurance Company Ltd. GIC

incorporated as a company.

LIC SUBSIDIARIES

6

Unlike provisions for private players in the insurance sector, the LIC Act provides for

setting up subsidiaries through policy holders fund. It is due to the LIC act that LIC of

India has a number of subsidiaries which help it in leveraging its potential to the

maximum, providing an enhanced set of diversified services to its customers. These

subsidiaries include LIC International, LIC Nepal, LIC Lanka, LIC Housing Finance

and LIC Mutual Fund.

LIC INERNATIONAL

This is a joint venture offshore company promoted by LIC which commenced

operations in July, 1989 with the objectives of offering US$ denominated policies to

cater to the insurance needs of NRIs and providing insurance services to holders of

LIC policies currently residing in the Gulf. LIC International operates in all GCC

countries.

LIC NEPAL

A joint venture company formed in 2001 with the Vishal Group of Industries, Nepal.

LIC LANKA

A joint venture company formed in 2003 with the Bartleet Group of Companies, Sri

Lanka.

LIC HOUSING FINANCE LTD.

The Company is recognized by National Housing Bank and listed on the National

Stock Exchange (NSE) & Bombay Stock Exchange Limited (BSE). LIC Housing

Finance Ltd. is one of the largest Housing Finance Company in India. Incorporated

on 19th June 1989 under the Companies Act, 1956, the company was promoted by

LIC of India and went public in the year 1994. Its main objective is to provide long

term finance for construction or purchase of houses or apartments. It has a Dubai

office.

LIC MUTUL FUND LTD.

7

Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989 and

contributed Rs. 2 Crores towards the corpus of the Fund. LIC Mutual Fund was

constituted as a Trust in accordance with the provisions of the Indian Trust Act, 1882.

There are some other subsidiaries of LIC which are

1. LIC Mutual Fund Asset Management Company Ltd.

2. LIC HFL Care Homes Ltd.

3. LICHFL Asset Management Company Private Limited.

4. LICHFL Trustee Company Private Limited.

5. LICHFL Financial Services Limited, etc.

WHAT IS LIFE INSURANCE?

8

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

(or his nominee) on the happening of the event insured against.

The contract is valid for payment of the insured amount during:

The date of maturity, or

Specified dates at periodic intervals, or

Unfortunate death, if it occurs earlier.

Among other things, the contract also provides for the payment of premium

periodically to the Corporation by the policyholder. Life insurance is universally

acknowledged to be an institution, which eliminates 'risk', substituting certainty for

uncertainty and comes to the timely aid of the family in the unfortunate event of death

of the breadwinner.

By and large, life insurance is civilization’s partial solution to the problems caused by

death. Life insurance, in short, is concerned with two hazards that stand across the

life-path of every person:

1. That of dying prematurely leaves a dependent family to fend for itself.

2. That of living till old age without visible means of support.

Life Insurance Vs. Other Savings

Contract of Insurance:

A contract of insurance is a contract of utmost good faith technically known as

uberrima fides. The doctrine of disclosing all material facts is embodied in this

important principle, which applies to all forms of insurance.

At the time of taking a policy, policyholder should ensure that all questions in the

proposal form are correctly answered. Any misrepresentation, non-disclosure or fraud

in any document leading to the acceptance of the risk would render the insurance

contract null and void.

Protection: Savings through life insurance guarantee full protection against risk of death of the

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saver. Also, in case of demise, life insurance assures payment of the entire amount

assured (with bonuses wherever applicable) whereas in other savings schemes, only

the amount saved (with interest) is payable.

Aid to Thrift: Life insurance encourages 'thrift'. It allows long-term savings since payments can be

made effortlessly because of the 'easy installment' facility built into the scheme.

(Premium payment for insurance is either monthly, quarterly, half yearly or yearly).

For example: The Salary Saving Scheme popularly known as SSS provides a

convenient method of paying premium each month by deduction from one's salary. In

this case the employer directly pays the deducted premium to LIC. The Salary Saving

Scheme is ideal for any institution or establishment subject to specified terms and

conditions.

Liquidity: In case of insurance, it is easy to acquire loans on the sole security of any policy that

has acquired loan value. Besides, a life insurance policy is also generally accepted as

security, even for a commercial loan.

Tax Relief: Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax.

This is available for amounts paid by way of premium for life insurance subject to

income tax rates in force.

Assesses can also avail of provisions in the law for tax relief. In such cases the

assured in effect pays a lower premium for insurance than otherwise.

Money When You Need It: A policy that has a suitable insurance plan or a combination of different plans can be

effectively used to meet certain monetary needs that may arise from time-to-time.

Children's education, start-in-life or marriage provision or even periodical needs for

cash over a stretch of time can be less stressful with the help of these policies.

Alternatively, policy money can be made available at the time of one's retirement

10

from service and used for any specific purpose, such as, purchase of a house or for

other investments. Also, loans are granted to policyholders for house building or for

purchase of flats (subject to certain conditions).

Who Can Buy A Policy? Any person who has attained majority and is eligible to enter into a valid contract can

insure himself/herself and those in whom he/she has insurable interest.

Policies can also be taken, subject to certain conditions, on the life of one's spouse or

children. While underwriting proposals, certain factors such as the policyholder’s

state of health, the proponent's income and other relevant factors are considered by

the Corporation.

Insurance For Women

Prior to nationalization (1956), many private insurance companies would offer

insurance to female lives with some extra premium or on restrictive conditions.

However, after nationalization of life insurance, the terms under which life insurance

is granted to female lives have been reviewed from time-to-time.

At present, women who work and earn an income are treated at par with men. In other

cases, a restrictive clause is imposed, only if the age of the female is up to 30 years

and if she does not have an income attracting Income Tax.

Medical And Non-Medical Schemes

Life insurance is normally offered after a medical examination of the life to be

assured. However, to facilitate greater spread of insurance and also to avoid

inconvenience, LIC has been extending insurance cover without any medical

examination, subject to certain conditions.

With Profit And Without Profit Plans

An insurance policy can be 'with' or 'without' profit. In the former, bonuses disclosed,

if any, after periodical valuations are allotted to the policy and are payable along with

the contracted amount.

In 'without' profit plan the contracted amount is paid without any addition. The

11

premium rate charged for a 'with' profit policy is therefore higher than for a 'without'

profit policy.

Keyman Insurance

Keyman insurance is taken by a business firm on the life of key employee(s) to

protect the firm against financial losses, which may occur due to the premature

demise of the Keyman.

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OBJECTIVES OF LIC

Spread Life Insurance widely and in particular to the rural areas and to the

socially and economically backward classes with a view to reaching all insurable

persons in the country and providing them adequate financial cover against death at a

reasonable cost.

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

savings adequately attractive.

Bear in mind, in the investment of funds, the primary obligation to its

policyholders, whose money it holds in trust, without losing sight of the interest of

the community as a whole; the funds to be deployed to the best advantage of the

investors as well as the community as a whole, keeping in view national priorities and

obligations of attractive return.

Conduct business with utmost economy and with the full realization that the

moneys belong to the policyholders.

Act as trustees of the insured public in their individual and collective

capacities.

Meet the various life insurance needs of the community that would arise in the

changing social and economic environment.

Involve all people working in the Corporation to the best of their capability in

furthering the interests of the insured public by providing efficient service with

courtesy.

Promote amongst all agents and employees of the Corporation a sense of

participation, pride and job satisfaction through discharge of their duties with

dedication towards achievement of Corporate Objective.

13

MISSION/VISSION

MISSION

"Explore and enhance the quality of life of people through financial security by

providing products and services of aspired attributes with competitive returns, and by

rendering resources for economic development."

VISSION

"A trans-nationally competitive financial conglomerate of significance to societies

and Pride of India."

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CHAPTER-3

RESEARCH METHODOLOGY

PURPOSE OF THE STUDY

The purpose behind the study of LIFE INSURANCE CORPORATION OF INDIA is

to understand the companies’ background as well as the nature of the various

products offered over many years in India. Purpose is to study the products and their

benefits to customers. This gives a brief idea of the nature of products of the

company.

OBJECTIVES OF THE STUDY

The objectives behind the study of the plans and policies of LIFE INSURANCE

CORPORATION OF INDIA are:

1. To impart knowledge about the history and objectives of the company and also its

different subsidiaries.

2. To aware the readers about the different plans and policies provided by LIC, there

value and benefits to its customers.

15

CHAPTER-4

POLICIES (SCHEMES)

Life Insurance Corporation of India provides number of products to its costumers.

LIC differentiated their policies into five different types which are:

1. Insurance Plans

2. Pension Plans

3. Unit Plans

4. Special Plans

5. Group Scheme

PRODUCTS BY LIC

INSURANCE PLANS

1. Jeevan Anand

Features

Product summary:

This plan is a combination of Endowment Assurance and Whole Life plans. It

provides financial protection against death throughout the lifetime of the life assured

with the provision of payment of a lump sum at the end of the selected term in case of

his survival.

Premium:

Premiums are payable yearly, half-yearly, quarterly, monthly or through salary

deductions as opted by you throughout the selected term of the policy or till earlier

death.

Bonuses:

This is a with-profit plan and participates in the profits of the Corporation’s life

insurance business. It gets a share of the profits in the form of bonuses. Simple

Reversionary Bonuses are declared per thousand Sum Assured annually at the end of

each financial year.  Once declared, they form part of the guaranteed benefits of the

plan. Bonuses will be added during the selected term or till death, if it occurs earlier.

Final (Additional) Bonus may also be payable provided the policy has run for certain

minimum period

16

Benefits

Benefits in case of death during the selected term:

The Sum Assured along with the vested bonuses is payable on death in a lump sum.

Benefits in case of survival to the end of selected term:

The Sum Assured along with the vested bonuses is payable in a lump sum on survival

to the end of the term. An additional Sum Assured is payable on death thereafter.

Accident Benefit:

An additional Sum Assured (subject to a limit of Rs.5 lakh) is payable in a lump sum

on death due to accident up to age 70 of life assured. In case of permanent disability

of the life assured due to accident this additional Sum assured is payable in

installments.

Supplementary/Extra Benefits:

These are the optional benefits that can be added to your basic plan for extra

protection/option.  An additional premium is required to be paid for these benefits.

Surrender Value:

Buying a life insurance contract is a long-term commitment. However, surrender

values are available on the plan on earlier termination of the contract.

Guaranteed Surrender Value:

The policy may be surrendered after it has been in force for 3 years or more.  The

guaranteed surrender value is 30% of the basic premiums paid excluding the first

year’s premium. Any extra premium(s) paid and premium(s) towards Accident

Benefit are also excluded.

Corporation’s policy on surrenders:

In practice, the Corporation will pay a Special Surrender Value – which is either

equal to or more than the Guaranteed Surrender Value. The benefit payable on

surrender reflects the discounted value of the reduced claim amount that would be

payable on death or at maturity. This value will depend on the duration for which

premiums have been paid and the policy duration at the date of surrender. In some

circumstances, in case of early termination of the policy, the surrender value payable

may be less than the total premium paid.

17

PENSION PLANS

1. New Jeevan Dhara-I

Features

Product summary:

These are Deferred Annuity plans that allow the policyholder to make provision for

regular income after the selected term.

Premiums:

Premiums are payable yearly, half-yearly, quarterly, monthly or through Salary

deduction, as opted by you, throughout the term of the policy or till earlier death.

Alternatively, the premium may be paid in one lump sum (single premium).

Tax Benefits:

Tax relief under Section 80ccc is available on premiums paid under New Jeevan

Suraksha I (Table No.147). The premiums paid under New Jeevan Dhara I (Table

No.148) qualify for tax relief under Section 88.

Bonuses:

These are with-profit plans and participate in the profits of the Corporation’s annuity /

pension business. Policies get a share of the profits in the form of bonuses. Simple

Reversionary Bonuses are declared per thousand Sum Assured annually at the end of

each financial year.  Once declared, they form part of the guaranteed benefits of the

plan. Final (Additional) Bonuses may also be payable provided policy has run for a

certain minimum period.

Benefits

Death Benefit:

On death of the Life Assured during the term of the policy the basic premiums paid,

excluding any rider premiums or extra premiums, up to the date of death accumulated

with interest at such rates as decided by the Corporation will be payable to the

nominee. Currently, the interest rate is 3%, 4% or 5 % if the death occurs within the

first 10 years, 20 years or thereafter respectively.

Maturity Benefit:

At maturity the policyholder can encash up to a maximum 25% of the maturity

18

proceeds as a tax-free lump sum. The balance should be compulsorily converted to an

annuity at the rates applicable at the time of maturity of the policy. The policyholder

has the choice of opting for any one of 5 annuity options. The annuity options

available are:

(i) annuity payable for remainder of life

(ii) annuity payable for life with guaranteed period of 5, 10, 15 or 20 years

(iii) Joint life and last survivor annuity to the annuitant and his/ her spouse under

which annuity payable to the spouse on death of the purchaser will be 50% of that

payable to the annuitant

(iv) Life annuity with a return of purchase price on death of the annuitant

(v) Life annuity increasing at a simple rate of 3% per annum

Supplementary/Extra Benefits:

These are the optional benefits that can be added to your basic plan for extra

protection/option.  An additional premium is required to be paid for these benefits.

Surrender Value:

Buying a life insurance contract is a long-term commitment.  However, surrender

value is available on the plan on earlier termination of the contract.

Guaranteed Surrender Value:

The policy may be surrendered after it has been in force for 2 years or more but

before the vesting date.  The guaranteed surrender value is 90% of the basic

premiums paid excluding the first year’s premium.  In case of a single premium

policy the guaranteed surrender value is allowed after 2 years from the date of

commencement of the policy.

Corporation’s policy on surrenders:

In practice, the company will pay a Special Surrender Value – which is equal to or

higher than the Guaranteed Surrender Value. The benefit payable on surrender

reflects the discounted value of the reduced claim amount that would be payable on

death or at maturity. This value will depend on the duration for which premiums have

been paid and the policy duration at the date of surrender. In some circumstances, in

case of early termination of the policy, the surrender value payable may be less than

the total premium paid.

19

UNIT PLANS-I

1. Market plus-I

This is a unit linked pension plan wherein the pension is payable after a   specified

period.  Four types of investment Funds namely Bond, Secured, Balanced and

Growth Fund are offered. Though primarily a Pension product, the plan has many

attractive features and options which make it an ideal Retirement solution for the

future.

BENEFITS

A) - On Vesting:

On   vesting of the policy, the Fund Value will be utilized to provide a pension based

on the then prevailing Annuity rates. An option to commute up to one third of the

payable benefit in a lump sum is available.

B) On Death:

 In event of the unfortunate death of the policy holder the Fund Value along with the

Riders, if any,  will be payable in a lump sum or as a pension.

OPTIONS

Three attractive benefits, viz. - Life Cover, Accident Benefit and Critical Illness

Benefit are available as options or riders. Life option is available within certain limits

depending on the age at entry of the life assured. The other options are available to all

proposers who have opted for Life Cover. The quantum of the risk covers can also be

reduced; subject to the minimum limits, once a year. A policy can be taken without

any of the riders also.

REVIVAL

An attractive feature of the plan is that provided the premiums have been paid for a

minimum period of three years, all the riders under the policy will continue for a

period of two years from the due date of first unpaid premium by deduction of

relevant charges from the policy fund. This period of two years is called the “Revival

Period”. Further, if premiums have been paid for a minimum period of three years,

20

revival can be effected merely by paying the arrears of premium, within the Revival

Period.

PAYMENT OF PREMIUMS

Premiums can be paid in a lump sum (single premium) and also by monthly (ECS),

quarterly, half-yearly and yearly modes.

CHANGE IN FUND TYPE (SWITCH)

The plan also allows a policy holder to switch from one type of fund to another up to

four times a year, free of charge.

OTHER FEAUTRES

 There will be no spread between the Bid and Offer price. The Net Asset Value

(NAV) will be declared on a daily basis. Additional premium in multiples of Rs.1,000

can be paid without any limit at anytime during the term of policy.

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SPECIAL PLANS

1. Bima Nivesh

Features

Bima Nivesh 2005 is a plan with compound rate of guaranteed additions and loyalty

additions. This is the revised version of our popular Bima Nivesh Plan 2004 and is

introduced to meet the overwhelming demand for a single premium plan from our

customers. It is a single premium, ideal investment plan for those who have no

regular income but good periodical income. Bima Nivesh 2005 is available for terms

5 and 10 years. The guaranteed surrender value is payable after the policy has run for

at least one year. Term Assurance Rider is also available by payment of a single

premium at the option of the proposer.

Benefits

Guaranteed Additions: Guaranteed additions at the compound rate of Rs.50 per

thousand Sum Assured per annum for the policy with term of 5 years and at the

compound rate of Rs.55 per thousand Sum Assured per annum for the policy with

term of 10 years.

Loyalty Addition: Depending upon the Corporation's experience with regard to

mortality, interest and expenses and based on term of the policy, Loyalty addition, if

any, may be declared by the corporation and paid on maturity.

Maturity Benefit: The Basic Sum Assured along with compounded Guaranteed

Additions will be payable. Loyalty addition, if any, will also be added to this benefit.

Payment on death: In case of the unfortunate death of the Life Assured during the

term of the policy, Sum Assured along with the accrued guaranteed additions will be

payable.

Surrender Value: Surrender value is payable after the policy has run at least for

one year.

Riders: Term Assurance rider is available.

22

Eligibility conditions and other restrictions

For the Main Plan Term Assurance Option

Min. Age at entry 13 years completed 18 years completed

Max. Age at entry 70 years 50 years

Max. Maturity Age 75 years 60 years

Policy Term 5 yrs. and 10 yrs Same as main plan

Sum Assured

Rs.25,000.

Maximum – No

limit.

Min. Sum Assured - Rs.1,00,000/-

Max. Sum Assured - An amount

up to the basic Sum Assured for

Term Assurance subject to a

maximum of Rs.25 lakh overall

Option limit, under all policies of

the life assured.

Premium Rates:

Single Premium rates for Rs.1000 Sum Assured are Rs.995 for 5 years term and Rs.

976 for 10 years term;

The Term Rider Premium depends on the age nearer birthday and the term of the

policy.

REBATES

1% of basic premium on the premium in excess of Rs.50,000.

Rs.500 plus 1.5% of basic premium on the premium in excess of Rs.1,00,000.

LOAN

Loan will be available to the policyholders under this plan within the Surrender

Value.

23

GROUP SCHEME

1. Janashree Bima Yojana (JBY)

Features

The objective of the scheme is to provide life insurance protection to the rural and

urban poor persons below poverty line and marginally above the poverty line.

ELIGIBILITY:

A person who is

*Aged between 18 and 59 years.

*Below or marginally above poverty line

*A member of any of the approved vocation/occupation groups

NODAL AGENCY:

A State Government Department which is concerned with the welfare of any such

vocation/occupation group, a Welfare Fund/ Society, Village Panchayat,NGO,Self-

Help Group,etc.

MINIMUM MEMBERSHIP SIZE:

Twenty five.

FORMS FOR JANASHREE BIMA YOJANA

1. Claim form & discharge receipt under JBY (Annexure A)

2. Application for scholarship under Shiksha Sahayog Yojana (Proforma A)

3. List of students eligible for scholarship under Shiksha Sahayog Yojana (Proforma

B)

4. Certificate of utilization ( Proforma C )

24

Benefits

In the events of

*Death (other than by accident) of the member, an amount of Rs.30,000/- is payable.

*death/total permanent disability, due to accident, an amount of Rs.75,000/-is

payable.

*Permanent partial disability, due to accident, an amount of Rs.37,500/- is payable.

PREMIUM:

*The premium under the scheme is Rs.200/-per annum per member. *50% of the

premium i.e. Rs.100/- will be contributed by the member and/or Nodal Agency/State

Government.

25

CHAPTER-5

FINDINGS

Findings: After completing the study following points can be drawn:

1. It has one of the single distribution networks amongst government insurance

players.

2. LIC has many numbers of insurance policies and plans having flexible to meet the

customers’ requirement and expectation.

3. LIC entered the market with aggressive marketing and supported by after sale

services with the help of technology.

4. All LIC Plans come with Sovereign Guarantee i.e., Government of India Guarantee

regarding repayment. Infact, as of now, only LIC plans enjoy this Government

Guarantee.

26

CHAPTER-6

CONCLUSION

After completing the project it is concluded that LIC develop its various plans and

policies, flexible in nature, according to the requirements of its targeted market or

customers and is thus beneficial to its customers in various ways. The most important

benefit it provides to its customers is that it is a government owned company. This

lead to increase in the satisfaction level of its customer that is why LIC has more than

200 million policyholders which is equal to the fourth largest country in world.

Therefore it is not only beneficial but better than other insurance companies not only

regarding its product but also its services.

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BIBLIOGRAPHY

Information and data used in the project has been collected from the

following sources:-

1. www.licindia.com

2. www.licmutual.com

3. www.lichousing.com

4. www.wikipedia.org

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