PROJECT

ON
LIFE
INSURANCE
CORPORATI
ON

PREPARED BY:
VIRENDRA JHA
16
KAMALESH KHARAT
21
SUSHANT GAIKWAD
07
GANESH MORE
34
VINAY KHANDAGLE
SURYAPRATAB SING

CLASS: T Y BBI
SUBJECT: MARKETING
SUBMITED TO: VIKRAM SIR
SUBMITED DATE: 18-09-2010

20
49

1. INTRODUCTION

Wherever there is uncertainty there is risk. The risk cant be averted. It

involves multiple losses. And so, risk is uncertainty of financial losses. We
do not have any command on uncertainties. The insurance is a co- operative
device to spread the loss. Further, it is also a social device to accumulate
funds to meet uncertain losses. The main function of insurance is to provide
protection against the possible chances of generating losses. It eliminates
worries and miseries of losses at destruction of property and death. It also
provides capital to the society as the accumulated funds are invested in the
productive heads. The product of insurance benefits the industry, the
business, an individual and a group of persons.
2. INSURANCE INFRASTRUCTURE IN INDIA
With largest number of life insurance policies in force in the world, Insurance
happens to be a mega opportunity in India. Its a business growing at the rate of
15-20 per cent annually and presently is of the order of Rs 450 billion. Together
with banking services, it adds about 7 per cent to the countrys GDP. Gross
premium collection is nearly 2 per cent of GDP and funds available with LIC
for investments are 8 per cent of GDP.
Yet, nearly 80 per cent of Indian population is without life insurance cover
while health insurance and non-life insurance continues to be below
international standards. And this part of the population is also subject to weak
social security and pension systems with hardly any old age income security.
This itself is an indicator that growth potential for the insurance sector is
immense.

A well-developed and evolved insurance sector is needed for economic

development as it provides long term funds for infrastructure development and
at the same time strengthens the risk taking ability. It is estimated that over the
next ten years India would require investments of the order of one trillion US
dollar. The Insurance sector, to some extent, can enable investments in
infrastructure development to sustain economic growth of the country.
Insurance is a federal subject in India. There are two legislations that govern the
sector- The Insurance Act- 1938 and the IRDA Act- 1999. The insurance sector
in India has come a full circle from being an open competitive market to
nationalization and back to a liberalized market again. Tracing the
developments in the Indian insurance sector reveals the 360 degree turn
witnessed over a period of almost two centuries.

The Insurance regulatory development authority (IRDA) is the regulatory

authority, which looks over the related aspects of the insurance business. The
IRDA bill provides guidance for three levels of players- Insurance
companies, Insurance Brokers and insurance agents.
In the life insurance segments the life insurance corporation of India (LIC) is
the major player. The LIC has 2050 branches and it is constituted in to 7
zones. Currently there are more than 5,60,000 LIC agents in India.
New India Insurance, Oriental Insurance, National Insurance and United
India Insurance, are doing major business. The general Insurance Industry
has been growing at the rate of 19% per year. LIC and GIC could not ensure
very fast growth of insurance in India even in a long period extending over
four decades. Hence, the penetration of insurance is very low in India.

The market players

A number of foreign Insurance companies have set up representative office
in India and have also tied up with various asset management companies.
They have either signed Memorandum of Understanding with Indian
companies or are trying to do the same. A few of them have been around for
the last four to five years. Some have carried out extensive research on the
Indian Insurance sector. Others have set up liaison offices. The following tieups are already in place:
INDIAN PARTNER

INTERNATIONAL PATRNER

Alpic Finance
Tata
CK Birla Group
ICICI
Hindustan Times
Ranbaxy
HDFC
Bombay Dyeing
Dabur Group
Kotak Mahindra
Godrej
Sanmar Group
Cholamandalam
SK Modi Group
20th Century Finance
M A Chidambaram
Vysya Bank

Allianz Holding, Germany

American Int. Group, US
Zurich Insurance, Switzerland
Prudential, UK
Commercial Union, UK
Cigna, US
Standard Life, UK
General Accident, UK
Liberty Mutual Fund, US
Chubb, US
J Rothschild, UK
Gio, Australia
Guardian Royal Exchange, UK
Legal & General, Australia
Canada Life
Met Life
ING
3. TYPES OF INSURANCE

Insurance

Life Insurance

General Insurance

Fire Insurance

Marine insurance

Special Insurance

Miscellaneous

LIFE INSURANCE

Life Insurance is a contract for payment of a sum of money to the person

assured (or failing him/her, to the person entitled to receive the same) on the
happening of the event insured against.
Usually the insurance contract provides for the payment of an amount on the
date of maturity or at specified dates at periodic intervals or at unfortunate
death if it occurs earlier. So, there is a price to be paid for this benefit.
Among other things, the contract also provides for the payment of premiums
by the assured. Life Insurance is universally acknowledged as a tool to
eliminate risk, substitute certainty for uncertainty and ensure timely aid of
the family in the unfortunate event of the death of the breadwinner. In other

words, it is the civilized world's partial solution to the problems caused by

death
In a nutshell, life insurance helps in two ways: premature death, which
leaves dependent families to fend for itself and old age without visible
means of support.

Benefits of Life Insurance:

Insurance
1. Superior to Any Other Savings Plan:
Unlike any other savings plan, a life insurance policy affords full protection
against risk of death. In the event of death of a policyholder, the insurance
company makes available the full sum assured to the policyholders' near and
dear ones. In comparison, any other savings plan would amount to the total
savings accumulated till date. If the death occurs prematurely, such savings
can be much lesser than the sum assured. Evidently, the potential financial
loss to the family of the policyholder is sizable.
2. Encourages and Forces Thrift:
A savings deposit can easily be withdrawn. The payment of life insurance
premiums, however, is considered sacrosanct and is viewed with the same
seriousness as the payment of interest on a mortgage. Thus, a life insurance
policy in effect brings about compulsory savings.
3. Easy Settlement and Protection against Creditors:
A life insurance policy is the only financial instrument the proceeds of which
can be protected against the claims of a creditor of the assured by effecting a
valid assignment of the policy.
4. Administering the legacy for beneficiaries:

Speculative or unwise expenses can quickly cause the proceeds to be

squandered. Several policies have foreseen this possibility and provide for
payments over a period of years or in a combination of installments and
lump sum amounts.
5. Disability benefits:
Death is not the only hazard that is insured; many polices also include
disability benefits. Typically, these provide for waiver of future premiums
and payment of monthly installments spread over certain time period.
6. Accidental death benefits:
Many policies can also provide for an extra sum to be paid (typically equal
to the sum assured) if death occurs as a result of accident.
7. Tax relief:
Under the Indian Income Tax Act, the following tax relief is available
a) 20 % of the premium paid can be deducted from your total

income

tax liability.
b) 100 % of the premium paid is deductible from your total

taxable

income.
When these benefits are factored in, it is found that most polices offer
returns that are or even better than other investment option.
4. LIFE INSURANCE CORPORATION OF INDIA
The Insurance sector in India governed by Insurance Act, 1938, the Life
Insurance

Corporation

Act,

1956

and

General

Insurance

Business

(Nationalization) Act, 1972, Insurance Regulatory and Development Authority

(IRDA) Act, 1999 and other related Acts.

Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) was formed in September, 1956 by an
Act of Parliament, viz., Life Insurance Corporation Act, 1956, with capital
contribution of Rs.50 million, from the Government of India. Then the Finance
Minister, Shri C.D. Deshmukh, while piloting the bill, outlined the objectives of
LIC:
To conduct the business with the utmost economy, in a spirit of
trusteeship to charge premium no higher than warranted by strict actuarial
considerations.
To invest the funds for obtaining maximum yield for the policy holders
consistent with safety of the capital.
To render prompt and efficient service to policy holders, thereby making
insurance widely popular.
Since nationalisation, LIC has built up a vast network of 2,048 branches, 100
divisions and 7 zonal offices spread over the country. The Life Insurance
Corporation of India also transacts business abroad and has offices in Fiji,
Mauritius and United Kingdom. LIC is associated with joint ventures abroad in
the field of insurance, namely, Ken-India Assurance Company Limited, Nairobi,
United Oriental Assurance Company Limited, Kuala Lumpur and Life
Insurance Corporation (International) E.C. Bahrain. The Corporation has
registered a joint venture company in 26th December, 2000 in Kathmandu,
Nepal by the name of Life Insurance Corporation (Nepal) Limited in
collaboration with Vishal Group Limited, a local industrial Group. An off-shore
company L.I.C. (Mauritius) Off-shore Limited has also been set up in 2001 to
tap the African insurance market.

The Life Insurance Corporation of India (LICI) is the largest life insurance
company in India; it is fully owned by the Government of India. It has a
network of around one million agents for soliciting life insurance business from
the public.
Life Insurance in its existing form came to India from the United Kingdom
with the establishment of a British firm Oriental Life Insurance Company in
Calcutta in 1818 followed by Bombay Life Assurance Company in 1823.
The Indian Life Assurance Companies Act, 1912 was the first statutory
measure to regulate life insurance business. Later in 1928 the Indian
Insurance Companies Act was enacted to enable the Government to collect
statistical information about both life and non-life insurance business
transacted in India by Indian and foreign insurers including provident
insurance societies. In 1938 with a view to protecting the interest of insuring
public earlier legislation was consolidated and amended by the Insurance
Act 1938 with comprehensive provisions detailed and effective control over
the activities of insurers.
By 1956, 154 Indian insurers, 16 foreign insurers and 75 provident societies
were carrying on life insurance business in India. Life insurance business
was concentrated in urban areas and confined to the higher strata of the
society. On January 19, 1956, the management of life insurance business of
245 Indian and foreign insurers and provident societies then operating in
India was taken over by the Central Government.
The nationalization of the life insurance aims at widening the channels of
public savings and is an important is an important step towards mobilizing
these savings more effectively than here to force, to finance National Plans.
The Corporations central office is located at Mumbai. There are seven zonal
offices, one each at Mumbai, Kolkatta, New Delhi, Kanpur, Bhopal, Chennai

and Hyderabad. Corporation has placed its 1530 branches on the Internet for
online payment of premium.
Contents
1 History
2 Current status
3 Subsidiaries
History
The Oriental Life Insurance Company, the first corporate entity in India offering
life insurance cover was established in Calcutta in 1818. Europeans in India
were its primary target market, and it charged Indians heftier premiums. The
Bombay Mutual Life Assurance Society, formed in 1870, was the first native
insurance provider. Other insurance companies established in the preindependence era included;
Bharat Insurance Company (1896)
United India (1906)
National Indian (1906)
National Insurance (1906)
Co-operative Assurance (1906)
Hindustan Co-operative (1907)
Indian Mercantile

 General Assurance
The first 150 years were marked mostly by turbulent economic conditions. It
witnessed, Indias First War of Independence, adverse affects of the World War I
and World War II on the economy of India, and in between them the period of
world wide economic crises triggered by the Great depression. The first half of
the 20th century also saw a heightened struggle for Indias independence. The
aggregate effect of these events led to a high rate of bankruptcies and
liquidation of life insurance companies in India. This had adversely affected the
faith of the general public in the utility of obtaining life cover.
The Life Insurance Companies Act and the Provident Fund Act were passed in
1912, providing the first regulatory mechanisms in the Life Insurance industry.
The Indian Insurance Companies Act of 1928 authorized the government to
obtain statistical information from companies operating in both life and non-life
insurance areas. The subsequent Insurance Act of 1938 brought stricter state
control over an industry that had seen several financially unsound ventures fail.
A bill was also introduced in the Legislative Assembly in 1944 to nationalize
the insurance industry.
Nearly a decade after India achieved independence, the Parliament of India
passed the Life Insurance of India Act on 19th June 1956. Nationalization of the
life insurance business in India was a result of the Industrial Policy Resolution
of 1956, which had created a policy framework for extending state control over
at least seventeen sectors of the economy, including the life insurance. The
company began operations with 5 zonal offices, 33 divisional offices and 212
branch offices.

 Current status
Over its existence of around 50 years, Life Insurance Corporation of India,
which commanded a monopoly of soliciting and selling life insurance in India,
created huge surpluses, and contributed around 7 % of Indias GDP in 2006.
The Corporation, which started its business with around 300 offices, 5.6 million
policies and a corpus of INR 45.9 Crores, has grown to 2,048 offices servicing
around 18 Crores policies and a corpus of over INR 3,40,000 Crores.
The organization now comprises 2048 branches, 100 divisional offices and 7
zonal offices, and employs over 10,00,000 agents. It also operates in 12 other
countries, primarily to cater to the needs of Non Resident Indians.
With the change in the Indias economic philosophy from the early 1990s, and
the subsequent relaxation of state control over several sectors of the economy,
the monopolistic position of the Life Insurance Corporation of India was
diluted, and it has had to compete with a number of other corporate entities,
Indian as well as transnational Life Insurance brand
Subsidiaries
LIC owns the following subsidiaries:
Life Insurance Corporation of India International: This is a joint
venture offshore company promoted by LIC which commenced
operations in July, 1989 with the objectives of offering US$ demonimated
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: Incorporated in 19th June 1989, its main objective
is to provide long term finance for construction or purchase of houses or
apartments. It has a Dubai office.
o LICHFL Care Homes: A wholly owned subsidiary of LIC Housing
Finance, it builds and operates "Assisted Community Living
Centres" for senior citizens.

MISSION OF LIC:
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.
OBJECTIVES OF LIC:
1. 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 adequate financial
cover against death at a reasonable cost.
2. Maximum mobilization of peoples savings by making
insurance linked savings adequately attractive.

3. Conduct business with utmost economy and with the full

realization that the money belongs to the policy holders.
4. Meet the various life insurance needs of the community that
would arise in the changing social and economic
environment.
5. 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.
6. Promote amongst all agents and employees of the
Corporations a sense of participation, pride and job
satisfaction through discharge of their duties with dedication
towards achievement of Corporate Objective.

5 SERVICE MARKETING MIX

This service marketing mix is explained further by taking example of LIFE
INSURANCE
PRODUCT
For LIC services is their product, hence the products of LIC is also a called a
bundled of utilities consisting of various product features and accompanying
services.
When an individual or a company buys a policys from LIC not only policies
are bought by him but the agent assistance and advice the prestige of
insurance organization, the facilities of claims and compensation are also
bought.

LIFE INSURANCE A UNIQUE PRODUCT

Life insurance is a package of saving and investment products. So also a
package of several benefits and options, Life Insurance e also gives a tax
concession on payment of premium and also it exempt tax on the maturity
(including bonus) payment.
Why Life Insurance
Protection: savings through life insurance guarantees financial protection
against risk of death of the policy holder. In the life insurance, in death, the full
sum assured is payable (with bonuses wherever applicable) whereas in other
savings schemes, only the amount saved (with interest) id payable.
Aid to Thrift
Life insurance encourages thrift. Long term saving can be made in a
relatively painless manner because of the easy instalments facility (premium
can be paid through monthly, quarterly, half yearly or yearly instalments). The
Salary Savings Scheme, popularly known as SSS, provides a convenient
method of paying premium each month through deduction from ones salary.
The employer remits the deducted premium to the LIC. The Salary Savings
Scheme can be introduced in an institution or establishment subject to specified
terms and conditions.
Who Can Buy A Life Insurance Policy?
Any person who has attained majority and is eligible to enter into a valid
contract can take out a life insurance policy for himself/herself and for those
he/she has insurable interest. Policies can also be taken out, subject to certain
conditions, on the life of ones spouse or children. While underwriting
proposals, factors such as the state of health of the life to be assured are granted
to policyholder for house building or for purchases of flats.

CLASSIFICATION OF LIC PLANS:-

PLANS

Combination plans

Money
Endowment
back plans
plans
Terms assurance Whole life plans

SALIENT FEATURES OF SOME OF THE PLANS / PRODUCT:

LIC has been introduced around 52 types of various plans, which are
attracting different customers as per their requirement. These plans are
design for various purposes such as purely risk covered, saving, children
education & marriage fund and also for annuity and pension at old age.
The following are the some of the plans:
Table No. 11-Endowment Assurance policy without profit:
Premium payment term under this plan is restricted to 25 years. Even
if a policy is taken to assure a life up to maximum maturity period 70
years, premium payment will stop on completion of 25 years of
policy. Insurance cover will continue up to maturity without further
premium payment. This is eligible for Disability benefit, Accident
benefit and loan.
Table No. 75-93 Money back policies:

These policies are especially suitable to businessmen, since certain

amount is received back from LIC even during continuation of the
policy term. Even on receipt of such amounts from LIC risk coverage
equal to full assured continues. These policies are eligible for bonus,
disability and accident benefit but not for loan.
Table No. 150 New Bima Kiran:
New Bima Kiran policy has been introduced with effect from 15 th
February 2002. This plan is replaced existing Bima Kiran.
This is a term assurance policy. In this policy policyholders will get
on maturity a sum equal to total amount of premium paid (including
accident benefits but excluding other extras) shall become payable on
end of the term.
Table No. 151 New Jeevan Shree:
A New Jeevan Shree has been introduced by LIC w. e. f. 5 th March
2002. Thereby the previous Jeevan Shree stands withdrawn w. e. f.
31st Jan 2002.
This plan is an endowment type of plan. In this plan LIC will give a
guaranteed addition @ Rs. 70/per 1000 sum assured.

PUBLIC RELATION IN LIFE INSURANCE

LIC also thinks in favour of publicity. Since this component of promotion if use
in right fashion makes the promotional affect proactive. Publicity is effective
since the messages, views, opinion, facts; figures are publicized by media or by
the vocal leaders. Strengthening the public relation activities is another
dimension which LIC gives due attention to.
At the apex and regional levels, the Public Relation officers bare the
responsibility of projecting a positive image of the organization and at the
branch level the responsibility is on the branch manager.
SALES PROMOTION IN LIFE INSURANCE
LIC gives various monetary as well as non-monetary incentives to its agents.
The agents are classified as members in 4 groups as follows: 1. Chairmen Club Member
2. Zonal Club Member
3. Divisional Club Member
4. BM Club Member
The agents become members of these clubs on the basis of policies they bring.
They receive the benefit as per the membership. The benefits range from perks
to house loan.
PLACE IN LIFE INSURANCE
Some of the important dimensions of place mix in relation to the location of
LIC branches are as follows:
Smooth accessibility.
Availability of infrastructure facilities.
Management of branch office.


Smooth accessibility
It helps LIC personnel and users in reaching its branches conveniently.
Availability of infrastructure facilities
It draws LICs attention on all weatherproof roads, power facilities, and
communication services and so on. Since LIC advocates in favour using
sophisticated information technologies by its branch offices, it is necessary to
have uninterrupted power supply and communication service.
LIC also gives due weightage to safety provision. Places found of vulnerable
nature are not selected.
Management of branch office
The management of office refers to office function, civic amenities and
facilities, parking facilities and interior dcor.
These are essential to make the work place conducive, attractive, and proactive
to the generation of efficiency. The motives are to offer the promised to the end
user without any distortions and making the branch office a point of attraction.
LIC has a total of 2048 branches spread all over the country as well they have
foreign offices at London, Fiji, Mauritius. Distribution wise 60% of the
branches are situated in the rural and semi-urban areas, while only 40% situated
at urban areas.
PEOPLE IN LIFE INSURANCE
People involved in the business organization of LIC are its Agents, Developing
Officers, frontline staff and Branch Managers.
The LIC management has a strong advocacy in favour of managing the
insurance personnel since they identify people as an important component of
the marketing mix.

Hence they provide due attention on the development of the insurance

professionals. The Front line staff and the Branch manager are given intensive
training so that they are in a position to make effective use of the technology.
LIC bears the responsibility of developing the credential of their employees.
As a result they take due care about the behavior of the insurance personnel.
The senior executive while recruiting, training and developing the insurance
personnel make sure that the people serving the organization have a high
behavioral profile in which empathy has been due place.
In short LIC uses a rational plan for the development of insurance personnel.
PROCESS IN LIFE INSURANCE
In the service sector only recently process has been given much attention,
although it has been the subject of study in production.
Service process consists of a number of activities or transactions by which
the service is delivered.
The process should be friendly in insurance industry. The speed and
accuracy of payment is of great importance. The processing method should be easy
and convenient to the customers. Instalment schemes should be streamlined to
cater to the ever growing demands of the customers. IT and data warehousing will
smoothen the process flow.
Information Technology will help in servicing large number of customers
efficiently and bring down overheads. Technology can either complement or
supplement the channel of distribution cost effectively. It can also help to improve
customer service levels. The use of data warehousing management and mining will
help to find out the profitability and potential of various customers and product
segments.

 CUSTOMER SATISFACTION BEST SERVICE:

In this competitive scenario, a key difference will be the customer experience
that each life insurance player can offer in terms of quality of advice on product
choice, along with policy servicing, and settlement of claims.
Service should focus on enhancing the customer experience and maximizing
customer convenience. Long-term growth in the business will depend greatly
on the distribution network, where the emphasis must evolve from merely
selling insurance to acting as financial advisors, helping customers plan their
finances depending on life stage and personal requirements.
This calls for a strong focus on training of the distribution force to act as
financial consultants and build a long lasting relationship with customer. This
would help create sustainable competitive advantage not easily matched.
13. PRODUCTS
PRODUCTS

As individuals it is inherent to differ. Each individuals insurance needs and requirements are
different from that of the others. LICs Insurance Plans are polices that talk to you individually
and give you the most suitable options that can fit your requirement.

Jeevan Anurag
CDA Endowment Vesting At 21
CDA Endowment Vesting At 18
Jeevan Kishore
Child Career Plan
Jeevan Aadhar
Jeevan Vishwas

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

The Endowment Assurance Policy

The Endowment Assurance Policy-Limited Payment
Jeevan Mitra(Double Cover Endowment Plan)
Jeevan Mitra(Triple Cover Endowment Plan)
Jeevan Anand
New Janaraksha Plan
Jeevan Shree-I
Jeevan Pramukh

The Money Back Policy-20 Years

The Money Back Policy-25 Years
Jeevan Surabhi-15 Years
Jeevan Surabhi-20 Years
Jeevan Surabhi-25 Years
Jeevan Rekha (closed for sale)
Bima Bachat

Jeevan Bharati

The Whole Life Policy

The Whole Life Policy- Limited Payment
The Whole Life Policy- Single Premium
Jeevan Rekha (closed for sale)
Jeevan Anand
Jeevan Tarang

Two Year Temporary Assurance Policy

The Convertible Term Assurance Policy
Anmol Jeevan-I
Amulya Jeevan

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

Jeevan Nidhi
Future Plus (closed for sale)
Jeevan Akshay-III (closed for sale)
Jeevan Akshay-IV (closed for sale)
Jeevan Akshay-V
New Jeevan Dhara-I
New Jeevan Suraksha-I

Unit plans are investment plans for those who realize the worth of hard-earned money. These
plans help you see your savings yield rich benefits and help you save tax even if you dont have
consistent income.

Jeevan Plus (closed for sale)

Future Plus (closed for sale)
Bima Plus (closed for sale)
Market Plus
Money Plus

LICs Special Plans are not plans but opportunities that knock on your door once in a lifetime.
These plans are a perfect blend of insurance, investment and a lifetime of happiness!

Bima Gold (closed for sale)

New Bima Gold

Bima Nivesh 2005

Jeevan Saral
Jeevan Madhur

Group Insurance Scheme is life insurance protection to groups of people. This scheme is ideal
for employers, associations, societies etc. and allows you to enjoy group benefits at really low
costs.

Group Term Insurance Schemes

Group Insurance Scheme in Lieu Of EDLI
Group Gratuity Scheme
Group Super Annuation Scheme
Group Savings Linked Insurance Scheme
Group Leave Encashment Scheme
Group Mortgage Redemption Assurance Scheme
Gratuity Plus

JanaShree Bima Yojana (JBY)

Shiksha Sahayog Yojana

INFORMATION TECHNOLOGY AND LIC

LIC has been one of the pioneering organizations in India who introduced
the leverage of Information Technology in servicing and in their business. Data
pertaining to almost 10 crore policies is being held on computers in LIC. We have
gone in for relevant and appropriate technology over the years.
1964 saw the introduction of computers in LIC. Unit Record Machines
introduced in late 1950s were phased out in 1980s and replaced by
Microprocessors based computers in Branch and Divisional Offices for Back
Office Computerization. Standardization of Hardware and Software commenced
in 1990s. Standard Computer Packages were developed and implemented for
Ordinary and Salary Savings Scheme (SSS) Policies.

FRONT END OPERATIONS With a view to enhancing customer responsiveness and services, in July
1995, LIC started a drive of On Line Service to Policyholders and Agents through
Computer. This on line service enabled policyholders to receive immediate policy
status report, prompt acceptance of their premium and get Revival Quotation, Loan
Quotation on demand. Incorporating change of address can be done on line.
Quicker completion of proposals and dispatch of policy documents have become a
reality. All our 2048 branches across the country have been covered under frontend operations. Thus all our 100 divisional offices have achieved the distinction of
100% branch computerisation. New payment related Modules pertaining to both
ordinary & SSS policies have been added to the Front End Package catering to

Loan, Claims and Development Officers Appraisal. All these modules help to
reduce time-lag and ensure accuracy.

METRO AREA NETWORK A Metropolitan Area Network, connecting 74 branches in Mumbai was
commissioned in November, 1997, enabling policyholders in Mumbai to pay their
Premium or get their Status Report, Surrender Value Quotation, Loan Quotation
etc. from ANY Branch in the city. The System has been working successfully.
More than 10,000 transactions are carried out over this Network on any given
working day. Such Networks have been implemented in other cities also.

WIDE AREA NETWORK All 7 Zonal Offices and all the MAN centers are connected through a Wide
Area Network (WAN). This will enable a customer to view his policy data and pay
premium from any branch of any MAN city. As at November 2005, we have 91
centers in India with more than 2035 branches networked under WAN.

INTERACTIVE VOICE RESPONSE SYSTEMS (IVRS)

IVRS has already been made functional in 59 centers all over the country. This
would enable customers to ring up LIC and receive information (e.g. next premium
due, Status, Loan Amount, and Maturity payment due, Accumulated Bonus etc.)
about their policies on the telephone. This information could also be faxed on
demand to the customer.

LIC ON THE INTERNET -

Our Internet site is information. We have displayed information about LIC &
its subsidiaries-LIC (International) E.C., LIC (Nepal) Ltd, LIC Mutual Fund, LIC
Housing Finance and their products. Efforts are on to upgrade our web site to make
it dynamic and interactive. The addresses/e-mail Ids of ur Zonal Offices, Zonal
Training Centers, Management Development Center, Overseas Branches,
Divisional Offices and also all Branch Offices with a view to speed up the
communication process.

PAYMENT

OF

PREMIUM

AND

POLICY

STATUS

ON

INTERNET LIC has given its policyholders a unique facility to pay premiums through
Internet absolutely free and also view their policy details on Internet premium
payments. There are 11 service providers with whom L I C has signed the
agreement to provide this service. (Registration is compulsory for this service.)

INFORMATION KIOSKS We have set up 150 Interactive Touch screen based Multimedia KIOSKS in
prime locations in metros and some major cities for dissemination information to
general public on our products and services. These KIOSKS are enabling to
provide policy details and accept premium payments.

INFO CENTRES We have also set up 8 call centers, manned by skilled employees to provide you
with information about our Products, Policy Services, Branch addresses and other
organizational information

CHANGE OF ADDREE AND TRANSFER OF POLICY RECORDS

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 The policyholder should immediately intimate the change of his/her

address to the Branch Office servicing the policy. The correct address
facilitates better service and quicker settlement of claims.
Policy records can also be transferred from one Branch Office to another
for servicing, as requested by the policyholder.

LOSS OF POLICY DOCUMENT The Policy Document is an evidence of the contract between the Insurer
and the Insured. Hence the policyholder should preserve the Policy Bond till
the contracted amount under it is settled.
Loss of the Policy Document should be immediately intimated to the
Branch Office where it is serviced.

LOANS Loans are granted on policies to the extent of 90% of Surrender Value of
the policies which are in force and 85% of the Surrender Value in case of
policies which are paid-up, inclusive of the cash value of bonus. The rate of
interest charged at present is 9% p.a. payable half-yearly.
Loans are not granted for a period shorter than six months. The Conditions
and Privileges printed on the back of the Policy Bond states whether a
particular policy is with or without the loan facility.

RELIEF TO POLICYHOLDERS The Corporation generally allows concessions on payment of premiums,

settlement of claims, issue of duplicate policies, etc when the policyholder

are affected by natural calamities such as droughts, cyclones, floods,

earthquakes, etc.

NOMINATIONS Nomination is a right conferred on the holder of a Policy of Life Assurance

on his own life to appoint a person/s to receive policy moneys in the event of
the policy becoming a claim by the assureds death. The Nominee does not
get any other benefit except to receive the policy moneys on the death of the
Life Assured. A nomination may be changed or cancelled by the life assured
whenever he likes without the consent of the Nominee. Ensure nomination
exists in the policy for easy settlement of claims.

ASSIGNMENT Assignment means transfer of rights, title and interest. When an assignment
is executed, all rights, title and interest in respect of the property assigned
are immediately transferred to the Assignee/s and the Assignee/s becomes
the owner/s of the policy subject to any lawful condition made in the
assignment.
Assignment can be either conditional or absolute. On assignment (other
than to LIC), Nomination automatically stands cancelled. Hence, when such
a policy is reassigned, the policyholder will have to make a fresh nomination
to avoid delay in settlement of claim.

SURVIVAL BENEFIT/MATURITY CLAIMS -

 LIC settles survival benefit/maturity claims on or before the due date.

Policyholder are intimated well in advance by the Branch Office which
services the policy regarding the payment, and the necessary Discharge
Voucher is also sent for execution by the assured. In case the policyholder
does not get any intimation from the Branch Office concerned, he/she should
contact them, quoting the Policy Number.
Survival Benefit payment up to Rs.60, 000/- are settled without insisting
for Policy Bond and Discharge Voucher.

DEATH CLAIMS If the life assured dies during the term of the policy, death claim arises. The
death of the policyholder should be immediately intimated in writing to the
Branch Office where the policy is serviced along with the following
particulars:
1. The No./s of the policy/ies
2. The name of the policyholder
3. Death Certificate issued by concerned Authority
4. The date of death
5. The cause of death and
6. Claimants relationship with the deceased
On receipt of the intimation of death, necessary claim forms are sent by the
Branch Office for completion along with instructions regarding the
procedure to be followed by the claimant.

 The claims which have arisen after a period of three years are treated as
non-early claims and settled within 30 days from the date of receipt of all
requirements.
The claims that have arisen within a period of two years from the date of
commencement of the policy are treated as early claims and investigation is
compulsory in such cases.
The claim is usually payable to the nominee/assignee or the legal heirs, as
the case may be. However, if the deceased policyholder has not
nominated/assigned the policy or if he/she has not made a suitable provision
regarding the policy moneys by way of a Will, the claim is payable to the
holder of a Succession Certificate or some such evidence of title from a
Court of Law.
The Corporation grants claims concessions under certain Plans whereby
payment of full sum assured is made, subject to the deduction of unpaid
premiums with interest till the date of death and unpaid premiums falling
due before the next anniversary of the policy, in the event of the death of the
life assured within a period of six months or one year from the date of the
first unpaid premium, provided premiums have been paid for at least three
years and five years respectively.

CLAIM REVIEW COMMITTEE The Corporation settles a large number of Death Claims every year. Only in
case of fraudulent suppression of material information is the liability repudiated.
This is to ensure that claims are not paid to fraudulent persons at the cost of honest
policyholders. The number of Death Claims repudiated is, however, very small.
Even in these cases, an opportunity is given to the claimant to make a

representation for consideration by the Review Committees of the Zonal office and
the Central Office. As a result of such review, depending on the merits of each
case, appropriate decisions are taken. The Claims Review Committees of the
Central and Zonal Offices have among their Members, a retired High
Court/District Court Judge. This has helped providing transparency and confidence
in our operations and has resulted in greater satisfaction among claimants,
policyholders and public.
CONCLUSION
Competition will surely cause the market to grow beyond current rates, create a
bigger "pie," and offer additional consumer choices through the introduction of
new products, services, and price options.
Yet, at the same time, public and private sector companies will be working
together to ensure healthy growth and development of the sector. Challenges
such as developing a common industry code of conduct, contributing to a
common catastrophe reserve fund, and chalking out agreements between
insurers to settle claims to the benefit of the consumer will require concerted
effort from both sectors.
The market is now in an evolving phase where one can expect a lot of actions
in coming days. The current impediments for foreign participation like 26%
equity cap on foreign partner, ill defined regulatory role of IRDA (Insurance
Regulatory development Authority- the watchdog of the industry) in pension
business etc.are expected to be removed in near future.
The early-adopters will then have a clear advantage compared to laggards in
gaining the market share and market leadership. The will need to make sure
right now that their entire infrastructure is in place so that they can reap the
benefit of an "unlimited potential."

WE MUST INSURE OURSELF