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1)INTRODUCTION
Insurance is a cover used for protecting oneself from the risk of a financial
loss. It is important to understand that risk is a part of any person’s life and
that it increases as a person increases in age, responsibility and wealth.
Insurance is risk coverage against financial losses and should not be taken as an
investment instrument.
There are mainly two parties involved in this – the insurer and the insured. The
insurer is the insurance company who will provide the cover to the insured against
any financial losses. The insured may be an individual person or a group of people
like an employer, members of a society, etc.
A policy is the contract between the insurer and the insured, which states the
risks covered, the exclusions, if any, and the benefits reimbursed on the
happening of an event like death, illness etc. The policy is paid through what is
called a premium, which is a set amount that must be paid by the insured on a
monthly, semi-annual or annual basis. On the happening of an event like death,
disability, fire, etc, for which the insured is covered, the benefit amount stated
in the policy contract can be claimed by the insured.
1.2)Classification of Insurance
There are mainly two broad classes of Insurance – Life and Non Life.
• Life insurance products include Term Life policies, which give a pure risk
coverage of only the death benefit, whereas endowment or money back policies have
a risk as well as savings component i.e. death as well as maturity benefit. Also
coming under the life insurance umbrella are the Unit – Linked Policies in which
there is a risk component and a savings component, which is invested in equity,
debt or gilt funds, depending on the insurance company.
• Non Life insurance products include property or casualty, health insurance
or house, fire, marine insurance etc. This insurance class deals with all the non-
life aspects of an insured like his/her house, health, land, office, cargo, etc
which might bring financial loss.
1.3)WHAT IS INSURANCE
Insurance is a form of risk management in which the insured transfers the cost of
potential loss to another entity in exchange for monetary compensation known as
the premium. (For background reading, see The History Of Insurance In America.)
1.4)FUNDAMENTAL OF INSURANCE
1.4.1)How does insurance work?
Insurance works by pooling risk.What does this mean? It simply means that a large
group of people who want to insure against a particular loss pay their premiums
into what we will call the insurance bucket, or pool. Because the number of
insured individuals is so large, insurance companies can use statistical analysis
to project what their actual losses will be within the given class. They know that
not all insured individuals will suffer losses at the same time or at all. This
allows the insurance companies to operate profitably and at the same time pay for
claims that may arise. For instance, most people have auto insurance but only a
few actually get into an accident. You pay for the probability of the loss and for
the protection that you will be paid for losses in the event they occur.
1.4.2)Risks
Life is full of risks - some are preventable or can at least be minimized, some
are avoidable and some are completely unforeseeable. What's important to know
about risk when thinking about insurance is the type of risk, the effect of that
risk, the cost of the risk and what you can do to mitigate the risk. Let's take
the example of driving a car. (For more insight on the concept of risk, see
Determining Risk And The Risk Pyramid.)
1.4.3)Type of risk: Bodily injury, total loss of vehicle, having to fix your car
The effect: Spending time in the hospital, having to rent a car and having to make
car payments for a car that no longer exists
1.5)TYPES OF INSURANCE
The story of insurance is probably as old as the story of mankind. The same
instinct that prompts modern businessmen today to secure themselves against loss
and disaster existed in primitive men also. They too sought to avert the evil
consequences of fire and flood and loss of life and were willing to make some sort
of sacrifice in order to achieve security. Though the concept of insurance is
largely a development of the recent past, particularly after the industrial era –
past few centuries – yet its beginnings date back almost 6000 years.
Life Insurance in its modern form came to India from England in the year 1818.
Oriental Life Insurance Company started by Europeans in Calcutta was the first
life insurance company on Indian Soil. All the insurance companies established
during that period were brought up with the purpose of looking after the needs of
European community and Indian natives were not being insured by these companies.
However, later with the efforts of eminent people like Babu Muttylal Seal, the
foreign life insurance companies started insuring Indian lives. But Indian lives
were being treated as sub-standard lives and heavy extra premiums were being
charged on them. Bombay Mutual Life Assurance Society heralded the birth of first
Indian life insurance company in the year 1870, and covered Indian lives at normal
rates. Starting as Indian enterprise with highly patriotic motives, insurance
companies came into existence to carry the message of insurance and social
security through insurance to various sectors of society. Bharat Insurance Company
(1896) was also one of such companies inspired by nationalism. The Swadeshi
movement of 1905-1907 gave rise to more insurance companies. The United India in
Madras, National Indian and National Insurance in Calcutta and the Co-operative
Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative
Insurance Company took its birth in one of the rooms of the Jorasanko, house of
the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General
Assurance and Swadeshi Life (later Bombay Life) were some of the companies
established during the same period. Prior to 1912 India had no legislation to
regulate insurance business. In the year 1912, the Life Insurance Companies Act,
and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912
made it necessary that the premium rate tables and periodical valuations of
companies should be certified by an actuary. But the Act discriminated between
foreign and Indian companies on many accounts, putting the Indian companies at a
disadvantage.
The first two decades of the twentieth century saw lot of growth in insurance
business. From 44 companies with total business-in-force as Rs.22.44 crore, it
rose to 176 companies with total business-in-force as Rs.298 crore in 1938. During
the mushrooming of insurance companies many financially unsound concerns were also
floated which failed miserably. The Insurance Act 1938 was the first legislation
governing not only life insurance but also non-life insurance to provide strict
state control over insurance business. The demand for nationalization of life
insurance industry was made repeatedly in the past but it gathered momentum in
1944 when a bill to amend the Life Insurance Act 1938 was introduced in the
Legislative Assembly. However, it was much later on the 19th of January, 1956,
that life insurance in India was nationalized. About 154 Indian insurance
companies, 16 non-Indian companies and 75 provident were operating in India at the
time of nationalization. Nationalization was accomplished in two stages; initially
the management of the companies was taken over by means of an Ordinance, and
later, the ownership too by means of a comprehensive bill. The Parliament of India
passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life
Insurance Corporation of India was created on 1st September, 1956, with the
objective of spreading life insurance much more widely and in particular to the
rural areas with a view to reach all insurable persons in the country, providing
them adequate financial cover at a reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from
its corporate office in the year 1956. Since life insurance contracts are long
term contracts and during the currency of the policy it requires a variety of
services need was felt in the later years to expand the operations and place a
branch office at each district headquarter. re-organization of LIC took place and
large numbers of new branch offices were opened. As a result of re-organisation
servicing functions were transferred to the branches, and branches were made
accounting units. It worked wonders with the performance of the corporation. It
may be seen that from about 200.00 crores of New Business in 1957 the corporation
crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for
LIC to cross 2000.00 crore mark of new business. But with re-organisation
happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore
Sum Assured on new policies.
Today LIC functions with 2048 fully computerized branch offices, 100 divisional
offices, 7 zonal offices and the Corporate office. LIC’s Wide Area Network covers
100 divisional offices and connects all the branches through a Metro Area Network.
LIC has tied up with some Banks and Service providers to offer on-line premium
collection facility in selected cities. LIC’s ECS and ATM premium payment facility
is an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info
Centres have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai,
Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of
providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK
offices. The satellite offices are smaller, leaner and closer to the customer. The
digitalized records of the satellite offices will facilitate anywhere servicing
and many other conveniences in the future.
LIC continues to be the dominant life insurer even in the liberalized scenario of
Indian insurance and is moving fast on a new growth trajectory surpassing its own
past records. LIC has issued over one crore policies during the current year. It
has crossed the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005,
posting a healthy growth rate of 16.67% over the corresponding period of the
previous year.
From then to now, LIC has crossed many milestones and has set unprecedented
performance records in various aspects of life insurance business. The same
motives which inspired our forefathers to bring insurance into existence in this
country inspire us at LIC to take this message of protection to light the lamps of
security in as many homes as possible and to help the people in providing security
to their families.
2.2)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 nationalised. 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.
• 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.
2.5)MISSION/VISION
2.5.1)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."
2.5.2)Vision
"A trans-nationally competitive financial conglomerate of significance to
societies and Pride of India."
2.6)BORD OF DIRECTORS
In our country, which is one of the most populated in the world, the prominence of
insurance is not as widely understood, as it ought to be. What follows is an
attempt to acquaint readers with some of the concepts of life insurance, with
special reference to LIC.
For more details, please contact our branch or divisional office. Any LIC Agent
will be glad to help you choose the life insurance plan to meet your needs and
render policy servicing.
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.
3.3.1)Protection:
Savings through life insurance guarantee full protection against risk of death of
the saver. Also, in case of demise, life insurance assures payment of the entire
amount assured (with bonuses wherever applicable) whereas in other savings
schemes, only the amount saved (with interest) is payable.
3.3.3)Aid To Thrift:
Life insurance encourages 'thrift'. It allows long-term savings since payments can
be made effortlessly because of the 'easy instalment' 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.
3.3.4)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.
3.3.5)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.
Assessees 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.
3.3.6)Money When You Need It:
A policy that has a suitable insurance plan or a combination of different plans
can be effectively used to meet certain monetary needs that may arise from time-
to-time.
Children's education, start-in-life or marriage provision or even periodical needs
for cash over a stretch of time can be less stressful with the help of these
policies.
Alternatively, policy money can be made available at the time of one's retirement
from service and used for any specific purpose, such as, purchase of a house or
for other investments. Also, loans are granted to policyholders for house building
or for purchase of flats (subject to certain conditions).
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.
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.
In 'without' profit plan the contracted amount is paid without any addition. The
premium rate charged for a 'with' profit policy is therefore higher than for a
'without' profit policy.
3.3.11)Keyman Insurance
Jeevan Anurag
Komal Jeevan
Marriage Endowment Or
Educational Annuity Plan
Jeevan Kishore
Jeevan Chhaya
Jeevan Aadhar
Jeevan Vishwas
The Endowment Assurance Policy
Jeevan Anand
Jeevan Amrit
Jeevan Shree-I
Jeevan Pramukh
Bima Bachat
Jeevan Bharati - I
Jeevan Anand
Jeevan Tarang
Anmol Jeevan-I
Amulya Jeevan-I
Jeevan Saathi
Jeevan Bharati - I
FEATURES:-
Introduction
LIC’s Jeevan Bharati-I – is a plan exclusively for women. It is a with profit plan
having special features considering the needs of women. The plan also provides for
Accident Benefit, Critical Illness Benefit and Congenital Disability Benefit as
optional Riders
1. SPECIAL FEATURES
4. Auto Cover::
After two years premiums have been paid, whenever premium payment is discontinued,
the life cover for full sum assured will continue for 3 years from the due date of
first unpaid premium.
If death occurs during the Auto Cover period, then death benefit after deducting
unpaid premiums, with interest is payable along with the vested bonus, if any.
2. OPTIONAL RIDERS:
The following riders are available under this plan:
If any survival benefit falls due during the above 3-year auto cover period the
same will be paid after deduction of unpaid premiums with interest until the due
date of the survival benefit, provided it is more than the unpaid premiums with
interest. If the survival benefit is insufficient to cover the arrears of premiums
with interest up to the due date of such survival benefit, then the survival
benefit will be payable only on payment of such arrears of premiums with
interest , during the period of the aforesaid 3 years or on revival of the policy
thereafter.
(ii) If Critical Illness Rider is opted for:
During the auto cover period, the policy can be revived by payment of full arrears
of premium together with interest and subject to submission of proof of continued
insurability of the Life Assured to the satisfaction of the Corporation. The
Corporation reserves the right to accept at original terms, accept at revised
terms or decline the revival of the policy. The revival of the policy shall take
effect only after the same is approved by the Corporation and is specifically
communicated to the Life Assured.
If any survival benefit falls due during the above 3-year auto cover period the
same will be paid only after revival of the policy as stated above.
The policy thereafter shall be free from all liabilities for payment of the
premiums, but shall not be entitled to the future bonuses. The existing vested
reversionary bonuses, if any, will remain attached to the reduced paid-up Policy.
This paid up value shall be payable on the date of maturity or at Life Assured’s
prior death. No survival benefit shall be payable under paid up policies.
The rider benefits will cease to apply if the policy is in lapsed condition and
will not acquire any paid up value.
10. SURRENDER VALUE:
The Guaranteed Surrender value will be available after the expiry of 3 policy
years provided the premiums have been paid for at least three years. The
Guaranteed Surrender Value is equal to 30% of the total amount of premiums paid
excluding the premiums paid for the first year, any premiums paid towards riders,
all extra premiums that may have been paid less the amount of survival benefits
paid earlier. The cash value of any existing bonuses, if ,any will also be paid .
Corporation may, however, pay special surrender value as the discounted value of
Paid up sum assured and vested bonus, if any, as applicable on date of surrender,
provided the same is higher than guaranteed surrender value.
11. EXCLUSIONS:
Suicide: This policy shall be void if the Life Assured commits suicide (whether
sane or insane at that time) at any time on or after the date on which the risk
under the policy has commenced but before the expiry of one year from the date of
commencement of risk under the policy and the Corporation will not entertain any
claim by virtue of this policy except to the extent of a third party’s bonafide
beneficial interest acquired in the policy for valuable consideration of which
notice has been given in writing to the branch where the Policy is being presently
serviced (where the policy records are kept), at least one calendar month prior to
death.
12. COOLING OFF PERIOD:
If you are not satisfied with the “Terms and Conditions” of the policy, you may
return the policy to us within 15 days.
BENEFITS
A. Survival Benefits:
On Survival the following benefits are payable:
End
of
Year Total premiums paid till end of year Death Benefit during the year
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 6345 100000 2200 4500 102200 104500
2 12690 100000 4400 9000 104400 109000
3 19035 100000 6600 13500 106600 113500
4 25380 100000 8800 18000 108800 118000
5 31725 100000 11000 22500 111000 122500
6 38070 100000 13200 27000 113200 127000
7 44415 100000 15400 31500 115400 131500
8 50760 100000 17600 36000 117600 136000
9 57105 100000 19800 40500 119800 140500
10 63450 100000 22000 45000 122000 145000
15 95175 100000 36667 75000 136667 175000
20 126900 100000 48900 100000 148900 200000
End
of
Year Total premiums paid till end of year BENEFIT ON SURVIVAL / MATURITY AT
THE END OF YEAR
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 6345 0 0 0 0 0
2 12690 0 0 0 0 0
3 19035 0 0 0 0 0
4 25380 0 0 0 0 0
5 31725 20000 0 0 20000 20000
6 38070 0 0 0 0 0
7 44415 0 0 0 0 0
8 50760 0 0 0 0 0
9 57105 0 0 0 0 0
10 63450 20000 0 0 20000 20000
15 95175 20000 0 0 20000 20000
20 126900 40000 48900 100000 88900 140000
Note: i)his illustration is applicable to a standard (from medical, life style and
occupation point of view) life.
i) The non-guaranteed benefits (1) and (2) in above illustration are calculated so
that they are consistent with the Projected Investment Rate of Return assumption
of 6% p.a.(Scenario 1) and 10% p.a. (Scenario 2) respectively. In other words, in
preparing this benefit illustration, it is assumed that the Projected Investment
Rate of Return that LICI will be able to earn throughout the term of the policy
will be 6% p.a. or 10% p.a., as the case may be. The Projected Investment Rate of
Return is not guaranteed.
Section 45 of Insurance Act, 1938:
No policy of life insurance shall after the expiry of two years from the date on
which it was effected, be called in question by an insurer on the ground that a
statement made in the proposal for insurance or in any report of a medical
officer, or referee, or friend of the insured, or in any other document leading to
the issue of the policy, was inaccurate or false, unless the insurer shows that
such statement was on a material matter or suppressed facts which it was material
to disclose and that it was fraudulently made by the policyholder and that the
policyholder knew at the time of making it that the statement was false or that it
suppressed facts which it was material to disclose. Provided that nothing in this
section shall prevent the insurer from calling for proof of age at any time if he
is entitled to do so, and no policy shall be deemed to be called in question
merely because the terms of the policy are adjusted on subsequent proof that the
age of the life assured was incorrectly stated in the proposal.
PENSION PLAN
Pension Plans are Individual Plans that gaze into your future and foresee
financial stability during your old age. These policies are most suited for senior
citizens and those planning a secure future, so that you never give up on the best
things in life.
Jeevan Nidhi
Jeevan Akshay-VI
Jeevan Nidhi
FEATURE
LIC's JEEVAN NIDHI is a with profits Deferred Annuity (Pension) plan. On survival
of the policyholder beyond term of the policy the accumulated amount (i.e. Sum
Assured + Guaranteed Additions + Bonuses) is used to generate a pension (annuity)
for the policyholder. The plan also provides a risk cover during the deferment
period. The USP of the plan being the pension can commence at 40 years. The
premiums paid are exempt under Section 80CCC of Income Tax Act.
Salient Features:
a . Guaranteed Additions: Guaranteed Additions @ Rs.50/- per thousand Sum assured
for each completed year, for the first five years.
c. Benefit On Vesting:
1. Option to commute up to 1/3rd of the amount available on vesting, which shall
include the Sum Assured under the Basic Plan together with accrued Guaranteed
Additions, simple Reversionary Bonuses and Terminal Bonus, if any.
2 . Annuity as per the option selected: Annuity on the balance amount if
commutation is exercised, otherwise annuity on the full amount.
d. Annuity Options:
On vesting, the annuity instalment, mode of annuity payment and type of annuity
which shall be made available to the Life Assured (Annuitant) / Nominee will
depend upon the then prevailing Immediate Annuity plan of the Life Insurance
Corporation of India and its terms and conditions.
Currently the following options are available under LIC’s immediate annuities:
1. Annuity for life: The annuity is paid to the life assured as long as he/she is
alive.
2. Annuity Guaranteed for certain periods: The annuity is paid to the life assured
for periods of 5 or 10 or 15 or 20 years as chosen by him/her, whether or not
he/she survives that period. After the chosen period, the annuity is paid to the
life assured as long as he/she is alive.
3. Annuity with return of purchase price on death: The annuity is paid to the life
assured as long as he/she is alive. On the death of the life assured, the purchase
price of the annuity is paid as death benefit. The purchase price includes the Sum
Assured under the Basic Plan, the accrued Guaranteed Additions and any accrued
bonuses, excluding the commuted value, if any.
4. Increasing annuity: The annuity is paid to the life assured as long as he/she
is alive. The amount of annuity increases every year at a simple rate of 3% per
annum.
5. Joint Life Last Survivor Annuity: The annuity is paid to the life assured as
long as he/she is alive. On death of the life assured, 50% of the annuity is
payable to the nominated spouse as long as the spouse is alive.
e. Death Benefit on death before annuity vests: On the death of the Life Assured
during the deferment period of the policy, i.e. before the annuity vests, an
amount equal to the Sum Assured under the Basic plan along with the accrued
Guaranteed Additions, simple Reversionary Bonuses and Terminal Bonus, if any, will
be paid in a lump sum to the appointed nominee, provided the policy is in force
for full Sum Assured. Nominee will also have the option to purchase an annuity
with this amount.
BENEFITS:-
Eligibility Conditions And Other Restrictions Under This Plan:
Rebates:
f. Grace Period:
A grace period of 30 days will be available for payment of yearly, half-yearly or
quarterly premiums and 15 days for monthly premiums.
h. Paid-up Value:
The policy will acquire paid-up value after at least 3 full year’s premiums have
been paid.
j. Revival: The policyholder can revive his lapsed policy by paying arrears of
premium together with interest within a period of five years from the date of
first unpaid premium subject to satisfactory evidence of health. The rate of
interest for this purpose will be decided by the Corporation from time to time.
The present rate of interest is 9% pa.
k. Options:
Accidental Death and Disability Benefit:
In case of death due to accident (within 180 days) an additional amount equal to
the Accident Benefit Sum assured will be payable. In case of Total and Permanent
disability arising due to accident an amount equal to accident benefit sum assured
will be payable over a period of 10 years in monthly instalments. However, the
payment of accident benefit will be subject to an overall limit of Rs.25 lakh
under all policies of the Life Assured with the Corporation taken together.
The disability due to accident should be total and such that the Life Assured is
unable to carry out any work to earn a living. Following disabilities due to
accident are also covered -
Loan / Assignment:
No Loan/Assignment will be available by the Corporation to the policyholders under
this plan.
EXCLUSIONS:
Suicide: This policy shall be void if the Life Assured commits suicide (whether
sane or insane at the time) at any time on or after the date on which the risk
under the policy has commenced but before the expiry of one year from the date of
commencement of risk under the policy and the Corporation will not entertain any
claim by virtue of this policy except to the extent of a third party’s bonafide
beneficial interest acquired in the policy for valuable consideration of which
notice has been given in writing to the office in which the policy is being
serviced, at least one calendar month prior to death.
Single Premium
Age at entry Policy Term
10 15 20 25 30 35
20 - - 616.40 523.40 446.50 384.35
25 - 727.30 617.30 525.35 450.30 390.70
30 856.45 728.05 619.25 529.40 457.45 401.85
35 857.10 730.10 623.70 537.50 470.35 420.80
40 858.40 733.85 631.60 550.95 490.95 450.35
45 860.70 740.35 644.15 571.80 522.35 -
50 864.55 750.40 663.30 603.10 - -
55 869.95 764.85 691.20 - - -
60 878.30 787.25 - - - -
65 892.25 - - - - -
Annual Premium
Age at entry Policy Term
5 10 15 20 25 30 35
20 - - - 52.45 40.30 32.35 26.90
25 - - 72.75 52.55 40.55 32.75 27.45
30 - 113.05 72.90 52.90 41.05 33.45 28.40
35 231.90 113.40 73.45 53.60 42.05 34.80 30.15
40 232.35 114.05 74.40 54.95 43.80 37.05 33.05
45 233.05 115.25 76.10 57.15 46.65 40.70 -
50 234.45 117.40 78.85 60.75 51.30 - -
55 236.55 120.45 83.05 66.40 - -
60 239.55 125.40 90.15 - - - -
65 245.00 134.55 - - - - -
BENEFIT ILLUSTRATION
Insurance Regulatory & Development Authority (IRDA) requires all life insurance
companies operating in India to provide official illustrations to their customers.
The illustrations are based on the investment rates of return set by the Life
Insurance Council (constituted under Section 64C(a) of the Insurance Act 1938) and
is not intended to reflect the actual investment returns achieved or may be
achieved in future by Life Insurance Corporation of India (LICI).
For the year 2004-05 the two rates of investment return declared by the Life
Insurance Council are 6% and 10% per annum.
Product summary:
This is a with-profits pension plan which provides for death cover during the
deferment period and on survival to the date of vesting, the maturity proceeds are
compulsorily to be used for purchase of annuity.
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(1) is available on premiums paid under this policy.
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 for cash after the policy is kept in force by
payment of premiums for at least three years. The guaranteed surrender value
available under this plan for all modes, except the single premium mode, will be
equal to 30% of the total amount of premiums paid excluding the first year’s
premium and the extra premiums. In case of single premium mode, The guaranteed
surrender value will be 90% of the premium paid excluding all extra premiums.
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, especially in case of early termination of the policy, the
surrender value payable may be less than the total premium paid.
The Corporation reviews the surrender value payable under its plans from time to
time depending on the economic environment, experience and other factors.
Note: The above is the product summary giving the key features of the plan. This
is for illustrative purpose only. This does not represent a contract and for
details please refer to your policy document. Further, the tax benefits are as per
present Tax Laws.
Benefit Illustration:
Statutory Warning
“Some benefits are guaranteed and some benefits are variable with returns based on
the future performance of your insurer carrying on life insurance business. If
your policy offers guaranteed returns then these will be clearly marked
“guaranteed” in the illustration table on this page. If your policy offers
variable returns then the illustrations on this page will show two different rates
of assumed future investment returns. These assumed rates of return are not
guaranteed and they are not upper or lower limits of what you might get back as
the value of your policy is dependent on a number of factors including future
investment performance.”
Illustration 1:
Age at entry: 35 years
Policy Term: 25 years
Premium paying term: 25 years
Sum Assured (Rs.): 100000
Yearly Premium (Rs.): 4121
End of year Total premiums paid till end of year Benefit payable on death /
Amount available on survival up to the date of vesting for purchase of annuity
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 4,121 1,00,000 0 0 100000 100000
2 8,242 1,05,000 0 0 105000 105000
3 12,363 1,10,000 0 0 110000 110000
4 16,484 1,15,000 0 0 115000 115000
5 20,605 1,20,000 0 0 120000 120000
6 24,726 1,25,000 2300 7300 127300 132300
7 28,847 1,25,000 4600 14600 129600 139600
8 32,968 1,25,000 6900 21900 131900 146900
9 37,089 1,25,000 9200 29200 134200 154200
10 41,210 1,25,000 11500 36500 136500 136500
15 61,815 1,25,000 23000 73000 148000 198000
20 82,420 1,25,000 48500 157500 173500 282500
25 1,03,025 1,25,000 63500 206000 188500 331000
Illustration 2:
Age at entry: 35 years
Policy Term: 25 years
Sum Assured (Rs.): 100000
Single Premium (Rs.): 53750
End of year Total premiums paid till end of year Benefit payable on death /
Amount available on survival up to the date of vesting for purchase of annuity
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 53,750 1,00,000 0 0 100000 100000
2 53,750 1,05,000 0 0 105000 105000
3 53,750 1,10,000 0 0 110000 110000
4 53,750 1,15,000 0 0 115000 115000
5 53,750 1,20,000 0 0 120000 120000
6 53,750 1,25,000 2500 12400 127500 137400
7 53,750 1,25,000 5000 24800 130000 149800
8 53,750 1,25,000 7500 37200 132500 162200
9 53,750 1,25,000 10000 49600 135000 174600
10 53,750 1,25,000 12500 62000 137500 187000
15 53,750 1,25,000 25000 124000 150000 249000
20 53,750 1,25,000 53500 268000 178500 393000
25 53,750 1,25,000 70000 350500 195000 475500
i) This illustration is applicable to a non-smoker male/female standard (from
medical, life style and occupation point of view) life.
ii) The non-guaranteed benefits (1) and (2) in above illustration are calculated
so that they are consistent with the Projected Investment Rate of Return
assumption of 6% p.a.(Scenario 1) and 10% p.a. (Scenario 2) respectively. In
other words, in preparing this benefit illustration, it is assumed that the
Projected Investment Rate of Return that LICI will be able to earn throughout the
term of the policy will be 6% p.a. or 10% p.a., as the case may be. The Projected
Investment Rate of Return is not guaranteed.
iii) The main objective of the illustration is that the client is able to
appreciate the features of the product and the flow of benefits in different
circumstances with some level of quantification.
iv) Future bonus will depend on future profits and as such is not guaranteed.
However, once bonus is declared in any year and added to the policy, the bonus so
added is guaranteed.
v) The Maturity benefit is the amount shown at the end of the Policy term.
UNIT PLANS
Unit plans are investment plans for those who realise the worth of hard-earned
money. These plans help you see your savings yield rich benefits and help you save
tax even if you don't have consistent income.
Market Plus I
Profit Plus
Money Plus-I
SPECIAL PLANS
LIC’s 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!
Jeevan Nischay
Jeevan Saral
Jeevan Madhur
Jeevan Mangal
Age is the main basis of calculation of premium under life insurance policies. The
following are accepted as evidence of age:
• Certified extract from Municipal or Local Body’s records made at the time of
birth.
• Certificate of Baptism or Certified Extract from Family Bible, if it
contains age or date of birth.
• Certified Extract from School or College records, if age or date of birth is
stated therein.
• Certified Extract from Service Register in the case of Govt. employees and
employees of Quasi-Govt. Institutions or
• Passport issued by the Passport Authorities in India.
5.1.2)Payment Of Premium:
• By cash, local cheque (subject to realization of cheque), Demand Draft at
Branch Office.
• The DD and cheques or Money Order may be sent by post.
• You can pay your premiums at any of our Branches as 99% of our Branches are
networked.
• Many Banks do accept standing instructions to remit the premiums. So by
providing a standing instruction to your Bank to debit your account for the
premium amount and send it vide a banker’s cheque to LIC, on the due dates and
months mentioned on your policy bond.
• Through Internet : Payment of premiums can be made through Internet through
Service Providers viz.HDFC Bank, ICICI Bank, Times of Money, Bill Junction, UTI
Bank, Bank of Punjab, Citibank, Corporation Bank, Federal Bank and BillDesk.
• Premium payment can also be made through ATMs of Corporation Bank and UTI
Bank.
• Premium payment can also be made through Electronic Clearing Service (ECS)
which has been launched at Mumbai, Hyderabad, Chennai, Kolkata, New Delhi, Kanpur,
Bangalore, Vijaywada, Patna, Jaipur, Chandigarh, Trivandrum, Ahmedabad, Pune, Goa
and Nagpur, Secunderabad & Visakhapatnam. A policyholder having an account in any
Bank which is a Member of the local Clearing House can opt for ECS debit to pay
premiums. The policyholders wishing to use this system would have to fill up a
Mandate Form available at our Branches/DO and get it certified by the Bank. The
certified Mandate Forms are to be submitted to our BO/DO.
Policy can be anywhere in India.
• Citibank Kiosks at Industrial Assurance Building, Churchgate, New India
Building, Santacruz, Jeevan Shikha Building, Borivili are dedicated for collection
of premiums through cheques.
5.1.3)Days Of Grace:
• Policyholder should pay the premiums on due dates. However, a grace period
of one month but not less than 30 days will be allowed for payment of yearly/half-
yearly/quarterly premiums and 15 days for monthly premiums.
• When the days of grace expire on a Sunday or a public holiday, the premium
may be paid on the following working day to keep the policy in force.
• If the premium is not paid before the expiry of the days of grace, the
policy lapses.
5.1.4)Revival Of Lapsed Policy:
• If the policy has lapsed, it can be revived during the life time of the life
assured, within a period of five years from the date of the first unpaid premium
but before the date of maturity subject to certain conditions.
• The Corporation offers three convenient schemes of revival viz., Ordinary
Revival, Special Revival and Installment Revival. Policies can also be revived
under Loan-cum-Revival and SB-cum-Revival schemes.
• Request for revival may be made to the Branch Office servicing the policy.
Change Of Address And Transfer Of Policy Records:
• 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.
5.1.5)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.
5.1.6)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.
5.1.7)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.
5.1.8)Nomination:
• 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 assured’s 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.
5.1.9)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 become 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.
5.1.10)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.
5.1.11)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. Claimant’s 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.
5.1.12)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.
5.1.13)Insurance Ombudsman:
• The Grievance Redressal Machinery has been further expanded with the
appointment of Insurance Ombudsman at different centers by the Government of
India. At present there are 12 centres operating all over the country.
• Following type of complaints fall within the purview of the Ombdusman
a) any partial or total repudiation of claims by an insurer;
b) any dispute in regard to premiums paid if payable in terms of the policy;
c) any dispute on the legal construction of the policies in so far as such
disputes relate to claims;
d) delay in settlement of claims;
e)non-issue of any insurance document to customers after receipt of premium.
• Policyholder can approach the Insurance Ombudsman for the redressal of their
complaints free of cost.
5.1.14)Initiatives In Policy Servicing Areas:
• All 2048 Branches of LIC are fully computerized covering all policy
servicing aspects to give prompt computerized services from new policy
introduction, acceptance of renewal premium, revivals, loans, etc to final claims
settlement.
• Green Channel facility has been introduced for the speedy completion of
proposals.
• Payment of premiums can be made through internet through service providers,
viz., HDFC Bank, ICICI Bank, Times of money, Bill Junction, UTI Bank, Bank of
Punjab,Citi Bank, Corporation Bank, Federal Bank and Billdesk.
5.1.15)Grievance Redressal Machinery:
• A machinery for redressal of policyholders? grievances exist in all the
offices of the Corporation. These are headed by designated Officers who are
available at their respective Offices every Monday between 2.30 pm and 4.30 pm.
except holidays. Policyholder can approach these officers to get their grievances
redressed.
• The Designated Officers at the various offices of the Corporation are :
At Branch Office --- Sr./Branch Manager
At Divisional Office --- Marketing Manager
At Zonal Office --- Regional Manager (Mktg)
At Central Office --- Executive Director (Mktg/IO/CRM)
5.1.17)Citizens’ Charter:
• Citizens' Charter was presented to the Nation in November, 1997. In the
Charter the bench marks were prescribed for 30 servicing areas.
1964 saw the introduction of computers in LIC. Unit Record Machines introduced in
late 1950’s were phased out in 1980’s and replaced by Microprocessors based
computers in Branch and Divisional Offices for Back Office Computerization.
Standardization of Hardware and Software commenced in 1990’s. Standard Computer
Packages were developed and implemented for Ordinary and Salary Savings Scheme
(SSS) Policies.
6.9)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 enable to provide policy
details and accept premium payments.
6.10)INFO CENTRES
We have also set up 8 call centres, manned by skilled employees to provide you
with information about our Products, Policy Services, Branch addresses and other
organizational information.
AWARDS
World Brand Congress Award OUTLOOK MONEY -- NDTV PROFIT AWARD 2009 in
" BEST LIFE INSURER CATEGORY "
NDTV PROFIT BUSSINESS LEADERSHIP, AWARDS 2009 CNBC AWAAZ CONSUMER AWARD 2009 for
" Most preferred insurance company "
ASIA PACIFIC HRM Congress, 2009 Award for INNOVATIVE HR PRACTICES Brand Equity
Most Trusted Brand 2009 Top in Insurance Category
Golden Peacock Innovative Product / Service Award - 2009 Loyalty Award - 2009
Reader's Digest Trusted Brand Award, 2009 ( Platinum category ) CNBC Awaaz
Consumer Awards 2008
NDTV Profit Business Leadership Award 2008 INDY's Silver Award for Best
Corporate Film
HONOURED BY YOU
Dr.Manmohan Singh
Prime Minister of India
Shri.P.Chidambaram
Union Finance Minister
“In the year 1956, 245 Indian and foreign companies were nationalized and today,
the three letters ‘LIC’, stands as a synonym for insurance, for services, for
excellence in strengthening the economic fibre of this country. I dare to say that
no other three letters taken together are more recognised to the length and
breadth of India than LIC.”
“The performance figures of LIC give an indication why LIC is dear to us, why LIC
is a Jewel in our crown and why we will continue to nurture LIC and grow it into a
great organization rendering service to the people of India.”
“LIC’s footprints are now to be found in many other countries in the world.
Wherever Indians go - and they go everywhere now, wherever Indians are welcome -
and they are welcome in every part of the world, wherever Indians settle down –
they have found many new homes, wherever Indians excel – and they excel in every
walk of life, they want LIC – they want LIC to protect them, to look after their
savings, and provide for protection as well as their retirement.”
P. Chidambaram
Union Finance Minister
Excerpts from speeches at the inaugural function of LIC’s Golden Jubilee
Celebrations.
Lucknow, September 1, 2005.
CONCLUSION
WWW.LICINDIA.COM
WWW.HK-FD.COM
WWW.GOOGLE.CO.IN
http://realneo.us/system/files/Ag-show-hail-insurance
9.2)REPORTS:-
1.1)INTRODUCTION
Insurance is a cover used for protecting oneself from the risk of a financial
loss. It is important to understand that risk is a part of any person’s life and
that it increases as a person increases in age, responsibility and wealth.
Insurance is risk coverage against financial losses and should not be taken as an
investment instrument.
There are mainly two parties involved in this – the insurer and the insured. The
insurer is the insurance company who will provide the cover to the insured against
any financial losses. The insured may be an individual person or a group of people
like an employer, members of a society, etc.
A policy is the contract between the insurer and the insured, which states the
risks covered, the exclusions, if any, and the benefits reimbursed on the
happening of an event like death, illness etc. The policy is paid through what is
called a premium, which is a set amount that must be paid by the insured on a
monthly, semi-annual or annual basis. On the happening of an event like death,
disability, fire, etc, for which the insured is covered, the benefit amount stated
in the policy contract can be claimed by the insured.
1.2)Classification of Insurance
There are mainly two broad classes of Insurance – Life and Non Life.
• Life insurance products include Term Life policies, which give a pure risk
coverage of only the death benefit, whereas endowment or money back policies have
a risk as well as savings component i.e. death as well as maturity benefit. Also
coming under the life insurance umbrella are the Unit – Linked Policies in which
there is a risk component and a savings component, which is invested in equity,
debt or gilt funds, depending on the insurance company.
• Non Life insurance products include property or casualty, health insurance
or house, fire, marine insurance etc. This insurance class deals with all the non-
life aspects of an insured like his/her house, health, land, office, cargo, etc
which might bring financial loss.
1.3)WHAT IS INSURANCE
Insurance is a form of risk management in which the insured transfers the cost of
potential loss to another entity in exchange for monetary compensation known as
the premium. (For background reading, see The History Of Insurance In America.)
Insurance works by pooling risk.What does this mean? It simply means that a large
group of people who want to insure against a particular loss pay their premiums
into what we will call the insurance bucket, or pool. Because the number of
insured individuals is so large, insurance companies can use statistical analysis
to project what their actual losses will be within the given class. They know that
not all insured individuals will suffer losses at the same time or at all. This
allows the insurance companies to operate profitably and at the same time pay for
claims that may arise. For instance, most people have auto insurance but only a
few actually get into an accident. You pay for the probability of the loss and for
the protection that you will be paid for losses in the event they occur.
1.4.2)Risks
Life is full of risks - some are preventable or can at least be minimized, some
are avoidable and some are completely unforeseeable. What's important to know
about risk when thinking about insurance is the type of risk, the effect of that
risk, the cost of the risk and what you can do to mitigate the risk. Let's take
the example of driving a car. (For more insight on the concept of risk, see
Determining Risk And The Risk Pyramid.)
1.4.3)Type of risk: Bodily injury, total loss of vehicle, having to fix your car
The effect: Spending time in the hospital, having to rent a car and having to make
car payments for a car that no longer exists
1.5)TYPES OF INSURANCE
2.1)Brief History Of LIC
The story of insurance is probably as old as the story of mankind. The same
instinct that prompts modern businessmen today to secure themselves against loss
and disaster existed in primitive men also. They too sought to avert the evil
consequences of fire and flood and loss of life and were willing to make some sort
of sacrifice in order to achieve security. Though the concept of insurance is
largely a development of the recent past, particularly after the industrial era –
past few centuries – yet its beginnings date back almost 6000 years.
Life Insurance in its modern form came to India from England in the year 1818.
Oriental Life Insurance Company started by Europeans in Calcutta was the first
life insurance company on Indian Soil. All the insurance companies established
during that period were brought up with the purpose of looking after the needs of
European community and Indian natives were not being insured by these companies.
However, later with the efforts of eminent people like Babu Muttylal Seal, the
foreign life insurance companies started insuring Indian lives. But Indian lives
were being treated as sub-standard lives and heavy extra premiums were being
charged on them. Bombay Mutual Life Assurance Society heralded the birth of first
Indian life insurance company in the year 1870, and covered Indian lives at normal
rates. Starting as Indian enterprise with highly patriotic motives, insurance
companies came into existence to carry the message of insurance and social
security through insurance to various sectors of society. Bharat Insurance Company
(1896) was also one of such companies inspired by nationalism. The Swadeshi
movement of 1905-1907 gave rise to more insurance companies. The United India in
Madras, National Indian and National Insurance in Calcutta and the Co-operative
Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative
Insurance Company took its birth in one of the rooms of the Jorasanko, house of
the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General
Assurance and Swadeshi Life (later Bombay Life) were some of the companies
established during the same period. Prior to 1912 India had no legislation to
regulate insurance business. In the year 1912, the Life Insurance Companies Act,
and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912
made it necessary that the premium rate tables and periodical valuations of
companies should be certified by an actuary. But the Act discriminated between
foreign and Indian companies on many accounts, putting the Indian companies at a
disadvantage.
The first two decades of the twentieth century saw lot of growth in insurance
business. From 44 companies with total business-in-force as Rs.22.44 crore, it
rose to 176 companies with total business-in-force as Rs.298 crore in 1938. During
the mushrooming of insurance companies many financially unsound concerns were also
floated which failed miserably. The Insurance Act 1938 was the first legislation
governing not only life insurance but also non-life insurance to provide strict
state control over insurance business. The demand for nationalization of life
insurance industry was made repeatedly in the past but it gathered momentum in
1944 when a bill to amend the Life Insurance Act 1938 was introduced in the
Legislative Assembly. However, it was much later on the 19th of January, 1956,
that life insurance in India was nationalized. About 154 Indian insurance
companies, 16 non-Indian companies and 75 provident were operating in India at the
time of nationalization. Nationalization was accomplished in two stages; initially
the management of the companies was taken over by means of an Ordinance, and
later, the ownership too by means of a comprehensive bill. The Parliament of India
passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life
Insurance Corporation of India was created on 1st September, 1956, with the
objective of spreading life insurance much more widely and in particular to the
rural areas with a view to reach all insurable persons in the country, providing
them adequate financial cover at a reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from
its corporate office in the year 1956. Since life insurance contracts are long
term contracts and during the currency of the policy it requires a variety of
services need was felt in the later years to expand the operations and place a
branch office at each district headquarter. re-organization of LIC took place and
large numbers of new branch offices were opened. As a result of re-organisation
servicing functions were transferred to the branches, and branches were made
accounting units. It worked wonders with the performance of the corporation. It
may be seen that from about 200.00 crores of New Business in 1957 the corporation
crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for
LIC to cross 2000.00 crore mark of new business. But with re-organisation
happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore
Sum Assured on new policies.
Today LIC functions with 2048 fully computerized branch offices, 100 divisional
offices, 7 zonal offices and the Corporate office. LIC’s Wide Area Network covers
100 divisional offices and connects all the branches through a Metro Area Network.
LIC has tied up with some Banks and Service providers to offer on-line premium
collection facility in selected cities. LIC’s ECS and ATM premium payment facility
is an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info
Centres have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai,
Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of
providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK
offices. The satellite offices are smaller, leaner and closer to the customer. The
digitalized records of the satellite offices will facilitate anywhere servicing
and many other conveniences in the future.
LIC continues to be the dominant life insurer even in the liberalized scenario of
Indian insurance and is moving fast on a new growth trajectory surpassing its own
past records. LIC has issued over one crore policies during the current year. It
has crossed the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005,
posting a healthy growth rate of 16.67% over the corresponding period of the
previous year.
From then to now, LIC has crossed many milestones and has set unprecedented
performance records in various aspects of life insurance business. The same
motives which inspired our forefathers to bring insurance into existence in this
country inspire us at LIC to take this message of protection to light the lamps of
security in as many homes as possible and to help the people in providing security
to their families.
2.2)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 nationalised. 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.
2.4)OBJECTIVE OF LIC
• Spread Life Insurance widely and in particular to the rural areas and to the
socially and economically backward classes with a view to reaching all insurable
persons in the country and providing them adequate financial cover against death
at a reasonable cost.
• Maximize mobilization of people's savings by making insurance-linked savings
adequately attractive.
• Bear in mind, in the investment of funds, the primary obligation to its
policyholders, whose money it holds in trust, without losing sight of the interest
of the community as a whole; the funds to be deployed to the best advantage of the
investors as well as the community as a whole, keeping in view national priorities
and obligations of attractive return.
• Conduct business with utmost economy and with the full realization that the
moneys belong to the policyholders.
• Act as trustees of the insured public in their individual and collective
capacities.
• Meet the various life insurance needs of the community that would arise in
the changing social and economic environment.
• Involve all people working in the Corporation to the best of their
capability in furthering the interests of the insured public by providing
efficient service with courtesy.
• Promote amongst all agents and employees of the Corporation a sense of
participation, pride and job satisfaction through discharge of their duties with
dedication towards achievement of Corporate Objective.
2.5)MISSION/VISION
2.5.1)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."
2.5.2)Vision
"A trans-nationally competitive financial conglomerate of significance to
societies and Pride of India."
2.6)BORD OF DIRECTORS
In our country, which is one of the most populated in the world, the prominence of
insurance is not as widely understood, as it ought to be. What follows is an
attempt to acquaint readers with some of the concepts of life insurance, with
special reference to LIC.
For more details, please contact our branch or divisional office. Any LIC Agent
will be glad to help you choose the life insurance plan to meet your needs and
render policy servicing.
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.
3.3.1)Protection:
Savings through life insurance guarantee full protection against risk of death of
the saver. Also, in case of demise, life insurance assures payment of the entire
amount assured (with bonuses wherever applicable) whereas in other savings
schemes, only the amount saved (with interest) is payable.
3.3.3)Aid To Thrift:
Life insurance encourages 'thrift'. It allows long-term savings since payments can
be made effortlessly because of the 'easy instalment' 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.
3.3.4)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.
3.3.5)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.
Assessees 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.
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.
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.
In 'without' profit plan the contracted amount is paid without any addition. The
premium rate charged for a 'with' profit policy is therefore higher than for a
'without' profit policy.
3.3.11)Keyman Insurance
INSURANCE PLANS
As individuals it is inherent to differ. Each individual?s insurance needs and
requirements are different from that of the others. LIC?s Insurance Plans are
policies that talk to you individually and give you the most suitable options that
can fit your requirement.
Jeevan Anurag
Komal Jeevan
Marriage Endowment Or
Educational Annuity Plan
Jeevan Chhaya
Jeevan Aadhar
Jeevan Vishwas
Jeevan Anand
Jeevan Amrit
Jeevan Shree-I
Jeevan Pramukh
Bima Bachat
Jeevan Bharati - I
Jeevan Anand
Jeevan Tarang
Two Year Temporary Assurance Policy
Anmol Jeevan-I
Amulya Jeevan-I
Jeevan Saathi
Jeevan Bharati - I
FEATURES:-
Introduction
LIC’s Jeevan Bharati-I – is a plan exclusively for women. It is a with profit plan
having special features considering the needs of women. The plan also provides for
Accident Benefit, Critical Illness Benefit and Congenital Disability Benefit as
optional Riders
1. SPECIAL FEATURES
4. Auto Cover::
After two years premiums have been paid, whenever premium payment is discontinued,
the life cover for full sum assured will continue for 3 years from the due date of
first unpaid premium.
If death occurs during the Auto Cover period, then death benefit after deducting
unpaid premiums, with interest is payable along with the vested bonus, if any.
2. OPTIONAL RIDERS:
The following riders are available under this plan:
If any survival benefit falls due during the above 3-year auto cover period the
same will be paid after deduction of unpaid premiums with interest until the due
date of the survival benefit, provided it is more than the unpaid premiums with
interest. If the survival benefit is insufficient to cover the arrears of premiums
with interest up to the due date of such survival benefit, then the survival
benefit will be payable only on payment of such arrears of premiums with
interest , during the period of the aforesaid 3 years or on revival of the policy
thereafter.
(ii) If Critical Illness Rider is opted for:
During the auto cover period, the policy can be revived by payment of full arrears
of premium together with interest and subject to submission of proof of continued
insurability of the Life Assured to the satisfaction of the Corporation. The
Corporation reserves the right to accept at original terms, accept at revised
terms or decline the revival of the policy. The revival of the policy shall take
effect only after the same is approved by the Corporation and is specifically
communicated to the Life Assured.
If any survival benefit falls due during the above 3-year auto cover period the
same will be paid only after revival of the policy as stated above.
The policy thereafter shall be free from all liabilities for payment of the
premiums, but shall not be entitled to the future bonuses. The existing vested
reversionary bonuses, if any, will remain attached to the reduced paid-up Policy.
This paid up value shall be payable on the date of maturity or at Life Assured’s
prior death. No survival benefit shall be payable under paid up policies.
The rider benefits will cease to apply if the policy is in lapsed condition and
will not acquire any paid up value.
10. SURRENDER VALUE:
The Guaranteed Surrender value will be available after the expiry of 3 policy
years provided the premiums have been paid for at least three years. The
Guaranteed Surrender Value is equal to 30% of the total amount of premiums paid
excluding the premiums paid for the first year, any premiums paid towards riders,
all extra premiums that may have been paid less the amount of survival benefits
paid earlier. The cash value of any existing bonuses, if ,any will also be paid .
Corporation may, however, pay special surrender value as the discounted value of
Paid up sum assured and vested bonus, if any, as applicable on date of surrender,
provided the same is higher than guaranteed surrender value.
11. EXCLUSIONS:
Suicide: This policy shall be void if the Life Assured commits suicide (whether
sane or insane at that time) at any time on or after the date on which the risk
under the policy has commenced but before the expiry of one year from the date of
commencement of risk under the policy and the Corporation will not entertain any
claim by virtue of this policy except to the extent of a third party’s bonafide
beneficial interest acquired in the policy for valuable consideration of which
notice has been given in writing to the branch where the Policy is being presently
serviced (where the policy records are kept), at least one calendar month prior to
death.
12. COOLING OFF PERIOD:
If you are not satisfied with the “Terms and Conditions” of the policy, you may
return the policy to us within 15 days.
BENEFITS
A. Survival Benefits:
On Survival the following benefits are payable:
End
of
Year Total premiums paid till end of year Death Benefit during the year
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 6345 100000 2200 4500 102200 104500
2 12690 100000 4400 9000 104400 109000
3 19035 100000 6600 13500 106600 113500
4 25380 100000 8800 18000 108800 118000
5 31725 100000 11000 22500 111000 122500
6 38070 100000 13200 27000 113200 127000
7 44415 100000 15400 31500 115400 131500
8 50760 100000 17600 36000 117600 136000
9 57105 100000 19800 40500 119800 140500
10 63450 100000 22000 45000 122000 145000
15 95175 100000 36667 75000 136667 175000
20 126900 100000 48900 100000 148900 200000
End
of
Year Total premiums paid till end of year BENEFIT ON SURVIVAL / MATURITY AT
THE END OF YEAR
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 6345 0 0 0 0 0
2 12690 0 0 0 0 0
3 19035 0 0 0 0 0
4 25380 0 0 0 0 0
5 31725 20000 0 0 20000 20000
6 38070 0 0 0 0 0
7 44415 0 0 0 0 0
8 50760 0 0 0 0 0
9 57105 0 0 0 0 0
10 63450 20000 0 0 20000 20000
15 95175 20000 0 0 20000 20000
20 126900 40000 48900 100000 88900 140000
Note: i)his illustration is applicable to a standard (from medical, life style and
occupation point of view) life.
i) The non-guaranteed benefits (1) and (2) in above illustration are calculated so
that they are consistent with the Projected Investment Rate of Return assumption
of 6% p.a.(Scenario 1) and 10% p.a. (Scenario 2) respectively. In other words, in
preparing this benefit illustration, it is assumed that the Projected Investment
Rate of Return that LICI will be able to earn throughout the term of the policy
will be 6% p.a. or 10% p.a., as the case may be. The Projected Investment Rate of
Return is not guaranteed.
Section 45 of Insurance Act, 1938:
No policy of life insurance shall after the expiry of two years from the date on
which it was effected, be called in question by an insurer on the ground that a
statement made in the proposal for insurance or in any report of a medical
officer, or referee, or friend of the insured, or in any other document leading to
the issue of the policy, was inaccurate or false, unless the insurer shows that
such statement was on a material matter or suppressed facts which it was material
to disclose and that it was fraudulently made by the policyholder and that the
policyholder knew at the time of making it that the statement was false or that it
suppressed facts which it was material to disclose. Provided that nothing in this
section shall prevent the insurer from calling for proof of age at any time if he
is entitled to do so, and no policy shall be deemed to be called in question
merely because the terms of the policy are adjusted on subsequent proof that the
age of the life assured was incorrectly stated in the proposal.
PENSION PLAN
Pension Plans are Individual Plans that gaze into your future and foresee
financial stability during your old age. These policies are most suited for senior
citizens and those planning a secure future, so that you never give up on the best
things in life.
Jeevan Nidhi
Jeevan Akshay-VI
Jeevan Nidhi
FEATURE
LIC's JEEVAN NIDHI is a with profits Deferred Annuity (Pension) plan. On survival
of the policyholder beyond term of the policy the accumulated amount (i.e. Sum
Assured + Guaranteed Additions + Bonuses) is used to generate a pension (annuity)
for the policyholder. The plan also provides a risk cover during the deferment
period. The USP of the plan being the pension can commence at 40 years. The
premiums paid are exempt under Section 80CCC of Income Tax Act.
Salient Features:
a . Guaranteed Additions: Guaranteed Additions @ Rs.50/- per thousand Sum assured
for each completed year, for the first five years.
c. Benefit On Vesting:
1. Option to commute up to 1/3rd of the amount available on vesting, which shall
include the Sum Assured under the Basic Plan together with accrued Guaranteed
Additions, simple Reversionary Bonuses and Terminal Bonus, if any.
Currently the following options are available under LIC’s immediate annuities:
1. Annuity for life: The annuity is paid to the life assured as long as he/she is
alive.
2. Annuity Guaranteed for certain periods: The annuity is paid to the life assured
for periods of 5 or 10 or 15 or 20 years as chosen by him/her, whether or not
he/she survives that period. After the chosen period, the annuity is paid to the
life assured as long as he/she is alive.
3. Annuity with return of purchase price on death: The annuity is paid to the life
assured as long as he/she is alive. On the death of the life assured, the purchase
price of the annuity is paid as death benefit. The purchase price includes the Sum
Assured under the Basic Plan, the accrued Guaranteed Additions and any accrued
bonuses, excluding the commuted value, if any.
4. Increasing annuity: The annuity is paid to the life assured as long as he/she
is alive. The amount of annuity increases every year at a simple rate of 3% per
annum.
5. Joint Life Last Survivor Annuity: The annuity is paid to the life assured as
long as he/she is alive. On death of the life assured, 50% of the annuity is
payable to the nominated spouse as long as the spouse is alive.
e. Death Benefit on death before annuity vests: On the death of the Life Assured
during the deferment period of the policy, i.e. before the annuity vests, an
amount equal to the Sum Assured under the Basic plan along with the accrued
Guaranteed Additions, simple Reversionary Bonuses and Terminal Bonus, if any, will
be paid in a lump sum to the appointed nominee, provided the policy is in force
for full Sum Assured. Nominee will also have the option to purchase an annuity
with this amount.
BENEFITS:-
Eligibility Conditions And Other Restrictions Under This Plan:
Rebates:
f. Grace Period:
A grace period of 30 days will be available for payment of yearly, half-yearly or
quarterly premiums and 15 days for monthly premiums.
h. Paid-up Value:
The policy will acquire paid-up value after at least 3 full year’s premiums have
been paid.
j. Revival: The policyholder can revive his lapsed policy by paying arrears of
premium together with interest within a period of five years from the date of
first unpaid premium subject to satisfactory evidence of health. The rate of
interest for this purpose will be decided by the Corporation from time to time.
The present rate of interest is 9% pa.
k. Options:
Accidental Death and Disability Benefit:
In case of death due to accident (within 180 days) an additional amount equal to
the Accident Benefit Sum assured will be payable. In case of Total and Permanent
disability arising due to accident an amount equal to accident benefit sum assured
will be payable over a period of 10 years in monthly instalments. However, the
payment of accident benefit will be subject to an overall limit of Rs.25 lakh
under all policies of the Life Assured with the Corporation taken together.
The disability due to accident should be total and such that the Life Assured is
unable to carry out any work to earn a living. Following disabilities due to
accident are also covered -
Loan / Assignment:
No Loan/Assignment will be available by the Corporation to the policyholders under
this plan.
EXCLUSIONS:
Suicide: This policy shall be void if the Life Assured commits suicide (whether
sane or insane at the time) at any time on or after the date on which the risk
under the policy has commenced but before the expiry of one year from the date of
commencement of risk under the policy and the Corporation will not entertain any
claim by virtue of this policy except to the extent of a third party’s bonafide
beneficial interest acquired in the policy for valuable consideration of which
notice has been given in writing to the office in which the policy is being
serviced, at least one calendar month prior to death.
Single Premium
Age at entry Policy Term
10 15 20 25 30 35
20 - - 616.40 523.40 446.50 384.35
25 - 727.30 617.30 525.35 450.30 390.70
30 856.45 728.05 619.25 529.40 457.45 401.85
35 857.10 730.10 623.70 537.50 470.35 420.80
40 858.40 733.85 631.60 550.95 490.95 450.35
45 860.70 740.35 644.15 571.80 522.35 -
50 864.55 750.40 663.30 603.10 - -
55 869.95 764.85 691.20 - - -
60 878.30 787.25 - - - -
65 892.25 - - - - -
Annual Premium
Age at entry Policy Term
5 10 15 20 25 30 35
20 - - - 52.45 40.30 32.35 26.90
25 - - 72.75 52.55 40.55 32.75 27.45
30 - 113.05 72.90 52.90 41.05 33.45 28.40
35 231.90 113.40 73.45 53.60 42.05 34.80 30.15
40 232.35 114.05 74.40 54.95 43.80 37.05 33.05
45 233.05 115.25 76.10 57.15 46.65 40.70 -
50 234.45 117.40 78.85 60.75 51.30 - -
55 236.55 120.45 83.05 66.40 - -
60 239.55 125.40 90.15 - - - -
65 245.00 134.55 - - - - -
BENEFIT ILLUSTRATION
Insurance Regulatory & Development Authority (IRDA) requires all life insurance
companies operating in India to provide official illustrations to their customers.
The illustrations are based on the investment rates of return set by the Life
Insurance Council (constituted under Section 64C(a) of the Insurance Act 1938) and
is not intended to reflect the actual investment returns achieved or may be
achieved in future by Life Insurance Corporation of India (LICI).
For the year 2004-05 the two rates of investment return declared by the Life
Insurance Council are 6% and 10% per annum.
Product summary:
This is a with-profits pension plan which provides for death cover during the
deferment period and on survival to the date of vesting, the maturity proceeds are
compulsorily to be used for purchase of annuity.
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(1) is available on premiums paid under this policy.
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 for cash after the policy is kept in force by
payment of premiums for at least three years. The guaranteed surrender value
available under this plan for all modes, except the single premium mode, will be
equal to 30% of the total amount of premiums paid excluding the first year’s
premium and the extra premiums. In case of single premium mode, The guaranteed
surrender value will be 90% of the premium paid excluding all extra premiums.
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, especially in case of early termination of the policy, the
surrender value payable may be less than the total premium paid.
The Corporation reviews the surrender value payable under its plans from time to
time depending on the economic environment, experience and other factors.
Note: The above is the product summary giving the key features of the plan. This
is for illustrative purpose only. This does not represent a contract and for
details please refer to your policy document. Further, the tax benefits are as per
present Tax Laws.
Benefit Illustration:
Statutory Warning
“Some benefits are guaranteed and some benefits are variable with returns based on
the future performance of your insurer carrying on life insurance business. If
your policy offers guaranteed returns then these will be clearly marked
“guaranteed” in the illustration table on this page. If your policy offers
variable returns then the illustrations on this page will show two different rates
of assumed future investment returns. These assumed rates of return are not
guaranteed and they are not upper or lower limits of what you might get back as
the value of your policy is dependent on a number of factors including future
investment performance.”
Illustration 1:
Age at entry: 35 years
Policy Term: 25 years
Premium paying term: 25 years
Sum Assured (Rs.): 100000
Yearly Premium (Rs.): 4121
End of year Total premiums paid till end of year Benefit payable on death /
Amount available on survival up to the date of vesting for purchase of annuity
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 4,121 1,00,000 0 0 100000 100000
2 8,242 1,05,000 0 0 105000 105000
3 12,363 1,10,000 0 0 110000 110000
4 16,484 1,15,000 0 0 115000 115000
5 20,605 1,20,000 0 0 120000 120000
6 24,726 1,25,000 2300 7300 127300 132300
7 28,847 1,25,000 4600 14600 129600 139600
8 32,968 1,25,000 6900 21900 131900 146900
9 37,089 1,25,000 9200 29200 134200 154200
10 41,210 1,25,000 11500 36500 136500 136500
15 61,815 1,25,000 23000 73000 148000 198000
20 82,420 1,25,000 48500 157500 173500 282500
25 1,03,025 1,25,000 63500 206000 188500 331000
Illustration 2:
Age at entry: 35 years
Policy Term: 25 years
Sum Assured (Rs.): 100000
Single Premium (Rs.): 53750
End of year Total premiums paid till end of year Benefit payable on death /
Amount available on survival up to the date of vesting for purchase of annuity
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 53,750 1,00,000 0 0 100000 100000
2 53,750 1,05,000 0 0 105000 105000
3 53,750 1,10,000 0 0 110000 110000
4 53,750 1,15,000 0 0 115000 115000
5 53,750 1,20,000 0 0 120000 120000
6 53,750 1,25,000 2500 12400 127500 137400
7 53,750 1,25,000 5000 24800 130000 149800
8 53,750 1,25,000 7500 37200 132500 162200
9 53,750 1,25,000 10000 49600 135000 174600
10 53,750 1,25,000 12500 62000 137500 187000
15 53,750 1,25,000 25000 124000 150000 249000
20 53,750 1,25,000 53500 268000 178500 393000
25 53,750 1,25,000 70000 350500 195000 475500
ii) The non-guaranteed benefits (1) and (2) in above illustration are calculated
so that they are consistent with the Projected Investment Rate of Return
assumption of 6% p.a.(Scenario 1) and 10% p.a. (Scenario 2) respectively. In
other words, in preparing this benefit illustration, it is assumed that the
Projected Investment Rate of Return that LICI will be able to earn throughout the
term of the policy will be 6% p.a. or 10% p.a., as the case may be. The Projected
Investment Rate of Return is not guaranteed.
iii) The main objective of the illustration is that the client is able to
appreciate the features of the product and the flow of benefits in different
circumstances with some level of quantification.
iv) Future bonus will depend on future profits and as such is not guaranteed.
However, once bonus is declared in any year and added to the policy, the bonus so
added is guaranteed.
v) The Maturity benefit is the amount shown at the end of the Policy term.
UNIT PLANS
Unit plans are investment plans for those who realise the worth of hard-earned
money. These plans help you see your savings yield rich benefits and help you save
tax even if you don't have consistent income.
Market Plus I
Profit Plus
Money Plus-I
SPECIAL PLANS
LIC’s 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!
Jeevan Nischay
New Bima Gold
Jeevan Saral
Jeevan Madhur
Jeevan Mangal
4.1)INCOME-TAX AND TAX BENEFITS FROM LIFE INSURANCE
Age is the main basis of calculation of premium under life insurance policies. The
following are accepted as evidence of age:
• Certified extract from Municipal or Local Body’s records made at the time of
birth.
• Certificate of Baptism or Certified Extract from Family Bible, if it
contains age or date of birth.
• Certified Extract from School or College records, if age or date of birth is
stated therein.
• Certified Extract from Service Register in the case of Govt. employees and
employees of Quasi-Govt. Institutions or
• Passport issued by the Passport Authorities in India.
5.1.2)Payment Of Premium:
• By cash, local cheque (subject to realization of cheque), Demand Draft at
Branch Office.
• The DD and cheques or Money Order may be sent by post.
• You can pay your premiums at any of our Branches as 99% of our Branches are
networked.
• Many Banks do accept standing instructions to remit the premiums. So by
providing a standing instruction to your Bank to debit your account for the
premium amount and send it vide a banker’s cheque to LIC, on the due dates and
months mentioned on your policy bond.
• Through Internet : Payment of premiums can be made through Internet through
Service Providers viz.HDFC Bank, ICICI Bank, Times of Money, Bill Junction, UTI
Bank, Bank of Punjab, Citibank, Corporation Bank, Federal Bank and BillDesk.
• Premium payment can also be made through ATMs of Corporation Bank and UTI
Bank.
• Premium payment can also be made through Electronic Clearing Service (ECS)
which has been launched at Mumbai, Hyderabad, Chennai, Kolkata, New Delhi, Kanpur,
Bangalore, Vijaywada, Patna, Jaipur, Chandigarh, Trivandrum, Ahmedabad, Pune, Goa
and Nagpur, Secunderabad & Visakhapatnam. A policyholder having an account in any
Bank which is a Member of the local Clearing House can opt for ECS debit to pay
premiums. The policyholders wishing to use this system would have to fill up a
Mandate Form available at our Branches/DO and get it certified by the Bank. The
certified Mandate Forms are to be submitted to our BO/DO.
Policy can be anywhere in India.
• Citibank Kiosks at Industrial Assurance Building, Churchgate, New India
Building, Santacruz, Jeevan Shikha Building, Borivili are dedicated for collection
of premiums through cheques.
5.1.3)Days Of Grace:
• Policyholder should pay the premiums on due dates. However, a grace period
of one month but not less than 30 days will be allowed for payment of yearly/half-
yearly/quarterly premiums and 15 days for monthly premiums.
• When the days of grace expire on a Sunday or a public holiday, the premium
may be paid on the following working day to keep the policy in force.
• If the premium is not paid before the expiry of the days of grace, the
policy lapses.
5.1.4)Revival Of Lapsed Policy:
• If the policy has lapsed, it can be revived during the life time of the life
assured, within a period of five years from the date of the first unpaid premium
but before the date of maturity subject to certain conditions.
• The Corporation offers three convenient schemes of revival viz., Ordinary
Revival, Special Revival and Installment Revival. Policies can also be revived
under Loan-cum-Revival and SB-cum-Revival schemes.
• Request for revival may be made to the Branch Office servicing the policy.
Change Of Address And Transfer Of Policy Records:
• 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.
5.1.5)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.
5.1.6)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.
5.1.7)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.
5.1.8)Nomination:
• 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 assured’s 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.
5.1.9)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 become 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.
5.1.10)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.
5.1.11)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. Claimant’s 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.
5.1.12)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.
5.1.13)Insurance Ombudsman:
• The Grievance Redressal Machinery has been further expanded with the
appointment of Insurance Ombudsman at different centers by the Government of
India. At present there are 12 centres operating all over the country.
• Following type of complaints fall within the purview of the Ombdusman
a) any partial or total repudiation of claims by an insurer;
b) any dispute in regard to premiums paid if payable in terms of the policy;
c) any dispute on the legal construction of the policies in so far as such
disputes relate to claims;
d) delay in settlement of claims;
e)non-issue of any insurance document to customers after receipt of premium.
• Policyholder can approach the Insurance Ombudsman for the redressal of their
complaints free of cost.
5.1.14)Initiatives In Policy Servicing Areas:
• All 2048 Branches of LIC are fully computerized covering all policy
servicing aspects to give prompt computerized services from new policy
introduction, acceptance of renewal premium, revivals, loans, etc to final claims
settlement.
• Green Channel facility has been introduced for the speedy completion of
proposals.
• Payment of premiums can be made through internet through service providers,
viz., HDFC Bank, ICICI Bank, Times of money, Bill Junction, UTI Bank, Bank of
Punjab,Citi Bank, Corporation Bank, Federal Bank and Billdesk.
5.1.15)Grievance Redressal Machinery:
• A machinery for redressal of policyholders? grievances exist in all the
offices of the Corporation. These are headed by designated Officers who are
available at their respective Offices every Monday between 2.30 pm and 4.30 pm.
except holidays. Policyholder can approach these officers to get their grievances
redressed.
• The Designated Officers at the various offices of the Corporation are :
At Branch Office --- Sr./Branch Manager
At Divisional Office --- Marketing Manager
At Zonal Office --- Regional Manager (Mktg)
At Central Office --- Executive Director (Mktg/IO/CRM)
5.1.17)Citizens’ Charter:
• Citizens' Charter was presented to the Nation in November, 1997. In the
Charter the bench marks were prescribed for 30 servicing areas.
1964 saw the introduction of computers in LIC. Unit Record Machines introduced in
late 1950’s were phased out in 1980’s and replaced by Microprocessors based
computers in Branch and Divisional Offices for Back Office Computerization.
Standardization of Hardware and Software commenced in 1990’s. Standard Computer
Packages were developed and implemented for Ordinary and Salary Savings Scheme
(SSS) Policies.
6.9)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 enable to provide policy
details and accept premium payments.
6.10)INFO CENTRES
We have also set up 8 call centres, manned by skilled employees to provide you
with information about our Products, Policy Services, Branch addresses and other
organizational information.
AWARDS
World Brand Congress Award OUTLOOK MONEY -- NDTV PROFIT AWARD 2009 in
" BEST LIFE INSURER CATEGORY "
NDTV PROFIT BUSSINESS LEADERSHIP, AWARDS 2009 CNBC AWAAZ CONSUMER AWARD 2009 for
" Most preferred insurance company "
ASIA PACIFIC HRM Congress, 2009 Award for INNOVATIVE HR PRACTICES Brand Equity
Most Trusted Brand 2009 Top in Insurance Category
Golden Peacock Innovative Product / Service Award - 2009 Loyalty Award - 2009
Reader's Digest Trusted Brand Award, 2009 ( Platinum category ) CNBC Awaaz
Consumer Awards 2008
NDTV Profit Business Leadership Award 2008 INDY's Silver Award for Best
Corporate Film
Business Superbrand India 2009 ASIA BRAND CONGRESS BRAND LEADERSHIP AWARD,
2008
HONOURED BY YOU
Dr.Manmohan Singh
Prime Minister of India
Shri.P.Chidambaram
Union Finance Minister
“In the year 1956, 245 Indian and foreign companies were nationalized and today,
the three letters ‘LIC’, stands as a synonym for insurance, for services, for
excellence in strengthening the economic fibre of this country. I dare to say that
no other three letters taken together are more recognised to the length and
breadth of India than LIC.”
“The performance figures of LIC give an indication why LIC is dear to us, why LIC
is a Jewel in our crown and why we will continue to nurture LIC and grow it into a
great organization rendering service to the people of India.”
“LIC’s footprints are now to be found in many other countries in the world.
Wherever Indians go - and they go everywhere now, wherever Indians are welcome -
and they are welcome in every part of the world, wherever Indians settle down –
they have found many new homes, wherever Indians excel – and they excel in every
walk of life, they want LIC – they want LIC to protect them, to look after their
savings, and provide for protection as well as their retirement.”
P. Chidambaram
Union Finance Minister
Excerpts from speeches at the inaugural function of LIC’s Golden Jubilee
Celebrations.
Lucknow, September 1, 2005.
CONCLUSION
9.1)REFERENCE WEBSITE
WWW.LICINDIA.COM
WWW.HK-FD.COM
WWW.GOOGLE.CO.IN
http://realneo.us/system/files/Ag-show-hail-insurance
9.2)REPORTS:-
1.1)INTRODUCTION
Insurance is a cover used for protecting oneself from the risk of a financial
loss. It is important to understand that risk is a part of any person’s life and
that it increases as a person increases in age, responsibility and wealth.
Insurance is risk coverage against financial losses and should not be taken as an
investment instrument.
There are mainly two parties involved in this – the insurer and the insured. The
insurer is the insurance company who will provide the cover to the insured against
any financial losses. The insured may be an individual person or a group of people
like an employer, members of a society, etc.
A policy is the contract between the insurer and the insured, which states the
risks covered, the exclusions, if any, and the benefits reimbursed on the
happening of an event like death, illness etc. The policy is paid through what is
called a premium, which is a set amount that must be paid by the insured on a
monthly, semi-annual or annual basis. On the happening of an event like death,
disability, fire, etc, for which the insured is covered, the benefit amount stated
in the policy contract can be claimed by the insured.
1.2)Classification of Insurance
There are mainly two broad classes of Insurance – Life and Non Life.
• Life insurance products include Term Life policies, which give a pure risk
coverage of only the death benefit, whereas endowment or money back policies have
a risk as well as savings component i.e. death as well as maturity benefit. Also
coming under the life insurance umbrella are the Unit – Linked Policies in which
there is a risk component and a savings component, which is invested in equity,
debt or gilt funds, depending on the insurance company.
• Non Life insurance products include property or casualty, health insurance
or house, fire, marine insurance etc. This insurance class deals with all the non-
life aspects of an insured like his/her house, health, land, office, cargo, etc
which might bring financial loss.
1.3)WHAT IS INSURANCE
Insurance is a form of risk management in which the insured transfers the cost of
potential loss to another entity in exchange for monetary compensation known as
the premium. (For background reading, see The History Of Insurance In America.)
1.4)FUNDAMENTAL OF INSURANCE
1.4.1)How does insurance work?
Insurance works by pooling risk.What does this mean? It simply means that a large
group of people who want to insure against a particular loss pay their premiums
into what we will call the insurance bucket, or pool. Because the number of
insured individuals is so large, insurance companies can use statistical analysis
to project what their actual losses will be within the given class. They know that
not all insured individuals will suffer losses at the same time or at all. This
allows the insurance companies to operate profitably and at the same time pay for
claims that may arise. For instance, most people have auto insurance but only a
few actually get into an accident. You pay for the probability of the loss and for
the protection that you will be paid for losses in the event they occur.
1.4.2)Risks
Life is full of risks - some are preventable or can at least be minimized, some
are avoidable and some are completely unforeseeable. What's important to know
about risk when thinking about insurance is the type of risk, the effect of that
risk, the cost of the risk and what you can do to mitigate the risk. Let's take
the example of driving a car. (For more insight on the concept of risk, see
Determining Risk And The Risk Pyramid.)
1.4.3)Type of risk: Bodily injury, total loss of vehicle, having to fix your car
The effect: Spending time in the hospital, having to rent a car and having to make
car payments for a car that no longer exists
1.5)TYPES OF INSURANCE
The story of insurance is probably as old as the story of mankind. The same
instinct that prompts modern businessmen today to secure themselves against loss
and disaster existed in primitive men also. They too sought to avert the evil
consequences of fire and flood and loss of life and were willing to make some sort
of sacrifice in order to achieve security. Though the concept of insurance is
largely a development of the recent past, particularly after the industrial era –
past few centuries – yet its beginnings date back almost 6000 years.
Life Insurance in its modern form came to India from England in the year 1818.
Oriental Life Insurance Company started by Europeans in Calcutta was the first
life insurance company on Indian Soil. All the insurance companies established
during that period were brought up with the purpose of looking after the needs of
European community and Indian natives were not being insured by these companies.
However, later with the efforts of eminent people like Babu Muttylal Seal, the
foreign life insurance companies started insuring Indian lives. But Indian lives
were being treated as sub-standard lives and heavy extra premiums were being
charged on them. Bombay Mutual Life Assurance Society heralded the birth of first
Indian life insurance company in the year 1870, and covered Indian lives at normal
rates. Starting as Indian enterprise with highly patriotic motives, insurance
companies came into existence to carry the message of insurance and social
security through insurance to various sectors of society. Bharat Insurance Company
(1896) was also one of such companies inspired by nationalism. The Swadeshi
movement of 1905-1907 gave rise to more insurance companies. The United India in
Madras, National Indian and National Insurance in Calcutta and the Co-operative
Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative
Insurance Company took its birth in one of the rooms of the Jorasanko, house of
the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General
Assurance and Swadeshi Life (later Bombay Life) were some of the companies
established during the same period. Prior to 1912 India had no legislation to
regulate insurance business. In the year 1912, the Life Insurance Companies Act,
and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912
made it necessary that the premium rate tables and periodical valuations of
companies should be certified by an actuary. But the Act discriminated between
foreign and Indian companies on many accounts, putting the Indian companies at a
disadvantage.
The first two decades of the twentieth century saw lot of growth in insurance
business. From 44 companies with total business-in-force as Rs.22.44 crore, it
rose to 176 companies with total business-in-force as Rs.298 crore in 1938. During
the mushrooming of insurance companies many financially unsound concerns were also
floated which failed miserably. The Insurance Act 1938 was the first legislation
governing not only life insurance but also non-life insurance to provide strict
state control over insurance business. The demand for nationalization of life
insurance industry was made repeatedly in the past but it gathered momentum in
1944 when a bill to amend the Life Insurance Act 1938 was introduced in the
Legislative Assembly. However, it was much later on the 19th of January, 1956,
that life insurance in India was nationalized. About 154 Indian insurance
companies, 16 non-Indian companies and 75 provident were operating in India at the
time of nationalization. Nationalization was accomplished in two stages; initially
the management of the companies was taken over by means of an Ordinance, and
later, the ownership too by means of a comprehensive bill. The Parliament of India
passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life
Insurance Corporation of India was created on 1st September, 1956, with the
objective of spreading life insurance much more widely and in particular to the
rural areas with a view to reach all insurable persons in the country, providing
them adequate financial cover at a reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from
its corporate office in the year 1956. Since life insurance contracts are long
term contracts and during the currency of the policy it requires a variety of
services need was felt in the later years to expand the operations and place a
branch office at each district headquarter. re-organization of LIC took place and
large numbers of new branch offices were opened. As a result of re-organisation
servicing functions were transferred to the branches, and branches were made
accounting units. It worked wonders with the performance of the corporation. It
may be seen that from about 200.00 crores of New Business in 1957 the corporation
crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for
LIC to cross 2000.00 crore mark of new business. But with re-organisation
happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore
Sum Assured on new policies.
Today LIC functions with 2048 fully computerized branch offices, 100 divisional
offices, 7 zonal offices and the Corporate office. LIC’s Wide Area Network covers
100 divisional offices and connects all the branches through a Metro Area Network.
LIC has tied up with some Banks and Service providers to offer on-line premium
collection facility in selected cities. LIC’s ECS and ATM premium payment facility
is an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info
Centres have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai,
Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of
providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK
offices. The satellite offices are smaller, leaner and closer to the customer. The
digitalized records of the satellite offices will facilitate anywhere servicing
and many other conveniences in the future.
LIC continues to be the dominant life insurer even in the liberalized scenario of
Indian insurance and is moving fast on a new growth trajectory surpassing its own
past records. LIC has issued over one crore policies during the current year. It
has crossed the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005,
posting a healthy growth rate of 16.67% over the corresponding period of the
previous year.
From then to now, LIC has crossed many milestones and has set unprecedented
performance records in various aspects of life insurance business. The same
motives which inspired our forefathers to bring insurance into existence in this
country inspire us at LIC to take this message of protection to light the lamps of
security in as many homes as possible and to help the people in providing security
to their families.
2.2)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 nationalised. 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.
• 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.
2.5)MISSION/VISION
2.5.1)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."
2.5.2)Vision
"A trans-nationally competitive financial conglomerate of significance to
societies and Pride of India."
2.6)BORD OF DIRECTORS
In our country, which is one of the most populated in the world, the prominence of
insurance is not as widely understood, as it ought to be. What follows is an
attempt to acquaint readers with some of the concepts of life insurance, with
special reference to LIC.
For more details, please contact our branch or divisional office. Any LIC Agent
will be glad to help you choose the life insurance plan to meet your needs and
render policy servicing.
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.
3.3.1)Protection:
Savings through life insurance guarantee full protection against risk of death of
the saver. Also, in case of demise, life insurance assures payment of the entire
amount assured (with bonuses wherever applicable) whereas in other savings
schemes, only the amount saved (with interest) is payable.
3.3.3)Aid To Thrift:
Life insurance encourages 'thrift'. It allows long-term savings since payments can
be made effortlessly because of the 'easy instalment' 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.
3.3.4)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.
3.3.5)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.
Assessees 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.
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.
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.
In 'without' profit plan the contracted amount is paid without any addition. The
premium rate charged for a 'with' profit policy is therefore higher than for a
'without' profit policy.
3.3.11)Keyman Insurance
INSURANCE PLANS
As individuals it is inherent to differ. Each individual?s insurance needs and
requirements are different from that of the others. LIC?s Insurance Plans are
policies that talk to you individually and give you the most suitable options that
can fit your requirement.
Jeevan Anurag
Komal Jeevan
Marriage Endowment Or
Educational Annuity Plan
Jeevan Kishore
Jeevan Chhaya
Jeevan Aadhar
Jeevan Vishwas
The Endowment Assurance Policy
Jeevan Anand
Jeevan Amrit
Jeevan Shree-I
Jeevan Pramukh
Bima Bachat
Jeevan Bharati - I
Jeevan Anand
Jeevan Tarang
Anmol Jeevan-I
Amulya Jeevan-I
Jeevan Saathi
Jeevan Bharati - I
FEATURES:-
Introduction
LIC’s Jeevan Bharati-I – is a plan exclusively for women. It is a with profit plan
having special features considering the needs of women. The plan also provides for
Accident Benefit, Critical Illness Benefit and Congenital Disability Benefit as
optional Riders
1. SPECIAL FEATURES
4. Auto Cover::
After two years premiums have been paid, whenever premium payment is discontinued,
the life cover for full sum assured will continue for 3 years from the due date of
first unpaid premium.
If death occurs during the Auto Cover period, then death benefit after deducting
unpaid premiums, with interest is payable along with the vested bonus, if any.
2. OPTIONAL RIDERS:
The following riders are available under this plan:
If any survival benefit falls due during the above 3-year auto cover period the
same will be paid after deduction of unpaid premiums with interest until the due
date of the survival benefit, provided it is more than the unpaid premiums with
interest. If the survival benefit is insufficient to cover the arrears of premiums
with interest up to the due date of such survival benefit, then the survival
benefit will be payable only on payment of such arrears of premiums with
interest , during the period of the aforesaid 3 years or on revival of the policy
thereafter.
(ii) If Critical Illness Rider is opted for:
During the auto cover period, the policy can be revived by payment of full arrears
of premium together with interest and subject to submission of proof of continued
insurability of the Life Assured to the satisfaction of the Corporation. The
Corporation reserves the right to accept at original terms, accept at revised
terms or decline the revival of the policy. The revival of the policy shall take
effect only after the same is approved by the Corporation and is specifically
communicated to the Life Assured.
If any survival benefit falls due during the above 3-year auto cover period the
same will be paid only after revival of the policy as stated above.
The policy thereafter shall be free from all liabilities for payment of the
premiums, but shall not be entitled to the future bonuses. The existing vested
reversionary bonuses, if any, will remain attached to the reduced paid-up Policy.
This paid up value shall be payable on the date of maturity or at Life Assured’s
prior death. No survival benefit shall be payable under paid up policies.
The rider benefits will cease to apply if the policy is in lapsed condition and
will not acquire any paid up value.
10. SURRENDER VALUE:
The Guaranteed Surrender value will be available after the expiry of 3 policy
years provided the premiums have been paid for at least three years. The
Guaranteed Surrender Value is equal to 30% of the total amount of premiums paid
excluding the premiums paid for the first year, any premiums paid towards riders,
all extra premiums that may have been paid less the amount of survival benefits
paid earlier. The cash value of any existing bonuses, if ,any will also be paid .
Corporation may, however, pay special surrender value as the discounted value of
Paid up sum assured and vested bonus, if any, as applicable on date of surrender,
provided the same is higher than guaranteed surrender value.
11. EXCLUSIONS:
Suicide: This policy shall be void if the Life Assured commits suicide (whether
sane or insane at that time) at any time on or after the date on which the risk
under the policy has commenced but before the expiry of one year from the date of
commencement of risk under the policy and the Corporation will not entertain any
claim by virtue of this policy except to the extent of a third party’s bonafide
beneficial interest acquired in the policy for valuable consideration of which
notice has been given in writing to the branch where the Policy is being presently
serviced (where the policy records are kept), at least one calendar month prior to
death.
12. COOLING OFF PERIOD:
If you are not satisfied with the “Terms and Conditions” of the policy, you may
return the policy to us within 15 days.
BENEFITS
A. Survival Benefits:
On Survival the following benefits are payable:
End
of
Year Total premiums paid till end of year Death Benefit during the year
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 6345 100000 2200 4500 102200 104500
2 12690 100000 4400 9000 104400 109000
3 19035 100000 6600 13500 106600 113500
4 25380 100000 8800 18000 108800 118000
5 31725 100000 11000 22500 111000 122500
6 38070 100000 13200 27000 113200 127000
7 44415 100000 15400 31500 115400 131500
8 50760 100000 17600 36000 117600 136000
9 57105 100000 19800 40500 119800 140500
10 63450 100000 22000 45000 122000 145000
15 95175 100000 36667 75000 136667 175000
20 126900 100000 48900 100000 148900 200000
End
of
Year Total premiums paid till end of year BENEFIT ON SURVIVAL / MATURITY AT
THE END OF YEAR
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 6345 0 0 0 0 0
2 12690 0 0 0 0 0
3 19035 0 0 0 0 0
4 25380 0 0 0 0 0
5 31725 20000 0 0 20000 20000
6 38070 0 0 0 0 0
7 44415 0 0 0 0 0
8 50760 0 0 0 0 0
9 57105 0 0 0 0 0
10 63450 20000 0 0 20000 20000
15 95175 20000 0 0 20000 20000
20 126900 40000 48900 100000 88900 140000
Note: i)his illustration is applicable to a standard (from medical, life style and
occupation point of view) life.
i) The non-guaranteed benefits (1) and (2) in above illustration are calculated so
that they are consistent with the Projected Investment Rate of Return assumption
of 6% p.a.(Scenario 1) and 10% p.a. (Scenario 2) respectively. In other words, in
preparing this benefit illustration, it is assumed that the Projected Investment
Rate of Return that LICI will be able to earn throughout the term of the policy
will be 6% p.a. or 10% p.a., as the case may be. The Projected Investment Rate of
Return is not guaranteed.
Section 45 of Insurance Act, 1938:
No policy of life insurance shall after the expiry of two years from the date on
which it was effected, be called in question by an insurer on the ground that a
statement made in the proposal for insurance or in any report of a medical
officer, or referee, or friend of the insured, or in any other document leading to
the issue of the policy, was inaccurate or false, unless the insurer shows that
such statement was on a material matter or suppressed facts which it was material
to disclose and that it was fraudulently made by the policyholder and that the
policyholder knew at the time of making it that the statement was false or that it
suppressed facts which it was material to disclose. Provided that nothing in this
section shall prevent the insurer from calling for proof of age at any time if he
is entitled to do so, and no policy shall be deemed to be called in question
merely because the terms of the policy are adjusted on subsequent proof that the
age of the life assured was incorrectly stated in the proposal.
PENSION PLAN
Pension Plans are Individual Plans that gaze into your future and foresee
financial stability during your old age. These policies are most suited for senior
citizens and those planning a secure future, so that you never give up on the best
things in life.
Jeevan Nidhi
Jeevan Akshay-VI
Jeevan Nidhi
FEATURE
LIC's JEEVAN NIDHI is a with profits Deferred Annuity (Pension) plan. On survival
of the policyholder beyond term of the policy the accumulated amount (i.e. Sum
Assured + Guaranteed Additions + Bonuses) is used to generate a pension (annuity)
for the policyholder. The plan also provides a risk cover during the deferment
period. The USP of the plan being the pension can commence at 40 years. The
premiums paid are exempt under Section 80CCC of Income Tax Act.
Salient Features:
a . Guaranteed Additions: Guaranteed Additions @ Rs.50/- per thousand Sum assured
for each completed year, for the first five years.
Currently the following options are available under LIC’s immediate annuities:
1. Annuity for life: The annuity is paid to the life assured as long as he/she is
alive.
2. Annuity Guaranteed for certain periods: The annuity is paid to the life assured
for periods of 5 or 10 or 15 or 20 years as chosen by him/her, whether or not
he/she survives that period. After the chosen period, the annuity is paid to the
life assured as long as he/she is alive.
3. Annuity with return of purchase price on death: The annuity is paid to the life
assured as long as he/she is alive. On the death of the life assured, the purchase
price of the annuity is paid as death benefit. The purchase price includes the Sum
Assured under the Basic Plan, the accrued Guaranteed Additions and any accrued
bonuses, excluding the commuted value, if any.
4. Increasing annuity: The annuity is paid to the life assured as long as he/she
is alive. The amount of annuity increases every year at a simple rate of 3% per
annum.
5. Joint Life Last Survivor Annuity: The annuity is paid to the life assured as
long as he/she is alive. On death of the life assured, 50% of the annuity is
payable to the nominated spouse as long as the spouse is alive.
e. Death Benefit on death before annuity vests: On the death of the Life Assured
during the deferment period of the policy, i.e. before the annuity vests, an
amount equal to the Sum Assured under the Basic plan along with the accrued
Guaranteed Additions, simple Reversionary Bonuses and Terminal Bonus, if any, will
be paid in a lump sum to the appointed nominee, provided the policy is in force
for full Sum Assured. Nominee will also have the option to purchase an annuity
with this amount.
BENEFITS:-
Eligibility Conditions And Other Restrictions Under This Plan:
Rebates:
f. Grace Period:
A grace period of 30 days will be available for payment of yearly, half-yearly or
quarterly premiums and 15 days for monthly premiums.
h. Paid-up Value:
The policy will acquire paid-up value after at least 3 full year’s premiums have
been paid.
j. Revival: The policyholder can revive his lapsed policy by paying arrears of
premium together with interest within a period of five years from the date of
first unpaid premium subject to satisfactory evidence of health. The rate of
interest for this purpose will be decided by the Corporation from time to time.
The present rate of interest is 9% pa.
k. Options:
Accidental Death and Disability Benefit:
In case of death due to accident (within 180 days) an additional amount equal to
the Accident Benefit Sum assured will be payable. In case of Total and Permanent
disability arising due to accident an amount equal to accident benefit sum assured
will be payable over a period of 10 years in monthly instalments. However, the
payment of accident benefit will be subject to an overall limit of Rs.25 lakh
under all policies of the Life Assured with the Corporation taken together.
The disability due to accident should be total and such that the Life Assured is
unable to carry out any work to earn a living. Following disabilities due to
accident are also covered -
a) irrevocable loss of the entire sight of both eyes or
b) amputation of both hands at or above the wrists or
c) amputation of both feet at or above ankles, or
d) amputation of one hand at or above the wrist and one foot at or above the
ankle.
Loan / Assignment:
No Loan/Assignment will be available by the Corporation to the policyholders under
this plan.
EXCLUSIONS:
Suicide: This policy shall be void if the Life Assured commits suicide (whether
sane or insane at the time) at any time on or after the date on which the risk
under the policy has commenced but before the expiry of one year from the date of
commencement of risk under the policy and the Corporation will not entertain any
claim by virtue of this policy except to the extent of a third party’s bonafide
beneficial interest acquired in the policy for valuable consideration of which
notice has been given in writing to the office in which the policy is being
serviced, at least one calendar month prior to death.
Single Premium
Age at entry Policy Term
10 15 20 25 30 35
20 - - 616.40 523.40 446.50 384.35
25 - 727.30 617.30 525.35 450.30 390.70
30 856.45 728.05 619.25 529.40 457.45 401.85
35 857.10 730.10 623.70 537.50 470.35 420.80
40 858.40 733.85 631.60 550.95 490.95 450.35
45 860.70 740.35 644.15 571.80 522.35 -
50 864.55 750.40 663.30 603.10 - -
55 869.95 764.85 691.20 - - -
60 878.30 787.25 - - - -
65 892.25 - - - - -
Annual Premium
Age at entry Policy Term
5 10 15 20 25 30 35
20 - - - 52.45 40.30 32.35 26.90
25 - - 72.75 52.55 40.55 32.75 27.45
30 - 113.05 72.90 52.90 41.05 33.45 28.40
35 231.90 113.40 73.45 53.60 42.05 34.80 30.15
40 232.35 114.05 74.40 54.95 43.80 37.05 33.05
45 233.05 115.25 76.10 57.15 46.65 40.70 -
50 234.45 117.40 78.85 60.75 51.30 - -
55 236.55 120.45 83.05 66.40 - -
60 239.55 125.40 90.15 - - - -
65 245.00 134.55 - - - - -
BENEFIT ILLUSTRATION
Insurance Regulatory & Development Authority (IRDA) requires all life insurance
companies operating in India to provide official illustrations to their customers.
The illustrations are based on the investment rates of return set by the Life
Insurance Council (constituted under Section 64C(a) of the Insurance Act 1938) and
is not intended to reflect the actual investment returns achieved or may be
achieved in future by Life Insurance Corporation of India (LICI).
For the year 2004-05 the two rates of investment return declared by the Life
Insurance Council are 6% and 10% per annum.
Product summary:
This is a with-profits pension plan which provides for death cover during the
deferment period and on survival to the date of vesting, the maturity proceeds are
compulsorily to be used for purchase of annuity.
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(1) is available on premiums paid under this policy.
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 for cash after the policy is kept in force by
payment of premiums for at least three years. The guaranteed surrender value
available under this plan for all modes, except the single premium mode, will be
equal to 30% of the total amount of premiums paid excluding the first year’s
premium and the extra premiums. In case of single premium mode, The guaranteed
surrender value will be 90% of the premium paid excluding all extra premiums.
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, especially in case of early termination of the policy, the
surrender value payable may be less than the total premium paid.
The Corporation reviews the surrender value payable under its plans from time to
time depending on the economic environment, experience and other factors.
Note: The above is the product summary giving the key features of the plan. This
is for illustrative purpose only. This does not represent a contract and for
details please refer to your policy document. Further, the tax benefits are as per
present Tax Laws.
Benefit Illustration:
Statutory Warning
“Some benefits are guaranteed and some benefits are variable with returns based on
the future performance of your insurer carrying on life insurance business. If
your policy offers guaranteed returns then these will be clearly marked
“guaranteed” in the illustration table on this page. If your policy offers
variable returns then the illustrations on this page will show two different rates
of assumed future investment returns. These assumed rates of return are not
guaranteed and they are not upper or lower limits of what you might get back as
the value of your policy is dependent on a number of factors including future
investment performance.”
Illustration 1:
Age at entry: 35 years
Policy Term: 25 years
Premium paying term: 25 years
Sum Assured (Rs.): 100000
Yearly Premium (Rs.): 4121
End of year Total premiums paid till end of year Benefit payable on death /
Amount available on survival up to the date of vesting for purchase of annuity
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 4,121 1,00,000 0 0 100000 100000
2 8,242 1,05,000 0 0 105000 105000
3 12,363 1,10,000 0 0 110000 110000
4 16,484 1,15,000 0 0 115000 115000
5 20,605 1,20,000 0 0 120000 120000
6 24,726 1,25,000 2300 7300 127300 132300
7 28,847 1,25,000 4600 14600 129600 139600
8 32,968 1,25,000 6900 21900 131900 146900
9 37,089 1,25,000 9200 29200 134200 154200
10 41,210 1,25,000 11500 36500 136500 136500
15 61,815 1,25,000 23000 73000 148000 198000
20 82,420 1,25,000 48500 157500 173500 282500
25 1,03,025 1,25,000 63500 206000 188500 331000
Illustration 2:
Age at entry: 35 years
Policy Term: 25 years
Sum Assured (Rs.): 100000
Single Premium (Rs.): 53750
End of year Total premiums paid till end of year Benefit payable on death /
Amount available on survival up to the date of vesting for purchase of annuity
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 53,750 1,00,000 0 0 100000 100000
2 53,750 1,05,000 0 0 105000 105000
3 53,750 1,10,000 0 0 110000 110000
4 53,750 1,15,000 0 0 115000 115000
5 53,750 1,20,000 0 0 120000 120000
6 53,750 1,25,000 2500 12400 127500 137400
7 53,750 1,25,000 5000 24800 130000 149800
8 53,750 1,25,000 7500 37200 132500 162200
9 53,750 1,25,000 10000 49600 135000 174600
10 53,750 1,25,000 12500 62000 137500 187000
15 53,750 1,25,000 25000 124000 150000 249000
20 53,750 1,25,000 53500 268000 178500 393000
25 53,750 1,25,000 70000 350500 195000 475500
ii) The non-guaranteed benefits (1) and (2) in above illustration are calculated
so that they are consistent with the Projected Investment Rate of Return
assumption of 6% p.a.(Scenario 1) and 10% p.a. (Scenario 2) respectively. In
other words, in preparing this benefit illustration, it is assumed that the
Projected Investment Rate of Return that LICI will be able to earn throughout the
term of the policy will be 6% p.a. or 10% p.a., as the case may be. The Projected
Investment Rate of Return is not guaranteed.
iii) The main objective of the illustration is that the client is able to
appreciate the features of the product and the flow of benefits in different
circumstances with some level of quantification.
iv) Future bonus will depend on future profits and as such is not guaranteed.
However, once bonus is declared in any year and added to the policy, the bonus so
added is guaranteed.
v) The Maturity benefit is the amount shown at the end of the Policy term.
UNIT PLANS
Unit plans are investment plans for those who realise the worth of hard-earned
money. These plans help you see your savings yield rich benefits and help you save
tax even if you don't have consistent income.
Market Plus I
Profit Plus
Money Plus-I
SPECIAL PLANS
LIC’s 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!
Jeevan Nischay
Jeevan Saral
Jeevan Madhur
Jeevan Mangal
Age is the main basis of calculation of premium under life insurance policies. The
following are accepted as evidence of age:
• Certified extract from Municipal or Local Body’s records made at the time of
birth.
• Certificate of Baptism or Certified Extract from Family Bible, if it
contains age or date of birth.
• Certified Extract from School or College records, if age or date of birth is
stated therein.
• Certified Extract from Service Register in the case of Govt. employees and
employees of Quasi-Govt. Institutions or
• Passport issued by the Passport Authorities in India.
5.1.2)Payment Of Premium:
• By cash, local cheque (subject to realization of cheque), Demand Draft at
Branch Office.
• The DD and cheques or Money Order may be sent by post.
• You can pay your premiums at any of our Branches as 99% of our Branches are
networked.
• Many Banks do accept standing instructions to remit the premiums. So by
providing a standing instruction to your Bank to debit your account for the
premium amount and send it vide a banker’s cheque to LIC, on the due dates and
months mentioned on your policy bond.
• Through Internet : Payment of premiums can be made through Internet through
Service Providers viz.HDFC Bank, ICICI Bank, Times of Money, Bill Junction, UTI
Bank, Bank of Punjab, Citibank, Corporation Bank, Federal Bank and BillDesk.
• Premium payment can also be made through ATMs of Corporation Bank and UTI
Bank.
• Premium payment can also be made through Electronic Clearing Service (ECS)
which has been launched at Mumbai, Hyderabad, Chennai, Kolkata, New Delhi, Kanpur,
Bangalore, Vijaywada, Patna, Jaipur, Chandigarh, Trivandrum, Ahmedabad, Pune, Goa
and Nagpur, Secunderabad & Visakhapatnam. A policyholder having an account in any
Bank which is a Member of the local Clearing House can opt for ECS debit to pay
premiums. The policyholders wishing to use this system would have to fill up a
Mandate Form available at our Branches/DO and get it certified by the Bank. The
certified Mandate Forms are to be submitted to our BO/DO.
Policy can be anywhere in India.
• Citibank Kiosks at Industrial Assurance Building, Churchgate, New India
Building, Santacruz, Jeevan Shikha Building, Borivili are dedicated for collection
of premiums through cheques.
5.1.3)Days Of Grace:
• Policyholder should pay the premiums on due dates. However, a grace period
of one month but not less than 30 days will be allowed for payment of yearly/half-
yearly/quarterly premiums and 15 days for monthly premiums.
• When the days of grace expire on a Sunday or a public holiday, the premium
may be paid on the following working day to keep the policy in force.
• If the premium is not paid before the expiry of the days of grace, the
policy lapses.
5.1.4)Revival Of Lapsed Policy:
• If the policy has lapsed, it can be revived during the life time of the life
assured, within a period of five years from the date of the first unpaid premium
but before the date of maturity subject to certain conditions.
• The Corporation offers three convenient schemes of revival viz., Ordinary
Revival, Special Revival and Installment Revival. Policies can also be revived
under Loan-cum-Revival and SB-cum-Revival schemes.
• Request for revival may be made to the Branch Office servicing the policy.
Change Of Address And Transfer Of Policy Records:
• 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.
5.1.5)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.
5.1.6)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.
5.1.7)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.
5.1.8)Nomination:
• 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 assured’s 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.
5.1.9)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 become 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.
5.1.10)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.
5.1.11)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. Claimant’s 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.
5.1.12)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.
5.1.13)Insurance Ombudsman:
• The Grievance Redressal Machinery has been further expanded with the
appointment of Insurance Ombudsman at different centers by the Government of
India. At present there are 12 centres operating all over the country.
• Following type of complaints fall within the purview of the Ombdusman
a) any partial or total repudiation of claims by an insurer;
b) any dispute in regard to premiums paid if payable in terms of the policy;
c) any dispute on the legal construction of the policies in so far as such
disputes relate to claims;
d) delay in settlement of claims;
e)non-issue of any insurance document to customers after receipt of premium.
• Policyholder can approach the Insurance Ombudsman for the redressal of their
complaints free of cost.
5.1.14)Initiatives In Policy Servicing Areas:
• All 2048 Branches of LIC are fully computerized covering all policy
servicing aspects to give prompt computerized services from new policy
introduction, acceptance of renewal premium, revivals, loans, etc to final claims
settlement.
• Green Channel facility has been introduced for the speedy completion of
proposals.
• Payment of premiums can be made through internet through service providers,
viz., HDFC Bank, ICICI Bank, Times of money, Bill Junction, UTI Bank, Bank of
Punjab,Citi Bank, Corporation Bank, Federal Bank and Billdesk.
5.1.15)Grievance Redressal Machinery:
• A machinery for redressal of policyholders? grievances exist in all the
offices of the Corporation. These are headed by designated Officers who are
available at their respective Offices every Monday between 2.30 pm and 4.30 pm.
except holidays. Policyholder can approach these officers to get their grievances
redressed.
• The Designated Officers at the various offices of the Corporation are :
At Branch Office --- Sr./Branch Manager
At Divisional Office --- Marketing Manager
At Zonal Office --- Regional Manager (Mktg)
At Central Office --- Executive Director (Mktg/IO/CRM)
5.1.17)Citizens’ Charter:
• Citizens' Charter was presented to the Nation in November, 1997. In the
Charter the bench marks were prescribed for 30 servicing areas.
6.1)INFORMATION TECHNOLOGY & 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 1950’s were phased out in 1980’s and replaced by Microprocessors based
computers in Branch and Divisional Offices for Back Office Computerization.
Standardization of Hardware and Software commenced in 1990’s. Standard Computer
Packages were developed and implemented for Ordinary and Salary Savings Scheme
(SSS) Policies.
6.9)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 enable to provide policy
details and accept premium payments.
6.10)INFO CENTRES
We have also set up 8 call centres, manned by skilled employees to provide you
with information about our Products, Policy Services, Branch addresses and other
organizational information.
AWARDS
World Brand Congress Award OUTLOOK MONEY -- NDTV PROFIT AWARD 2009 in
" BEST LIFE INSURER CATEGORY "
NDTV PROFIT BUSSINESS LEADERSHIP, AWARDS 2009 CNBC AWAAZ CONSUMER AWARD 2009 for
" Most preferred insurance company "
ASIA PACIFIC HRM Congress, 2009 Award for INNOVATIVE HR PRACTICES Brand Equity
Most Trusted Brand 2009 Top in Insurance Category
Golden Peacock Innovative Product / Service Award - 2009 Loyalty Award - 2009
Reader's Digest Trusted Brand Award, 2009 ( Platinum category ) CNBC Awaaz
Consumer Awards 2008
NDTV Profit Business Leadership Award 2008 INDY's Silver Award for Best
Corporate Film
Dr.Manmohan Singh
Prime Minister of India
Shri.P.Chidambaram
Union Finance Minister
“In the year 1956, 245 Indian and foreign companies were nationalized and today,
the three letters ‘LIC’, stands as a synonym for insurance, for services, for
excellence in strengthening the economic fibre of this country. I dare to say that
no other three letters taken together are more recognised to the length and
breadth of India than LIC.”
“The performance figures of LIC give an indication why LIC is dear to us, why LIC
is a Jewel in our crown and why we will continue to nurture LIC and grow it into a
great organization rendering service to the people of India.”
“LIC’s footprints are now to be found in many other countries in the world.
Wherever Indians go - and they go everywhere now, wherever Indians are welcome -
and they are welcome in every part of the world, wherever Indians settle down –
they have found many new homes, wherever Indians excel – and they excel in every
walk of life, they want LIC – they want LIC to protect them, to look after their
savings, and provide for protection as well as their retirement.”
P. Chidambaram
Union Finance Minister
Excerpts from speeches at the inaugural function of LIC’s Golden Jubilee
Celebrations.
Lucknow, September 1, 2005.
CONCLUSION
WWW.LICINDIA.COM
WWW.HK-FD.COM
WWW.GOOGLE.CO.IN
http://realneo.us/system/files/Ag-show-hail-insurance
9.2)REPORTS:-