Insurance Claims Project

Project on Insurance Claims
INTRODUCTION
Insurance is a social device where uncertain risks of individuals may be
combined in a group and thus made more certain - small periodic contributions
by the individuals provide a found out of which those who suffer losses may be
reimbursed. In addition to being a means to protect oneself, the insurance
Industry is an efficient conduit for the saving of people to be channeled towards
economic growth. In India, the Insurance Industry7 is more than150 years old.
Today, it is monopolized by two PSUs in their respective fields of life
and General Insurance.
However, with the successful passage IRDA Bill
through both houses of parliament in December 1999 the sector has been
opened up to private players. This will provided much. Needed impetus to the
Industry and will improve the quality of service and products and will also
increase employment opportunities. There are still some issues their need to be
sorted out, particularly with regard to the status of intermediaries as envisaged
by the Insurance Regulatory Authority.An insurance company works out how
likely it is that an accident or event will happen and what it would cost to put it
right. Based on this, the insurance company sets what is know as a
premium.This is the amount it asks you to pay in order to protect yourself
against the accident or event. The cost of the premium is often spread so you
pay it on a monthly basis. If whatever it is you have insured yourself against
happens, you then make a claim to your insurance company and it pays out the
agreed amount.

History of Insurance in India
Insurance in India has its history dating back till 1818, when Oriental Life Insurance
Company was started by Europeans in Kolkata to cater to the needs of European community.
Pre-independent era in India saw discrimination among the life of foreigners and Indians
with higher premiums being charged for the latter. It was only in the year 1870, Bombay
Mutual Life Assurance Society, the first Indian insurance company covered Indian lives at
normal rates. At the dawn of the twentieth century, insurance companies started
mushrooming up. In the year 1912, the Life Insurance Companies Act, and the Provident
Fund Act were passed to regulate the insurance business. 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. However, the disparage still existed as discrimination
between Indian and foreign companies. The oldest existing insurance company in India is
National Insurance Company Ltd, which was founded in 1906 and is doing business even
today. The Insurance industry earlier consisted of only two state insurers: Life Insurers i.e.
Life Insurance Corporation of India (LIC) and General Insurers i.e. General Insurance
Corporation of India (GIC). GIC had four subsidiary companies.With effect from December
2000, these subsidiaries have been de-linked from parent company and made as independent
insurance companies: Oriental Insurance Company Limited, New India Assurance Company
Limited, National Insurance Company Limited and United India Insurance Company
Limited.
INTRODUCTION OF THE COMPANY

LIFE INSURANCE CORPORATION OF INDIA (LIC)
Life Insurance Corporation of India (LIC) was formed in September, 1956, by
an Act of Parliament, viz., Life Insurance Corporation Act, 1956, with capital
contribution from the Government of India.The then Finance Minister, Shri
C.D. Deshmukh, while piloting the bill, outlined the objectives of LIC thus to
conduct the business with the utmost economy, and a spirit of trusteeship; to
charge premium no higher than warranted by strict actuarial considerations; to
invest the funds for obtaining maximum yield for the' policy holders consistent
with safety of the capital; to render prompt and efficient service to policy
holders, thereby making insurance widely popular. Since nationalization, LIC
has built up a vast network of 2,048 branches, 100divisions and 7 zonal offices
spread over the country. The Life Insurance Corporation of India also' transacts
business abroad and has offices in Fiji, Mauritius and United Kingdom. LIC is
associated with joint ventures abroad in the field of insurance, namely, KenIndia ,Assurance Company Limited, Nairobi; United Oriental Assurance
Company
Limited,
Kuala
Lumpur
and
Life
Insurance
Corporation
(International) E.C.Bahrain. The Corporation has registered a joint venture

company in 26th December,2000 in Katmandu, Nepal by the name of Life
Insurance Corporation (Nepal) Limited in collaboration with Vishal Group
Limited, a local industrial Group. An off-shore company L.I.C. (Mauritius) Offshore Limited has also been set up in 2001 to tap the African insurance market.

General Insurance:
General insurance business in the country was nationalized with effect from
1stJanuary, 1973 by the General Insurance Business (Nationalization) Act,
1972. More than 100 non-life insurance companies including branches of
foreign companies operating within viz., the National Insurance Company Ltd.,
The New India Assurance Company Ltd., The Oriental Insurance Company
Ltd., and The United India Insurance Company Ltd. with head offices at
Calcutta, Bombay, New Delhi and Madras, respectively. General Insurance
Corporation (GIC) which was the holding company of the four public sector
general insurance companies has since been de linked from the later and has
been approved as the "Indian Re insurer" since 3rd November 2000. The share
capital of GIC and that of the four companies are held by the Government of
India. All the five entities are Government companies registered under the
Companies Act, 1956. The general insurance business has grown in spread and
volume after nationalization. The four companies have 2699 branch offices,
1360divisional offices and 92 regional offices spread all over the country. GIC
and its subsidiaries have representation either directly through branches or
agencies in 16countries and through associate locally incorporated subsidiary
companies in 14 other countries. A wholly- owned subsidiary company of
GIC, i.e. Indian International Pvt. Ltd. is operating in Singapore and there is a
joint venture company, viz. Ken-India Assurance Ltd. in Kenya. A new wholly
owned subsidiary called New India International Ltd., UK has also been
registered

Related Acts:The insurance sector went through a full circle of phases from being unregulated to
completely regulated and then currently being partly deregulated. It is governed by a number
of acts, with the first one being the Insurance Act, 1938.
The Insurance Act, 1938
The Insurance Act, 1938 was the first legislation governing all forms of insurance to provide
strict state control over insurance business.
Life Insurance Corporation Act, 1956
Even though the first legislation was enacted in 1938, it was only in 19 January 1956, that life
insurance in India was completely nationalized, through a Government ordinance; the Life
Insurance Corporation Act, 1956 effective from 1.9.1956 was enacted in the same year to,
inter-alia, form LIFE INSURANCE CORPORATION after nationalization of the 245
companies into one entity. There were 245 insurance companies of both Indian and foreign
origin in 1956. Nationalization was accomplished by the govt. acquisition of the management
of the companies. The Life Insurance Corporation of India was created on 1 September, 1956,
as a result and hasgrown to be the largest insurance company in India as of 2006.

General Insurance Business (Nationalization) Act, 1972
The General Insurance Business (Nationalization) Act, 1972 was enacted to nationalize the
100 odd general insurance companies and subsequently merging them into four companies.
All the companies were amalgamated into National Insurance, New India Assurance, Oriental
Insurance, and United India Insurance which were headquartered in each of the four
metropolitan cities.
Insurance Regulatory and Development Authority (IRDA) Act, 1999

Till 1999, there were not any private insurance companies in Indian insurance sector. The
Govt. of India, then introduced the Insurance Regulatory and Development Authority Act in
1999, thereby de-regulating the insurance sector and allowing private companies into the
insurance. Further, foreign investment was also allowed and capped at 26% holding in the
Indian insurance companies. In recent years many private players entered in the Insurance
sector of India. Companies with equal strength competing in the Indian insurance market.
Currently, in India only 2 million people (0.2 % of total population of 1 billion), are covered
under Med claim, whereas in developed nations like USA about 75 % of the total population
are covered under some insurance scheme. With more and more private players in the sector
this scenario may change at a rapid pace.
General Insurance Business (Nationalization) Act, 1972
The General National Insurance, New India Assurance, Oriental Insurance, United India
Insurance which were headquartered in each of the four metropolitan cities.LIC:- LIFE
INSURANCE CORPRATION OF INDIA )BRIEF HISTORY OF LIFE INSURANCE
CORPORATION (LIC)
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-organization servicing functions were transferred to the
branches, and branches were made accounting units. It worked wonders with the performance
of the corporation. It may be seen that from about 200.00 crores of New Business in 1957 the
corporation crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for
LIC to cross 2000.00 crore mark of new business. But with re-organization happening in the
early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on new
policies. Today LIC functions with 2048 fully computerized branch offices, 100 divisional
offices, 7 zonal offices and the corporate office. LICs Wide Area Network covers 100
divisional offices and connects all the branches through a Metro Area Network. LIC has tied
up with some Banks and Service providers to offer on-line premium collection facility in
selected cities. LICs ECS and ATM premium payment facility is an addition to customer
convenience. Apart from on-line Kiosks and IVRS, Info Centers have been commissioned at
Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad,Kolkata, New Delhi, Pune and many
other cities. With a vision of providing easy access to its policyholders, LIC has launched its
SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the
customer. The digitalized records of the satellite offices will facilitate anywhere servicing and
many other conveniences in the future.
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. Life Insurance Corporation of India
Some Areas
The traditional life insurance business for the LIC has been a little more than a savings policy.
Term life (where the insurance company pays a predetermined amount if the policyholder dies
within a given time but it pays nothing if the policyholder does not die) has accounted for less
than 2% Life Insurance.
Corporation of India
Some Areas of Future Growth
Life Insurance
The traditional life insurance business for the LIC has been a little more than a savings policy of
the insurance premium of the LIC (Mitra and Nayak, 2001). For the new life insurance
companies, term life policies would be the main line of business.
Health Insurance
Health insurance expenditure in India is roughly 6% of GDP, much higher than most other
countries with the same level of economic development. Of that, 4.7% is private and the rest is
public. What is even more striking is that 4.5% are out of pocket expenditure (Berman, 1996).
There has been an almost total failure of the public health care system in India. This creates an
opportunity for the new insurance companies. Thus, private insurance companies will be able to
sell health insurance to a vast number of families who would like to have health care cover but do
not have it.
Pension
The pension system in India is in its infancy. There are generally three forms of plans: provident
funds, gratuities and pension funds. Most of the pension schemes are confined to government
employees (and some large companies). The vast majority of workers are in the informal sector.
As a result, most workers do not have any retirement benefits to fall back on after retirement.
Total assets of all the pension plans in India amount to less than USD 40 billion. Therefore, there
is a huge scope for the development of pension funds in India. The finance minister of India has
repeatedly asserted that a Latin American style reform of the privatized pension system in India
would be welcome (Roy, 1997). Given all the pros and cons, it is not clear whether such a
wholesale privatization would really benefit India or not (Sinha, 2000).
PRODUCTS OF LIC
Whole Life with Profits Plan 002
Features:
This plan is mainly devised to create an estate for the heirs of the policyholder as
the plan basically provides for payment of sum assured plus bonuses on the death of
the policyholder. However, considering the increased longevity of the Indian
population, the Corporation has amended the above provision, thereby proving for
payment of sum assured plus bonuses in the form of maturity claim on completion
of age 80 years or on expiry of term of 40 years from date of commencement of the
policy whichever is later. The premiums under the policy are payable up to age 80
years of the policyholder or for a term of 35 years whichever is later. If the payment
of premium ceases after 3years, a paid-up policy for such reduced sum assured will
be automatically secured provided the reduced sum assured exclusive of any
attached bonus is not less thanRs.250/-. Such reduced paid-up policy is not entitled
to participate in the bonus declared thereafter but the bonuses already declared on
the policy will remain attach, provided the policy is converted in to a paid-up policy
after the premiums are paid for 5 years.
Suitable For:
This policy is suitable for people of all ages who wish to protect their families from
financial crises that may occur owing to the policyholder's premature death.
BENEFITS
SURVIVAL BENEFIT:
Sum assured plus accrued bonuses and the terminal bonuses, if any; on
the policyholder attaining age 80 years or on expiry of term of 40 years from the
date of commencement of the policy whichever is later.
DEATH BENEFIT:
Sum assured plus accrued bonuses and the terminal bonuses, if any, on the death
of the policyholder are paid to his/her nominees/heirs.
LIMITED PAYMENT WHOLE LIFE - PLAN 005 (WITH PROFITS)
Features:
This is the best form of life assurance for family provision since it enables the Life
Assured to pay all the premiums during the ordinarily vigorous and most productive
years of life. He need not pay any premium in the later stages of life if and when his
conditions might become adverse.With Profits Limited Payments Policies do not
cease to participate in profits after completion of the premium paying period but
continue to share in the periodical Bonus Distribution until the death of the Life
Assured. If the policyholder pays at least 3 years' premiums and then discontinues
paying any more premiums, a reduced paid-up assurance policy comes into force.
Such a reduced paid-up Policy will not been titled to participate in the profits
declared. Thereafter, but such Bonus as has already been declared on the Policy will
remain attached thereto. The premium paying term under this plan is five years
minimum and 55 years maximum.
BENEFITS Survival benefits

If the Life Assured survives the premium paying period and the policy continues in
full force, provided all premiums have been paid, but no further premiums are
required to be paid.
BENEFITS
Disability Benefit:
In case policy holder becomes totally and permanently disabled due to an
accident before reaching the age of 70 and the policy is in full force, he will not be
required to pay further premiums, (the Disability Benefit is available in respect of
the firstRs.20000 sum assured on anyone life) and the policy will continue to be in
force.
Accident Benefit:
By paying a small extra premium of Rs. l per Rs. 1000/- sum assured per year he
or his family are entitled to the following benefits on death or permanent disability
caused by accident. Even students above the age of 18 years can avail of this
benefit.
Premium Stoppage:
If payment of premiums ceases after at least THREE years' premiums have
been paid , a free paid-up policy for a reduced sum assured will be automatically
secured provided the reduced sum assured, exclusive of any attached bonus, is not
less than Rs. 250/The reduced sum assured will become payable on the event as stipulated in the
policy.
Bonus:
Is there anything extra payable besides the sum assured at the time of claim
settlement? Yes, but only if it is a 'with profits' policy. Every year the Life Insurance
Corporation distributes its surplus among policyholder to 'with profits' polices in the
form of bonuses. Substantial bonuses have been declared in the past after each
valuation of policy liabilities.
ANMOL JEEVAN - I (WITHOUT PROFITS) BENEFITS

On Death during the Term of the Policy: Sum Assured On Maturity: Nil
RESTRICTIONS
(A) Minimum age at entry: 18 years (completed)
(B) Maximum age at entry: 55 years (nearer birthday)
(C)Maximum age at maturity: 65 years
(D) Minimum Term: 5 years
(E) Maximum Term: 25 years
(F) Minimum Sum Assured: Rs. Five Lakh
(G) Maximum Sum Assured: Rs. Three Crore (Inclusive of all
plans)
term
Assurance
Note: The policy would be issued in multiples of Rs. one lakh for Sum
Assured above Rs. five lakh.
(H)Mode of Premium Payment: Yearly, Half- Yearly and Single premium.
UNDERWRITING, AGE PROOF AND MEDICAL REQUIREMENTS:

The plan is available to Standard and Sub-standard lives (upto Class VI EMR).
This plan is also available to female lives (category I and II lives only) and to
physically handicapped persons subject to certain conditions. Standard age proof
will have to be submitted along with the Proposal Form.
PAID-UP AND SURRENDER VALUE:
The policy will not acquire any paid-up value.
No Surrender Value will be available under this plan.
GRACE PERIOD FOR NON-FORFEITURE PROVISIONS:
A grace period of 15 days will be allowed for payment of yearly or halfyearly premiums. If death occurs within this period and before the payment of the
premium then due, the policy will still be valid and the Sum Assured paid after
deduction of the said premium as also unpaid premiums falling due before the next
policy anniversary of the Policy. If the premium is not paid before the expiry of the
days of grace, the Policy gets lapsed.
REVIVAL:
If the Policy has lapsed, it may be revived during the life time of the Life Assured,
but before the date of expiry of policy term, on submission of proof of continued
insurability to the satisfaction of the Corporation and the payment of all the arrears
of premium together with interest at such rate as may be prevailing at the time of
the payment. The corporation reserves the right to accept or decline the revival
of discontinued policy. The revival of the discontinued policy shall take effect only
after the same is approved by the Corporation and is specifically communicated to
the Life Assured. The cost of the Medical reports, including Special Reports, if any,
required for the purposes of revival of the policy, should be borne by the Life
Assured.
PAYMENT OF CLAIMS:
No Claims concession will be applicable to this Policy.
BACK-DATING INTEREST:
The policy can be back dated within the financial year. No dating back interest
shall be charged.
BENEFITS:
Survival benefits:
If one or both the lives survive to the maturity date, the sum assured, along with the
accumulated bonus, is payable.
Death Benefits:
In case either of the couple dies during the policy's term, two things happen. One,
LIC pays to the surviving spouse the full sum assured. And, two, the policy
continues on the life of the surviving partner without him/her having to pay any
further premiums ,i.e. the life cover on the survivor continues free of cost. The sum
assured is again be payable on the death of the other partner in case both the
husband and wife were to die during the term of the policy. Vested bonus would
also be paid along with the sum assured on the second death.
NEW INSURANCE SCHEMES:

Universal Health Insurance Scheme
The Universal Health Insurance policy is available to groups of 100 or more
families. he policy provides for reimbursement of medical expenses upto
Rs.30000/-towards hospitalization members of the family, death cover due to an
accident 5000 to the earning head of the family and compensation due to loss f
earning head of the family @ Rs.50/- per day upto a maximum of 15 days, after
awaiting period of three days, when the earning head of the family is hospitalized.
The premium under the policy is Rs.1! - Per day (i.eRs.365/-per annum) for an
individual Rs. 1.5 per day for a family of five limited to spouse and children
(i.e.Rs.548 per annum), and Rs.2/- per day (i.e. Rs. 730 per annum) for covering
dependent overall family size of seven. A subsidy of Rs. 100 per year towards
annual premium for "Below Poverty Life" families is also provided under the
scheme.
For purpose of this policy hospital means:

Any Hospital/Nursing home registered with the local authorities and under the
supervision of a registered and qualified Medical practitioner.
Hospital, Nursing Home runs by Government.
Enlisted hospitals run by NGOs/ Trusts/ selected private hospitals with fixed
schedule of charges.
Hospitalization should be for a minimum period of 24 hours. However, this time
limit is not applied to some specific treatments and also where due to technological
advancement hospitalization for 24 hours may not be required.
Main Exclusions:
All pre-existing diseases.
Corrective, cosmetic or aesthetic dental surgery or treatment.
Cost of spectacles, contact lens and hearing aid.
Primarily diagnostic expenses not related to sickness/injury.
Treatment for Pregnancy, Childbirth, Miscarriage, abortions etc.

Age Limitations:
This policy covers people between the age of 3 months to 65 years.
Floater Basis:
The benefit of family' will operate on floater basis i.e. the total reimbursement of
Rs.30,000/- can be availed of individually or collectively by members of the family.
Unit plans:
Unit plans are investment plans for those who realize the worth of hard-earned
money. These plans help you see your savings yield rich benefits and help you save
tax even if you dont have consistent income.
Jeevan plus
Future plus
Bima plus
Market plus
Money plus
Profit plus
Fortune plus
Fortune plus:
It is a unit linked assurance plan where premium payment term (PPT) is 5 years and
the premium payable in the first year will be 50% of total premium payable under
the policy. The level of cover will depend on the level of premium you agree to pay.
Four types of investment funds are offered. Premiums paid after allocation charge
will purchase units of the Fund type chosen. The Unit Fund is subject to various
charges and value of the units may increase or decrease, depending on the Net Asset
Value (NAV). The plan therefore serves the purpose of insurance-cum-investment.
1. Payment of Premiums:
You may pay premiums regularly at yearly, half-yearly, quarterly or monthly (ECS)
intervals for 5 years. The minimum First year premium will be Rs.20,000/- and you
may pay any amount exceeding it. From second year onwards each years premium
will be 25% of the first year premium.
Other Features:
i) Partial Withdrawals:
You may encash the units partially after the third policy anniversary subject to the
following:
In case of minors, partial withdrawals shall be allowed from the policy anniversary
coinciding with or next following the date on which the life assured attains
majority(i.e. on or after18th birthday).Partial withdrawals may be in the form of
fixed amount or in the form of fixed number of units.For 2 years period from the
date of withdrawal, the Sum Assured under the Basic plan shall be reduced to the
extent of the amount of partial withdrawals made.Under policies where less than 3
years premiums have been paid and further premiums are not paid, the partial
withdrawals shall not be allowed.Under policies where at least 3 years premiums
have been paid, partial withdrawal will be allowed subject to Policyholders Fund
Value being at least Rs. 10,000/-.
ii) Switching:
You can switch between any fund types for the entire Fund Value
during the policy term subject to switching charges, if any.
iii) Discontinuance of premiums:
If premiums are payable either yearly, half-yearly, quarterly or monthly (ECS) and
the same have not been duly paid within the days of grace under the Policy, the
Policy will lapse. A lapsed policy can be revived during the period of two years
from the due date of first unpaid premium.
i Where at least 3 years premiums have been paid, the Life Cover and Accident
Benefit rider, if any, shall continue during the revival period. During this period, the
charges for Mortality and Accident Benefit cover, if any, shall be taken, in addition
to other charges, by canceling an appropriate number of units out of the
Policyholders Fund Value every month. This will continue to provide relevant risk
covers for i.e. two years from the due date of first unpaid premium, or
ii. Till the date of maturity, or

iii. Till such period that the Policyholders Fund Value reduces to Rs. 5,000/-,
whichever is earlier. The benefits payable under the policy in different
contingencies during this period shall be as under:
A. In case of Death: Higher of Sum assured under the Basic Plan or the
Policyholders Fund Value. The Sum Assured shall be subject to provisions of
Partial Withdrawals made, if any.
B. In case of Death due to accident: Accident Benefit Sum Assured in addition to
the amount under A above, if Accident Benefit is opted for.
C. On Maturity: The Policyholders Fund Value.
D. In case of Surrender (including Compulsory Surrender): The Policyholders
Fund Value. The Surrender value, however, shall be paid only after the completion
of 3 policy years.
E. In case of Partial Withdrawals: For 2 years period from the date of withdrawal,
the sum assured under the basic plan shall be reduced to the extent of the amount
of partial withdrawals made.
II) Where the policy lapses without payment of at least 3 years premiums, the Life
Cover and Accident Benefit rider cover, if any, shall cease and no charges for
these benefits shall be deducted. However, deduction of all the other charges shall
continue. The benefits under such a lapsed policy shall be payable as under
F. In case of Death: The Policyholders Fund Value.
G. In case of death due to accident: Only, the amount as under F above.
H. In case of Surrender (including Compulsory Surrender): Policyholders Fund
Value / monetary value as the case may be, shall be payable after the completion
of the third policy anniversary. No amount shall be payable within 3 years from the
date of commencement of policy.
I. In case of Partial withdrawal: Partial Withdrawals shall not be allowed under such
a policy even after completion of 3 years period.
III) Revival: If due premium is not paid within the days of grace, the policy lapses.
A lapsed policy can be revived during the period of two years from the due date of
first unpaid premium or before maturity, whichever is earlier. The period during
which the policy can be revived will be called Period of revival or revival
period .If premiums have not been paid for at least 3 full years, the policy may be
revived within two years from the due date of first unpaid premium.
The revival shall be made on submission of proof of continued insurability to the
satisfaction of the Corporation and the payment of all the arrears of premium
without interest. If at least 3 full years premiums have been paid and subsequent
premiums are not paid, the policy may be revived within two years from the due
date of first unpaid premium but before the date of maturity. No proof of continued
insurability shall be required but all arrears of premium without interest shall be
required to be paid. The Corporation reserves the right to accept the revival at its
own terms or decline the revival of a lapsed policy. The revival of a lapsed policy
shall take effect only after the same is approved by the Corporation and is
specifically communicated in writing to the Propose / Life Assured .Irrespective of
what is stated above, if less than 3 years premiums have been paid and the
Policyholders Fund Value is not sufficient to recover the charges, the policy
shall be terminated and thereafter revival will not be entertained. If 3 years or more
than 3years premiums have been paid and the Policyholders Fund Value reduces to
Rs.5000/-, the policy shall terminate and Policyholders Fund Value as on such date
shall be refunded to the Life Assured and thereafter revival will not be allowed.
IV) Settlement Option: When the policy comes for maturity, you may exercise
Settlement Option and may receive the policy money in installments spread over
a period of not more than five years from the date of maturity. There shall not be
any life cover during this period. The value of installment payable on the date
specified shall be subject to investment risk i.e. the NAV may go up or down
depending upon the performance of the fund.
Reinstatement:
A policy once surrendered will not be reinstated.
Risks borne by the Policyholder:
i) LICs Fortune Plus is a Unit Linked Life Insurance product which is different
from the traditional insurance products and is subject to the risk factors.
ii) The premium paid in Unit Linked Life Insurance policies are subject to
investment risks associated with capital markets and the NAVs of the units may go
up or down based on the performance of fund and factors influencing the capital
market and the insured is responsible for his/her decisions.
iii) Life Insurance Corporation of India is only the name of the Insurance Company
and LICs Fortune Plus is only the name of the unit linked life insurance contract
and does not in any way indicate the quality of the contract, its future prospects or
returns.
iv) Please know the associated risks and the applicable charges, from your
Insurance agent or the Intermediary or policy document of the insurer.
v) The various funds offered under this contract are the names of the funds and do
not in any way indicate the quality of these plans, their future prospects and returns.
vi) All benefits under the policy are also subject to the Tax Laws and other financial
enactments as they exist from time to time.
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.
Loan: No loan will be available under this plan.
Assignment: Assignment will be allowed under this plan.
Exclusions: Any amount exceeding it. From second year onwards each
years premium will be 25% of the first year premium. In case the Life Assured
commits suicide at any time within one year, the Corporation will not entertain any
claim by virtue of the policy except to the extent of the Policyholders Fund Value
on death.
MARKET PLUS
IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO
IS BORNE BY THE POLICYHOLDER"
LICs MARKET PLUS:
This is a unit linked deferred pension plan. You can take the plan with or without
risk cover. You can also choose the level of cover within the limits, which will
depend on whether the policy is a Single premium or Regular premium contract and
on the level of premium you agree to pay. The allocated premiums will be applied
to purchase units as per the Fund type chosen. Your Unit Account will be subject to
deduction of charges as specified in the Policy Conditions. The value of the units in
the Unit Fund may increase or decrease, depending on the investment return of the
assets representing the chosen Fund i.e.
Payment of Premiums:
You may pay premiums regularly at yearly, half-yearly or quarterly intervals over
the term of the policy. The minimum annual premium will be Rs.5, 000/- increasing
thereafter in multiples of Rs.1, 000/-.Alternatively, a Single premium can be paid
subject to a minimum of Rs.10,000 and thereafter in multiples of Rs.1, 000.ii.
Benefits:
A) Death Benefit:
If the Life cover is opted for, the Sum Assured under the Basic Plan together with
the Fund Value of units either as a lump sum or as pension. In case the policy is
taken without life cover, then the Fund Value of the units held in the Policyholders
Unit Account shall be payable either as a lump sum or as a pension. The amount of
pension will depend on the then prevailing immediate annuity rates under the
annuity option chosen.
B) Benefit on Vesting:
On your surviving to the date of vesting, the Fund Value of the units held in your
Unit Account will compulsorily be utilized to provide a pension based on the then
prevailing immediate annuity rates under the relevant annuity option. However, you
may opt to commute up to one-third of the Benefit to be paid asa lump sum.
Further, you may choose to purchase pension from LIC or other life insurance
company.
Accident Benefit Option:
If you have opted for life cover, you may opt for Accident Benefit equal to life
cover subject to minimum Rs. 25,000 and maximum Rs. 50 lakh (taken all policies
with LIC of India and other insurers).In case of death by Accident, an additional
sum equal to Accident benefit will be payable.
OBJECTIVES OF LIC
Spread Life Insurance widely and in particular to the rural areas and to the socially and
economically backward classes with a view to reaching all insurable persons in the country
and providing them adequate financial cover against death at a reasonable cost.
Maximize mobilization of people's savings by making insurance-linked savings adequately

attractive.
Bear in mind, in the investment of funds, the primary obligation to its policyholders, whose
money it holds in trust, without losing sight of the interest of the community as a whole; the
funds to be deployed to the best advantage of the investors as well as the community as a
whole, keeping in view national priorities and obligations of attractive return.
Conduct business with utmost economy and with the full realization that the moneys belong to
the policyholders.
Act as trustees of the insured public in their individual and collective capacities.
PENSION: - A BRIEF INTRODUCTION

What Is Pension
The pension system in India is in its infancy. There are generally three forms of plans:
provident funds, gratuities and pension funds. Most of the pension schemes are confined to
government employees (and some large companies). The vast majority of workers are in the
informal sector. As a result, most workers do not have any retirement benefits to fall back on
after retirement. Total assets of all the pension plans in India amount to less than USD 40
billion.Therefore, there is a huge scope for the development of pension funds in India. The
finance minister of India has repeatedly asserted that a Latin American style reform of the
privatized pension system in India would be welcome (Roy, 1997). Given all the pros and
cons, it is not clear whether such a wholesale privatization would really benefit India or not
(Sinha, 2000).
PENSION PLAN OF LIC
JEEVAN NIDHI
JEEVAN AKSHAY-VI
JEEVAN DHARA-I
NEW JEEVAN SURAKSHA-I Introduction to the Pension Plans of LIC.
Pension plan 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
New Jeevan Dhara-I
New Jeevan Suraksha-I
Jeevan Nidhi
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.
b. Participation in profits: The policy shall participate in profits of the Corporation from
the 6th year onwards and shall be entitled to receive bonuses declared as per the experience
of the Corporation.
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 withaccrued Guaranteed
Additions, simple Reversionary Bonuses andTerminal 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 LICs 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
alive3. 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
commuted value, if
bonuses excluding
the
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.
6. 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
ICICI PRUDENTIAL
HISTORY OF ICICI PRUDENTIAL
ICICI Prudential is a joint venture between ICICI Bank and Prudential plcengaged in
the
business
of
life
insurance
in
India.
ICICI Prudential is the largest private
insurance company and second largest insurance in India after LIC. ICICI Prudential Life
Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse,
and prudential plc, a leading international financial services group headquartered in the
United Kingdom. ICICI Prudential was amongst the first private
companies
to
begin
operations
sector
insurance
in December 2000 after receiving approval from
Insurance Regulatory Development Authority (IRDA).ICICI Prudential Life's capital stands

at Rs. 37.72 billion (as on March, 2008) with ICICI Bank and Prudential plc holding 74% and
26% stake respectively. For the year ended March 31, 2008, the company garnered Retail
New Business Weighted premium of
How to plan for retirement?
5 simple steps to arrive at an ideal retirement plan
Step 1: Decide how much income you require to live comfortably in your post-retirement
years. Remember to take into account aspects like increased medical costs, vacations and
gifts for family, but reduce costs like children's education and rent, if you own your home.
Use our easy Inflation Index Calculator to calculate the impact of inflation.
Step 2: Determine how much you need to save regularly, starting today. Use our
Retirement Calculator to determine how large a kitty you will need and how much you need
to save each year.
Step 3: Select the right retirement plan that enables you to meet your post-retirement
requirements. Preferably invest in market-linked plans, which can provide you with
potentially higher returns in the long run. Our Life Stage Profiler will help you select the
plan that meets your criteria
Step 4: Start saving now so you have time on your side and can enjoy the power of
compounding. Use our simple Power of Compounding Calculator.
Step 5: Systematically invest a fixed amount every month for your postretirement years.
Why is retirement planning important?
Retire from work. Not from life.
A retirement plan is an assurance that you will continue to earn a satisfying income and
enjoy a comfortable lifestyle, even when you are no longer working. To understand why an
increasing number of individuals have already started planning for their retirement, and why
you should too, read on.
Independence is the new way of life: An increasing number of young Indian professionals
are moving away from the traditional joint family structure. Since support no longer comes
easily, parents have realized the need to provide for themselves during their retirement years.
Costs set to soar: Skyrocketing costs throw even a well-salaried person off balance. With
rates rising everyday, you can imagine how high they will be when you are ready to retire. A
retirement plan provides you with a steady income every month, to arm you in the face of
rising costs.To understand how inflation can impact your monthly expenses, use our special
tool, the Inflation Index calculatoNon-earning retirement phase is now longer: Only 4% of
India working population- mostly government employees are cover ed by pensions. The
remaining 96% comprises self-employed and salaried professionals who do not have a
formal, mandated provision for pensions. ICICI Prudential offers two key retirement plans,
LifeLink Super Pension and LifeTime Super Pension - flexible income cum insurance
plans that ensure you meet all your retirement requirements. So you can retire peacefully
from work, but not from life.
Retirement Solutions
To cater to the needs of a customer looking for retirement planning, ICICI Prudential
presents a wide array of products. These products have been designed to take into account the
diverse set of needs that characterize individual customers.
Plan Name
Plan Type
LifeStage Pension
Unit Linked
PremierLife Pension
Unit Linked
LifeTime Super Pension
Unit Linked
LifeLink Super Pension
Unit Linked
ForeverLife
Traditional
Immediate Annuity
Traditional
Why Life Stage Pension

Retirement time is the time to live your dream, dream that you have been putting off as you
never had the time for it. But your retirement dream has a cost attached to it. We call this your
retirement number.To help you achieve your retirement number ICICI Prudential presents to
you,
LifeStage Pension.
One of the most distinguishing features of this policy is that it has no premium allocation
charge for regular premiums which means 100% of your money is invested. Whats more, the
policy provides you with a unique lifecycle-based strategy that continuously re-distributes
your money across various asset classes based on your life stage and risk tolerance,
eventually providing you with a customized retirement solution.Invest today to attain your
retirement number and fulfill your dream
Why Premier Life Pension
You have strived hard to achieve your dreams and have attained the best comforts life could
offer. After having reached this enviable and secure position, wouldnt you like to continue
living life on your own terms even after retirement? If you think so, then you need a
retirement solution that not only suits your needs but also lets you retire RICH. To help you
achieve this, ICICI Prudential Life Insurancepresents PremierLife Pension Plan- a limited
premium paying, unit-linked pension policy designed for preferred customers like you.
Why LifeTime Super Pension Plan
ICICI Prudential's LifeTime Super Pension policy is especially designed to help you
systematically save towards a joyful and satisfying retirement. LifeTime Super Pension
Plan is a cost-effective pension plan that delivers great value in the long run. A regularpremium unit-linked pension policy, LifeTime Super Pension ensures you earn a fixed
income, for your entire life after retirement. So you can relax and live moments that truly
matter.
Why LifeLink Super Pension
ICICI Prudential's LifeLink Super Pension Plan has been especially tailored for individuals
who would much rather make a lump-sum investment than pay premiums at regular intervals
for their retirement planning. A cost-effective single premium unit-linked pension policy,
LifeLink Super Pension Plan provides potentially higher returns that ensure your golden
years are secure and peaceful. Invest in LifeLink Super Pension Plan today and watch your
money multiply every month, right up to the day you retire. Receive an assured income from
your retirement day, for the rest of your life. Read more about the features and benefits of this
plan
Why ForeverLife
ICICI Prudential's ForeverLife is a complete insurance cum pension plan that performs
two crucial roles: it acts as a protective cover while you earn for your retirement, and
provides you with regular pensions once youretire.
Why Immediate Annuity
Security and comfort during retirement is a top priority for everyone. It forms the central
aspect of a dream that everyone hopes to achieve and realize at some point or the other
during his or her life as a senior citizen.If you fear that you've missed the bus as far as
retirement planning is concerned, there is no reason to despair. With ICICI Prudential's
Single Premium Product, you can start earning an annuity income immediately after paying
the premium. What's more, the annuity income is guaranteed for life which means that the
insurance company pays you and your spouse (as the case maybe) a guaranteed pension till
you live.
Tax Benefits on Insurance and Pension

Life insurance and retirement plans are effective ways to save taxes when doing your year
end tax planning.
To assist you in tax planning, the tax breaks that are available under our various insurance
and pension policies are described below:
Our life insurance plans are eligible for tax deduction under Sec. 80C.
1. Our Pension plans are eligible for a tax deduction under Sec. 80CCC.
2. Our health insurance plans/riders are eligible for tax deduction under Sec. 80D.
3. The proceeds or withdrawals of our life insurance policies are exempt under Sec
10(10D), subject to norms prescribed in that section. Invest in ICICI Prudential Life
insurance and retirement plans and avail of these tax planning services to save tax at
your year end tax planning
ULIPs: An Introduction
Most importantly, what are ULIPs? Here, you will find all the information you need to set
your mind at ease about how to invest in ULIPs, and which ULIP is right for you. ULIPs are
a category of goal-based financial solutions that combine the safety of insurance protection
with wealth creation opportunities. In ULIPs, a part of the investment goes towards
providing you life cover. The residual portion of the ULIP is invested in a fund which in turn
invests in stocks or bonds; the value of investments alters with the performance of the
underlying fund opted by you. Simply put, ULIPs are structured in such that the protection
element and the savings element are distinguishable, and hence managed according to your
specific needs. In this way, the ULIP plan offers unprecedented flexibility and transparency.
Working of ULIPs It is critical that you understand how your money gets invested once you
purchase a ULIP: When you decide the amount of premium to be paid and the amount of life
cover you want from the ULIP, the insurer deducts some portion of the ULIP premium
upfront. This portion is known as the Premium Allocation charge, and varies from product to
product. The rest of the premium is invested in the fund or mixture of funds chosen by you.
Mortality charges and ULIP administration charges are thereafter deducted on a periodic
(mostly monthly) basis by cancellation of units, whereas the ULIP fund management charges
are adjusted from NAV on a daily basis. Since the fund of your choice has an underlying
investment either in equity or debt or a combination of the two your fund val ue will
reflect the performance of the underlying asset classes. At the time of maturity of your plan,
you are entitled to receive the fund value as at the time of maturity. The pie-chart below
illustrates the split of your ULIP premiumTYPES OF ULIP
ULIP FOR RETIREMENT PLANNING
Types of ULIPs
One of the big advantages that a ULIP offers is that whatever be your specific financial
objective, chances are that there is a ULIP which is just right for you. The figure below gives
a general guide to the different goals that people have at various age-groups and thus, various
life-stages.
Depending on your specific life-stage and the corresponding goal, there is a

ULIP which can help you plan for it.
PLANNING ULIPS FOR RETIREMENT
Retirement is the end of active employment and brings with it the cessation of regular
income. Today an increasing number of people have stated planning for their retirement for
below mentioned reasons
Almost 96% of the working population has no formal provisions for retirement
With the growing nuclearisation of family structure, traditional support

system of the younger earning members is no longer available
Developments in the healthcare space has lead to an increase in life expectancy
Cost of living is increasing at an alarming rate
Pension plans from insurance companies ensure that regular, disciplined savings in such
plans can accumulate over a period of time to provide a steady income post-retirement.
Usually all retirement plans have two distinctive phases
The accumulation phase when you are saving and investing during your learning years
to build up a retirement corpus and
The withdrawal phase when you actually reap the benefits of your investment as your
annuity payouts begin
In a typical pension plan you have the flexibility to make a lump sum payment or a regular
contribution every year during your earning years. Your money is then invested in funds of
your choice. You can opt to receive the annuity at any time after vesting age (age at which
you become eligible for pension chosen by you at the inception of the plan). Most of the Unit
linked pension plans also come with a wide range of annuity options which gives you choice
in structuring the post-retirement benefit pay-outs. Also at the time of vesting you can make a
lump sum tax-exempted withdrawal of up to 33 per cent of the accumulated corpus. In a
retirement plan the earlier you begin the greater you gain post retirement due to the power
of compounding. Let us take an example of Gaurav & Hari. Both of them want to retire at the
age of 60. Gaurav starts investing Rs. 10,000 every year from the age of 25 till the time that
he retires. In all, he would have invested Rs. 350,000. If his investments were to earn 7%
return every year, at the time of his retirement, Gaurav will have a retirement corpus of Rs.
13, 82,368. Now, Hari starts investing 10 years later (i.e. at the age of 35) and in order to
make up for the lost time, invests Rs.15,000 every year (which is 50% more than Gauravs
annual investment). So, by the time of his retirement, he would have invested Rs. 3,75,000.
And assuming the same annual return of 7%, he will end up with a retirement corpus of Rs 9,
48,735.
So, you see how despite setting aside more than 50% of Gauravs annual contribution, Hari
ends up with a retirement corpus which is almost a third lesser than Gauravs. That is the
power of compounding.
Which is why, it is never too early to invest in a ULIP for retirement
Planning
Tax Benefits of Ulip

ULIPs are an efficient tax saving instrument too .The tax benefits that you can avail in case
you invest in ULIPs are described below:
Life insurance plans are eligible for deduction under Sec. 80C
Pension plans are eligible for a deduction under Sec. 80CCC
Health insurance plans and critical illness riders are eligible for deduction under Sec.
80D The maturity proceeds or withdrawals of life insurance policies are exempt
under Sec 10(10D), subject to norms prescribed in that section
Why pension plans offer the best retirement solutions

Mohan Shahs father Prakash retired last year from Central Bank of India. During his 29 years
of service, he failed to opt for any pension scheme. And being the sole earning member,
Prakash retired with little savings. The little that was there in his bank account was used up
last December to pay for his second daughters wedding.
Today, he and his wife live with Mohan and are forced to rely on their children for financial
support. But for how long? Having turned 60 last month, and looking at the mortality tables,
Mohans father has probably another 15 to 20 years left. Added to daily expenses, in January
this year, Mohans mother was diagnosed with diabetes and has to take insulin regularly.This
means medical expenses for Mohan. Health and medical costs have increased manifold and
will quadruple over the next 10 years. This is an additional expense for Mohan, as doctors
visits become a regular feature as one ages. Its not just medical costs alone. Even daily
expenses like food, petrol and transportation end up costing more. A kilo of potatoes used to
cost just Rs 1.50 some time back. Today, a kilo costs Rs 8, and if inflation rises at the annual
rate of five to six per cent, 10 years from now potatoes could cost Rs 43 a kilo! Petrol prices
have equally shot up from Rs 17 a litre 10 years back to Rs 34-35 plus today, and could well
rise to Rs 60 a litre 10 years from now. Enter pension, to reduce tension. Pension is all about
insuring oneself financially against the risk of living too long. It is about fund management,
long-term savings, protection and annuity income. Moreover, investment in pension plans
offers taxpayers a direct tax deduction of Rs 10,000 from ones taxable income under Section
80 CCC (1) of the Income Tax Act. Unlike Section 88, the tax benefits under this section are
available to persons in all income brackets. Even for those eligible to save tax under Section
88, the saving on an investment of Rs 10,000 is higher in the case of pension plans. The tax
saved is Rs 3,150, whereas under Section 88 a Rs 10,000 investment yields a maximum tax
rebate of Rs 2,000. However, one doesnt invest in pension schemes only for tax savings.
Considering the high cost of living and falling interest rates, people ought to be saving far
more than Rs 10,000 a year if they wish to retain their present lifestyles. Take the Life
Insurance Corporations (LIC) Jeevan Suraksha pension plan. A 30-year-old paying Rs
10,238 every year for a term of 20 years will be entitled to a pension of just Rs 14,200 per
month on retiring at the age of 50. LIC assumes an annual bonus rate of Rs 65 per Rs 1,000.
This is purely an illustration, which could vary depending on interest rates and investment
strategies. A pension plan also allows a policyholder to withdraw a certain percentage of the
accumulated funds on retirement to take care of some large expenses. Most of the private
players - ICICI Prudential, HDFC Standard Life, Tata AIG and Aviva Life - have followed in
the LICs footsteps and offer a maximum withdrawal of 25 per cent of the accumulated
corpus at the time of retirement. OM Kotak Mahindra Life is the only one to offer a
maximum withdrawal of 33 per cent of the accumulated amount. After withdrawal,
policyholders have to buy an annuity plan from the balance amount that will provide them
with a monthly pension till they bid a final goodbye. By taking an open market option,
customers can, on maturity, buy an annuity product from any life insurance company. Should
a policyholder die within the accumulating period, most life insurers return premium with
interest, subject to a maximum of sum assured, plus accumulated bonuses to date, say
officials with HDFC Standard Life. It is not easy to decide today how much annuity one
should take 20 years later. Thats a decision best left to be made at the time of retirement.
Customers can choose from various annuity options available, including options like annuity
for husband and wife, annuity with annual increment, annuity with return of purchase price
and more. During the accumulation phase, a customer can only decide how much he/she can
contribute and afford to put aside for post-retirement needs, says Tata AIG Life Insurance
Company managing director Ian Watts. Looking at the inflation rate and increasing postretirement costs in terms of healthcare needs, this means one should ideally save longer and
more if one wishes to preserve ones existing lifestyle. A few ballpark numbers will help you
figure out how much you should save in your circumstances. If you save Rs 10,000 every
year for a period of 30 years under LICs Jeevan Suraksha, you can expect a pension of Rs
9,290 per month on retirement after withdrawing Rs 3.93 lakh on retirement. Should you not
opt to withdraw a part of the accumulated corpus, you can expect a monthly pension of Rs
12,388 based on LICs current indicative calculations. A lot, however, depends on interest
rates at the point of retirement. A warning is in order, though: The incentive to save more than
Rs 10,000 is low because the balance has to come from post-tax income.On the other hand, if
you do save more and entitle yourself to higher pension, that pension income will be taxed
again as normal income. So, its a double whammy double taxation of pension saving s
and pension income. Yet, Mohan, learning from his fathers failure to save for post-retirement
life, signed his first pay cheque away towards the purchase of an ICICI Prudential pension
plan. He plans to religiously put aside Rs 20,000 every year to get himself a worthwhile
pension and in the hope that thegovernment will increase the tax deduction in the years to
come. Meanwhile, his life gets covered during the savings/ accumulation period. ICICI
Prudential also offers a health cover and guarantees capital protection during the
accumulation phase. To be sure, pension plans are not the only available instruments in the
market today for long-term savings. During the accumulation phase, one could opt for mutual
funds, the governments tax-free bonds, the public provident fund, or government securities.
But there is no tax exemption or inherent life cover in mutual funds; in the case of PPF, you
get section 88 benefits for incomes up to Rs 5 lakh, but not above. The interest is, however,
tax-free. Some infrastructure bonds also offer Section 88 benefits.
Pension plans rise in insurance co portfolios
Can I lead a comfortable life after my retirement ? That's a question an increasing number of
people are asking themselves.And that's the reason why pension plans today contribute about
30% of the insurance industry's total business . The industry is seeing a 20%-25 % annual
growth in pension policies and a 50% growth in premium. "The average premium for pension
plans is higher ," says Amit Gupta, director for marketing in ING Vysya Life Insurance. At
ING Life, pension plans used to contribute 4%-5 % of business in 2006. But in 2008, that's
grown to about 10%. For Bharti AXA Life, the retirement product , which was launched in
January 2008, contributed 20% of the total premium in the year.Most private companies do
not offer pensions, and employees are typically dependent only on their provident fund for
retirement financing, which in most cases is insufficient to maintain current living standards.
That's the gap pension plans are seeking to fill. "Pension plans are mainly targeted towards
couples in the age group of 35 and 45 years. Couples at this age would have completed
saving for their protection needs, would have children who are slightly older and would be
now interested in planning for retirement ," says Gupta. Young couples are also beginning to
plan for retirement, but this is still a relatively small proportion and is largely seen in
metros.Financial planners say it is best to start investing in a pension plan early in life, like
25-35 years, in order to get a meaningful deferred annuity. As the gap reduces between the
contribution period and the vesting period the pension amount becomes smaller. A global
survey on retirement trends conducted by AXA in 2008 revealed that the working population
in India expects to have a better quality of life or at least maintain the current life standards
postretirement."The survey covered 26 countries and Indians were the most optimistic. The
optimism is not supported with financial planning, as 56% of the population hadn't started
preparing for retirement," says the survey. Insurance companies say major concerns among
people in pension planning relates to deciding the right time to invest and choosing a plan
that provides payout beyond a certain age. Companies are coming with products to cater to
different needs. "We have a product that allows people to increase contribution to the
retirement kitty,"says Shyamal Saxena, chief marketing officer of Bharti AX
Did you say retirement is all about surviving on a meager pension?
Banish the thought. With the market flush with different types of schemes, you need not walk
into the twilight zone with empty pockets. In fact, retirement solutions are suddenly in
demand with people becoming more aware of the need to save for the sunset years.
Particularly in a country like India where, according to a survey by the Invest India Economic
Foundation, less than a sixth of those about to retire in the next 10 years are covered by some
form of pension, and only 2% of those not working in government (where pensions are
generous) being able to fund their retired lives even if they cut expenses by half, the need for
retirement plans is inevitable.Surprisingly, in sharp contrast to times when only traditional
pension plans were available in the market, the entry of private insurance players has changed
the scenario, as also the profile of the products. Pension plans today are more oriented
towards the model of ULIPs (unit-linked insurance products) because of their ability to
provide better returns on the back of robust stock market performances, as is the norm
abroad.Says Bert Paterson, managing director, Aviva India: In the last 20-25 years,
traditional products have taken a back seat in the developed markets. Now more than 80%90% of people invest in unit-linked products for both pensions and life insurance.
This, however, is not the case with India. Here, the majority of people still rely on the
traditional pension schemes such as PF and post office plans. But taking a cue from the
developed world, new age insurance companies have introduced a whole range of unit-linked
pension plans in the Indian market too, with their number growing by the day.
Aviva Indias PensionPlus, ICICI Prudentials LifeL ink Super Pension and LifeTime Super
Pension, TaTa AIGs InvestAssure Gold, SBI Lifes Horizon II Pension and Reliance Golden
Years Plan are some of them. Furthermore, as the insurance companies providing these plans
have increased manifold, there are more product choices before investors than ever before.
Even within the ULIPs, investors have choices in terms of varying their exposure to the
equity markets by choosing an aggressive or dominant pension fund, says Ashish Kapur,
CEO, Invest Shopp e India Ltd, adding that for instance, an aggressive pension scheme would
invest up to 60% inequity and the rest in debt-oriented avenues, while the conservative plan
would have a nominal exposure of 10-15% to equity.
Conventional pension plans, on the other hand, invest a major portion of the premium amount
in bonds and government securities (G-Secs). That is why the returns are on the lower side
there, say investment experts. And if one were to factor into the equation an annual inflation
figure of approximately 5%-6% per annum, then the real return figures look even more
unimpressive. As against this, unit-linked pension plans are said to be giving returns of 2540% in some cases.
Pension Plus comes with three fund options Balance d, Growth and Secure. And the same is
the case with most other plans. Thus, depending upon their risk appetite, the customers can
choose which fund option to go for.Thus, as against the conventional belief that ULIPs being
market-linked products are risky, it is possible to build in an element of guaranteed return
within the unit-link framework too. The key point is that customers can tailor their
investment strategy to suit their risk profile. Besides, the investment strategy is flexible and
can be changed as the customers needs and circumstances change, he adds. Besides,
according to experts, unit-linked products have distinct advantages over traditional ones.
Firstly, they are transparent. A customer can track the value of his investments on a daily
basis as the NAV is published in leading dailies and on the websites of the companies.
Further, all charges on the policy are shown to the customer. Secondly, they are flexible.
Every insurance company has four to five ULIPs with varying investment options, charges
and conditions for withdrawals and surrender. Moreover, schemes have been tailored to suit
different customer profiles and, in that sense, offer a great deal of choice, says
Kapur.Thirdly, ULIPs offer liquidity to the individual as he can withdraw money anytime he
wishes to after the initial lock-in period without a surrender charge. This is unlike
conventional endowment plans where individuals tend to lose out on surrender charges on
surrendering their policies. Other advantage are that since the investments are made for long
periods, the chances of earning a decent return are high. Also, the premiums paid for ULIPs
are eligible for tax rebates under Section 80C which allows a tax deduction of premiums paid
within the overall ceiling of Rs 1 lakh. Further, proceeds from ULIPs are tax-free under
section 10(10D), unlike those from a mutual fund which attract capital gains tax. This,
however, doesnt mean that one should opt for unit-linked products without taking any
precaution. First, one should look at the various charges being levied by the insure before
choosing a pension plan. One should also look at the fund performance and avoid reacting
impulsively. Usuall y investors react impulsively to the volatile movements of the market
and switch in between the schemes. Since ULIPs are designed for long-term investment, one
should watch the performance over a period of time, advis es an SBI Life Insurance
spokesperson.It also makes eminent sense to avoid putting all your eggs in one basket. More
so, since none of the private insurers has a performance track record available for evaluation.
Although LIC has been around for decades, it has opted out of assuring returns as it did in the
past. So spread your investment over plans of more than one company, but not at the cost of
your investment objective and risk profile, advises Kapur.
Also, a prudent factor while choosing a pension plan is that it should preferably be a pure
pension plan. Frills like life insurance cover and accident or critical illness riders should
preferably be avoided
COMPRATIVE ANALYSIS OF LICAND ICICI PRUDENTIAL WITH OTHER

INSURANCE COMPANY
There are a total of 13 life insurance companies operating in India, of which one is a Public
Sector Undertaking and the balance 12 are Private Sector Enterprises.
List of Companies are indicated below:NAME OF THE LIFE INSURANCE COMPANY AND THE SHARE HOLDING
PATTEN
Name of the company
Nature of Holding
Allianz Bajaj Life Insurance Co
Private
Aviva Life Insurance
Private
Birla Sun Life Insurance Co
Private
HDFC Standard Life Insurance Co
Private
ICICI Prudential Life Insurance Co
Private
ING Vysya Life Insurance Co.
Private
Life Insurance Corporation of India
Public
Max New York Life Insurance Co.
Private
MetLife Insurance Co.
Private
Om Kotak Mahindra Life Insurance
Private
Reliance insurance
Private
SBI Life Insurance Co
Private
TATA- AIG Life Insurance Company
Private
MARKET SHARE OF INSURANCE COMPANY (%)
Name of the Player
Market share (%)
LIFE INSURANCE CORPORATION OF INDIA
82.3
ICICI PRUDENTIAL
5.63
BIRLA SUN LIFE
2.56
BAJAJ ALLIANZ
2.03
SBI LIFE INSURANCE
1.80
HDFC STANDARD
1.36
TATA AIG
1.29
MAX NEW YARK
0.90
AVIVA
0.79
OM KOTAK MAHINDRA
0.51
ING VYSYA
0.37
MET LIFE
0.21
PRESENT SCENARIO OF INSURANCE INDUSTRY

India with about 200 million middle class household shows a huge untapped potential for
players in the insurance industry. Saturation of markets in many developed economies has
made the Indian market even more attractive for global insurance majors. The insurance
sector in India has come to a position of very high potential and competitiveness in the
market. Indians, have always seen life insurance as a tax saving device, are now suddenly
turning to the private sector that are providing them new products and variety for their choice.
Consumers remain the most important centre of the insurance sector. After the entry of the
foreign players the industry is seeing a lot of competition and thus improvement of the
customer service in the industry. Computerization of operations and updating of technology
has become imperative in the current scenario. Foreign players are bringing in international
best practices in service through use of latest technologiesThe insurance agents still remain
the main source through which insurance products are sold. The concept is very well
established in the country like India but still the increasing use of other sources is imperative.
At present the distribution channels that are available in the market are listed below.
Direct selling
Corporate agents
Group selling
Brokers and cooperative societies
Bank assurance
Customers have tremendous choice from a large variety of products from pure term (risk)
insurance to unit-linked investment products. Customers are offered unbundled products with
a variety of benefits as riders from which they can choose. More customers are buying
products and services based on their true needs and not just traditional money back policies,
which is not considered very appropriate for long-term protection and savings. There is lots
of saving and investment plans in the market. However, there are still some key new products
yet to be introduced - e.g. health products.The rural consumer is now exhibiting an increasing
propensity for insurance products.
FINDINGS
1.
According to you, which have played a major role in the field of life-insurance
companies?
Pvt. Employees
Govt. Employees
Business Man
LIC
10
13
10
HDFC
ICICI
Others
Insurance
14
No. of Respondents
12
10
Pvt. Employees
Govt. Employees
6
Business Man
4
2
0
LIC
HDFC
ICICI
Others
After analyzing this data it is found that from the given three respective level of Pvt. Govt.
and Business 10 out of 20 (30%), 13 out of 20 (39%) and 10 out of 20 (30%) are in favour of
LIC, while 5 out of 20 (15%), 3 out of 20 (9%) and 5 out of 20 (6%), 1 out of 20 (30%) and 1
out of 20 (30%) are in favour of other Pvt. Companies.
2.
Which insurance companies have been successful to make strong public base by
advertisement?
Pvt. Employees
Govt. Employees
Business Man
LIC
12
14
12
HDFC
ICICI
Others
Insurance
16
14
No. of Respondents
12
10
8
Pvt. Employees
Govt. Employees
Business Man
4
2
0
LIC
3.
HDFC
ICICI
Others
Which insurance company has gained massive public support in the current fiscal year?
Pvt. Employees
Govt. Employees
Business Man
LIC
12
14
10
HDFC
ICICI
Others
Insurance
16
14
12
No. of Respondents
10
Pvt. Employees
Govt. Employees
Business Man
6
4
2
0
LIC
HDFC
ICICI
Others
From the above table, it is found that from the given three sector Private, Govt. and Business
12 out of 20 (36%), 14 out of 20 (42%), 10 out of 20 (30%), are in the favour of LIC 3 out of
20 (9%), 2 out of 20 (6%) and 4 out of 20 (12%) are in favour of ICICI, whereas only 2 out of
20 (6%), 2 out of 20 (6%) 1 and out of 20 (3%) favour others company.
4.
Yes
No
Do you think insurance policy is in the direction of public welfare?
Pvt. Sector
Govt. Sector
Business Man
13
16
12
18
16
14
No. of Respondents
12
10
Yes
No
6
4
2
0
Pvt. Sector
Govt. Sector
Business Man
The above table shows that from private sector 13 out of 20 (30%) agree and 7 out of 20 (21%)
disagree, from govt. sector 16 out of 20 (48%) think it right but 4 out of 20 (12%) dont thick it so and
from business man 12 out of 20 (36%) are in favour of the above statement but 8 out of 20 (24%)
dont favour it.
5.
Is retirement bond or pension policy launched by the number of private player as well as
public sector Company in the direction of secured old age?
Yes
No
Pvt. Sector
Govt. Sector
Business Man
15
18
13
20
18
16
No. of respondents
14
12
Yes
No
10
8
6
4
2
0
Pvt. Sector
Govt. Sector
Business Man
It is obvious from the above table that 15 out of 20 (45%), 18 out of 20 (54%) and 13 out of
20 (39%) from the given three think retirement bend or pension policy a legitimate step in the
direction of secure old age but 5 out 20 (15%), 2 out of 20 (6%) and 7 out 20 (21%) dont
agree with the opinion of the majority class.
6.
Do you think that risk coverage factor included in Insurance policy attracts general public
towards the policy?
Yes
No
Pvt. Sector
Govt. Sector
Business Man
12
16
11
18
16
14
No. of respondents
12
10
Yes
No
6
4
2
0
Pvt. Sector
Govt. Sector
Business Man
From the above table it is found that 12 out of 20 (36%) from Private sector 16 out of 20
(48%). From Govt. sector and 11 out of 20 (33%) thinks risk coverage factor attractive but
rest 8 out of 20 (24%), 4 out of 20 (12%) and 9 out 20 (27%) from the above them sector
dont think it so encouraging towards saving trend whereas 3 out of 20 (9%), 2 out of 20
(6%) and 4 out of 20 (12%) dont think it so.
7.
What according to you, the term plan that only covers risk and doesnt cover maturity benefit
on survival at the end of the term provides security cover over policy holders or a smart way of
accumulative money from policy holders?
Security Cover
Accumulative Money
Pvt. Sector
Govt. Sector
Business Man
11
15
12
16
14
12
No. of Respondents
10
Security Cover
Accumulative Money
6
4
2
0
Pvt. Sector
Govt. Sector
Business Man
It is obvious from the above data that 11 out of 20 (33%), from the Pvt. Sector, 15 out of 20
(45%) from Govt. sector and 12 out of 20 (36%) think term plan as a security cover but 9 out
of 20 (27%), 5 out of 20 (15%) and 8 out of 20 (24%) from the three respective group think it
as a way of accumulating money insurance company.
8.
Do you think that the arrival of so many private companies in this insurance sector
envisage a lot of choice to policy holder?
Yes
Pvt. Sector
Govt. Sector
Business Man
16
18
16
No
20
18
16
No. of Respondents
14
12
Yes
10
No
8
6
4
2
0
Pvt. Sector
Govt. Sector
Business Man
From analyzing the above data it is found that 16 out of 20 (48%) from Pvt. Sector, 18 out of
20 (54%) from Govt. sector and 16 out of 20 (48%) think that the arrival of private players
envisage a lot of choice to policy holder. But 4 out of 20 (12%), 2 out of 20 (6%) and 4 out of
20 (12%) dont think it so.
9.
Do you agree that customer-centricity and transparency are the buzzwords for success in this
evolving industry?
Yes
No
Pvt. Sector
Govt. Sector
Business Man
18
20
19
25
No. of Respondents
20
15
Yes
No
10
Pvt. Sector
Govt. Sector
Business Man
From this above data, it is found the 18 out of 20 (54%) from Pvt. Sector and 20 out of 20
(60%) from Govt. Sector 19 out of 20 (57%) from Business men agree with this statement
whereas only 2 out of 20 (6%) from Pvt. Sector and 1 out of 20 (3%) from Business men do
not agree with this statement.
Conclusion
The insurance business is major service oriented business in the world. The services
offered by the insurance industry is well recognized and utilized by the general public and
commercial sector of the world. The life insurance business has covered nearly 40% of the
population of the world. Global players with strong brands in the insurance industry today set
up their back office operation in low cost countries, manage capital on a global basis, make
use of their special skills world wide and use their superior managerial ability to secure
leadership positions in the industry.
The claims management is an integral part of insurance. It involves the storage ,
processing and transmission of information relating to settlement of insurance claims. The
use of Information Technology also plays a very important role in claims settlement. In
managing the claims handling function, insurers seek to balance the elements of customer
satisfaction, administrative handling expenses, and claims overpayment leakages. As part of
this balancing act, fraudulent insurance practices are a major business risk that must be
managed and overcome. Disputes between insurers and insureds over the validity of claims or
claims handling practices occasionally escalate into litigation which should be solved with
due care.
In this fast developing scenario it will not be enough if companies have the futuristic
strategies. Implementation of the strategies, effectively adapting them to ongoing changes can
spell success. The success of claim management depends on the satisfaction of the customers.
The customers are attracted to an insurance company by its state of art claim service.
Therefore, before designing an IT system for claim management, customers expectations are
to be taken in to account. The customers, their needs, knowledge of how the market works,
and what they want, these are the things that are important for an insurance company for
serving the customers in a better manner through better technology.
Bibliography
www.insuremagic.com
www.licindia.com
www.icicprulife.com
www.insurancewatch.com
www.insuranceonline.com
www.sipnsurf.com
www.7506259405mukesh.com

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Project on Insurance Claims

However, with the successful passage IRDA Bill

Project on Insurance Claims

INTRODUCTION OF THE COMPANY

Project on Insurance Claims

(International) E.C.Bahrain. The Corporation has registered a joint venture

Project on Insurance Claims

Project on Insurance Claims

Project on Insurance Claims

Insurance Regulatory and Development Authority (IRDA) Act, 1999

BENEFITS Survival benefits

ANMOL JEEVAN - I (WITHOUT PROFITS) BENEFITS

(H)Mode of Premium Payment: Yearly, Half- Yearly and Single premium.

UNDERWRITING, AGE PROOF AND MEDICAL REQUIREMENTS:

NEW INSURANCE SCHEMES:

For purpose of this policy hospital means:

Treatment for Pregnancy, Childbirth, Miscarriage, abortions etc.

ii. Till the date of maturity, or

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

PENSION: - A BRIEF INTRODUCTION

New Jeevan Dhara-I

New Jeevan Suraksha-I

Guaranteed Additions @ Rs.50/per thousand Sum assured for each

ICICI Prudential is the largest private

in December 2000 after receiving approval from

Insurance Regulatory Development Authority (IRDA).ICICI Prudential Life's capital stands

LifeTime Super Pension

LifeLink Super Pension

Why Life Stage Pension

Tax Benefits on Insurance and Pension

Depending on your specific life-stage and the corresponding goal, there is a

With the growing nuclearisation of family structure, traditional support

Developments in the healthcare space has lead to an increase in life expectancy

Cost of living is increasing at an alarming rate

Tax Benefits of Ulip

Pension plans are eligible for a deduction under Sec. 80CCC

Why pension plans offer the best retirement solutions

COMPRATIVE ANALYSIS OF LICAND ICICI PRUDENTIAL WITH OTHER

Name of the company

Allianz Bajaj Life Insurance Co

Aviva Life Insurance

Birla Sun Life Insurance Co

HDFC Standard Life Insurance Co

ICICI Prudential Life Insurance Co

ING Vysya Life Insurance Co.

Life Insurance Corporation of India

Max New York Life Insurance Co.

MetLife Insurance Co.

Om Kotak Mahindra Life Insurance

SBI Life Insurance Co

TATA- AIG Life Insurance Company

MARKET SHARE OF INSURANCE COMPANY (%)

Name of the Player

Market share (%)

LIFE INSURANCE CORPORATION OF INDIA

BIRLA SUN LIFE

SBI LIFE INSURANCE

MAX NEW YARK

PRESENT SCENARIO OF INSURANCE INDUSTRY

Brokers and cooperative societies

Do you think insurance policy is in the direction of public welfare?

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