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Savings and Investments
Insurance is a means to Save and Invest. Your periodic premiums are like
Savings and you are assured of a lump sum amount on maturity. A policy can
come in handy at the time of your child’s education or marriage! Besides, it can
be used as supplemental retirement income.
Tax Benefits
Life insurance is one of the best tax saving options today. Your tax can be
saved twice on a life insurance policy.
Contract Of Insurance:
A contract of insurance is a contract of utmost good faith technically known as
uberrima fides. The doctrine of disclosing all material facts is embodied in this
important principle, which applies to all forms of insurance.
At the time of taking a policy, policyholder should ensure that all questions in the
proposal form are correctly answered. Any misrepresentation, non-disclosure or
fraud in any document leading to the acceptance of the risk would render the
insurance contract null and void.
Protection:
Savings through life insurance guarantee full protection against risk of death of the
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.
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Aid To Thrift:
Life insurance encourages 'thrift'. It allows long-term savings since payments can
be made effortlessly because of the 'easy installment' facility built into the scheme.
(Premium payment for insurance is either monthly, quarterly, half yearly or
yearly).
For example: The Salary Saving Scheme popularly known as SSS, provides a
convenient method of paying premium each month by deduction from one's salary.
In this case the employer directly pays the deducted premium to LIC. The Salary
Saving Scheme is ideal for any institution or establishment subject to specified
terms and conditions.
Liquidity:
In case of insurance, it is easy to acquire loans on the sole security of any policy
that has acquired loan value. Besides, a life insurance policy is also generally
accepted as security, even for a commercial loan.
Tax Relief:
Life Insurance is the best way to enjoy tax deductions on income tax and wealth
tax. This is available for amounts paid by way of premium for life insurance
subject to income tax rates in force.
Assesses can also avail of provisions in the law for tax relief. In such cases the
assured in effect pays a lower premium for insurance than otherwise.
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.
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1.4 Who Can Buy A Policy?
Any person who has attained majority and is eligible to enter into a valid
contract can insure himself/herself and those in whom he/she has insurable interest.
Policies can also be taken, subject to certain conditions, on the life of one's
spouse or children. While underwriting proposals, certain factors such as the
policyholder’s state of health, the proponent's income and other relevant factors are
considered by the Corporation.
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CHAPTER: 2
INTRODUCTION TO LIFE INSURANCE CORPORATION OF
INDIA
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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 Rabindra nath 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
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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 200.00crores of New Business in
1957 the corporation crossed 1000.00crores only in the year 1969-70, and it
took another 10 years for LIC to cross 2000.00crore mark of new business. But
with re-organization happening in the early eighties, by 1985-86 LIC had
already crossed 7000.00crore Sum Assured on new policies.
Today LIC functions with 2048 fully computerized branch offices, 109
divisional offices, 8 zonal offices, 992 satellite offices and the Corporate office.
LIC’s Wide Area Network covers 109 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 Centers have been
commissioned at Mumbai, Ahmadabad, Bangalore, Chennai, Hyderabad,
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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.
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.
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.
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1928: The Indian Insurance Companies Act enacted to enable the
government to collect statistical information about both life and non-life
insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance
Act with the objective of protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies are taken
over by the central government and nationalized. LIC formed by an Act
of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5
crore from the Government of India.
2.2 NATIONALIZATION
In 1955, parliamentarian Feroze Gandhi raised the matter of insurance
fraud by owners of private insurance companies. In the ensuing investigations,
one of India's wealthiest businessmen, Ram Kishan Dalmia, owner of the Times
of India newspaper, was sent to prison for two months. Eventually, the
Parliament of India passed the Life Insurance of India Act on1956-06-19, and
the Life Insurance Corporation of India was created on1956-09-01,by
consolidating the life insurance business of 245 private life insurers and other
entities offering life insurance services. Nationalization of the life insurance
business in India was a result of the Industrial Policy Resolution of 1956, which
had created a policy framework for extending state control over at least
seventeen sectors of the economy, including the life insurance. The
company began operations with 5 zonal offices, 33 divisional offices and 212
branch offices.
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2.3 CURRENT STATUS
Over its existence of around 50 years, Life Insurance Corporation of
India, which commanded a monopoly of soliciting and selling life insurance in
India, created huge surpluses, and contributed around 7 % of India's GDP in
2006. The Corporation, which started its business with around 300 offices, 5.6
million policies and a corpus of INR 459 million, has grown to 2,048 offices
servicing around180 million policies and a corpus of over INR 3.4 trillion. The
organization now comprises 2048 branches, 100 divisional offices and 8 zonal
offices, and employs over 1 million agents. It also operates in 12 other
countries, primarily to cater to the needs of Non Resident Indians. With the
change in the India's economic philosophy from the early 1990s, and the
subsequent relaxation of state control over several sectors of the economy, the
monopolistic position of the Life Insurance Corporation of India was diluted,
and it has had to compete with a number of other corporate entities, Indian as
well as transnational Life Insurance brands. In the financial year 2006-07 Life
Insurance Corporation of India's number of policyholders are said to have
crossed a whopping 200 million (fourth in terms of population of the countries
of the world.
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2.5 SUBSIDIARIES
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.
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Conduct business with utmost economy and with the full realization that the
moneys belong to the policyholders.
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.
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2.8 BOARD OF DIRECTORS
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2.11 INTERNATIONAL OPERATIONS/ASSOCIATES
INTERNATIONAL OPERATIONS
LIC Fiji
LIC Mauritius
ASSOCIATES
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2.12 MARKET SHARE OF ALL LIFE INSURANCE
COMPANY IN INDIA
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 10crore policies is being held on computers in LIC. We
have gone in for relevant and appropriate technology over the years.
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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.
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WIDE AREA NETWORK
All 7 Zonal Offices and all the MAN centers are connected through a
Wide Area Network (WAN). This will enable a customer to view his policy
data and pay premium from any branch of any MAN city. As at November
2005, we have 91 centers in India with more than 2035 branches networked
under WAN.
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2.14 AWARDS RECEIVED BY LIC DURING 2011-2012
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2.15 PRIVATE LIFE INSURANCE COMPANIES
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CHAPTER : 3
PRODUCTS OF LIC
Bima Account 1
Bima Account 2
Endowment Plus
Jeevan Aadhar
Jeevan Vishwas
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The Endowment Assurance Policy
The Endowment Assurance Policy-Limited Payment
Jeevan Mitra(Double Cover Endowment Plan)
Jeevan Mitra(Triple Cover Endowment Plan)
Jeevan Anand
New Janaraksha Plan
Jeevan Amrit
Jeevan Sugam
Jeevan Shree-I
Jeevan Pramukh
Jeevan Bharati - I
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The Whole Life Policy
The Whole Life Policy- Limited Payment
The Whole Life Policy- Single Premium
Jeevan Anand
Jeevan Tarang
Jeevan Saathi
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.
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Jeevan Akshay-VI
New Jeevan Nidhi
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 don't have consistent income.
Endowment Plus
Flexi Plus
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!
Bima Nivesh
2005
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3.5 GROUP INSURANCE SCHEME
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Fortune Plus Jeevan Saathi Plus
Health Plus Samridhi Plus
Pension Plus Jeevan Nidhi
New Jeevan
New Jeevan Suraksha-I
Dhara-I
Jeevan Vaibhav (Single Premium Endowment
Jeevan Vriddhi
Assurance Plan)
Jeevan Arogya
LIC policies provides you Money Back plan, Children Plan, Term Assurance
Plan. If you are looking for Lic Investment plan, Life Insurance, Lic Term
policy, New Bima Gold - Money back plan with difference. Compare various
good Lic policies Price, Features and Ratings; buy best Lic policy in Chennai.
Best LIC tax saving policy with good benefits ... LIC Insurance plans to
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guarantee education of your children. ... Endowment with Profit
Endowment with Profit Term Assurance Policy Term Assurance Policy Money
Back Policy Money Back Policy.
Pension Plans, Children's Plans, Investment Plans, Money Back Plans, Whole
life ... Compare all LIC Life insurance policies before you apply. Find LIC life
insurance policy best insurance life quote. ... Endowment Policy, Term
Policy, Money Back Policy, Joint Life Policy, Children's Policy
LIC Jeevan anand: LIC Jeevan Anand is a good whole life plan. It has
the wonderful returns and extremely helpful plan. Entire Life Plan +
Endowment guaranteed Plan.
LIC Jeevan saral: LIC's New Jeevan Saral Monthly Recurring
Scheme Jeevan Saral ATM Plan Table No 165. Jeevan saral policy
by Lic of India which is also called ATM plan. Jeevan Saral offers
insurance with money liquidity and tax saving. Awarded best innovative
Insurance product from IRDA
LIC new bima gold Policy: Table-179 It is a plan where premiums paid
over the term of plan are paid back during the policy term in installments
and life insurance cover is available not only during the term but also
during the extended term of the plan.
LIC Jeevan Tarang: Table 178 this is a with-profits whole of life plan
which provides for annual survival benefit at a rate of 5½ % of the Sum
Assured after the chosen Accumulation Period. The vested bonuses in a
lump sum are payable on survival to the end of the Accumulation Period
or on earlier death. Further, the Sum Assured, along with Loyalty
Additions, if any, is payable on survival to age 100 years or on earlier
death.
Jeevan Mitra(Triple Cover Endowment Plan): This is an Endowment
Assurance plan that provides greater financial protection against death
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throughout the term of plan. It pays the maturity amount on survival to
the end of the policy term.
Jeevan Shree-I: This is an Endowment Assurance plan offering the
choice of many convenient premium paying terms. It provides financial
protection against death throughout the term of plan with the payment of
maturity amount on survival to the end of the policy term.
LIC Endowment Plus: This is a unit linked Endowment plan which
offers investment cum insurance cover during the term of the policy. You
can choose the level of insurance cover within the limits, which will
depend on the mode and level of premium you agree to pay.
LIC Pension Plan Pension Plus: LIC’s Pension Plus is a unit linked
deferred pension plan, which provides you a minimum guarantee on the
gross premiums paid. The plan is without any life cover.
LIC Pension Plan Jeevan Nidhi: LIC's JEEVAN NIDHI is a with
profits Deferred Annuity (Pension) plan.
LIC Pension Plan Jeevan Akshay VI: It is an Immediate Annuity plan,
which can be purchased by paying a lump sum amount. The plan
provides for annuity payments of a stated amount throughout the life time
of the annuitant. Various options are available for the type and mode of
payment of annuities.
LIC Pension Plan New Jeevan Dhara-I: These are Deferred Annuity
plans that allow the policyholder to make provision for regular income
after the selected term.
LIC Pension Plan New Jeevan Suraksha-I: These are Deferred Annuity
plans that allow the policyholder to make provision for regular income
after the selected term.
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LIC Tarm Policy Amulya Jeevan – I: Death Benefit: In case of
unfortunate death of the Life Assured during the term of the policy, Sum
Assured is payable, provided the policy is kept in force.
LIC Tarm Policy Anmol Jeevan-I: On Death during the Term of the
Policy, Sum Assured.
LIC Children plans Child Career Plan: This plan is specially designed
to meet the increasing educational and other needs of growing children.
LIC Children plans Child Future Plan: This plan is specially designed
to meet the increasing educational, marriage and other needs of growing
children.
LIC Children plans Marriage Endowment or Educational Annuity
Plan: This is an Endowment Assurance plan that provides for benefits on
or from the selected maturity date to meet the Marriage/Educational
expenses of the named child.
LIC Children plans Jeevan Kishore: This is an Endowment Assurance
Plan available for children of less than 12 years of age. The policy may
be purchased by any of the parent/grand parent.
LIC Children plans Komal Jeevan: This is a Children's Money Back
Plan that provides financial protection against death during the term of
plan with periodic payments on survival at specified durations. This plan
can be purchased by any of the parent or grand parent for a child aged 0
to 10 years.
LIC Children plans Jeevan Anurag: Jeevan ANURAG is a with profits
plan specifically designed to take care of the educational needs of
children.
LIC Children plans Jeevan Chhaya: This is an Endowment Assurance
plan that provides financial protection against death throughout the term
of the plan.
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CHAPTER :4
Policy Conditions
Alterations In Policy
Admission Of Age
Nomination
Assignment
Surrender Value
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Maturity, Survival Benefits, Disability And Death Claims
Helpline
Policy Conditions
Every policy is taken for different types of needs; therefore the conditions for
your policy will vary according to the Plan and Term of the policy.
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The policy schedule contains on the first page of your policy, like the ones
mentioned above as well as other information like nominee, your address etc. It
also shows the date of commencement of your policy, date of birth, date of
maturity, due dates and months in which the renewal premiums are to be paid
etc.
The second page onwards carries the various policy conditions like risk
coverage, additional risks coverage if opted for, standard benefits that are
available for all policies, accident benefit if opted for, exclusion of risks if any
and other conditions that govern the contract of insurance.
Alterations In Policy
There may be instances when you would like to make alterations in your policy
like change of premium payment mode, reduction in premium paying term etc.
Your applications may be given in writing to the branch that services your
policy for our further action.
There are different types of alterations that are allowed on our life insurance
policies.
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etc, the remaining portion may be returned as evidence of loss of policy to LIC,
while applying for a duplicate policy.
In case you are sure that the policy bond is untraceable due to unknown causes,
there is a simple procedure to comply with while applying for the duplicate
policy at the branch that services your policy.
Admission of Age
Check your policy bond and see if your date of birth is correctly given therein.
This is one of the factors on which the premiums you pay for your policy is
arrived at.
This would also form the basis of all future policies you might avail from us.
In case your earlier policies do not have your date of birth incorporated and you
do have a date of birth certificate issued by the competent authority, you may
send an attested copy of the same to us, with a request to admit your age.
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Nomination
Ensure that the nominees name is correctly incorporated in the policy bond.
You may change the nomination in your policy any time during the lifetime of
the policy
In case you have not included the name of the nominee till now, please do not
delay; inform us your nomination immediately. Kindly note that the change of
nomination has to be done in the branch that services your policy.
The nominee is the person to whom the insurance claim amounts would be
payable, in case anything unfortunate within the purview of the policy
conditions happens to you.
The policy is usually taken by you to benefit your family – nominate the
persons who’ll have the welfare of your family in your absence; the usual
preferences being spouse and children.
You may nominate even minors like your children, in which case you have to
name another person who’ll have the welfare of the minor children, as an
appointee.
Assignment
In case you are raising a loan against your policy from LIC or any other
financial institution, your policy would have to be assigned to LIC or the
financial institution.
When you assign the policy the title of the policy is shifted from your name to
that of the institution.
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When To Pay the Premiums
Remember to pay your premium in time, even if our notices do not reach you.
There may be a postal delay.
LIC usually sends premium notices one month in advance to the due month of
the premium.
The months in which premiums are due are given on the first page of the Policy
bond.
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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 Bill Desk.
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, Ahmadabad, Pune, Goa, 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, Church gate, New India Building, Santacruz, Jeevan Shikha
Building, Borivali are dedicated for collection of premiums through
cheques.
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Now the policy status of policies being serviced in the cities connected by
network are also available through Internet. In select cities online touch screen
kiosks are also provided where you can view your policy status.
Surrender Value
This is the value which is the amount payable to you should you decide to
discontinue the policy and en cash the same from LIC.
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Surrender value is payable only after three full years premiums are paid to LIC.
More over if it is a participating policy the Bonus get attached to it as per
prevalent rules.
Surrender of policy is not recommended since the surrender value would always
be proportionately low.
Should you decide to go in for insurance at this stage further insurance would be
available to you at a much higher premium because your age would have
advanced since taking out the earlier policy.
Therefore retention of earlier policies and continuation of all policies without
allowing them to lapse is the best strategy for continuing life insurance
protection.
For each Salary Savings Scheme Policy your employer deducts the
premium from your salary and sends a consolidated cheque for all the
policies of the employees to a designated Branch of LIC, where all the
policy files are maintained.
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You can find out which Branch of LIC your policy file will be serviced
either from your Agent or from the pay roll department of your employer.
You will need to know which branch of LIC services your policy because
you will require their help in getting your Maturity/Survival Benefits, for
any alterations like change of address and for availing loans etc.
In case you are in a transferable job please inform the designated Branch
of LIC about your new place of posting.
After you join your new place of posting please ask your employer the
LIC Branch where the premiums are being remitted by your office there
and inform the LIC Branch which was servicing you earlier so that your
policy files can be transferred.
This way your records will be at correct place and will receive the
services from us like maturity, in time.
In case you are leaving your employer for a new job or joining another
firm, you have the facility to either continue the policy under the Salary
Savings Scheme of your new firm or to convert the payment mode into
quarterly, half yearly or yearly mode.
Always ensure the continuity of premium payments to avoid frequent
revivals of policy. This may become a cumbersome process for a person
who is in a transferable job.
Please do not send any installments directly to us. Your premium must
come through your employer only. We do not have systems to adjust
single installments received from our policy holders. Otherwise please
convert the mode into quarterly, half yearly, or yearly and pay directly.
This way you also get a discount on the premium payable.
Leave a permanent local address with us so that we can reach you
wherever you are even after many years.
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Helpline
To ensure that you get the best out of your policy please read our guidelines
carefully.
Keep the policy bond safe. It will be required at the time of maturity or
Survival Benefit. You will also require it if you are availing a loan or
want to assign your policy.
Inform your spouse/Parents/Children as to where the policy is kept.
When you shift residences, please inform the new address to us.
Otherwise any communication we send to you, like premium notices,
discharge vouchers, etc., will get delayed in reaching you.
Ensure that the nominees name is correctly incorporated in the policy
bond.
Remember to pay your premium in time, even if our notices do not reach
you. There may be a postal delay. The months in which premium are due
are given in the Policy bond.
You may pay the premium by Cheque, DD or Money Order. Remember
to quote the policy number every time in your correspondence. The
policy number is consisting of nine digits and can be found at the top left
hand corner of the policy bond.
Check your policy bond and see if your date of birth is correctly given
therein.
In case you are handing over the policy bond to any person or office,
including the LIC office please take a written acknowledgement.
When your Survival Benefits (For Money back policies) or maturity
benefits are due, we send intimations to your three months in advance. If
such intimations have not come to your even within one month of the due
date kindly inform us so that we may take necessary action.
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CHAPTER : 5
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LIC is one of the highest income tax playing Organization. For Financial
Year 2007-08, LIC has paid advance Tax Rs.2627. 14 Cr. & Service Tax
Rs.1292.15 Cr.
Social Strength
LIC - an institution builder promoting many financial and insurance
institutes like NSE, NCDEX, LIC Mutual Fund, Stock Holding
Corporation of India, National insurance Academy, insurance institute of
India etc.
LIC has foreign operations in Mauritius, Fiji and London and has joint
venture operating in Sri lanka, Nepal, Bahrain & Saudi Arabia. New
offices will bihourly opened in Australia, USA &Canada.
LIC is known as "Pension Provider" of the country.
1st Pension Company in India is floated by LIC as "LIC Pension Fund
Ltd" on 21st Nov 2007.
First to create waves in micro insurance sector by insuring people below
the poverty line. In year 2007-2008, 8.54lac policies sold through "Jeevan
Madhur" Plan.
Widest range of plans (about 48) for every need of the customer of 0 to
79 years of age.
Biggest Portfolio of Group insurance schemes available.
"Jeevan Saral" one of the product of LIC got "Best innovation product "
award from I.R.D.A.
LIC has covered lick Risk of 1.13crore citizens through "AAM ADMI
BIMAYOJANA" & " JANA SHREE BIMA YOJANA".
Very Unique Salary saving Portfolio.
Highest Number of Corporate Clients in Group insurance Scheme.
"Golden Jubilee Foundations" established for undertaking charitable
activities like education, health, relief of poverty etc.
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WEAKNESS :
Its employees and other staff are lethargic and least motivated to render
prompt and sincere customer service.
After sales customer grievance redressal mechanism is inefficient.
Agents not taking into account the needs of people and promote policies
having high commissions only.
Very slow decision making process and internal problems between top
management and lower cadre staff.
The top management or bosses are mediocre and there is large scale
corruption in main office.
The development officers and agents who are the foundation pillars of
LIC are not provided with extra funds and powers to promote its products
aggressively.
OPPORTUNITY:
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more easily available. So, that insurance companies working efficiently
and fast service.
Increased economic activities: increase in the economic activity has
become the opportunity for the life insurance sector. The activity such as
development in the automobile industry, development in the shipping
industry. The growth in the GDP shows the opportunity for this industry.
The growth rate expected this year 7-7.5%. So this is also one of the
opportunities for the life insurance sector.
Uncovered market: The Indian insurance market is the one of the least
markets in the world. India has a population 1044.15 million out of which
only 77.7 million have a life insurance policy. To enter into rural market
where customer awareness about insurance is low by effective and
efficient marketing strategies.
To sell insurance products through electronic Medias.
Natural calamities: natural calamities taking place now days have created
a concern for life insurance among the public. Because of natural
calamities like earthquake, flood, and cyclone people have become
conscious about benefits and need of insurance. Thus through a calamity
it has become a considerably big opportunity for the industry.
Growing population: the growth in the population (approximately 1.7%)
is very high. It is said that one Australia is added in our country every
year. Thus potential customers for the life insurance industry. It has
become an opportunity for the life insurance industry.
The lack of comprehensive social security system combined with a
willingness to save means that Indian people demand for pension
products will be large. Thus, it has become an opportunity for the life
insurance industry.
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THREATS:
Private entrants are naturally targeting the profitable and more lucrative
segments, by providing better service, new products and flexibility. They
are targeting the bigger corporate the other clients in the well established
metropolitan center. These new entrants succeeded in eating share of the
existing entities. This creates threat among rival firms itself.
Decreased in bank rate: the decreased bank rate is the biggest threat for
the life insurance sector. Fluctuation in the bank rate makes big difference
for the life insurance industry. It has become threats for the life insurance
industry.
Interest rate of P.F and bank saving create threat to insurance sector. All
other saving is obviously the threat for life insurance sector.
Increasing intensity of competition among industry rivals-may cause
squeeze (fall) on profit margins. Consumer’s education- consumers are
more and more confused because the market players are offering large
number of product range. As at present the awareness level is not much, it
is only because the education level is only 62 %( in which only 10% are
well educated).
Fraud in insurance sector: the major problem fraud, which affects the life
insurance sector.
The flight of talent to new entrants is already in evidence, and could be
on the rise for some time to come. Retaining qualified and competent
executives will be considerable challenges for existing companies.
One very serious danger that the government on units is likely to face is
that even if at some point of time, the government does decide to
disinvest a portion of its equity; they may not be fully free from
government interference.
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FINDINGS AND CONCLUSIONS
LIC is the giant of the insurance sector. The overall size of LIC is much
more than that of all private insurance companies. Private insurers are in
expansion mode and are increasing their size but are still much behind
LIC. Total premium deposits in LIC are much higher than the private
insurance companies. Total premium of LIC in FY 07-08 was
149789crores which three times more than that of private insurance
companies.
Income of LIC is much greater than private insurance companies. Last
year total income from investments of LIC was 48244.14crores which
was nearly equal to the total income of the all private insurance
companies. By this we can imagine how big the LIC is. Size of balance
sheet of private insurance companies is lagging much behind LIC.
Size of Balance sheet of LIC is seven times bigger than that of private
insurance companies.
If we see the total number of policies issued by LIC and private insurance
companies, we find that there is a huge gap between them. No doubt that
LIC is a well established player in the field of insurance and many private
companies have just started their business. Hence it is obvious that LIC is
having large number of policyholders.
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private insurance companies are mostly in urban areas and still it is LIC
which covers most of the area.
We see that due to excellent service quality and attractive offers private
insurance companies have started getting a number of customers. They
are growing rapidly. Though LIC is also increasing its customer base but
private insurance companies are moving at a fast pace.
Though the income of private insurance companies is negligible when
compared with LIC but then also the pace with which they are increasing
their income is tremendous. Private insurance companies are expanding
their business and will certainly going to give a tough competition to LIC in
the coming days.
LIC is certainly having a large customer base. Private insurance
companies are not having that much number of customer base but they
are increasing it rapidly. They have registered a decent growth of 104.64
% in number of new policies in the year 2006-07. Last year also their
growth rate was 67.4 %.
LIC, being the oldest player in the existing insurance market, has the
biggest market share of 73.9 % which was 87.3% five years earlier. We
see that private insurance companies are penetrating in the customer base
of LIC.
Overall we can see that private insurance companies are giving a tough
competition to the LIC and will certainly create a good business for
themselves in the coming days.
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There are many new entrants in this sector. There are many private
insurance companies who have reported loss in this and previous years.
This is the main reason why private insurance companies lag behind LIC
in case of business per branch. There is a big difference between them.
Customer base of LIC is very strong and still business per branch, profit
per branch or premium per branch, they are leading much ahead of
private insurance companies.
LIC has not shown their good concern when the matter of grievance
handling comes. Private insurance companies are far ahead in this matter.
LIC has just resolved 25%cases in the last five years while private
insurance companies have resolved nearly 70% cases. This is a matter
from where customer shift starts. We have seen the rapid increase in
customer base of private insurance companies which can be very much
affected by this factor.
Overall we have seen that still LIC is very famous but private insurance
companies are growing at exceptionally fast pace. Private companies show
due concern in grievance management and brings innovative schemes to
attract the customers. Right now they are giving good competition to LIC
and very soon they will give very tough competition to Life Corporation of
India.
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BIBLIOGRAPHY
NEWSPAPERS / MAGAZINES
The Economic Times
The Insurance Times
Insurance Post
BOOKS
Dr. Gupta S.P& Dr. Gupta M.P., Business Statistics by Addition 2004,
New Delhi,
WEBSITES
w.w.w.liclndia.com
www.lrdaindia.org.com
www.indiainfoline.com
www.icici.com
www.hdfc.com72
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