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Someone has greatly said that practical knowledge is far better than
classroom teaching. During this project, I fully realized this and come to
know about the present real world of Insurance sector. It includes all the
activities involved in providing insurance products to the final customers.
I am pleased to know about the consumers’ wants and competitors
activities in the real world of Insurance. The subject of my study is to
analyze the present insurance sector and products offered by LIC by
applying various tools like direct interaction with customers. The report
contains first of all brief introduction about the company. Then it
contains the various insurance plans/products offered by it to the general
public .I also put forward recommendations of the consumers and
conclusions that will help LIC to provide consumer satisfactory services
in the insurance sector.
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Introduction
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Research Objective
The report gives the brief background of the sector and proceeds to
highlight the short comings of the existing setup and players. The
benefits of liberalized sector are enumerated. The report also tries to
identify the market potential for insurance products and the strategy that
we employed to exploit the same. The stress is also given on knowing the
awareness level of general public.
• First and foremost objective is to find out the reasons for using of
Different Products of LIC.
• To find out the services that other insurance companies are giving
to their customers.
• To build the relationship with the customers and to follow up them,
make sure that they are satisfied with the product.
• To maintain good relationships with the corporate employees.
• To get more references from the customers and generate new leads
by following a chain process.
• To place LIC Products ahead of the competitors.
• To find out the customer awareness on booming Advance Product
market and to find out the using patterns of the people.
Research Methodology
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Basically there are 3 types of approaches used during the any research:
1. Exploratory
2. Descriptive
3. Experimental
Sampling Technique:
To study the Project, a Simple Random Technique is used in selecting
the sample size from a given population.
Data Collection:
Collection of data is done by:
Limitations of Study
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• The major limitation faced is the time constraint. The time span of
8-10 weeks is too short for understanding the industry as a whole
and makes recommendations.
• The other limitation is the cost factor. The probability of biasness
cannot be ignored as questionnaires are used.
• Scope of this project is limited to Delhi and cannot be generalized
for the whole of India.
• Mostly, consumers are very reluctant to provide answers to the
questions as they find it boring and of no use.
• Mindset of the people may vary depending upon their age, gender,
income etc.
Company Profile
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LIC – An Overview
The LIC is the largest state-owned life insurance company in India, and
also the country’s largest investor. The recent Economic Times Brand
Equity Survey rated LIC as the No. 1 Service Brand of the Country. 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, 101divisions and 8 zonal offices
located in different parts of India, along with satellite offices attached to
about some 50 branches, and has a network of around 1.2 million agents
for soliciting life insurance business from the public. The Life Insurance
Corporation of India also transacts business abroad and has offices in
Fiji, Mauritius and United Kingdom. LIC is associated with joint
ventures abroad in the field of insurance namely Ken-India Assurance
Company Limited, Nairobi; United Oriental Assurance Company
Limited, Kuala Lumpur and Life Insurance Corporation (International)
E.C.Bahrain. The Corporation has registered a joint venture company in
26th December,2000 in Katmandu, Nepal by the name of Life Insurance
Corporation (Nepal)Limited in collaboration with Vishal Group Limited,
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HISTORY
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The Oriental Life Insurance Company, the first corporate entity in India
offering life insurance coverage, was established in Calcutta in 1818 by
Bipin Behari Dasgupta and others. Europeans in India were its primary
target market, and it charged Indians heftier premiums. The Bombay
Mutual Life Assurance Society, formed in 1870, was the first native
insurance provider. Others insurance companies established in the pre-
independence are included:
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Subsidiaries:
LIC owns the following subsidiaries:
• Life Insurance Corporation of India International: This is a
joint venture offshore company promoted by LIC which
commenced operations in July, 1989 with the objectives of
offering US $ denominated policies to cater to the insurance needs
of NRIs and providing insurance services to holders of LIC
policies currently residing in the Gulf. LIC International operates
in all GCC countries.
• LIC Nepal: A joint venture company formed in 2001 with the
Vishal Group of Industries, Nepal.
• LIC Lanka: A joint venture company formed in 2003 with the
Bartleet Group of Companies, Sri Lanka.
• LIC Housing Finance: Incorporated in 19 June 1989, its main
objective is to provide long term finance for construction or
purchase of house or apartments. It has a Dubai office.
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Children Plans
Jeevan Anurag:
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LIC Jeevan Anurag fit plan specifically designed to take care of the
educational needs of children. The plan can be taken by a parent on his or
her own life. Benefits under the plan are payable at pre-specified
durations irrespective of whether the Life Assured survives to the end of
the policy term or dies during the term of the policy. In addition, this plan
also provides for an immediate payment of Basic Sum Assured amount
on death of the Life Assured during the term of the policy.
Benefits
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Rebates:
Mode rebate:
2% for yearly mode and 1% for half yearly mode on the tabular premium.
There are no rebates for quarterly and SSS modes. For monthly mode,
5% extra will be charged on the tabular premium.
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Payment of Premiums:
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Benefits:
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Death Benefit:
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The proposer can opt for this benefit if aged between 18 and 55 and is
medically fit. It provides waiver of premiums on death of proposer.
Further t benefit remain in force during the Auto cover period.Any
premiums that have paid during the Auto Cover period also be waived.
Grace Period:
Revival:
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Premiums:
Bonuses:
Benefits:
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Surrender Value:
The policy may be surrendered after it has been in force for 3 years or
more. The guaranteed surrender value is 30% of the basic premiums paid
excluding the first year’s premium.
Features:
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• High bonus
• High liquidity
• Savings oriented.
• Moderate premiums
This policy not only makes provisions for the family of the
Life Assured in event of his early death but also assures a
lump sum at a desired age. The lump sum can be
reinvested to provide an annuity during the remainder of
his life or in any other way considered suitable at that
time. Premiums are usually payable for the selected term
of years or until death if it occurs during the term period.
Suitable For:
Benefits:
This is the most popular form of life assurance since it not only makes
provision for the family of the Life Assured in the event of his early
death, but also assures a lump sum at any desired age. The amount
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assured, if not paid by reason of his earlier death, becomes payable at the
end of the endowment term when it may be invested to provide an
annuity during the remainder of his life or in any other way he may think
most suitable at the time. Other benefits include:
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 first Rs.20,
000 sum assured on any one
Accident Benefit: By paying a small extra premium of Rs.1 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.
Plan Parameters:
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Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through
Salary deductions, as opted by you, throughout the term of the policy or
earlier death.
Bonuses:
This is a with-profit plan and participates in the profits of the
Corporation’s life insurance business. It gets a share of the profits in the
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Benefits:
Death Benefit:
Table No 88: Twice the Sum assured plus all bonuses on the basic sum
assured to date is payable in a lump sum upon the death of the life
assured. Table No 133: Thrice the Sum assured plus all bonuses on the
basic sum assured to date is payable in a lump sum upon the death of the
life assured.
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Benefits:
Death Benefit: The Sum assured plus all bonuses to date is payable in a
lump sum upon the death of the life assured during the policy term.
Accident Benefit: The Sum assured (subject to a limit of Rs.5lakhs) is
payable in a lump sum on accidental death of the life assured during the
policy term. In case of permanent disability of the life assured due to
accident during the policy term, this benefit is payable in installments.
Maturity Benefit: The Sum Assured plus all bonuses declared up to
maturity date is payable in a lump sum on survival to the end of the
policy term.
Supplementary/Extra Benefits: These are the optional benefits that can
be added to your basic plan for extra protection/option. An additional
premium is required to be paid for these benefits.
Money back plans
The money back policy 20yrs
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Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through
salary deductions as opted by you throughout the term of the policy.
Benefits
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Death Benefit: The Sum assured plus all bonuses to date is payable in a
lump sum upon the death of the life assured during the policy term
irrespective of the Survival benefit /benefits paid earlier.
Survival Benefits: The percentage of Sum Assured as mentioned below
will be paid on survival to the end of specified durations:
All bonuses declared up to the maturity date will also be paid along with
the final survival benefit.
Supplementary/Extra Benefits: These are the optional benefits that can
be added to your basic plan for extra protection/option. An additional
premium is required to be paid for these benefits.
Surrender Value:
Buying a life insurance contract is a long-term commitment. However,
surrender values are available under the plan on earlier termination
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Plan Parameters:
Minimum Maximum
Entry age 13 (lbd) 50
Sum assured (Rs.) 50,000 NO LIMIT
Fixed at 20 for
Term (years) plan 75 and 25 -
for plan 93
Jeevan surabhi
Jeevan Surabhi plan is similar to other money back plans. However, main
differences in regular money back plans and Jeevan Surabhi are as under:
• Maturity term is more than premium paying term.
• Early and higher rate of survival benefit payment.
• Risk cover increases every five years.
The actual term and the premium paying term for these plans are as
under:
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Full sum assured is paid back as survival benefit by the end of premium
paying term. However, the risk cover and additional risk cover continue
and the policy participates in profits till the end of policy term.
Accident Benefit is restricted to the premium paying period and to the
overall limit of Rs.5lakhs on a single life.
This is a with-profits plan available for three different terms of 15, 20 and
25 years with corresponding premium paying terms of 12, 15 and 18
years. The plan provides a specified percentage of Sum Assured on
survival.
Suitable For:
This plan holds special interest to people who besides wishing to provide
for their old age and family feel the need for lump sum benefits at
periodical intervals.
Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through
salary deductions as opted by you throughout the premium paying term
of the policy or till the earlier death.
Benefits:
Death Benefit: The Sum Assured along with the additional cover, if any,
plus all bonuses declared till death is payable in a lump sum upon the
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death of the life assured during the policy term. The survival benefits
paid prior to death will not be deducted from the claim amount.
If death occurs at anytime during the term of a policy (provided the
policy has been kept in force by payment of all premiums that had fallen
due), the basic sum assured along with the vested bonus will be paid. The
survival benefits already paid, if any, will not be deducted from this
claim amount. An additional amount (depending on the duration of the
policy) will also be paid on death under such a policy. The additional
amounts payable, at various stages are shown in the table given below.
11th- 16th-
policy
1st year 15th 20th 21st-26th
Policy year
Policy policy policy policy year
6th-10th
year year
106 NIL 500 1000 NIL NIL
107 NIL 500 1000 1500 NIL
Maturity Benefit: The policy matures on your survival to the end of the
policy term. All bonuses declared up to maturity date will be paid in a
lump sum.
Supplementary/Extra Benefits: These are the optional benefits that can
be added to your basic plan for extra protection/option. An additional
premium is required to be paid for these benefits.
Surrender Value:
Buying a life insurance contract is a long-term commitment. However,
surrender values are available under the plan on earlier termination of the
contract.
Guaranteed Surrender Value:
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The policy may be surrendered after it has been in force for 3 years or
more. The guaranteed surrender value is 30% of the basic premiums paid
excluding the first year’s premium in case no survival benefit payment
has already fallen due. Where one or more survival benefits have fallen
due, the guaranteed surrender value will be 30% of the premiums paid on
or after the due date of payment of latest survival benefit.
Bima bachat
LIC Bima Bachat is a money-back policy which offers financial security
and assurance to the policy holder and his family. Bima Bachat requires
the policy holder to pay only one premium. The amount paid for the
premium depends on the duration of the policy taken and life insurance is
available till the date of maturity.
For a term of 9 years: The policy holder will receive 15% of the sum
assured at the end of every 3rd and 6th policy year.
For a term of 12 years: The policy holder will receive 15% of the sum
assured at the end of every 3rd and 6th policy year.
For a term 15 years: The policy holder will receive15% of the sum
assured at the end of every 3rd, 6th, 9th and 12th policy year. If the
policy holder outlives the duration of the policy, at the time of maturity, a
single premium payment (excluding extra premium) is made along with
loyalty additions, if any. The guaranteed surrender value is available only
after completion of at least one policy year. This value is equal to 90 %
of the single premium paid (excluding extra premium). Bema Bachat is
the only money-back policy that offers a loan facility. The rate of interest
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Premium Payment:
Let’s take an example of a 30 year old with a Bima Bachat policy for 12
years. If the sum assured is Rs 45,000 then he has to pay a premium of Rs
34800.75. But for a sum assured amount of Rs 50,000 he will have to pay
a premium of Rs 36734.13 only, thus getting a 5% rebate in premium.
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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 3 years, 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 than Rs.250/-.
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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.
Premiums:
Bonuses:
This is a with-profit plan and participates in the profits of the
Corporation’s life insurance business. It gets a share of the profits in the
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Benefits:
Death Benefit: The Sum assured plus all bonuses to date is payable in a
lump sum upon the death of the life assured.
Maturity Benefit: This is a whole of life assurance plan and hence does
not have a maturity date. You, however, have the option to take the Sum
Assured plus all bonuses declared under the policy anytime after 40 years
from the date of commencement of the policy provided you have
attained, at least, 80 years of age.
Surrender Value:
Buying a life insurance contract is a long-term commitment. However,
surrender value is available under the plan on earlier termination of the
plan.
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This is the best form of life assurance for family provision since it
enables the Life Assured to pay the premium during the ordinarily
vigorous and most productive years of life, relieving him from the
necessity of making payments later in life when they might become a
burden. With Profits Single Premium policies do not cease to participate
in profits after completion of the period for which premium has been paid
,but continue to share in the periodical Bonus Distribution until the death
of the Life Assured. This is a whole of life assurance plan that provides
financial protection against death through out the lifetime of the Life
Assured.
Suitable For:
Being a limited-payment life assurance policy, this plan is suitable for
people of all ages and social groups who wish to protect their families
from a financial setback that may occur owing to their demise.
Plan parameters:
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Minimum Maximum
Entry age 12 (Nearer Birthday) 60
Sum assured (Rs.) 30000 NO LIMIT
Term (years) N.A. N.A.
Jeevan Tarang
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.
Accumulation Period:
The plan offers three Accumulation periods – 10, 15 and 20 years. A
proposer may choose any of them.
Payment of Premium:
Premiums can be paid regularly at yearly, half-yearly, quarterly or
monthly intervals or through salary deductions over the Accumulation
Period. Alternatively, a Single Premium can be paid on commencement
of a policy.
Participation in Profits:
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Benefits:
Survival Benefits:
• On survival to the end of the selected accumulation period: Vested
reversionary bonuses in a lump sum will be payable.
• On survival to the end of each year after the accumulation period:
5½% of the Sum Assured will be payable. The first survival
benefit will be payable on survival to one year after the end of the
accumulation period.
Death Benefit:
• In case of death of the Life Assured during the Accumulation
Period, the Sum Assured along with vested reversionary bonuses is
payable.
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Other Benefits:
• Loan: Loan facility is available under this plan. However, the rate of
interest would be determined from time to time by the Corporation.
Presently the rate of interest is 9 % pa payable half-yearly.
• Grace period: A grace period of one month but not less than 30 days
will be allowed for payment of yearly, half-yearly or quarterly premiums
and 15 days for monthly premiums.
• 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.
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• Mode Rebate:
Yearly mode: 2% of tabular Premium
Half-yearly mode: 1% of the tabular premium
Quarterly: NIL
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Suitable For:
The Two Year Temporary Assurance policy caters to the individuals who
specifically require insurance cover against risk for a short period of two
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years, for instance persons who are required to go on tours for instance
for a year or so.
Benefits:
Minimum Maximum
Entry age 18 60
Sum assured (Rs.) 50,000 1,00,000
Term (years) 6,12,18,24 months Not Applicable
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Benefits:
SurvivalBenefit:NotApplicable
Death Benefit: The sum assured is payable only in the event of death of
the Life Assured before the expiry of the specified term.
Plan parameters:
Minimum Maximum
20 (nearer
Entry age 50
birthday)
Sum assured (Rs.) 50,000 1,00,00,000
Term (years) 5 7
Anmol Jeevan-I
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Benefits:
Restrictions:
Rebate:
I ) Sum Assured Rebate: NIL in case of regular premium policies
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II) Mode Rebate: 1 % of Annual premium for yearly mode and nil for
Half-Yearly mode.
Loan:
No loan will be granted under this plan.
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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.
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Q1. According to you, which have played a major role in the field of Life
Insurance?
Insurance LIC HDFC ICICI Others
Pvt. Employees 40% 25% 20% 15%
Govt. 64% 12% 14% 10%
Employees
Business Man 55% 30% 12% 3%
70%
60%
50%
40% Pvt. Employees
30% Govt. Employees
Business Man
20%
10%
0%
LIC HDFC ICICI Others
After analyzing this data it is found that from the given three respective
level of Pvt., Govt. and Business employees, 40%, 64%, and 55% are in
favour of LIC, while 25%, 12%, and 30% are in favour of HDFC, 20%,
14%, and 12% are for ICICI and 15%, 10%, and 3% are in favors of
other Pvt. Companies respectively.
Employees
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70%
60%
50%
40% Pvt. Employees
30% Govt. Employees
Business Man
20%
10%
0%
LIC HDFC ICICI Others
After analyzing this data it is found that from the given three respective
level of Pvt., Govt. and Business employees, 60%, 70%, and 60% are in
favour of LIC, while 15%, 10%, and 20% are in favour of HDFC, 20%,
15%, and 15% are for ICICI and 5%, 5%, and 5% are in favors of other
Pvt. Companies respectively. This is because of the fact that LIC is
exploiting the larger customer database through its heavy advertisements
campaign in different market segments.
Employees
Business Man 50% 25% 20% 5%
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70%
60%
50%
40% Pvt. Employees
30% Govt. Employees
Business Man
20%
10%
0%
LIC HDFC ICICI Others
From the above data, it can be interpreted that from given three
respective level of Pvt., Govt. and Business employees, 60%, 70%, and
50% feel that it is LIC which has gained massive public support in the
current fiscal year, while 15%, 10%, and 25% are in favour of HDFC,
15%, 10%, and 20% are for ICICI and 10%, 10%, and 5% are in favors
of other Pvt. Companies respectively.
Q4. Do you think LIC’s various insurance plans are in the direction
of public welfare?
Insurance YES NO
Pvt. Employees 65% 35%
Govt. Employees 80% 20%
Business Man 60% 40%
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80%
70%
60%
50%
Pvt. Sector
40%
Govt. Sector
30% Business Man
20%
10%
0%
YES NO
The above data shows that the 65% of Pvt. Employees agree that LIC’s
insurance plans are in the direction of public welfare and 35% disagree.
Similarly, 80% and 20% of Govt. Employees & 60% and 40% of
Business Man agree and disagree with the above statement respectively.
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80%
70%
60%
50%
Pvt. Employees
40%
Govt. Employees
30% Business Man
20%
10%
0%
YES NO
From the above data, it can be interpreted that 60%, 80% and 55% from
the Pvt. Sector, Govt. Sector and Business Sector respectively think the
risk coverage factor in insurance policies attractive. While rest of the
40%, 20% and 45% from the Pvt. Sector, Govt. Sector and Business
Sector respectively don’t think so.
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100%
80%
20%
0%
YES NO
From the above data, it is found that 90% from Pvt. Sector, 95% from
Govt. Sector & 93% from Business man agree with the statement that to
success in this evolving industry, the products should be more transparent
& customer-centric whereas only 10% from Pvt. Sector, 5% from Govt.
Sector & 7% from Business man do not agree with the statement.
Recommendations:
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policy holders towards life insurance products are already being done.
But there are some recommendations that are intensely felt and highly
required for insures to sustain in the market. These are as follows:
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Conclusion:
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BIBLIOGRAPHY
Text books:
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Internet:
• http://www.irdaindia.org/
• http://www.irda.gov.in/ADMINCMS/cms/NormalData_Layout.asp
x?page=PageNo4&mid=2
• http://www.asiainsurancereview.com/pages/e-Weekly-News.asp
Annexure (Questionnaire)
Name- ……………………………
Age- ………………………………
Occupation- ……………………..
Contact Details- …………………
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a) LIC
b) HDFC
c) ICICI
d) OTHERS Specify (………)
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b) NO