LIC India

Life Insurance Corporation of India (LIC) is the biggest provider of insurance and investment services in India. It is a publicly held organization held totally by the Union Government of India and also provides almost 24.6 percent of the governments expenses. Its assets have been valued at INR 13.25 trillion. It was established during 1956 when 243 provident societies and insurers merged together. Headquartered in Mumbai, financial and commercial capital of India, the Life Insurance Corporation of India currently has 8 zonal Offices and 113 divisional offices located in different parts of India, around 3500 servicing offices including 2048 branches, 54 Customer Zones, 25 Metro Area Service Hubs and a number of Satellite Offices located in different cities and towns of India and has a network of 13,37,064 individual agents, 242 Corporate Agents, 79 Referral Agents, 98 Brokers and 42 Banks (as on 31.3.2011) for soliciting life insurance business from the public. The slogan of LIC is "Yogakshemam Vahamyaham" which translates from Sanskrit to "Your welfare is our responsibility". The slogan is derived from the Ancient Hindu text, the Bhagavad Gita's 9th Chapter, 22nd verse. The literal translation from Sanskrit to English is "I carry what you require". The slogan can be seen in the logo, written in Devanagiri script. 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. Other insurance companies established in the pre-independence era included

Dividend Policy of LIC

Life Insurance dividends are earned by permanent participating life insurance policies. Let us take the whole life policy as an example. Some whole life policies are non participating policies which mean that they do not participate if the performance is better than anticipated. The premiums for non participating policies are usually lower than those of participating policies. Participating life insurance policies earn dividends. When Are Dividends Paid? As previously explained life insurance dividends are paid on participating life insurance policies. Dividends are not guaranteed but are based on the particular companies experience. Whenever the performance of the life insurance company is better than anticipated, assumed or projected the policy owner participates in this good performance. Payment of a life insurance dividend indicates that the life insurance company's operating expenses, risk selection and management experience has been better than expectations. Dividends are paid on a given policy on the policy anniversary the year after which it is earned. It is equal to the difference between the the policy value and the cash value in that year. The value of paid up additions are considered when calculating dividends and they also participate in dividend earnings. The policy value is equal to the guaranteed cash value, plus the gross annual, less mortality and expense charges, plus whatever interest is credited to the policy, minus the guaranteed cash value.

How Can You Use Dividends? Many life insurance companies automatically use them to purchase paid up additions if no other option is chosen. Paid up additions are fully paid up single premium policies that you never again pay any more premiums on. These paid up additions have cash values and also earn additional dividends if the company declares any.

You can use your life insurance dividends to reduce the premiums of your participating whole life insurance policy. Over a period of years the reduction can be considerable making premium payments for a policy you have had for years easier to handle. You can have your dividends paid to you in cash. If you should choose this option the life insurance company will send you a check each year. Dividends can be left to accumulate interest. Many people like this dividend option as the amount you receive after 10 years, 15 years, or 20 years can be considerable. Added to your cash value life insurance dividends if left to accumulate could put a large sum of money in your hands. Of course the amount depends on the size of the policy you own.

Capital Structure of LIC India

In finance, capital structure refers to the way a corporation finances its assets through some combination of equity, debt, or hybrid securities. A firm's capital structure is then the composition or 'structure' of its liabilities. For example, a firm that sells $20 billion in equity and $80 billion in debt is said to be 20% equity-financed and 80% debt-financed. The firm's ratio of debt to total financing, 80% in this example, is referred to as the firm's leverage. In reality, capital structure may be highly complex and include dozens of sources. Gearing Ratio is the proportion of the capital employed of the firm which come from outside of the business finance, e.g. by taking a short term loan etc. The Modigliani-Miller theorem, proposed by Franco Modigliani and Merton Miller, forms the basis for modern thinking on capital structure, though it is generally viewed as a purely theoretical result since it disregards many important factors in the capital structure decision. The theorem states that, in a perfect market, how a firm is financed is irrelevant to its value. This result provides the base with which to examine real world reasons why capital structure is relevant, that is, a company's value is affected by the capital structure it employs. Some other reasons include bankruptcy costs, agency costs, taxes, and information asymmetry. This analysis can then be extended to look at whether there is in fact an optimal capital structure: the one which maximizes the value of the firm.

Capital Structure (LIC Housing Finance) Period From To 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 Instrument Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Authorized Capital
(Rs. cr)

Issued Capital
(Rs. cr)

-PAIDUPShares (nos) Face Value 504663000 474663000 94932600 84932600 84932600 84932600 84932600 84932600 74932600 75057900 75057900 75057900 75057900 75057900 75057900 75057900 75057900 75057900 55000000 35000000 2 2 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10

Capital 100.93 94.93 94.93 84.93 84.93 84.93 84.93 84.93 74.93 75.06 75.06 75.06 75.06 75.06 75.06 75.06 75.06 75.06 55 35

150 150 150 150 150 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100

100.93 94.93 94.93 84.93 84.93 84.93 84.93 84.93 74.93 75.06 75.06 75.06 75.06 75.06 75.06 75.06 75.06 75.06 55 35