CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
CHAPTER I
1

Introduction:

Insurance is a protection against economical loss arising due to unexpected event. In any type
of insurance coverage claim settlement plays very important part. Claims settlement is an
integral part of the insurance business. Growth in insurance business is depend on the people,
the customers and consumers of service. Insurance is an arrangement by which losses
incurred by a small number of insured are divided over many exposed to same type of risks.
Insurance contract is a contract by which one party called the insurer promises to save the
other party, the insured on payment of consideration known as the premium. A right of
insured to receive the amount secured under the policy of insurance contract promised by
insurer is called claim. Claims can be maturity, survival up to the end of can be maturity
claims arise because of survival up to the end of the policy term i.e.to the date of maturity,
survival benefits due to survival up to a specified period during the term, death claims arise
due to death of the life assured during the term. policy holders or nominees must first file an
insurance claim before any money can be provided. An insurance claim is provided by an
insurance company. The insurance company may or may not approve the claim based on
their own assessment of the condition under which claim is made. Individuals pays regular or
sometime single premium for their insurance coverage. Most of the time these premium are
used to settle another persons insurance claim or to build up the available assets of the
insurance company. When claims are filed, the insured has to observe the settled rules and
procedures and the insurer has also to reciprocate in a similar manner by undertaking
appropriate steps for speedy disposal of claims. It is true that claims settlement is complex in
nature, but it is the driving force to plant confidence in the hearts of people, in general and
beneficiaries in specific. Insurance claim is a right of insured under a contract of Insurance.
The insurer promises to save the insured or nominees/assignees of the insured on happening
of event or risk insured. Disputes crop up in the payment of claim when the insurer and the
insured understand the process of claims payment in different way. It is obvious for the
insurance company to protect and guard the interests of the policyholders. An insurance
claim is the only way to officially apply for benefits under an insurance policy, but until the
insurance company has assessed the situation it will remain only a claim, not a pay-out.

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
2

Objective of the study

I) To study the management frame work of life Insurance Corporation of India
regarding Claim Settlement.
II) To study impact of Claim Settlement on the sales of life insurance policies in LIC of
India.
III) To study Claim Settlement process followed by LIC of India.
IV) To study awareness of claim settlement among the customers.
V) To analyze quality of services provided by LIC of India for Claim Settlement.

1.3) Research Methodology

Research Methodology is descriptive in nature.

The task of data collection begins after a research problem has been defined and research design is chalked
out. While deciding about the method of data collection to be used for the study; the researchers should
keep in mind two types of data i.e. Primary and Secondary data.
The primary data are those which are collected afresh and for the first time, and thus happen to be original
in character. The secondary data on other hand are those which have already been collected by someone else
and which have already been passed through the statistical process. The data used for the present research is
primary data.

Data collection was done through sample, survey method involving the questionnaire to be filled
in by the investigator. This was chosen because most of the facts and data where of the nature of
primary data. For study like this time framework is not significant. However, for cross sectional
analysis, both the insurance and customers were interviewed to find out real state of the affairs of
the problem understudy. We had been close to the data obtaining through questionnaire and
percentage as well as trend analysis have used to interpret the data
Primary Data:
The primary data will collected from existing employees of LIC,LIC customers who have taken
claims of their Life insurance policies and from those whose are planning to take life insurance
policies.
Secondary Data:
The Secondary data will collect from Books, Journals, Magazines, and Internet etc.

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
1.4 Scope of the Study:

1. It is useful to know the customers opinion about the claim settlement process.
2. It is helpful to improve the claim settlement process and subsequently improve the operational
efficiency.

1.5 Limitation Of the Study:

1. Data collected through questionnaires may be biased.
2. The area of study is limited to Mumbai region; results may differ from place to
place.
3. Time and money are the major constraint in the study.
4. The study is limited to 50 respondents of Mumbai city.
5. In case of secondary data, validity of the data depends upon the source of the data.

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
CHAPTER II

COMPANY PROFILE
2.1) Introduction:
Life Insurance in its modern form came to India from England in the year 1818. Oriental
Life Insurance Company stated by Europeans in Calcutta was the first life insurance company on
Indian Soil. All the insurance companies established during that period were brought up with the
purpose of looking after the needs of European community and Indian natives were not being
insured by these companies. However, later with the efforts of eminent people like Babu
Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives
were being treated as sub-standard lives and heavy extra premiums were being changed on them.
Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company
in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise with
highly patriotic motives, insurance companies came tito existence to carry the message of
insurance and social security through insurance to various sectors of society. Bharat Insurance
Company (1896) was also one of such companies inspired by nationalism. the Swedishi
movement of 1905-1907 gave rise to more insurance companies. The United India in Madras,
National Indian and National Insurance in Calcutta and the 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
4

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
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 19 th 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 reorganization 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 cores only in
the year 1969-70, and it took another 10 years for LIC to cross 2000.00 cores 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 online premium collection facility in selected cities. LICs ECS
and ATM premium payment facility is an addition to customer convenience. Apart from on-line
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CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
Kiosks and IVRS, Info Centre have been commissioned at Mumbai, Ahmadabad, Bangalore,
Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of
providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK offices.
The satellite offices are smaller, leaner and closer to the customer. The digitalized records of the
satellite offices will facilitate anywhere servicing and many other conveniences in the future.
LIC continues to be the dominant life insurer even in the liberalized scenario of Indian
insurance and is moving fast on a new growth trajectory surpassing its own past records. LIC has
issued over one crore policies during the current year. It has crossed the milestone of issuing
1,01,32,955 new policies by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the
corresponding period of the previous year.
From then to now, LIC has crossed many milestones and has set unprecedented
performance records in various aspects of life insurance business. The same motives which
inspired our forefathers to bring insurance into existence in this country inspire us at LIC to take
this message of protection to light the lamps of security in as many homes as possible and to help
the people in providing security to their families.
Some of the important milestones in the life insurance business in India are:
1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started
functioning.
1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its
business.
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
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.
The General insurance business in India, on the other hand, can trace its roots to the
Triton Insurance Company Ltd., the first general insurance company established in the year 1850
in Calcutta by the British.

VISION
To be the preferred life insurer of the people of Fiji by providing innovative life insurance
products and world class service at affordable rates.
MISSION

Explore and enhance the quality of life of people through financial security by providing
products and services of aspired attributes with competitive returns, and by rendering resources
for economic development.

LIC of India is the one and only public sector life insurance Company in India.
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CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
Some of the important milestones in the life insurance business in India are:
1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started
functioning.
1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its
business.
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies are taken over by the central
government and 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.
The General insurance business in India, on the other hand, can trace its roots to the Triton
Insurance Company Ltd., the first general insurance company established in the year 1850 in
Calcutta by the Britis

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
2.2) Nationalization
In 1955, parliamentarian Feroze Gandhi raised the matter of insurance fraud by owner's 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 on
1956-06-19, and the Life Insurance Corporation of India was created on 1956-09-01, 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.

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 around 180 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 policy holders are
said to have crossed a whopping 200 million (fourth in terms of population of the countries of
the world)

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
2.4 Subsidiaries:
LIC owns the following subsidiaries:
i.

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$ denomimated 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.

ii.

LIC Nepal: A joint venture company formed in 2001 with the Vishal Group of
Industries, Nepal.

iii.

LIC Lanka: A joint venture company formed in 2003 with the Bartleet Group of
Companies, Sri Lanka.

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CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
2.5 Objective of LIC:
a) Spread Life Insurance widely and in particular to the rural areas and to the socially an
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.
b) Maximize mobilization of people savings by making insurance-linked savings
adequately attractive.
c) 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.
d) Conduct business with utmost economy and with the full realization that moneys belong
to the policyholders.
e) Act as trustees of the insured public in their individual and collective capacities.
f) Meet the various life insurance needs of the community that would arise in the changing
social and economic environment.
g) 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.
h) Promote amongst all agent and employees of the corporation a sense of participation,
pride and job towards achievement of corporate objective.

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CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
CHAPTER III

CONCEPTUAL BACKGROUND

3.1) Introduction:
The Insurance Policy is taken by the consumers to compensate them in the event of happening
of an unforeseen event. It is a hedge against unavoidable circumstances. In general insurance the
loss is payable only on happening of some specific event. If the insured does not suffer any loss
no claim is paid to him. The premium is charged on yearly basis and no accumulation takes
place. However the scenario is different in case of life insurance. If the insured dies during the
policy period he gets the sum assured along with the bonus accrued under the policy if any. If the
insured survives the policy period he gets the maturity amount accrued under the policy. In this
lesson we shall learn the various aspects in settlement of life insurance claim.
3.2) Objectives
a)
b)
c)
d)

Learn the various categories of claim

Enlist the documents required in settlement of claim
Recall the process of claim settlement
Remember the guidelines issued by IRDA in respect of claim settlement

3.3) Claim Settlement:

Payment of claim is the ultimate objective of life insurance and the policyholder has waited for
it for a quite long time and in some cases for the entire life time literally for the payment. It is the
final obligation of the insurer in terms of the insurance contract, as the policyholder has already
carried out his obligation of paying the premium regularly as per the conditions mentioned in the
schedule of the policy document. The policy document also mentions in the schedule the event or
events on the happening of which the insurer shall be paying a predetermined amount of money
(S.A.).
There may be three types of claim in life insurance policies
A. Survival Benefit Claim
B. Maturity Benefit Claim
C. Death Benefit Claim
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CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

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We shall discuss hereunder the details of each category of claims.
A.Survival Benefit : Survival benefit is not payable under all types of plans. It is payable in
endowment or money back plans after a lapse of a fixed period say 4 or 5 years, provided firstly
the policy is in force and secondly the policyholder is alive. As the insurer sends out premium
notices to the policyholder for payment of due premium, so it sends out intimation also to the
policyholder if and when a survival benefit falls due. The letter of intimation of survival benefit
carries with it a discharge voucher mentioning the amount payable. The policyholder has merely
to return the discharge voucher duly signed along with the policy document. The policy
document is necessary for endorsement to the effect that the survival benefit which was due has
been paid. The survival benefit can take different forms under different types of policies.
B .Maturity Claim: It is a final payment under the policy as per the terms of the contract. Any
insurer is under obligation to pay the amount on the due date. Therefore the intimation of
maturity claim and discharge voucher are sent in advance with the instruction to return it
immediately. If the life assured dies after the maturity date, but before receiving the claim, there
arises a typical problem as to who is entitled to receive the money. As the policyholder was
surviving till the date of maturity, the nominee is not entitled to receive the claim. The policy
under such conditions is treated as a death claim where the policy does not have a nomination.
The insurer in such a case shall ask for a will or a succession certificate, before it can get a valid
discharge for payment of this maturity claim. In case the policy has been taken under Married
Womens Property Act, the payment of maturity claim has to be made to the appointed trustees,
as the policyholder has relinquished his right to all the benefits under the policy. It is for this
relinquishment of right that the policy money enjoys a privileged status of being beyond the
bounds of creditors etc. If the maturity claim is demanded within one year, before the maturity it
is called a discounted maturity claim. This amount is much less than the maturity claim.
D.Death Claim: If the life assured dies during the term of the policy, the death claim arises. If
the death has taken place within the first two years of the commencement of the policy, it is
called an early death claim and if the death has taken after 2 years, it is called a non early death
claim.

3.4) Claims settlement process followed by LIC of India :

The LIC of India has laid emphasis on prompt settlement of death as well as maturity claims.
Claims are normally paid however if found any fraudulent then it is referred to claim committee
operating in zonal offices and central offices.
The process for settlement of maturity and death claims is as follows as:

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CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
The death claim amount is payable in both conditions, when policys premiums is paid up-todate and where the death occurs within the days of grace. After receiving information regarding
death of the Life Assured the Branch office required following things:
a. Claim form A Claimants Statement giving details of the deceased and the
claimant
b. Certified extract from Death Register
c. Documentary proof of age, if age is not admitted .
d. Evidence of title to the deceaseds estate if the policy is not nominated, assigned
or issued under M.W.P. Act.
e. Original Policy Document The following additional forms are required if death
occurs within three years from the date of risk or from date of revival/
reinstatement:
f. Claim Form B Medical Attendants Certificate to be completed by the Medical
Attendant of the deceased during his/ her last illness.
g. Claim Form B1 if the life assured received treatment in a hospital.
h. Claim form B2 to be completed by the Medical Attendant who treated the
deceased life assured prior to his last illness.
i. Claim Form C Certificate of Identity and burial or cremation to be completed
and signed by a person of known character and responsibility.
j. Claim form E Certificate by Employer if the assured was employed person.
k. If death was due to accident or unnatural cause certified copies of the First
Information Report (FIR), the Post-mortem report and Police Investigation
Report. These additional forms are required at the time of investigation by the
officials of the Corporation and to prove the genuineness of the claim. 4.2 In case
of Maturity Claims
l. Amount is payable at the end of the policy period when it is Endowment type of
Policies, At least two months before the due date of payment the Branch which
provide services to the policy intimate the policyholder by sending a letter
informing the date on which the policy amount is payable. Discharged form duly
filled is requested in return from the policyholder along with the all policy
document. After receiving documents postdated cheque is sent by post so as to
reach the policyholder before the due date.
m. Plans like Money Back Policies give periodical amount to the policyholders if
premium due under the policies are paid up to the anniversary due for Survival
Benefit. In cases where amount payable is less than up to Rs.60,000/-, cheques are
released without calling for the Discharge Receipt or Policy Document. However,
in case of higher amounts discharge receipt or policy document is mandatory.

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CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

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CHAPTER IV

DATA ANALYSIS AND INTERPRETATION

4.1) Introduction:
An insurance claim is the actual application for benefits provided by an insurance company.
The insurance company may or may not approve the claim, based on their own assessment
of the circumstances. Individuals who take out home, life, health, or automobile insurance
policies must maintain regular payments called premiums to the insurers. When claims are filed,
the insured has to observe the settled rules and procedures and the insurer has also to reciprocate
in a similar manner by undertaking appropriate steps for speedy disposal of claims. The claim
settlement ratio indicates the number of claims that are paid out per 100 claims made by
policyholders. It indicates the extent to which the holder of a policy can expect his nominees to
receive the promised sum insured on his/her death..

4.2) Following table is related to the Customer and Employees Questionnaire responses:
I) Customer Responses:

Table No.4.2.1) Have you taken any life insurance coverage?

Sr. no.

Opinion

Respondents

In percentage

Yes

28

56

2 2

No

22

44

50

100%

Total
(Source: Primary Data)

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CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

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Respondents
Yes

44%

No

56%

(Graph no.4.2.1 source: Primary Data)

When asked about Life Insurance coverage out of 50 respondents, opinions for Yes are 28
and 22 for No.

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CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

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Table No 4.2.2).Are you aware of various types of life Insurance services?
Sr. no.

Opinion

Respondents

In percentage

Yes

30

60

No

20

40

50

100%

Total
(Source: Primary Data)

Respondents
Yes

No

40%
60%

(Graph no.4.2.2 source: Primary Data)

When asked about awareness of various type of Life Insurance services out of 50 respondents,
opinions for Yes are 30 and 20 are No.

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CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

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Table No.4.2.3) Is LIC of India is leading service provider in life Insurance?

S. No.

Opinion

Respondents

In Percentage

Strongly Agree

25

50

Strongly Disagree

Agree

18

36

Disagree

14

50

50%

Total
(Source: Primary Data)

Respondents

Strongly Agree
Strongly Disagree

18

25

Agree
Disagree

(Graph no.4.2.3 source: Primary Data)

When asked whether LIC of India is leading service provider in life Insurance, out of 50
respondents, opinions for Strongly agree are 25,Agree are 18, Disagree are 7 and
Strongly disagree is 0

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CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

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Table No.4.2.4) Are you aware of claim settlement process of LIC of India ?

S. No.

Opinion

Respondents

In Percentage

Well Aware

18

36

Slightly

12

24

Not Sure

12

24

Dont Know

16

50

50%

Total
(Source: Primary Data)

Respondents
well Aware

Slightly

Not Sure

Don't Know

16%
36%
24%
24%

(Graph no.4 .2.4source: Primary Data)

When asked about awareness of claim settlement process here out of 50 respondents,
opinions for Well Aware are 18, Slightly are 12, Not sure are 12 and Dont know are 8.

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CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

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Table No.4.2.5) While buying any Life insurance product do you take into consideration
claim settlement ratio? Scale your Importance.

S. No.

Opinion

Respondents

In Percentage

Always

18

36

Seldom

12

24

Never

Dont Know

17

17

50

50%

Total

Respondents
Always

Seldom

Never

34%

Don't Know

36%

6%

24%

(Source: Primary Data)

(Graph no.4.2.5 source: Primary Data)

Respondents scale their importance for consideration of claim settlement ratio while buying any
Life Insurance product here out of 50 respondents, opinions for Always are 18, Seldom are 12,
Never is 3 and Dont know are 17.

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Table No.4.2.6) Do you think proper Management frame work is essential for claim settlement ?

S. No.

Opinion

Respondents

In Percentage

Yes

28

56

No

10

20

Not Sure

10

20

Dont Know

50

50%

Total
(Source: Primary Data)

Respondents
yes

No

Not Sure

Don't Know

4%
20%
56%
20%

(Graph no.4.2.6 source: Primary Data)

When asked about importance of proper Management framework for claim settlement, here out
of 50 respondents, opinions for Yes are 28, No are 10, Not sure are 10 and Dont know are 2.

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Table No.4.2.7) Prompt settlement of claims motivates you to buy other life Insurance products?

S. No.

Opinion

Respondents

In Percentage

Always

13

32

Seldom

18

Never

10

25

Dont Know

10

25

50

50%

Total
(Source: Primary Data)

(Graph no.4.2.7 source: Primary Data)

Respondents
Always

Seldom

Never

25%

Don't Know

33%

25%

18%

When asked about prompt settlement of claims motivates respondents to buy other life Insurance
products, here out of 50 respondents, opinions for Yes are 13, No are 7, Seldom are 10 and
Never are 10.

Table No.4.2.8) Have you ever taken any claim on your life insurance policies?
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CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

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Sr. no.

Opinion

Respondents

In percentage

Yes

38

76

No

12

24

50

50%

Total
(Source: Primary Data)

Respondents
Yes

No

24%

76%

(Graph no.4.2.8 source: Primary Data)

When asked to respondents, ever they taken any claim on their life insurance policies, here out of
50 respondents, opinions for Yes are 38 and 12 are No.

Table No.4.2.9) Is proper process was followed during claim settlement?

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CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

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S. No.

Opinion

Respondents

In Percentage

Yes

10

20

No

10

20

Not Sure

Dont Know

28

56

50

100%

Total
(Source: Primary Data)
(Graph no.4.2.9 source: Primary Data)

Respondents
Yes

No

Not Sure

4%

Don't Know

20%

20%

56%

When asked about whether proper process was followed during claim settlement, here out of 50
respondents opinions for Yes are 10, No are 10, Not sure are 2 and Dont know are 28.

Table No.4.ss2.10) Is your claim was settled within said duration?

Sr. No.

Opinion

Respondents
24

In Percentage

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
1

Yes

10

20

No

16

Cant Say

32

64

50

100%

Total
(Source: Primary Data)

Respondents
Yes

No

Can't Say

20%
16%

64%

(Graph no.4.2.10 source: Primary Data)

When asked to respondents weather their claim was settled within said duration, here out of 100
respondents, opinions for yes are 10, No are 8 and for cant say are 32 because they were not in
need for claim on their policies.

II) Employee Questionnaire

Table No.4.2.11) Do you explain Insurance plan to every customer in detail?

25

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
S. No.

Opinion

Respondents

In Percentage

Always

50

100

Sometime

Seldom

Never

50

100

Total
(Source: Primary Data)
(Graph no.4.2.11 source: Primary Data)

Respondents
Always

Sometime

Seldom

Never

100%

Here out of 50 Employees respondents, opinions for Always are 50 since employees provide
information to every customer in detail, for Sometime is 0, Seldom is 0 and Never is 0.

Table No.4.2.12) Do you explain management framework of LIC of India regarding claim
settlement to the customers?

S. No.

Opinion

Respondents

In Percentage

Always

28

56

26

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
2

Sometime

18

36

Seldom

Never

50

100%

Total
(Source: Primary Data)

Respondents
Always

Sometime

Seldom

Never

8%
36%

56%

(Graph no.4.2.12 source: Primary Data)

When asked to Employees respondents do they explain management framework of LIC of India
regarding claim settlement to the customers, Here out of 50 Employees respondents, opinions
for Always are 28, Sometime are 18, Seldom are 4 and Never is 0.

Table No.4.2.13) Do you agree that better claim settlement increases sales of life insurance
policies?

S. No.

Opinion

Respondents
27

In Percentage

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
1

Always

38

76

Sometime

Seldom

12

24

Never

50

100%

Total
(Source: Primary Data)

Respondents
Always

Sometime

Seldom

Never

24%

76%

(Graph no.4.2.13 source: Primary Data)

When asked to Employees respondents whether they agree that better claim settlement
increases sales of Life insurance policies, Here out of 50 respondents, opinions for Always are
38, Seldom are 12, Sometime is 0 and Never is 0.

Table No.4.2.14) Do you agree that LIC of India is following proper claim settlement process?

S. No.

Opinion

Respondents

In Percentage

Strongly Agree

25

50

28

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
2

Strongly Disagree

Agree

25

50

Disagree

50

100%

Total
(Source: Primary Data)

Respondents
Strongly Agree

Strongly Dgree

50%

Agree

Disagree

50%

(Graph no.4.2.14 source: Primary Data)

When asked to Employees respondents do they agree that LIC of India is following proper claim
settlement process, Here out of 50 Employees respondents, opinions for Strongly agree are 25,
Agree are 25, Disagree is 0 and Strongly disagree is 0.

Table No.4.2.15) Do you agree that customers of LIC of India are aware of claim settlement
process?

S. No.

Opinion

Respondents
29

In Percentage

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
1

Strongly Agree

70

Strongly Disagree

Agree

35

30

Disagree

15

50

100%

Total
(Source: Primary Data)

Respondents
Strongly Agree

Strongly Disagree

Agree

Disagree

30%

70%

(Graph no.4.2.15 source: Primary Data)

When asked to Employees respondents do they agree that customers of LIC of India are aware
of claim settlement process, Here out of 50 Employees respondents, opinions for Agree are 15,
Disagree is 0, Strongly agree is 35, and Strongly disagree is 0.

Table No.4.2.16) Do you agree that effective claim settlement make LIC of India Market Leader
in Life Insurance services?

S. No.

Opinion

Respondents
30

In Percentage

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
1

Strongly Agree

40

80

Strongly Disagree

Agree

10

20

Disagree

50

100%

Total
(Source: Primary Data)

Respondents

20%

Strongly Agree
Strongly Dgree
Agree
Disagree

80%

(Graph no.4.2.16 source: Primary Data)

When asked to Employees respondents about effective claim settlement make LIC of India
market leader in life insurance services, Here out of 50 Employees respondents, opinions for
Strongly agree are 40, Agree is 10, Disagree is 0 and Strongly disagree is 0.

Table No.4.2.17) Do you provide any support at the time of the claims of life Insurance?

S. No.

Opinion

Respondents

In Percentage

Always

50

100

31

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
2

Sometime

Seldom

Never

50

100%

Total
(Source: Primary Data)

Respondents
Always

Sometime

Seldom

Never

100%

(
Graph no.4.2.17 source: Primary Data)
When asked to Employees respondents weather they pro- vide any support at the time of the
claims of life Insurance, Here out of 50 Employees respondents, opinions for Always are 50
since employees are willing to support during claims process, for Sometime is 0, Seldom is 0and
Never is 0.

Table No.4.2.18) Is customers are provided their claim settlement with in specified time limit?

S. No.

Opinion

Respondents

In Percentage

Always

25

50

Sometime

25

50

32

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
3

Seldom

Never

50

100%

Total
(Source: Primary Data)

Respondents
Always

Sometime

Seldom

50%

Never

50%

(Graph no.4.2.18 source: Primary Data)

When asked to Employees respondents weather customers are provided their claims with in
specified time limit, Here out of 50 Employees respondents, opinions for Always are 25,
Sometime is 25, Seldom is 0 and Never is 0

CHAPTER V

5.1 FINDINGS

33

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
5.1.1) GENERAL FINDINGS:
1) Here the overall percentage of respondents who are covered under Life Insurance is 56 %
and 44% are not covered under Life Insurance.
2) 60 % of respondents are aware of various types of Life Insurance services and 40 % of
respondents lack information about life insurance services.
3) LIC of India is leading life insurance provider, 50% of respondents are strongly agree ,
36% of respondents are agree and 14% of respondents are disagree about it.
4) 36% of respondents are well aware and 24% of respondents are slightly aware about
claim settlement process of LIC of India where as 24% of respondents are not sure and
16% of respondents dont know the process.
5) 36% of respondents always and 24% of respondents seldom take into consideration claim
settlement ratio while buying any Life Insurance product. Whereas 3% of respondents
never and 17% of respondents dont know about it
6) Proper management frame work is essential for claim settlement, 56% of respondents
respond yes and 20% of respondents respond not sure where as 20% of respondents
respond no and 4% of respondents respond dont know about it.
7) 32% of respondents respond yes and 18% of respondent respond seldom as they are
motivated to buy other life insurance products by prompt claim settlement whereas 25%
of respondents respond no and 25 % of respondents respond never about it.
8) 76% of respondents respond no, as they have never taken any claims on their life
insurance policies and 24% of respondents respond yes about it.
9) 20% of respondents respond yes as proper claim settlement process was followed during
their claim where as 20% of respondents responds not sure, 4% of respondents respond
no and 56% of respondents respond dont know about it.
10) 20% of respondents respond yes and 16% of respondents respond cant say where as 64
% of respondents respond no about it as their claims were not settled in said duration.

5.1.2) SPECIFIC FINDINGS:

1) 100% of employees respondents respond always as they explain insurance plan in detail
to every customer.
2) Management framework of LIC of India regarding claim settlement is explained to
customers, 56% of employees respondents respond always, 36 % of employees
respondents respond seldom and 8% of employees respondents respond sometime.

34

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
3) 76% of employees respond are always and 24% of employees respond are seldom that
better claim settlement increases sales of life insurance policies.
4) 50% of employees respondents are strongly agreed and 50% of employees respondents
are agree that LIC of India is following proper claim settlement process.
5) Customers of LIC of India are aware of claim settlement process as 70% of employees
respondent are agree and 30% of employees respondents are disagree.
6) 80% of employees respondents are strongly agree and 20% of employees respondents
are agree that due to effective claim settlement, LIC of India becomes market leader in
Life insurance services.
7) 100% of employees respondents respond always as they provide support at the time of
claims of life insurance.
8) 50 of employees respondents respond sometime and 50% of employees respondents
respond always for customers are provided their claim settlement with in specified time
limit.

5.2 SUGGESTION

5.2.1) GENRAL SUGGESTION:

a) By increasing the awareness about various life insurance products and services of LIC of
India, more people can be motivated to buy life insurance policies
35

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
b) Quality of services related with claim settlement of life insurance can improve with
constant feedback from both customers and employees.
c) There should be proper transparency and more time oriented activities in claim settlement
process in order to enhance overall process.

5.2.2) SPECIFIC SUGGESTION:

a) Periodically information about claim settlement process, Management framework of LIC
of India should be provided by the employees to the policy holders. This will help in
better understanding.
b) LIC of India can also increase their sales of life insurance policies by prompt settlement
of claims
c) Claim settlement ratio of life insurance policies should be updated regularly and publish
in various sources of information, it will be helpful for increasing the sales of Life
Insurance policies

5.3 CONCLUSION

Life Insurance coverage is taken to overcome risk of uncertainty. So it is very much essential that
importance should not only focus at time of buying any Life Insurance policies, but also during
settlement of claims. LIC of India is leading Life Insurance provider and they are able to settle
36

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
claims on time due to its strong management framework, predefine simple and prompt claim
settlement process, employees contribution towards claim settlement and maintaining the
quality of services to the customers which helps in more sales of their life insurance policies.
Those customers who didnt have fill any claims on their policies are satisfy and highly aware of
claim settlement process. The study found that LIC of India is able to provide effective claim
settlement and its employees ensures that customers are aware and satisfy with their prompt
services.

BIBLIOGRAPHY

1. Arora Kausal K. (1992), Development Banking In India, First Edition, Atlantic Publishers
and Distributors, New Delhi

37

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
2. Arumugam Vijayakumar (2009), Indian insurance sector in 21st century: an outlook
,Kalpaz Publications, New Delhi.
3. Babu G Ramesh (2005), Financial Services In India, Concept Publishing company, New
Delhi.
4. Bhole L.M and MahakudJitendra (2009), Financial Institutions and markets Structure,
growth and Innovations, TATA McGraw- Hill Companies, New Delhi.
5. Bodla B.S, Garg M.C and Singh K.P (2003), Insurance Fundamental, Environment and
Procedures, Deep & Deep Publication Pvt. Ltd, New Delhi.
6. Fabozzi J. Frank, Modigliani Franco, Jones J. Frank and Michael G. Ferri (2001),
Foundations of Financial Markets and Institutions, Prentice Hall of India Pvt. Ltd, New Delhi.
7. Gupta P.K (2011), Fundamental of Insurance, Himalaya Publication House,Mumbai.
8. Gurusamy Dr. S.(2009), Financial Services, TATA McGraw- Hill Companies, New Delhi.
9. Kapila Raj and Kapila Uma (2003), Indias Banking and Financial sector in the new
millennium volume 2, Academic Foundation, New Delhi.
10. KarveLaxmanDrShrikrishna (2009), Principle of Life Insurance, Himalaya Publication
House, Mumbai.

ANNEXURE

I)

CUSTOMER RESPONSES:

38

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
1) Have you taken any life insurance coverage?
1. Yes
2. No
2) Are you aware of various types of life Insurance services?
1. Yes
2. No
3) Is LIC of India is leading service provider in life Insurance?
1.
2.
3.
4.

Strongly Agree
Strongly Disagree
Agree
Disagree

4) Are you aware of claim settlement process of LIC of India?

1. Well Aware
2. Slightly
3. Not Sure
4. Dont Know
5) While buying any Life insurance product do you take into consideration claim settlement
ratio? Scale your Importance
1.
2.
3.
4.

Always
Seldom
Never
Dont know

6) Do you think proper Management frame work is essential for claim settlement?
1.
2.
3.
4.

Yes
No
Not sure
Dont know

39

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
7) Prompt settlement of claims motivates you to buy other life Insurance products?
1.
2.
3.
4.

Yes
No
Seldom
Never

8) Have you ever taken any claim on your life insurance policies?
1. Yes
2. No
9) Is proper process was followed during claim settlement?
1.
2.
3.
4.

Yes
No
Not Sure
Dont Know

10) Is your claim was settled within said duration?

1. Yes
2. No
3. Cant Say

II) EMPLOYEES RESPONSES:

11) Do you explain Insurance plan to every customer in detail?
1.
2.
3.
4.

Always
Sometime
Seldom
Never

12) Do you explain management framework of LIC of India regarding claim settlement to the
customers?
40

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
1.
2.
3.
4.

Always
Sometime
Seldom
Never

13) Do you agree that better claim settlement increases sales of life insurance policies?
1.
2.
3.
4.

Always
Sometime
Seldom
Never

14)Do you agree that LIC of India is following proper claim settlement process?
1.
2.
3.
4.

Strongly Agree
Strongly Disagree
Agree
Disagree

15) Do you agree that customers of LIC of India are aware of claim settlement process?
1.
2.
3.
4.

Strongly Agree
Strongly Disagree
Agree
Disagree

16) Do you agree that effective claim settlement make LIC of India Market Leader in Life
Insurance services?
1.
2.
3.
4.

Strongly Agree
Strongly Disagree
Agree
Disagree

17) Do you provide any support at the time of the claims of life Insurance?
1.
2.
3.
4.

Always
Sometime
Seldom
Never
41

CLAIM SETTLEMENT(WITH REFFRENCE TO LIC OF

INDIA)
18) Is customers are provided their claim settlement with in specified time limit?
1.
2.
3.
4.

Always
Sometime
Seldom
Never

42