CHAPTER: 1

INTRODUCTION TO INSURANCE

1.1 What Is Life Insurance ?

Life insurance is a contract that pledges payment of an amount to the
person assured (or his nominee) on the happening of the event insured against.
The contract is valid for payment of the insured amount during:
The date of maturity, or
Specified dates at periodic intervals, or
Unfortunate death, if it occurs earlier.

1.2 Why We Need Insurance ?

Life insurance is a contact by which you can protect yourself against
specific uncertainties by paying a premium over a period. Since each one of us
during our lives are faced with numerous risks-falling health, financial losses,
accident and even fatalities.
Protection
You need life insurance to be there and protect the people you love, making
sure that your family has a means to look after itself after you are gone. It is a
thoughtful business concept designed to protect the economic value of a human
life for the benefit of those financially dependent on him.
Retirement
Life insurance makes sure that you have regular income after you retire and
helps you maintain your standard of living. It can ensure that your post-
retirement years are spent in peace and comfort.

1
 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 childs 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.

1.3 Life Insurance Vs. Other Savings

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.

2
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.

Money When You Need It:

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.

3
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
policyholders state of health, the proponent's income and other relevant factors are
considered by the Corporation.

Insurance For Women

Prior to nationalization (1956), many private insurance companies would
offer insurance to female lives with some extra premium or on restrictive
conditions. However, after nationalization of life insurance, the terms under which
life insurance is granted to female lives have been reviewed from time-to-time.
At present, women who work and earn an income are treated at par with
men. In other cases, a restrictive clause is imposed, only if the age of the female is
up to 30 years and if she does not have an income attracting Income Tax.

Medical And Non-Medical Schemes

Life insurance is normally offered after a medical examination of the life
to be assured. However, to facilitate greater spread of insurance and also to avoid
inconvenience, LIC has been extending insurance cover without any medical
examination, subject to certain conditions.

With Profit And Without Profit Plans

An insurance policy can be 'with' or 'without' profit. In 'without' profit plan
the contracted amount is paid without any addition. The premium rate charged for a
'with' profit policy is therefore higher than for a 'without' profit policy.

4
 CHAPTER: 2
INTRODUCTION TO LIFE INSURANCE CORPORATION OF
INDIA

2.1 BRIEF HISTORY OF LIFE INSURANCE CORPORATION

OF INDIA
The story of insurance is probably as old as the story of mankind. The
same instinct that prompts modern businessmen today to secure themselves
against loss and disaster existed in primitive men also. They too sought to avert
the evil consequences of fire and flood and loss of life and were willing to make
some sort of sacrifice in order to achieve security. Though the concept of
insurance is largely a development of the recent past, particularly after the
industrial era past few centuries yet its beginnings date back almost 6000
years.
Life Insurance in its modern form came to India from England in the year
1818. Oriental Life Insurance Company started 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 charged 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 into 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

5
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

6
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.
LICs 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.
LICs ECS and ATM premium payment facility is an addition to customer
convenience. Apart from on-line Kiosks and IVRS, Info Centers have been
commissioned at Mumbai, Ahmadabad, Bangalore, Chennai, Hyderabad,

7
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.

8
 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.

9
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.

2.4 GOLDEN JUBILEE FOUNDATION

LIC Golden Jubilee Foundation was established in 2006 as a charity

organization. This entity has the aim of promoting education, alleviation of
poverty, and providing better living conditions for the under privileged. Out of
all the activities conducted by the organization, Golden Jubilee Scholarship
awards is the best known. Each year, this award is given to the meritorious
students in standard XII of school education or equivalent, who wish to continue
their studies and have a parental income less than 60,000 Rupees.

10
2.5 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 Bartlett Group of
Companies, Sri Lanka.

2.6 OBJECTIVES OF LIC

Spread Life Insurance widely and in particular to the rural areas and to the
socially and economically backward classes with a view to reaching all insurable
persons in the country and providing them adequate financial cover against death
at a reasonable cost.

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

adequately attractive.

Bear in mind, in the investment of funds, the primary obligation to its

policyholders, whose money it holds in trust, without losing sight of the interest
of the community as a whole; the funds to be deployed to the best advantage of
the investors as well as the community as a whole, keeping in view national
priorities and obligations of attractive return.

11
 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.

Promote amongst all agents and employees of the Corporation a sense of

participation, pride and job satisfaction through discharge of their duties with
dedication towards achievement of Corporate Objective.

2.7 MISSION / VISION

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."
Vision
"A trans-nationally competitive financial conglomerate of significance to
societies and Pride of India."

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2.8 BOARD OF DIRECTORS

Shri D.K. Mehrotra, (CHAIRMAN, LIC )

Shri Thomas Mathew T. (Managing Director, LIC )
Shri Sushobhan Sarker (Managing Director, LIC )
Shri Arvind Mayaram (Secretary, Department of Economic Affairs,
Ministry of Finance, Govt. of India.)
Shri Rajiv Takru (Secretary, Department of Financial Services,
Ministry of Finance, Govt. of India.)
Shri A.K. Roy (Chairman cum Managing Director, GIC.)
Shri M.V. Tanksale (Chairman & Managing Director, Central Bank of India )
Shri Anup Prakash Garg
Shri Sanjay Jain
Shri Ashok Singh
Shri K.S. Sampath
Shri Amardeep Singh Cheema

2.9 NETWORK OF LIC

All Life Insurance Corporation branches in the country would be inter
connected under Metro Area Network (MAN) inaugurated here on Thursday.
Speaking at the function, K Vaidya lingam, LIC southern zonal manager, said
about1500 branches would be getting covered under MAN in which the
premium amount of the policy holder could be remitted in any branch. Besides,
the policy holder gets his status report, policy position, revival and quotation
from the network. In every one hour the system got upgraded, he said. In
southern region there are about 10lakh new policy holders with a business of
Rs6500crore. About settlement of claims, 92 per cent of policies were settled on
or before maturity, he said, adding, LIC was in a better position and 100 per
13
cent connectivity was taking place. Kottayam stood third in premium collection
during the period between April to August 2002, the first being Kozhikode and
Thiruvananthapuram in second position in southern region. The premium
amount collected in 2001 was Rs.74,000crore through 2.32crore new policies by
8.2 lakh agents. LIC has introduced a new group insurance scheme
for Corporation Bank deposit holders.

2.10 OPERATION OF LIC

We Operate All Over India

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2.11 INTERNATIONAL OPERATIONS/ASSOCIATES

LIC has always acknowledged the need to expand. Our

expanding efforts have been consistent and are evident though our
associations given below for your reference.

INTERNATIONAL OPERATIONS

LIC Fiji

LIC Mauritius

LIC United Kingdom

LIC (Nepal) Ltd

LIC (Lanka) Ltd

Saudi Indian Company for Co-op. Insurance, KSA.

LIC Mauritius Offshore Ltd.

LIC Co-ordinating Office in India

ASSOCIATES

LIC Housing Finance Ltd.

LICHLF Care Homes Ltd.

LIC Mutual Fund AMC Ltd.

15
2.12 MARKET SHARE OF ALL LIFE INSURANCE
COMPANY IN INDIA

2.13 INFORMATION TECHNOLOGY AND LIC

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.

1964 saw the introduction of computers in LIC. Unit Record Machines

introduced in late 1950s were phased out in 1980s and replaced by

16
Microprocessors based computers in Branch and Divisional Offices for Back
Office Computerization. Standardization of Hardware and Software
commenced in 1990s. Standard Computer Packages were developed and
implemented for Ordinary and Salary Savings Scheme (SSS) Policies.

FRONT END OPERATIONS

With a view to enhancing customer responsiveness and services , in July
1995, LIC started a drive of On Line Service to Policyholders and Agents
through Computer. This on line service enabled policyholders to receive
immediate policy status report , prompt acceptance of their premium and get
Revival Quotation, Loan Quotation on demand. Incorporating change of address
can be done on line. Quicker completion of proposals and dispatch of policy
documents have become a reality. All our 2048 branches across the country
have been covered under front-end operations. Thus all our 100 divisional
offices have achieved the distinction of 100% branch computerization. New
payment related Modules pertaining to both ordinary & SSS policies have been
added to the Front End Package catering to Loan, Claims and Development
Officers Appraisal. All these modules help to reduce time-lag and ensure
accuracy.

METRO AREA NETWORK

A Metropolitan Area Network, connecting 74 branches in Mumbai was
commissioned in November, 1997, enabling policyholders in Mumbai to pay
their Premium or get their Status Report, Surrender Value Quotation, Loan
Quotation etc. from ANY Branch in the city. The System has been working
successfully. More than 10,000 transactions are carried out over this Network
on any given working day. Such Networks have been implemented in other
cities also.

17
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.

INTERACTIVE VOICE RESPONSE SYSTEMS (IVRS)

IVRS has already been made functional in 59 centers all over the country.
This would enable customers to ring up LIC and receive information (e.g. next
premium due, Status, Loan Amount, Maturity payment due, Accumulated
Bonus etc.) about their policies on the telephone. This information could also be
faxed on demand to the customer.

LIC ON THE INTERNET

Our Internet site is an information bank. We have displayed information
about LIC & its offices. Efforts are on to upgrade our web site to make it
dynamic and interactive. The addresses/e-mail Ids of your Zonal Offices, Zonal
Training Centers, Management Development Center, Overseas Branches,
Divisional Offices and also all Branch Offices with a view to speed up the
communication process.

PAYMENT OF PREMIUM AND POLICY STATUS ON INTERNET

LIC has given its policyholders a unique facility to pay premiums through
Internet absolutely free and also view their policy details on Internet premium
payments. There are 11 service providers with whom L I C has signed the
agreement to provide this service.

18
2.14 AWARDS RECEIVED BY LIC DURING 2011-2012

Awards Received in 2011-12

Readers Digest Superbrands

Asian Leadership Awards ET Brand Equity's Most Trusted

CNBC AWAAZ Dainik Bhaskar Group

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2.15 PRIVATE LIFE INSURANCE COMPANIES

Sr.No. Registration Date of Name of the Insurer

No. Registration
1 101 23/10/2000 HDFC Standard Life Insurance Co. Ltd.
2 104 15/11/2000 Max New York Life Insurance Co.Ltd.
3 105 24/11/2000 ICICI Prudential Life Insurance Co.Ltd.
4 107 10/01/2001 Kotak Mahindra old mutual Life
Insurance Co.Ltd.
5 109 31/01/2001 Birla Sun Life Insurance Co.Ltd.
6 110 12/02/2001 TATA AIG Life Insurance Co. Ltd.
7 111 30/03/2001 SBI Life Insurance Co.Ltd.
8 114 02/08/2001 ING Vysya Life Insurance Co.Ltd.
9 116 03/08/2001 Bajaj allianz Li Bajaj Allianz Life
Insurance Co.Ltd.
10 117 06/08/2001 Met Life India Insurance Co. Ltd.
11 121 03/01/2002 Reliance Life Insurance Co. Ltd.
12 122 14/05/2002 Aviva Life Insurance Co. Ltd.
13 127 06/02/2004 Sahara India Life Insurance Co.Ltd.
14 128 17/11/2005 Shriram Life Insurance Co.Ltd.
15 130 14/07/2006 Bharti Axa Life Insurance Co.Ltd.
16 133 04/09/2007 Future Generali India Life Insurance
Co.Ltd.
17 135 19/12/2007 IDBI Fortis Life Insurance Co. Ltd.
18 136 08/05/2008 Canara HSBC Oriental Bank of
Commerce Life Insurance Co. Ltd.
19 138 27/06/2008 Aegon Religare Life Insurance Co. Ltd.
20 140 27/06/2008 DLF Pramerica Life Insurance Co. Ltd.

20
 CHAPTER : 3

PRODUCTS OF LIC

3.1 INSURANCE PLAN

As individuals it is inherent to differ. Each individual's insurance needs and

requirements are different from that of the others. LIC's Insurance Plans are
policies that talk to you individually and give you the most suitable options that
can fit your requirement.

Bima Account 1
Bima Account 2

Endowment Plus

Jeevan Anurag Komal Jeevan

CDA Endowment Vesting At 21 Marriage Endowment Or
CDA Endowment Vesting At 18 Educational Annuity Plan
Jeevan Kishore Jeevan Chhaya
Child Career Plan Child Future Plan
Jeevan Ankur

Jeevan Aadhar
Jeevan Vishwas

21
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

The Money Back Policy-20 Years

The Money Back Policy-25 Years
Jeevan Surabhi-15 Years
Jeevan Surabhi-20 Years
Jeevan Surabhi-25 Years
Bima Bachat

Jeevan Bharati - I

22
 The Whole Life Policy
The Whole Life Policy- Limited Payment
The Whole Life Policy- Single Premium
Jeevan Anand
Jeevan Tarang

Two Year Temporary Assurance Policy

The Convertible Term Assurance Policy
Anmol Jeevan-I
Amulya Jeevan-I

Jeevan Saathi

3.2 PENSION PLANS

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.

23
 Jeevan Akshay-VI
New Jeevan Nidhi

3.3 UNIT PLANS

Unit plans are investment plans for those who realize the worth of hard-earned
money. These plans help you see your savings yield rich benefits and help you
save tax even if you don't have consistent income.

Endowment Plus
Flexi Plus

3.4 SPECIAL PLANS

LICs 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!

New Bima Jeevan Madhur

Gold Jeevan Mangal
Jeevan Deep

Bima Nivesh
2005

24
3.5 GROUP INSURANCE SCHEME

Group Insurance Scheme is life insurance protection to groups of people. This

scheme is ideal for employers, associations, societies etc. and allows you to
enjoy group benefits at really low costs.

Group Term Insurance Schemes

Group Insurance Scheme in Lieu Of EDLI
Group Gratuity Scheme
Group Savings Linked Insurance Scheme
Group Leave Encashment Scheme
Group Mortgage Redemption Assurance Scheme
Group Critical Illness Rider

JanaShree Bima Yojana (JBY)

Shiksha Sahayog Yojana
Aam Admi Bima Yojana

3.6 WITHDRAWAN PLANS

Jeevan Nischay Market Plus I

Wealth Plus Profit Plus
Jeevan Aastha Money Plus-I
Jeevan Varsha Child Fortune Plus

25
 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)

3.7 HEALTH PLANS

Health Protection Plus

Jeevan Arogya

3.8 DIFFERENT POLICIES IN DETAIL

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

26
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 5 % 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

27
 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: LICs 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.

28
 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.

29
 CHAPTER :4

GUIDELINES FOR POLICY HOLDERS

We welcome you as a policyholder and as a prospective customer to our

customer service section. This section will guide you through the various
intricacies of a life insurance contract and the facts that you must know to make
the best out of your life insurance policy. Please read our guidelines carefully.

Your Policy Bond And Its Safety

Your Policy Number

Policy Conditions

Alterations In Policy

If Your Policy Is Lost

Your Contact Address Keep Us Posted Without Fail

Admission Of Age

Nomination

Assignment

When To Pay The Premiums

Grace Period For Premium Payment

How And Where To Pay The Premiums

Policy Status Where Available

Revival Of Lapsed Policies

Availing Loans On Policies

Surrender Value

30
Maturity, Survival Benefits, Disability And Death Claims

Policies Under Salary Savings Scheme

Helpline

Your Policy Bond And Its Safety

The policy bond is the document that is given to you after we accept your
proposal for insurance.
The risk coverage commences after acceptance of your proposal and the
conditions and privileges of your policy are mentioned in the policy bond.
This is an important document which would be referred to for various servicing
interactions with you Keep the policy bond safe. It will be required at the time
of settlement of claims on the policy. You will also require it if you are availing
a loan or want to assign the policy.
Inform your spouse/Parents/Children as to where the policy is kept.
In case you are handing over the policy bond to any person or office, please take
a written acknowledgement. Keep a Photostat copy of the policy for your
reference.

Your Policy Number

The policy number is consisting of nine digits and can be found at the top left
hand corner of the schedule of your policy bond.
This is a unique identification number that distinguishes your policies from
other policies and will remain unchanged throughout the lifetime of the policy.
Remember to quote the policy number every time in your correspondence, as it
helps us to locate your records for reference.

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.

31
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.

If Your Policy Is Lost

Kindly make a thorough search before concluding that you have lost the policy
bond. Look for the same within your residence, among your investment papers,
at your office and even with your agent to whom you might have entrusted the
document for some reason.
It could have been even pledged with LIC/any other financial institution for
availing a loan by you. LIC retains the policy bond when you go in for a loan
against the policy. Make sure that the document you are searching is not one
that has already been assigned to LIC, or to another financial institution.
If the policy bond is partially destroyed due to natural causes like, fire, flood,

32
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.

Your Contact Address Keep Us Posted Without Fail

Your address is very important for us. Without your latest address we would not
be in a position to contact you for any service offering. We would not like to
keep any benefit that is due to you pending for want of this very important
information. Whenever you shift residences, please inform the new address to
us. Otherwise any communication we send to you, like premium notices,
discharge vouchers for maturity and survival benefits etc., will get delayed in
reaching you.
LIC provides for change of addresses, inclusion of telephone numbers, mobile
numbers and email addresses in your contact addresses information. Kindly
inform your servicing branch to incorporate the same in your policy records.

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.

33
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 wholl 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 wholl 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.

The policy would be reassigned to you on the repayment of the loan.

A fresh nomination should be done after reassignment of the policy.
Assignment of policies can be done even when a loan is not required or for
some special purposes.

34
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.

Grace Period For Premium Payment

In case you have not paid the premium within the due date there is still time for
you to make the payments without payment of interest on the premium. This
period is called the grace period. (With the exception of some plans)
The grace period for policies where the premium payment mode is monthly is
15 days from the due date.
The grace period for policies where the premium payment mode is quarterly,
half-yearly or yearly is one month but not less than30 days.

How And Where To Pay The Premiums

By cash, local cheque (subject to realization of cheque), Demand Draft at

Branch Office.
The DD and cheques or Money Order may be sent by post.
You can pay your premiums at any of our Branches as 99% of our
Branches are networked.
Many Banks do accept standing instructions to remit the premiums. So by
providing a standing instruction to your Bank to debit your account for
the premium amount and send it vide a bankers cheque to LIC, on the
due dates and months mentioned on your policy bond.

35
 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.

Policy Status Where Available

Status of your policy indicates if your policy is in force or has lapsed due to
non-payment of premium. It also provides other important information with
respect to your policy, for your reference.
The status of your policy is available at the branch that services your policies.
It is also available through our Interactive Voice Response Systems in select
cities. In cities connected by our computerized networks the status will be
available in any of the branches.

36
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.

Revival Of Lapsed Policies

If your policy has lapsed due to non-payment of premiums within the due date,
the terms and conditions of the policy contract are rendered void, till you revive
your policy.
A lapsed policy has to be revived by payment of the accumulated premiums
with interest as well as giving the health requirements as required . Always keep
your policy in force to ensure that your family gets their financial protection
assured by your policy.
However certain concessions dependent on the term for which you have paid
the premiums are available with the exception of some plans for claims
concession.

Availing Loans on Policies

Many of our plans are of endowment type and you would be allowed to raise a
loan against your policy should you require funds.
You repay the loan with interest or continue paying the interest and allow the
loan to be deducted at the time of the claim payments.
Further loans on policies are also allowed after deduction of earlier out
standings Most financial institutions too allow loans against LIC policies based
on the value LIC quotes on request from you.

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.

37
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.

Maturity, Survival Benefits, Disability And Death Claims:

When your Survival Benefits (For Money back policies) or maturity benefits are
due, we send intimations to you in advance. However, if the survival benefit
amount is less than or equal to Rs.60, 000/- the same will be sent to you directly
without policy or discharge forms with a few exceptions.
If such intimations have not come to you before the due date kindly inform us
so that we may take necessary action.

Policies Under Salary Savings Scheme

If you have taken your policy under salary Saving Scheme please read the
following suggestions:

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.

38
 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.

39
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.

40
 CHAPTER : 5

SWOT ANALYSIS OF THE COMPANY

The SWOT analysis involves an in depth study of the strength and

weakness of the provided organization and it also provides information to the
promoter, consultant, other agencies and helps in long term viability of the
project.
STRENGTH:

It is the oldest and most well experienced player having a Pan

India presence.
LIC has a strong and very well developed distribution network.
It is having a huge consumer base and is evolved as one of the most
powerful brands of the country.
It has a large product portfolio and claim settlement is easier to
get.
It has the advantage of government guarantee is accompanied
with it.
Largest insurance Company in the world in Customer Base
(23crore customers).
No.1 insurance company in the world in terms of agency (about
1.1Millionagents).
LIC is No.1 insurer in the world in Volume & Sold around
3.75Cr.Policies in2007-2008.
2nd Biggest Real Estate Owner next to Indian Railways.

41
 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.

42
 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:

Emergence of a huge middle income consumer market in the country.

People becoming more aware and demanding so there is scope for a
whole lot of innovative products.
Pension markets, health insurance and large real estate portfolio. Todays
human life becomes full uncertain, so they prefer protection against the
risk. Therefore they prefer life insurance. This is the opportunity for the
life insurance sector.
Easy accesses to development in the more advance market provide
further opportunity to upgrade their working. Technological, financial or
specific area based avenues of absorbing improved system are also now

43
 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.

44
 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. Consumers 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.

45
 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.

Number of branches of private insurance companies is increasing as the

new players are entering in this market. Also the established players are
in expansion phase and hence are expanding their business. There are
many private insurance companies and hence there total number of
branches has gone past LIC in the last financial year. But offices of

46
 private insurance companies are mostly in urban areas and still it is LIC
which covers most of the area.

Hence we see that LIC is leading when it comes to size. It is giant in

insurance sector having huge network and customer base.

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.

47
 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.

New business is increasingly going towards private insurance companies

but still the customer base of LIC is very strong. In issuing new policies
per branch also, they are ahead of private insurance companies though not
by very large margin.

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.

48
 BIBLIOGRAPHY

BROCHURES / INFORMATION BOOKLETS

Product List L.I.C.
L.I.C. Annual Report, 2006
ICICI Annual Report, 2006
HDFC Annual Report, 2006
Malhotra Committee Report on Reforms in the Insurance Sector, 1993.
The Insurance Regulatory and Development Authority Bill, 1999.

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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