A PROJECT REPORT ON

“ROLE OF LIC IN INSURANCE INDUSTRY”

SUBMITTED TO

UNIVERSITY OF MUMBAI

IN PARTIAL FULFILLMENT OF REQUIRMENT FOR

BACHELOR OF BANKING AND INSURANCE

SUBMITTED BY

OMKAR B. ADSUL

ROLL NO: - 171501

UNDER THE GUIDANCE OF

PROF. GIRISH KIRTANI

VEDANTA FOUNDATION

VEDANTA COLLEGE OF MANAGEMENT &

INFORMATION TECHNOLOGY
 DECLARATION
I, MR. OMKAR BANSIRAM ADSUL student of VEDANTA
COLLEGE OF MANAGEMENT & INFORMATION
TECHONOLOGY. Studying in Third Year of BACHELOR OF
BANKING AND INSURANCE (SEM VI) Roll No.171501 hereby
declare that I have completed the project on ―ROLE OF LIC IN
INSURANCE INDUSTRY” in the year 2017-2018.
The information submitted is true and original to the best of my
knowledge.

(OMKAR B.ADSUL)

Date:
Place:

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 ACKNOWLEDGEMENT

Any work that is to be done is never completed without the help

of many people from many different quarters of life. It has been the
same for us as well. Many different people have helped me over the
last 2 months in making this project a very successful venture. It
would be unbecoming of me not to thank them for all that they have
done for me. It is for them that I am writing these paragraphs.

My thanks first go to my project guide, Prof .GIRISH KIRTANI,

without whose thoughtful guidance and continuous prodding I would
not have been able to complete in time.

Last but not in the least, my thanks also go to my family and to

my friends, who would needle me, prod me, and help me to finish the
work. Without their enthusiastic support I would not have finished our
work on time.

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 VEDANTA college of Management
& information technology
Vitthalwadi Railway Station Road, Vithalwadi (W) Ulhasnagar 421003, Ph: 0251-2705865

CERTIFICATE

This is to certify that MR. OMKAR B. ADSUL has

satisfactorily completed the project work on “ROLE OF LIC
IN INSURANCE INDUSTRY” for partial fulfillment of the
three year full time course Bachelor of Banking and Insurance
(SEM-VI) Roll No.171501 of the University Of Mumbai for
the academic year 2017-18 under the guidance of
Prof. GIRISH KIRTANI.

Course coordinator

Internal Examiner

External Examiner Principal

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ROLE OF LIC IN INSURANCE INDUSTRY

"ज िंदगी के साथ भी, ज िंदगी के बाद भी"

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Executive Summary:
Someone has greatly said that the practical knowledge is far better than the
classroom trainings. During this project, I fully realised this and come to know
about the present real world of the Insurance sector. It includes all the activities
involved in providing Insurance products to the final customer.
The subject of my study is to analyse the present insurance sector &
products offered by LIC of India applying various tools like cold calling &
through direct interaction with customers. This report contains first of all brief
introduction about the company.
Then is contains current status of private insurance companies & foreign
insurance companies in India. I also put forward recommendations of the
consumers & conclusions that will help LIC of India to provide consumer
satisfactory services in the insurance sector.

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 INDEX

Cover page…………………………………………………………………………
Acknowledgement……………………………………………………….………..
Certificate……………………………………………………………………...
Table of Content…………………………………………………………………..
1. Introduction…………………………………………………….08 To 08
2. Meaning of insurance………………………………………….. 06 To 07
3. Classification of insurance…………………………………….. 08 To 15
4. Advantages & Disadvantages………………………………… 16 To 18
5. LIC Act 1956…………………………………………………..19 To 21
6. Latest LIC Policies……………………………………………. 22 To 26
7. Objective Of LIC…………………………………………….... 27 To 27
8. Role & Function Of LIC………………………………………28 To 28
9. Organisation Structure Of LIC……………………………….. 29 To 29
10. Conceptual Discussion………………………………………… 30 To 35
11. Data Analysis………………………………………………….. 36 To 45
12. Conclusion……………………………………………………46 To 46
13. Bibliography………………………………………………… 47 To 47

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INTRODUCTION:
―Man Proposes & God Disposes‖
This statement is self-explanatory that man has no control on its life and results of its human
activities. It means that there is always uncertainty of the results of human activity. From the
moment of birth, till the end of life, all material possessions are also continually exposed to
uncertainty. So, we can say that-
―Uncertainty is the fundamental fact of life”
This uncertainty leads to fear of risk in our life. Fear of risk can be satisfied by taking all
precautions to avoid risk. In spite of all precautions, accident occurs. So, only these
precautions are not sufficient to avoid the consequences of uncertainty, but it requires more
effective technique to deal with the problem of risk in our society. We can deal with the risk
in various ways but insurance is one of the best techniques to deal with the risk.

MEANING OF INSURANCE
Insurance is a cover used or protecting oneself from the risk of a financial loss. It is important
to understand that risk is a part of any person’s life and that it increases as a person increases
in age, responsibility and wealth. Insurance is risk coverage against financial losses and
should not be taken as an investment instrument. There are mainly two parties involved in
this- the insurer and the insured. The insurer is the insurance company who will provide the
cover to the insured against any financial losses. The insured may be an individual person or
a group of people like an employer, members of a society, etc.

PROJECT OBJECTIVES:
a) The report gives the brief background of the sector & proceeds to highlight the short
comings of the existing set-ups & Players
b) The benefits of liberalized sector are enumerated
c) The report also tries to identify the market potential for insurance products & the
strategy that can be employed to exploit the same.
d) The stress is also given on knowing the awareness level of general public.

PROJECT METHODOLOGY:
To conduct the market research first of all it is necessary to create a Project design.
A project design is basically a blue print of how project is to be constructed, it may include;
 Choosing the approach
 Determining the types of data needed
 Locating the source of data
 Choosing the method of data

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PROJECT DESIGN:
Basically there are 3 types of approaches to design a better project:
1. Exploratory
2. Descriptive
3. Experimental
During this project, I have considered the Descriptive & Exploratory approaches because
of the availability of relevant information to describe the relation between the marketing
problem & the available information.
For the project two types of data is used;
a. Primary source of data:
First-hand information, data, reviews & opinions from the survey through college
students, professors & neighbouring people
b. Secondary source of data:
Data, information which is already exists in collected from published sources. The
secondary data is collected through following sources;
i). Newspapers & magazines
ii). Insurance posts by LIC
iii). Websites (Internet)

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CLASSIFICATION OF INSURANCE:
TYPES OF INSURANCE:-

Insurance

Non-Life
Life Insurance
Insurance

General Miscellaneous
Insurance Insurance

 Life Insurance
 Non-Life Insurance- Property Insurance, Casualty Insurance, Health Insurance 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

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WHAT IS LIFE INSURANCE?
Life insurance may be defined as a contract in which the insurer in consideration of a certain
premium either in lump sum or other periodical payments, agrees to pay to the assured or to
the person for whose benefits the policy is taken, a stated sum of money on the happening of
a particular event contingent on the duration of human life. Thus, under a whole-life
assurance, the policy is payable at of the assured and under an endowment policy, the money
is payable on the assureds’ surviving a stated period of years.
MEANING OF LIFE INSURANCE:-
According to sec (2) (11) of the Insurance Act, Life insurance business means ―The business
effecting contracts upon human life‖. It includes:-
a) Any contracts whereby the payment of money is assured upon death (except death by
accident only) or the happening of any contingency dependent on human life.
b) Any contract which is subject to the payment of premium for a term dependent on
human life.
c) Any contract which include the granting of disability and double or triple indemnity,
accident benefits, the granting of annuities upon human life, and the granting of
super-annulations allowances.

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TYPES OF LIFE INSURANCE

Life insurance may be divided into two basic classes – temporary and permanent or following
subclasses – term, universal, whole life and endowment life insurance.

 Term Insurance
Term assurance provides life insurance coverage for a specified term of years in exchange for
a specified premium. The policy does not accumulate cash value. Term is generally
considered "pure" insurance, where the premium buys protection in the event of death and
nothing else.
 There are three key factors to be considered in term insurance:
 Face amount (protection or death benefit),
 Premium to be paid (cost to the insured),
 Length of coverage (term).
Various insurance companies sell term insurance with many different combinations of
these three parameters. The face amount can remain constant or decline. The term can be for
one or more years. The premium can remain level or increase. Common types of term
insurance include Level, Annual Renewable and Mortgage insurance."
Level Term policy has the premium fixed for a period of time longer than a year.
These terms are commonly 5, 10, 15, 20, 25, 30 and even 35 years. Level term is often used
for long term planning and asset management because premiums remain consistent year to
year and can be budgeted long term. At the end of the term, some policies contain a renewal
or conversion option. Guaranteed Renewal, the insurance company guarantees it will issue a
policy of equal or lesser amount without regard to the insurability of the insured and with a
premium set for the insured's age at that time. Annual renewable term is a one year policy but
the insurance company guarantees it will issue a policy of equal or lesser amount without
regard to the insurability of the insured and with a premium set for the insured's age at that
time.
Another common type of term insurance is mortgage insurance, which is usually a
level premium, declining face value policy. The face amount is intended to equal the amount
of the mortgage on the policy owner’s residence so the mortgage will be paid if the insured
dies.
A policy holder insures his life for a specified term. If he dies before that specified
term is up (with the exception of suicide see below), his estate or named beneficiary receives
a payout.If he does not die before the term is up, he receives nothing. However, in some
European countries (notably Serbia), insurance policy is such that the policy holder receives
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the amount he has insured himself to, or the amount he has paid to the insurance company in
the past years.
 Permanent Life Insurance
Permanent life insurance is life insurance that remains in force (in-line) until the
policy matures (pays out), unless the owner fails to pay the premium when due (the policy
expires OR policies lapse). The policy cannot be canceled by the insurer for any reason
except fraud in the application, and that cancellation must occur within a period of time
defined by law (usually two years). Permanent insurance builds a cash value that reduces the
amount at risk to the insurance company and thus the insurance expense over time. This
means that a policy with a million dollar face value can be relatively expensive to a 70 year
old. The owner can access the money in the cash value by withdrawing money, borrowing the
cash value, or surrendering the policy and receiving the surrender value.
 Whole life coverage:
Whole life insurance provides for a level premium, and a cash value table included in
the policy guaranteed by the company. The primary advantages of whole life are guaranteed
death benefits; guaranteed cash values, fixed and known annual premiums, and mortality and
expense charges will not reduce the cash value shown in the policy. The primary
disadvantages of whole life are premium inflexibility, and the internal rate of return in the
policy may not be competitive with other savings alternatives. The death benefit can also be
increased through the use of policy dividends. Dividends cannot be guaranteed and may be
higher or lower than historical rates over time. Premiums are much higher than term
insurance in the short term, but cumulative premiums are roughly equal if policies are kept in
force until average life expectancy.
Cash value can be accessed at any time through policy "loans" and are received
"income-tax free". Since these loans decrease the death benefit if not paid back, payback is
optional. Cash values support the death benefit so only the death benefit is paid out.
Dividends can be utilized in many ways. First, if Paid up additions is elected, dividend
cash values will purchase additional death benefit which will increase the death benefit of the
policy to the named beneficiary. Another alternative is to opt in for 'reduced premiums' on
some policies. This reduces the owed premiums by the unguaranteed dividends amount. A
third option allows the owner to take the dividends as they are paid out. (Although some
policies provide other/different/less options than these - it depends on the company for some
cases)

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  Universal life coverage:
Universal life insurance (UL) is a relatively new insurance product intended to
provide permanent insurance coverage with greater flexibility in premium payment and the
potential for greater growth of cash values. There are several types of universal life insurance
policies which include "interest sensitive" (also known as "traditional fixed universal life
insurance"), variable universal life (VUL), guaranteed death benefit, and equity indexed
universal life insurance.
A universal life insurance policy includes a cash value. Premiums increase the cash
values, but the cost of insurance (along with any other charges assessed by the insurance
company) reduces cash values. However, with the exception of VUL, interest is credited on
cash values at a rate specified by the company and may also increase cash values. With VUL,
cash values will ebb and flow relative to the performance of the investment subaccounts the
policy owner has chosen. The surrender value of the policy is the amount payable to the
policy owner after applicable surrender charges, if any.
Universal life insurance addresses the perceived disadvantages of whole life – namely
that premiums and death benefit are fixed. With universal life, both the premiums and death
benefit are flexible. Except with regards to guaranteed death benefit universal life, this
flexibility comes at a price: reduced guarantees.
Depending on how interest is credited, the internal rate of return can be higher
because it moves with prevailing interest rates (interest-sensitive) or the financial markets
(Equity Indexed Universal Life and Variable Universal Life). Mortality costs and
administrative charges are known. And cash value may be considered more easily attainable
because the owner can discontinue premiums if the cash value allows it
Option A is often referred to as a level death benefit. Generally speaking, the death
benefit will remain level for the life of the insured and premiums are expected to be lower
than policies with an Option B death benefit.
Option B pays the face amount plus the cash value. If cash values grow over time, so
would the death benefit which is payable to the insured's beneficiaries. If cash values decline,
the death benefit would also decline. Presumably option B death benefit policies require
greater premium than option A policies.

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Limited-pay:

Another type of permanent insurance is Limited-pay life insurance, in which all the premiums
are paid over a specified period after which no additional premiums are due to keep the
policy in force. Common limited pay periods include 10-year, 20-year, and paid-up at age 65.

3. Endowments:

Endowments are policies in which the cash value built up inside the policy, equals the death
benefit (face amount) at a certain age. The age this commences is known as the endowment
age. Endowments are considerably more expensive (in terms of annual premiums) than either
whole life or universal life because the premium paying period is shortened and the
endowment date is earlier.

In the United States, the Technical Corrections Act of 1988 tightened the rules on tax shelters
(creating modified endowments). These follow tax rules as annuities and IRAs do.

 Accidental Death
Accidental death is a limited life insurance that is designed to cover the insured when they
pass away due to an accident. Accidents include anything from an injury, but do not typically
cover any deaths resulting from health problems or suicide. Because they only cover
accidents, these policies are much less expensive than other life insurances. It is also very
commonly offered as "accidental death and dismemberment insurance", also known as an
AD&D policy. In an AD&D policy, benefits are available not only for accidental death, but
also for loss of limbs or bodily functions such as sight and hearing, etc. Accidental death and
AD&D policies very rarely pay a benefit; either the cause of death is not covered, or the
coverage is not maintained after the accident until death occurs. To be aware of what
coverage they have, an insured should always review their policy for what it covers and what
it excludes. Often, it does not cover an insured who puts themselves at risk in activities such
as: parachuting, flying an airplane, professional sports, or involvement in a war (military or
not).

Accidental death benefits can also be added to a standard life insurance policy as a rider. If
++this rider is purchased, the policy will generally pay double the face amount if the insured
dies due to an accident. This used to be commonly referred to as double indemnity coverage.
In some cases, some companies may even offer triple indemnity coverage

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  Related Life Insurance Products
Riders are modifications to the insurance policy added at the same time the policy is issued.
These riders change the basic policy to provide some feature desired by the policy owner. A
common rider is accidental death, which used to be commonly referred to as "double
indemnity", which pays twice the amount of the policy face value if death results from
accidental causes, as if both a full coverage policy and an accidental death policy were in
effect on the insured. Another common rider is premium waiver, which waives future
premiums if the insured becomes disabled. Joint life insurance is either a term or permanent
policy insuring two or more lives with the proceeds payable on the first death or second
death. Survivorship life: is a whole life policy insuring two lives with the proceeds payable
on the second (later) death. Single premium whole life: is a policy with only one premium
which is payable at the time the policy is issued. Modified whole life: is a whole life policy
that charges smaller premiums for a specified period of time after which the premiums
increase for the remainder of the policy. Group life insurance: is term insurance covering a
group of people, usually employees of a company or members of a union or association.
Individual proof of insurability is not normally a consideration in the underwriting. Rather,
the underwriter considers the size and turnover of the group, and the financial strength of the
group. Senior and preneed products: Insurance companies have in recent years developed
products to offer to niche markets, most notably targeting the senior market to address needs
of an aging population. Many companies offer policies tailored to the needs of senior
applicants. Preneed (or prepaid) insurance policies: are whole life policies that, although
available at any age, are usually offered to older applicants as well. This type of insurance is
designed specifically to cover funeral expenses when the insured person dies. In many cases,
the applicant signs a prefunded funeral arrangement with a funeral home at the time the
policy is applied for.

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  Investment policies
Some policies allow the policyholder to participate in the profits of the insurance company
these are with-profits policies. Other policies have no rights to participate in the profits of the
company, these are non-profit policies.

With-profits policies are used as a form of collective investment to achieve capital growth.
Other policies offer a guaranteed return not dependent on the company's underlying
investment performance; these are often referred to as without-profit policies which may be
construed as a misnomer.

 Investment Bonds
Pensions: Pensions are a form of life assurance. However, whilst basic life assurance,
permanent health insurance and non-pensions annuity business includes an amount of
mortality or morbidity risk for the insurer, for pensions there is a longevity risk.

A pension fund will be built up throughout a person's working life. When the person retires,
the pension will become in payment, and at some stage the pensioner will buy an annuity
contract, which will guarantee a certain pay-out each month until death.

 Annuities
An annuity is a contract with an insurance company whereby the insured pays an initial
premium or premiums into a tax-deferred account, which pays out a sum at pre-determined
intervals. There are two periods: the accumulation (when payments are paid into the account)
and the annuitization (when the insurance company pays out). IRS rules restrict how you take
money out of an annuity.

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ADVANTAGES OF LIFE INSURANCE
Life Insurance is one of the most widely available and used financial products being used by
people. But before buying various types of life insurance such as variable, term life insurance
not many people do a pros and cons analysis. This is quite sad since it is one of the biggest
yearly expenses and is one of the most important security assets for our family in case of
death or serious injury. Life Insurance has different meanings in different countries as well.
In India Life Insurance is mostly looked upon as an investment product. Most people buy
insurance as an investment product leading to the wide prevalence of hybrid insurance
investment products like ULIPs , Child Plans etc. It is easily found that these hybrid products
are wasteful since it would be cheaper to buy separate investment and insurance products.

1) Life Insurance is not an Investment:- Life Insurance is an Expense and not an Asset. It
is an expense just like your health insurance to make sure in case of serious illness you are
covered and not in a position to pay the costs of your illness leading to your life ending in a
bad manner. Life Insurance makes sure that your dependents can lead a decent life

economically despite your death. This is the main purpose and advantage of life insurance

2)Tax Advantage :– A number of countries allow you to offset the premiums that you pay
for you life insurance in your taxable income. Also the maturity amount that you get is also
not taxable in a number of places. Insurance is widely used by financial advisors to reduce
your tax burden.

3) Advantage Of Term Insurance :- While Insurance companies sell a wide variety of

insurance products like term variable universal insurance most are complex and intended to
fleece customers. Term Insurances is the best life insurance product for its simplicity and
cheapness. It gives you a lump sum amount in case of death and has no clause and
conditions. Its very simple to understand and the cheapest insurance product as well.

4) Flexibility in Coverage :- Life Insurance is supposed to cover you till the time you
have enough of a corpus for your dependents. You can take life insurance for 5,10,15,20
year. This also depends on your age but you get the basic idea. Suppose you have $50,000 in
savings and you need another $450,000 for your family to be comfortable in case of your
death. If you save $50,000 every year then it means that you need 9 more years to get to your
target .In that case you can take life insurance for 9 years.

5) Government Regulation provides Safety: – The government heavily regulates the

insurance sector making sure that your insurance company has enough assets to cover your
liability. This means that you have the peace of mind that in case of your death the money
will be given out by the life insurance company and it does not go bankrupt. Governments
18
make sure that insurance companies don‟t fail like banks. Even if they do their liabilities are
taken over by the government.

Universal and Variable Life Insurance Advantages :– While in my opinion both of these 2
types of insurance are a complete waste of time and money they offer the advantage in some
specific niche cases. These offer the option of investment and insurance by giving you an
interest in the cash value of your insurance. Variable insurance allows you to change the
premiums on your life insurance. However the complications of calculating mortality and
investment in a hybrid product is beyond the intelligence of most people in my opinion and
you are better staying away from these products.

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DISADVANTAGES OF LIFE INSURANCE

 Uncomfortable insurance product:-The Cons of a Life Insurance chosen carefully

is almost negligible. However the disadvantage of Life Insurance arises when it is
used as an investment product. Insurance companies also promote these as people are
uncomfortable in paying premiums on which returns are uncertain. They think that if
you are paying for insurance you must get back something. This is because of the
psychological make up of humans where we underestimate the chances of our demise.

 Buying Life Insurance when you have no Need: – People buy insurance when they
have no need for example an old woman buying life insurance. Also the example of
buying life insurance for a very long time period till you is 80 years old. At that age
you have no need since you would have no dependents and earning power as well.

 Buying Complex Life Insurance Products:- like ULIPs, Endowment, Child Plans
etc which give sub optimal returns – Millions of people every year buy insurance
products without understanding it. Most of the complex products give suboptimal
returns and have no suitability for the buyers. Agents frequently give bad advice to
get more commissions. Companies also make more money by selling complex
products which people don‟t understand.

 Buying Expensive Policies – People have little clue and don‟t compare life insurance
products even from the same provider. Buying Life Insurance is not Rocket Science
however this trillion dollar industry has made it complicated. There are hundreds of
types of insurance and products which makes choosing a difficult thing for a
person.But keeping it simple like buying term insurance for your insurance needs and
other financial assets for your investment will keep it simple.

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 LIC ACT 1956

Life Insurance Business in India was nationalized with effect from January 19, 1956. On the
date, the Indian business of 16 non-Indian insurers operating in India and 75 Provident
Societies were taken over by Government of India. Life Insurance Corporation of India, Act
was passed by the Parliament on June 18, 1956 and came into effect from July 1, 1956. Life
Insurance Corporation of India commenced its functioning as a corporate body from
September 1, 1956. Its working is governed by the LIC Act. The LIC is a corporate having
perpetual succession and a common seal with a power to acquire hold and dispose of property
and can by its name sue and be sued.

Important Provisions of Life Insurance Corporation Act, 1956

 Constitution
 Capital
 Functions of the Corporation
 Transfer of Services
 Set-up of the Corporation
 Committee of the Corporation
 Authorities
 Finance, Accounts and Audit
 Miscellaneous

Life Insurance Corporation of India (LIC)

The LIC of India was set up under the LIC Act, 1956 under which the life insurance was
nationalized. As a result, business of 243 insurance companies was taken over by LIC on 1-9-
1956.

It is basically an investment institution, in as much as the funds of policy holders are invested
and dispersed over different classes of securities, industries and regions, to safeguard their
maximum interest on long term basis. LIC is required to invest not less than 75% of its funds
in Central and State Government securities, the government guaranteed marketable securities
and in the socially-oriented sectors. At present, it is the largest institutional investor. It
provides long term finance to industries. Besides, it extends resource support to other term
lending institutions by way of subscription to their shares and bonds and also by way of term
loans.

LIC which has entered into its 57th year has emerged as the world’s largest insurance co. in
terms of number of policies covered. The LIC’s total coverage of policies including
individual, group and social schemes has crossed the 11 crore.

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FUNCTIONS OF THE CORPORATION:
1. Subject, to the rules, if any, made by the Central Government in this behalf, it shall
be the general duty of the Corporation to carry on life insurance business, whether in
or outside India, and the Corporation shall so exercise its powers under this Act as to
secure that life insurance business is developed to the best advantage of the
community.
2. Without prejudice to the generality of the provisions contained in sub-section (1) but
subject to the other provisions contained in this Act, the Corporation shall have
power—
a. to carry on capital redemption business, annuity certain business or reinsurance
business in so far as such reinsurance business appertains to life insurance
business;
b. subject to the rules, if any, made by the Central Government in this behalf, to
invest the funds of the Corporation in such manner as the Corporation may think
fit and to take all such steps as may be necessary or expedient for the protection or
realization of any investment; including the taking over of and administering any
property offered as security for the investment until a suitable opportunity arises
for its disposal;
c. to acquire, hold and dispose of any property for the purpose of its business;
d. to transfer the whole or any part of the life insurance business carried on outside
India to any other person or persons, if in the interest of the Corporation it is
expedient so to do;
e. to advance or lend money upon the security of any movable property or
otherwise;
f. to borrow or raise any money in such manner and upon such security as the
Corporation may think fit;
g. to carry on either by itself or through any subsidiary any other business in any
case where such other business was being carried on by a subsidiary of an insurer
whose controlled business has been transferred to an vested in the Corporation
under this Act;
h. to carry on any other business which may seen to the Corporation to be capable
of being conveniently carried on in connection with its business and calculated
directly or indirectly to render profitable the business of the Corporation;
i. To do all such things as may be incidental or conducive to the proper exercise of
any of the powers of the Corporation.
3. In the discharge of any of its functions the Corporation shall act so far as may be on
business principles

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Offices, branches and agencies.-
1. The central office of the Corporation shall be at such place as the Central
Government may, by notification in the Official Gazette, specify.
2. The Corporation shall establish a zonal office at each of the following places,
namely, Bombay, Calcutta, Delhi, Kanpur and Madras, and, subject to the previous
approval of the Central Government, may establish such other zonal offices as it
thinks fit.
3. The territorial limits of each zone shall be such as may be specified by the
Corporation.
4. There may be established as many divisional offices and branches in each zone as
the Zonal Manager thinks fit.

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LATEST LIC POLICY BY LIC OF INDIA:

1) LICs Single Premium Endowment Plan

2) LIC's New Endowment Plan
3) LIC's New Jeevan Anand
4) LIC's Jeevan Rakshak
5) LIC's Limited Premium Endowment Plan
6) LIC's JEEVAN SANGAM
7) LIC's Jeevan Lakshya
8) LIC's NEW MONEY BACK PLAN - 20 YEARS
9) LIC's NEW MONEY BACK PLAN - 25 YEARS
10) LIC's NEW BIMA BACHAT
11) LIC's NEW CHILDREN'S MONEY BACK PLAN Policy Document
12) LIC's Jeevan Tarun
13) LIC's Anmol Jeevan II
14) LIC's Amulya Jeevan II
15) LIC's e-Term
16) LIC's NEW TERM ASSURANCE RIDER

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Feature of Lic's New Money Back Plan - 25 Years:

LIC New Money back Plan-20 years offers financial protection against death throughout the
term as well as periodic payment at specified durations during the period. It provides
financial cover for the family of the deceased policy-holder until Maturity and lump sum
amount (40% of Basic Sum Assured along with Simple Reversionary Bonus and Final
Additional Bonus) at the time of Maturity in case of survival. The Death benefit provided by
this policy includes the Sum Assured on Death (higher one of 125% of Basic Sum Assured or
10 times of annualized premium) along with Simple Reversionary Bonuses and Final
Additional Bonus.. If the policy holder survives till the end of specified term 15% of Basic
Sum Assured will be paid at each 5th, 10th and 15th and 20th years.

The maximum age at entry must be 30 years while the minimum must be 15 years. The term
is 20 years. The minimum Sum Assured is 1, 00,000Rupees and there is no maximum limit.
The maximum Maturity age is 70 years. The policy holder will get a share in the profits of
the company through Simple Reversionary Bonus if the policy is running properly. Final
Bonus will be declared at the time of claiming the policy through death or maturity. In case of
accidental death, an optional rider called Accidental Death Benefit rider can be opted for
which provides twice the sum assured, available with payment of Rs.100 per 1 lakh sum
assured every year.

25
Feature of Lic's Single Premium Endowment Plan:

This is an endowment plan or policy which combines savings and financial protection. In
case the person whose life is insured survives the term of maturity, he/she will get the assured
sum along with the ensued bonus. If the person dies without completing the term of maturity,
then the nominee gets the mentioned total amount. However the tax benefit for this plan is
not great; it is only 10% of the initial sum, no matter how large the amount is In case the age
of policy holder is less than 8 years at the time of starting policy, the risk will commence
either 2 years from the starting date or from the policy anniversary which coincides with the
attainment of 8 years, whichever comes before. If the policy holder is above 8 years then the
risk commences immediately. The minimum age at entry is 90 days while Maximum age at
entry is 65 years. Term ranges between 10 years and 25 years. The minimum age at maturity
is 18-75 years. There is no upper limit on the maximum sum assured while the minimum sum
is 50,000 Rupees.

26
Feature of Lic's New Jeevan Anand:

This plan provides insurance and risk coverage for the entire life of the policy-holder,
because this policy will continue after the end of the policy term. At the end of policy term
Sum assured along with the accumulated bonus and final bonus will be paid to the policy
holder. At death or attainment of 100 years of the policy holder (whichever occurs earlier),
sum assured will be paid to the nominee. The policy can be bought between 18 to 50 years.
The premium paying modes are yearly, half yearly, quarterly and monthly (ECS Only).The
Policy Term ranges from 15 to 35 Years. The basic sum assured is 100000 and above (in
multiple of 5000). A Loan can be availed after 3 years. The policy holder will get a share in
the profits of the company through Simple Reversionary Bonus if the policy is running
properly. Final Bonus will be declared at the time of claiming the policy through death or
maturity. This plan also provides optional disability benefit in case of permanent disability
during policy term, and the future premiums would be waived off. In case of accidental death,
an optional rider called Accidental Death Benefit rider can be opted for which provides twice
the sum assured, available with payment of Rs.100 per 1 lakh sum assured every year.
Service Tax is applicable on the premium paid at the rate of 3.09% for 1st year and 1.545%
from 2nd year onwards.

27
Feature of Lic's New Children's Money Back Plan:

This is a non-linked plan which is designed to fulfill the educational and marriage needs of
growing children through Benefits of Survival. It can be taken by the parent or grandparent of
any child up to 12 years. If the policy-holder dies before Maturity of policy or before
commencement of risk, then the premiums will be returned excluding taxes and extra, rider
premium. If the policy holder dies after the date of commencement of risk, the Death Benefit
is payable, which is the Sum Assured (greater than 10 times of annualized premium or Basic
Sum Assured). The Death benefit will not be less than 105% of total premiums paid till death,
excluding taxes, extra and rider premium. If the policy holder survives till the age of 18, 20
and 22 years, 20% of the Basic Sum Assured will be paid on each of the mentioned years. If
the policy holder survives till Maturity of policy, then he/she is entitled to receive Sum
Assured on Maturity which is 40% of Basic Sum Assured, in addition to Reversionary and
Final Additional Bonuses. The age of policy holder must be between 0-12 years and the age
of Maturity is 25 years. The term of Policy would be (25- Age at entry) years. The minimum
basic Sum Assured is 1, 00,000 Rupees and there is no maximum limit.

The optional benefits provided are the Option to defer the Survival Benefits and the LIC
Premium Waiver Benefit Rider. According to this the policy holder will have the option to
claim the Survival Benefit on or after the due date. If this option is availed, the Corporation
will be paying increased survival benefit which is equal to Survival Benefits % * Sum
Assured * (Factor applicable to Survival Benefit (s)), provided written intimation by policy
holder before 6 months of due date. The LIC Premium Waiver Benefit Rider is available to
the proposer (between 18-55 years) with additional premium payment. If the proposer dies,
the premiums after death under the basic policy will be waived off. However this does not
apply to suicide of the proposer in sane or insane conditions within 12 months of issue of first
Premium receipt or within 12 months of policy revival, and the cost of medical and special
reports are not covered by the Corporation.

28
 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.
 Conduct business with utmost economy and with the full realization that the moneys belong
to the policyholders.
 Act as trustees of the insured public in their individual and collective capacities.
 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.

29
ROLE AND FUNCTIONS OF LIC
 It collects the savings of the people through life policies and invests the fund in a
variety of investments.
 It invests the funds in profitable investments so as to get good return. Hence the
policy holders get benefits in the form of lower rates of premium and increased bonus.
In short, LIC is answerable to the policy holders.
 It subscribes to the shares of companies and corporations. It is a major shareholder in
a large number of blue chip companies.
 It provides direct loans to industries at a lower rate of interest. It is giving loans to
industrial enterprises to the extent of 12% of its total commitment.
 It provides refinancing activities through SFCs in different states and other industrial
loan giving institutions.
 It has provided indirect support to industry through subscriptions to shares and bonds
of financial institutions such as IDBI, IFCI, ICICI, SFCs etc. at the time when they
required initial capital. It also directly subscribed to the shares of Agricultural
Refinance Corporation and SBI.
 It gives loans to those projects which are important for national economic welfare.
The socially oriented projects such as electrification, sewage and water channelizing
are given priority by the LIC.
 It nominates directors on the boards of companies in which it makes its investments.
 It gives housing loans at reasonable rates of interest.
 It acts as a link between the saving and the investing process. It generates the savings
of the small savers, middle income group and the rich through several schemes.

30
ORGANIZATION STRUCTURE OF LIC OF INDIA:

31
CONCEPTUAL DISCUSSION:
Table of Life Insurance Companies market share. This is based on the New Business
premium collected in the year. Renewal premiums have not been included in these
calculations.
Company Name 2012-13 2013-14 2014-15 2015-16 2016-17
LIC 71.80% 71.40% 75.50% 69.30% 70.50%
SBI Life 5.70% 4.80% 4.20% 4.90% 5.10%
ICICI Prudential 3.90% 4.50% 3.10% 4.70% 4.90%
HDFC Life 3.40% 4.10% 3.40% 4.80% 4.70%
Bajaj Allianz 2.40% 2.80% 2.20% 2.40% 2.10%
Max Life 1.70% 1.80% 1.90% 2.30% 2.10%
Birla Sun Life 1.70% 1.70% 1.40% 1.70% 1.60%
Kotal Life 1.00% 1.10% 1.10% 1.40% 1.60%
Reliance Nippon Life 1.60% 1.30% 1.60% 1.80% 1.10%
India First 0.90% 1.20% 1.40% 1.40% 1.10%
PNB Metlife 0.90% 0.80% 0.60% 0.70% 0.70%
Canara HSBC 0.60% 0.60% 0.50% 0.40% 0.60%
Tata AIA 0.80% 0.50% 0.40% 0.30% 0.50%
DHFL Prameria 0.10% 0.10% 0.10% 0.50% 0.50%
Shriram Life 0.30% 0.40% 0.30% 0.40% 0.50%
Star Union Dai-ichi 0.80% 0.70% 0.50% 0.60% 0.50%
Exide Life 0.60% 0.60% 0.50% 0.60% 0.50%
IDBI Federal 0.30% 0.30% 0.30% 0.40% 0.40%
Bharti AXA 0.20% 0.20% 0.30% 0.40% 0.40%
Aviva 0.70% 0.60% 0.50% 0.50% 0.20%
Future Generali Life 0.30% 0.20% 0.20% 0.20% 0.20%
Edelweiss Tokio 0.00% 0.00% 0.10% 0.10% 0.10%
Aegon Life 0.20% 0.10% 0.10% 0.20% 0.10%
Sahara Life 0.10% 0.10% 0.10% 0.00% 0.00%

LIC Market Share

80.00%
Percentage

75.00%
70.00%
65.00%
2012-13 2013-14 2014-15 2015-16 2016-17
YOY Growth

32
NAV FOR THE DATE : 27/01/2018
Plan Name(Number) Launch Date

Face NAV as Repurchase Sale

Fund SFIN No.
Value on date Value Value

FUTURE PLUS (172) Launch Date:04/03/2005

Balanced ULIF003040305LICFUT+BAL512 10 29.4262 29.4262 29.4262

Bond ULIF001040305LICFUT+BND512 10 24.0913 24.0913 24.0913

Growth ULIF004040305LICFUT+GRW512 10 45.4734 45.4734 45.4734

Income ULIF002040305LICFUT+INC512 10 29.4585 29.4585 29.4585

JEEVAN PLUS (173) Launch Date:18/10/2005

Balanced ULIF003181005LICJVN+BAL512 10 24.8826 24.8826 24.8826

Bond ULIF001181005LICJVN+BND512 10 24.2673 24.2673 24.2673

Growth ULIF004181005LICJVN+GRW512 10 40.5398 40.5398 40.5398

Secured ULIF002181005LICJVN+SEC512 10 25.1504 25.1504 25.1504

MONEY PLUS (180) Launch Date:20/12/2006

Balanced ULIF003201206LICMNY+BAL512 10 24.7902 24.7902 24.7902

Bond ULIF001201206LICMNY+BND512 10 24.7805 24.7805 24.7805

Growth ULIF004201206LICMNY+GRW512 10 23.7479 23.7479 23.7479

Secured ULIF002201206LICMNY+SEC512 10 25.6493 25.6493 25.6493

33
NAV FOR THE DATE : 27/01/2018
Plan Name(Number) Launch Date

Face NAV as Repurchase Sale

Fund SFIN No.
Value on date Value Value

MARKET PLUS (181) Launch Date:05/07/2006

Balanced ULIF003050706LICMKT+BAL512 10 29.4412 29.4412 29.4412

Bond ULIF001050706LICMKT+BND512 10 27.5986 27.5986 27.5986

Growth ULIF004050706LICMKT+GRW512 10 25.9925 25.9925 25.9925

Secured ULIF002050706LICMKT+SEC512 10 30.383 30.383 30.383

FORTUNE PLUS (187) Launch Date:23/08/2007

Balanced ULIF003230807LICFTN+BAL512 10 18.9071 18.9071 18.9071

Bond ULIF001230807LICFTN+BND512 10 22.5764 22.5764 22.5764

Growth ULIF004230807LICFTN+GRW512 10 22.2071 22.2071 22.2071

Secured ULIF002230807LICFTN+SEC512 10 23.1148 23.1148 23.1148

PROFIT PLUS (188) Launch Date:23/08/2007

Balanced ULIF003230807LICPFT+BAL512 10 30.7597 30.7597 30.7597

Bond ULIF001230807LICPFT+BND512 10 24.2904 24.2904 24.2904

Growth ULIF004230807LICPFT+GRW512 10 21.8119 21.8119 21.8119

Secured ULIF002230807LICPFT+SEC512 10 27.07 27.07 27.07

34
NAV FOR THE DATE : 27/01/2018
Plan Name(Number) Launch Date

Face NAV as Repurchase Sale

Fund SFIN No.
Value on date Value Value

MARKET PLUS - I (191) Launch Date:17/06/2008

Balanced ULIF003170608LICMK1+BAL512 10 20.8229 20.8229 20.8229

Bond ULIF001170608LICMK1+BND512 10 21.8506 21.8506 21.8506

Growth ULIF004170608LICMK1+GRW512 10 26.0093 26.0093 26.0093

Secured ULIF002170608LICMK1+SEC512 10 21.0949 21.0949 21.0949

MONEY PLUS - I (193) Launch Date:22/05/2008

Balanced ULIF003220508LICMY1+BAL512 10 26.411 26.411 26.411

Bond ULIF001220508LICMY1+BND512 10 25.2169 25.2169 25.2169

Growth ULIF004220508LICMY1+GRW512 10 28.5938 28.5938 28.5938

Secured ULIF002220508LICMY1+SEC512 10 28.2806 28.2806 28.2806

CHILD FORTUNE PLUS (194) Launch Date:01/11/2008

Balanced ULIF003011108LICCHF+BAL512 10 26.114 26.114 26.114

Bond ULIF001011108LICCHF+BND512 10 20.0507 20.0507 20.0507

Growth ULIF004011108LICCHF+GRW512 10 35.0108 35.0108 35.0108

Secured ULIF002011108LICCHF+SEC512 10 29.0656 29.0656 29.0656

35
NAV FOR THE DATE : 27/01/2018
Plan Name(Number) Launch Date

Face NAV as Repurchase Sale

Fund SFIN No.
Value on date Value Value

JEEVAN SAATHI PLUS (197) Launch Date:29/06/2009

Balanced ULIF003290609LICJST+BAL512 10 20.4288 20.4288 20.4288

Bond ULIF001290609LICJST+BND512 10 18.9663 18.9663 18.9663

Growth ULIF004290609LICJST+GRW512 10 20.6564 20.6564 20.6564

Secured ULIF002290609LICJST+SEC512 10 19.7495 19.7495 19.7495

WEALTH PLUS (801) Launch Date:09/02/2010

WealthPlus ULIF001090210LICWLT+FND512 10 15.7263 15.7263 15.7263

ENDOWMENT PLUS (802) Launch Date:20/09/2010

Balanced ULIF003200910LICEND+BAL512 10 18.948 18.948 18.948

Bond ULIF001200910LICEND+BND512 10 18.2633 18.2633 18.2633

Growth ULIF004200910LICEND+GRW512 10 20.7946 20.7946 20.7946

Secured ULIF002200910LICEND+SEC512 10 17.8498 17.8498 17.8498

PENSION PLUS (803) Launch Date:02/09/2010

Debt ULIF001020910LICPEN+DBT512 10 18.2372 18.2372 18.2372

Mixed ULIF002020910LICPEN+MIX512 10 18.567 18.567 18.567

SAMRIDHI PLUS (804) Launch Date:25/02/2011

Samridhi
ULIF001250211LICSMD+FND512 10 20.1827 20.1827 20.1827
Plus

36
NAV FOR THE DATE : 27/01/2018

Plan Name(Number) Launch Date

Face NAV as Repurchase Sale

Fund SFIN No.
Value on date Value Value

FLEXI PLUS (811) Launch Date:02/01/2013

Debt_Fund ULIF001180912LICFLX+DBT512 10 15.0939 15.0939 15.0939

Mixed_Fund ULIF002180912LICFLX=+MIX512 10 15.7102 15.7102 15.7102

NEW ENDOWMENT PLUS (835) Launch Date:19/08/2015

Balanced ULIF003201114LICNED+BAL512 10 13.1936 13.1936 13.1936

Bond ULIF001201114LICNED+BND512 10 12.2664 12.2664 12.2664

Growth ULIF004201114LICNED+GRW512 10 13.3823 13.3823 13.3823

Secured ULIF002201114LICNED+SEC512 10 12.9535 12.9535 12.9535

HEALTH PLUS (901) Launch Date:04/02/2008

Health Plus ULIF001040208LICHLT+FND512 10 21.7733 21.7733 21.7733

HEALTH PROTECTION PLUS (902) Launch Date:29/04/2009

Health
Protection ULIF001290409LICHPR+FND512 10 20.9371 20.9371 20.9371
Plus

37
DATA ANALYSIS

Data analysis gives meaning to the data that has been collected. More than 51
respondents were given questionnaire by mail. After verification as to completeness of
collected questionnaire, samples were finalized. In the data having responses both male and
female. The majority of male is more than female. The majority of female is 13 & male is 37.

Q1] You want to invest in the LIC policy ?

 Figure 1

people response

10%

Yes

No

90%

Figure 1: We can invest 90% of people's LIC policies and 10% of people cannotinvest in
LICs policies.

38
Q2] which policy do you want to open?

 Figure 2

People Response
0%

18%

43% Money Back Policy

Life Insurance Policy
Tax Saving Policy

39%

Figure 2: 43% people want to invest in money back policy

39% people want to invest in life insurance policy

18% people want to invest in tax saving policy .

39
3] How much money can you put in the monthly?

 Figure 3

People Response

14%

39%
1000
14%
2000

3000

5000

33%

Figure 3: 39% people can pay 1000 rupees.

33% people can pay 2000 rupees.

14% people can pay 3000 rupees.

14% people can pay 5000 rupees.

40
4] How much will be the payment period ?

 Figure 4

People Response

16%

Monthly
44%
12%
Quarterly

Half Yearly

Yearly

28%

Figure 4: 44% of the people can make money on a MONTHLY basis.

28% of the people can make money on a QUARTERLY basis.

12% of the people can make money on a HALF YEARLY basis.

16% of the people can make money on a YEARLY basis.

41
Q5] What is the term of the policy?

 Figure 5

People Response

10%

35%
5 Years
27% 10 Years
20 Years
Above20 Years

29%

Figure : 35% people choose the 5years term of policy.

29% people choose the 10years term of policy.

27% people choose the 20years term of policy.

10% people choose the above 20 years term of policy.

42
Q6] What is your perception about LIC of india

 Figure 6

People Response

8%

Positive

Negetive

92%

Figure 6:92% people perception about LIC of India is positive.

8% people perception about LIC of India is Negative.

43
Q7]Give reasons for insuring with LIC

 Figure 7

People Response

12%

35%
Company Profile
Brand
Public Sector
33%
Grievances

21%

Figure 7: 35%people insuring with LIC because company profile.

21% people insuring with LIC because brand .

33% people insuring with LIC because public sector.

12%people insuring with LIC because Grievances.

44
Q8] Satisfaction level towards services offered by LIC

 Figure 8

People Response

6%

10%

Satisfied
Fully Satisfied
Partially Satisfied
26% 58% Not Satisfied

Figure 8: 58% people satisfied services offered by LIC.

26% people fully satisfied services offered by LIC.

10% people partially satisfied services offered by LIC.

6% people not satisfied services offered by LIC.

45
Q9] Do LIC have complex formalities ?

 Figure 9

People Response

41%
Yes

No
59%

Figure 9: 59% people satisfied with LIC formalities.

41% people not satisfied with LIC formalities.

46
Q10] Undue delay in claim settlement process

 Figure 10

People Response

39%

Yes
No

61%

Figure10 : 61% people satisfied with LIC claim process.

39% people not satisfied with LIC claim process.

47
CONCLUSION:
Insurance is a large investment and you will most likely purchase multiple policies
throughout your lifetime. It is essential that you know what each type of insurance covers and
how it works so you can make the best decision about what to buy. Do not base your decision
on just what is cheapest, but look at what it provides.
Take the time to shop around and find the right insurance for your situation. People
often say they cannot afford insurance, but the reality is that they cannot afford not to have it.
It can save them from thousands or more dollars in unplanned expenses when unexpected
situations arise. You do not want to waste your money on policies that do not meet your
needs, but the right insurance policy can protect you and your family from unforeseen
disasters.

48
 BIBLIOGRAPHY

Magazine:

Yogkshem – LIC of India magazine finance and banking

Newspaper

Times of India

Economics times

WEBLIOGRAPHY

www.moneycontrol.com

www.licindia.com

www.scribe.com

www.rbi.com

www.irdaindia.org.com

49