12.

CLAIM SATTELEMENT:
In an insurance contract, a claim settlement is the most
important activity as far as the policyholder is concerned.
Hence, when it is time to settle a claim, an insurer should
empathize with the policyholder and look for reasons to pay
the claim rather than refuse it. By adopting fair practices,
both the insurer as well as the insured can ensure that no
problems arise at the time of the claims settlement. If the
insurer rejected a claim on some flimsy grounds at the end
of such a long period, it would no doubt create a sense of
dejection for the policyholder and would lead ultimately to a
total loss of faith in the whole system. In order to make sure
that such a situation would not arise, there are several unfair
claim settlement practices that the insurers should avoid.
Some of these are follows:
Misrepresentation of pertinent facts of misinterpretation
of policy conditions in order to refuse a claim should be
totally avoided. It is particularly of additional
significance in India, where the policyholder is not given
to reading the policy conditions until a dispute arises.
The policyholder, on his part, should be thoroughly
aware of the various conditions that the insurance
contract goes with, so that heartburns at a later stage
can be avoided. One should realize that it is not merely
a document to be stacked away along with bank
deposit receipts and share certificates.
When an insurance company receives an application for
a claim payment, an insurer should respond
immediately and act in accordance with the terms of
the contract. A claim should not be merely made to wait
endlessly on any ground. If there is a need for
investigation into the claim, no time should be lost in
initiating the process. Above all, no claim be rejected
without conducting a proper investigation of survey, on
trivial reasons.

59

 Documents to be submitted along with the claim

application should be called for based on the needs of
the case. The insurer should not resort to calling for all
papers irrespective of whether a particular situation
demands it or not. By doing so, the insurer would not
only ensure that the systems are not diluted but also
reduce the processing activity a great deal.
CLAIMS IN LIFE INSURANCE:
There are two types of claims included in life insurance,
which are given below:
1. Maturity claim.
2. Death claim.
MATURITY CLAIM:
The settlement of a maturity claim is much simpler because
the policyholder himself/herself is around to tackle any
complications. If the formalities are properly taken care of,
there is no reason for the insurer to raise any queries with
regard to claim payment. The policyholder need only ensure
that the policy had always been force and that all the
premiums due during the period have been remitted.
Another important point to be remembered is that the
change of address, if any, has been reported to the insurer
because all the notices and other papers concerned with the
maturity claim are sent to the latest address as noted in the
insurers records.
DEATH CLAIM:
Settlement of a death claim, it is more complicated. The
beneficiary has to pool in all the papers/requirements and
submit the claim to the insurer. Depending on whether the
policyholder had a natural death or an unnatural death,
these requirements might change and could be quite

60

complex in case of death due to accident, murder etc. It is

also possible that the nominee would have pre-deceased the
policyholder should be careful in such cases and re-nominate
some other person so that the complications at a later stage
could be avoided.
SECONDARY DATA ANALYSIS
13. COMPARISONS OF PRODUCTS
LIC
PRODUCTS
Term
TROP
Whole Life
Endowment
Money Back
SPB
Pension
Children
Loan Term
Joint life
Rural
Womens Products
GROUP PLANS
Group Term
Assurance
Group
Superannuation
Group Gratuity

ICICI
PRUDENTIAL

61

 COMPARISON OF TERM PLANS

Product
name

Anmol
Jeevan

LIC
Term
Assurance
Plan

Options
available
Min/Max
age at
entry

None

None

None

ICICI
1.
Lifeguard
Level Term
Assurance
2.
Lifeguard
Single
Premium
None

18 / 50
yrs.

18 / 60
yrs.

20 / 50
yrs.

18 / 50
yrs.

50

62

55

65

10 / 20
yrs. (10,
15 & 20
yrs.)
Yrly,halfyrly,qtrly
& Single
Pay

6 / 24 yrs.
(6,12,18 &
24 yrs.)

5 or 6 or 7
yrs.

5 / 25 yrs.

Single pay

Yrly,halfyrly,qtrly,
Mthly

Rs. 5 lacs /
3 crores

Rs.
50000 / 1
crore
DNA

Rs. 50000

Yrly,halfyrly,qtrly,
Mthly/Singl
e Pay for
2nd Option
DNA

Maturity
age
Min/Max
Term
(years)
Premium
paying
frequency
Min/Max
Sum
assured
Min.
premium

DNA

Convertibl
e Term
Assurance
Plan

DNA

62

Rs. 2400
yearly

payable
BENEFITS
:
Death
Surrender
value
Riders
available

Sum
assured
None

Sum
assured
None

Sum
assured
None

Sum
assured
None

None

None

None

Accident &
disability
benefit

COMPARISON OF TERM PLANS WITH RETURN OF

PREMIUMS

Product name
Min/Max age at
entry
Maturity age
Min/Max Term
(years)
Min/Max Sum
assured
Premium paying
frequency
BENEFITS:
Death

Surrender value

Maturity

LIC
New Bima Kiran
18 / 45

ICICI
Lifeguard (Regular)
18 / 50

60
30 /15

65
40 / 5

Rs. 1 lac / 10 lacs

Rs. 1 lac / 1 crore

Yrly,half-yrly,qtrly,
Mthly

Yrly,half-yrly,qtrly,
Mthly

SA + Loyalty
Addition (if policy
has been in force
for 4 years)
Guaranteed
SV=30% of total
premiums
excluding 1st & all
other premiums
ROP + Loyalty
Addition + 10

SA

After 3 years
premium has been
repaid
Premium paid
(excluding rider
63

Riders available

USP

On the flip side

years free
Insurance cover
In built accident
benefit (restricted
to Rs. 5 lacs)
Offers Loyalty
Addition + 10
years free
Insurance cover +
In built accident
rider
Entry age is limited
till 45, Max SA
cannot exceed Rs.
10 lacs

premiums)
Accident &
disability rider,
Accident benefit
rider
Doesnt have a
very unique
feature

It doesnt make a
payout in case of
partial disabilty

64

 COMPARISON OF ENDOWMENT PLANS

12 / 65

Ltd Pay
End.
With
Profit
12 / 60

18 / 50

LIC
Jeevan
Mitra
Triple
Cover
18 / 50

75

70

70

70

5 / 55

5 / 50

15 / 30

15 / 30

Product
name

End.
With
Profits

Min/Max
age at
entry
Maturity
age
Min/Max
Term (yrs)
Min/Max
Sum
assured
Min.
premium
payable
Premium
paying
frequency

Jeevan
Mitra

Bhavish
ya
Jeevan

Jeevan
Anand

New
Janaraks
ha

12 / 50

18 / 65

18 / 50

0 / 60

70

75

70

70

12 / 30

10 / 30

Rs.
30000 /
750000
DNA

Rs.
50000 / 1
crore
4800

15 or 20
5 / 57
or 25
Rs.
Rs.
Rs.
Rs.
Rs.
Rs. 30000
30000 / 30000 / 30000 / 30000 / 30000 / / No limit
No limit No limit No limit No limit No limit
DNA
DNA
DNA
DNA
DNA
DNA
Yrly,half Yrly,hal Yrly,hal Yrly,hal Yrly,half Yrly,halffffyrly,qtrly,
yrly,qtrl yrly,qtrl yrly,qtrl yrly,qtrl yrly,qtrl
Mthly

65

ICICI
Save n
Protect

Yrly,half- Yrly,halfyrly,qtrly yrly,qtrly,

, Mthly
Mthly

Premium
paying
period
BENEFIT
S:
Death

y, Mthly

y,
Mthly

Entire
term

Entire
term

SA +
Vested
Bonus

SA +
Vested
Bonus

y,
Mthly,S
S
Entire
term

y,
Mthly,
SSS
Entire
term

Double 3 times
SA +
SA +
vested Vested
Bonus
Bonus
on
basic
SA Or
Double
Acciden
t
benefit
s, (if
opted
for) will
triple
the
amount
of SA.

66

y, Mthly
Entire
term

Entire
term

Entire
term

Entire
term

SA +
Vested
Bonus

SA +
Vested
Bonus

SA +
Accrued
Bonus

<7 yrs
premium
s
refunded
>7 yrs
SA+
Guarante
ed
additions
+ Vested
bonus

Maturity

SA +
Vested
Bonus
+ Final
Addition
al
Bonus

SA +
Bonus

SA +
Vested
Bonus
on
Basic
SA

SA +
Vested
Bonus

Surrender
value

Paid up
is
availabl
e if the
policy
was in
force
for 3
yrs &
paid up
value is
not less
than Rs.
250
Sec.88,
Sec.
10(10D)

Paid up
is
availabl
e if the
policy
was in
force
for 3
yrs &
paid up
value is
not less
than
Rs. 250
Sec.88,
Sec.
10(10D

Paid up
is
availabl
e if the
policy
was in
force
for 3
yrs &
paid up
value is
not less
than
Rs. 250
Sec.88,
Sec.
10(10D

Paid up After 3
is
yrs
availabl
e if the
policy
was in
force
for 3
yrs &
paid up
value is
not less
than
Rs. 250
Sec.88, Sec.88,
Sec.
Sec.
10(10D 10(10D)

Tax
benefits

67

SA +
Vested
Bonus

SA +
Vested
Bonus at
the end
of
premium
paying
term
Paid up is
available
if the
policy
was in
force for
3 yrs &
paid up
value is
not less
than Rs.
250
Sec.88,
Sec.
10(10D)

SA +
Accrued
Bonus

SA+
Guarante
ed
additions
@3.5%
c.a. for
1st 4 yrs
+ Vested
bonus
Paid up Guarante
is
ed SV
available
after 3
if the
yrs
policy
was in
force for
3 yrs &
paid up
value is
not less
than Rs.
250
Sec.88,
Sec.
10(10D)

Sec.88,
Sec.
10(10D)

Riders
available

Policy
loan
Special
features

ABR,
ADBR

)
None

)
None

)
In built
ABR to
the
limit of
Rs.
500000

None

Double
Accident
benefit
during
premium
paying
term-till
age 70
Available

Double
ABR,ADB
Accident
R,
benefit CIBR,MSA
Rider
R

Availabl Availabl Availabl Availabl Availabl

Available After SV
e
e (not
e
e
e
period
to
minors)
Death
Death
Annual
It is a
Provides Extended
benefit benefit premiu combinati life ins. life cover
as
as
m
on of
Cover for
(but
double triple of payable Wholelife
3 yrs
when
st
of SA
SA
for 1 5
&
even
opted for,
yrs are Endowme when the no riders
3 times
nt Plan,
premium available)
of
Rebates
are not
premiu
on large
paid
m
SA
provided
payable
2 yrs
for rest
prem
of the
have

68

yrs

69

been
paid

 COMPARISON OF MONEY BACK PLANS

Product
name
Min/Max
age at
entry
Maturity
age
Min/Max
Term
(years)

Jeevan
samriddhi
14 / 58

LIC
Money
Back Policy
13 / 50

Jeevan
Surabhi
14 / 55

70

70

70

12,15,20
& 25 yrs

20 & 25

Min/Max
40000 /
Sum
No limit
assured
Premium
Yrly, halfpaying
yrly,qtrly,
frequency
mthly
Min prem
DNA
payable
BENEFIT
S:
Death
SA + GA +
Loyalty
Additions

Survival

Fixed % of
SA at
specified
intervals
depending
upon the
term +

15, 20, &

25 (prem
paying term
12, 15, 18)
40000 / No
40000 /
limit
DNA
Yrly, halfyrly,qtrly ,
mthly
DNA

Yrly, halfyrly,qtrly,
mthly
DNA

SA +
Bonus on
full SA

SA +
Vested
Bonus +
Additional
Amt

Regular
payment
for 20 yr
term (in
5th,10th
15th) 25 yr
term

ICICI
Cash Bak
16 / 55
70
15 / 20

75000 /
No limit
Yrly, halfyrly,qtrly
,mthly
4800

SA + GA
@3.5%
c.a. for 1st
7 yrs +
Vested
Bonus
Regular
Regular
payment 15 payments
yr term
for 15 yr
30% (after
term (in
4 & 8 yr), in 3,6,9 & 12
20 & 25 yr
yr), 20 yr
term after
term (in

70

Balanced
(5th,10th
4,8,12 & 15 4,8,12, &
th
th
SA + GA + 15 ,20 ) + yr 25% of
16 yr) in
LA at
Balance
SA on each the order
maturity
40% +
occasion,
of
Bonus
bonus at
10%,15%,
the end of 20%, 25%
18th yr in
+ 50% GA
case of 25
+ Vested
yr term +
Bonus at
Bonus at
maturity
maturity for
20 & 15 yr
term
Surrender
DNA
DNA
DNA
After 3 yrs
value
prem have
been paid
guarantee
d SV
Riders
ABR @ Re.
DNA
ABR (up to
ADBR,
available
1 per
Rs. 5 lacs)
MSAR
thousand
SA to a
max of Rs.
10 lacs
Policy loan
NO
DNA
NO
NO
Special
Premium
feature
paying
terms
greater
than
benefit
period, Risk
cover
increases
every 5 yrs

71

 COMPARISON OF PENSION PRODUCTS

LIC
Product
name
Type of
plan
Premium
type
Min/Max
Term
(years)
Term of
coverage
Retiremen
t age
Min/Max
Sum
assured
Min
premium
Min topup
Choice of
funds

New
New
Jeevan
Jeevan
Suraksha
Suraksha
Trade par with
Revisionary & Final
Bonuses
Single
Regular

ICICI
Lifelink
Pension

Life Time
Pension

Nonlinked

Linked

Linked

Regular

Regular
with Topup
18 / 60

Forever
Life

15 / 65

18 / 65

20 / 60

Single
with
Top-up
18 / 62

2 / 35

2 / 35

5 / 30

3 / 52

10 / 52

50-79

50-79

50-70

50-70

50-70

DNA

Rs. 50000
/ No limit

Rs. 0 /
None

Rs. 0 /
None

Rs.10000

Rs.
50000 /
DNA
Rs.2500

DNA

DNA

DNA

DNA

Rs.10000
(A,H,M)
Rs.10000

DNA

DNA

DNA

Rs.2500
0
Rs.1000
0
GrowthIncome
Balance
d

Premiums
paid
accumulat

SA + GA
+ Vested
Bonus

Max
105%
or 0%

Max
(SA,FV at
death)

BENEFIT
S:
Death
Premiums
(during
paid
retirement accumulat

72

GrowthIncome
Balanced

period)

ed @5%
c.a.

Surrender Guarantee
(during
d SV is
retirement 90% of all
period)
prem paid
excl yr 1
prem from
yr 3,
Special SV
after 2 full
yr of prem
paid
Maturity
Notional
(during
Cash
retirement option +
period)
RB + Final
add Bonus
Policy loan
NO
Riders
NO

ed @5%
c.a.

of
premiu
m paidFV at
death
Guarantee Guarantee 0 in yr Guarantee
d SV is
d SV after
1, SV
d SV after
90% of all
3 yrs
from yr
3 yrs
prem paid
2
excl yr 1
prem from
yr 3,
Special SV
after yr 1
Notional
Cash
option +
RB + Final
add Bonus
NO
NO

SA + GA
+ VA

Fund
value

Fund
value

DNA
CIBR,MSA
B, ADBR

DNA
NO

DNA
CIBR,MSA
B, ADBR

73

 COMPARISON OF SINGLE PREMIUM BOND

LIC
Product
name

Bima
Nivesh

Bima
Nivesh
Triple
Cover
Not
applicable

Options
available

Not
applicable

Type

Participati
ng

Min/Max
age at
entry

18 / 70

NonParticipati
ng
18 / 50

Maturity
age
Min/Max
Term
(years)
Min/Max
Sum
assured

75

60

5 & 10

10

ICICI
Assure
Life Link
Invest
Not
1.Maximis
applicable er (growth)
2.Protector
(income)
3.Balancer
(Balanced)
NonUnit
Participati
Linked
ng
7 / 62 (60 0 / 62 (risk
for 7 yr
commenci
term & 57
ng at 7)
for 10 yr
term)
67
67
5,7 & 10

25000 / 50 25000 / 10 25000 / 50

lac
lac (in
lac
multiples

74

No fixed
term
DNA

Min prem
payable

BENEFITS
:
Death

24625 for
5 yr term
& 23075
for 10 yr
term

of 5000)
24025

SA +
Accrued
GA

Three
times of
SA

maturity

SA + GA
@ 60 per
1000 +
Loyalty
additions

SA + GA
@ 60 per
1000 +
Loyalty
additions

Surrender
value

SV ranges
from 81%
in 1st yr &
98.5% in
9th yr of SA
+ GA

Available
after 1 yr

Riders
available

ADBR,
Level term

None

25000

40000

10% of SP
(no death
benefit if it
occurs in
the 1st yr
unless it is
a result of
an
accident)
+ maturity
benefits at
the end of
the term
GA
ranging
from 4.3%
to 5.75%
depending
upon the
term &
single
prem
Available
after 1 yr

Higher of
1.05 times
of amt
invested
or fund
value
(death
benefit will
reduce by
1.05 times
of the amt
withdrawn
)
Unit value

Term
Assurance
75

No specific
maturity
date,
anytime
after 1 yr
withdrawal
is possible
None

benefit

Top-ups

Not
allowed

Not
allowed

Policy loan
Other
features

Yes
Rebates
available
of 0.5% of
basic SA
for higher
sum
assured &
also for
employed
persons
above 50
yrs who
availed
VRS

No
Back
dating is
possible
within a
year @
11% p.a.

rider
(eligibility
age 18/50,
twice the
SA to the
max of
Rs.50 lac
min SA Rs.
50000)
Not
Min top-up
allowed
10000
(death
benefit
increases
by 1.05
times the
amt of topup)
DNA
No
Guarantee
One free
d returns
switch
every yr
after which
switching
fee of 1%
of
switching
amt
charged
initial
charges of
1% on topups,
loading
charges
1.25% to
2%
depending
on prems

76

77

 COMPARISON OF CHILDRENS POLCIES

Product
name

Komal
Jeevan

Life
Child
insured
Min/Max
Not
age at applicabl
entry
e
for
parent
Maturity
25
age
Min/Max
0 / 10
age at
entry
for child
Min/Max
Term

Jeevan
Sukanya

Jeevan
Kishore

LIC
Jeevan
Balya

Girl Child

Child

Child

Not
applicabl
e

Not
applicabl
e

50

45

1 / 12

50 yrs
less than

Children
s
Deferred
Plan

Parent

Marriage
Endowme
nt
/Educatio
nal
Annuity
Parent

Child

Parent

18 / 40

18 / 60

DNA

20 / 60

60

65

70

65

70

1 / 12

0 / 17

70

0 / 17

0 / 12

15 / 35

13 / 50

Should
be less
than 1
year
18 / 25

5 / 25

25 / 50

78

Jeevan
Chhaya

ICICI
Smart
Kid

(years)
Min/Max
Sum
assured
Min
prem
payable
Prem
paying
period
(min/ma
x)

Rs. 1
lac / 25
lac
DNA

Prem
paying
frequen
cy

Single
premium
, yrly,hlf
yrly,qtrly
, SS

BENEFI
TS:
Death

DNA

SA + GA

entry
age
Rs.20000 Rs.20000
/ 5 lac
/ No limit
DNA

DNA

Rs.250
00 / 1
lac
DNA

20 yrs
minus
age at
entry /
50 yrs
minus
age at
entry
yrly,hlf
yrly,qtrly
, mthly

DNA

DNA

Death of
the

Rs.20000 Rs.20000
/ No limit / No limit
DNA

DNA

DNA

DNA

DNA

DNA

yrly,hlf
yrly,qtrly,
mthly

yrly,hlf
yrly,qtrly
, mthly

DNA

yrly,hlf
yrly,hlf
yrly,hlf
yrly,qtrly yrly,qtrl yrly,qtrly
, mthly
y,
, mthly
mthly

SA +
Accrued

SA +
SA paid
Attache immediat

79

Rs.20000 Rs. 1 lac

/ No limit / Rs. 30
lac
DNA
8000

SA +
Bonus

SA paid
+ Inbuilt

assured= bonus +
d
ely
payable
SA &
Final
bonus
(Apart
on
bonus & Additiona
from
lumpsum
policy
l bonus
fixed
or in 10
continue
benefits)
hlf-yrly
s, Death
instalmen
of life
ts at the
assured=
option of
SA +
beneficiar
Accrued
y
bonus &
policy
ceases
Pay out Instalme
SA at
SA +
After
% of
SA +
structur
nts at
age 20
Accrued vesting fixed SA
Bonus
e
age 18,
policy
bonus +
date
at fixed
payable
20,22,24 continue
Final
before intervals
on
& GA &
s to
Additiona maturit + Bonus lumpsum
Loyalty participat l bonus
y SA +
+
or in 10
additions
e in
Attache Additiona
hlf-yrly
at age 25 profits &
d
l bonus if instalmen
life cover
Bonus
any at
ts at the
continue
maturity option of
s
beneficiar
y
Surrend Guarante

80

WOP

After 3

er value

ed SV
after 3
policy yrs

yrs 90%
of prem
paid incl
1st years
prem

Riders
availabl
e

WOP &
Term
rider

Inbuilt
WOP

Policy
loan
Other
features

No

No

No

WOP,
Income
Benefit
s

Inbuilt
WOP &
ADBR

ABR

No

No

Yes

A legal
guardian
can also
take the
policy for
a child,
No
medical
examinat
ion reqd.

Inbuilt
WOP,
IBR,
ADBR
(max of
Rs. 10
lac)
No
Deferme
nt at age
18 or 21

81

The
policy
can be
transferr
ed to
another
child if
the 1st
benefici
ary were
to
expire

82

14. COMPARISON ON THE BASIS OF MARKET SHARE

FIRST YEAR PREMIUM UNERWRITTEN BY LIFE INSURERS FOR THE NINE MO
PERIOD ENDED DECEMBER, 2003
S.
Insurer
Total Premium u/w
Total No. of
Market Share b
No
on
.
Policies Issued
Decemb
Decemb Apr.er
Apr.-Dec.
er
Dec.
Premium
Po
10572.5
1 TATA AIG
938.02
5 10342 109579
1.09
2 OM KOTAK

1204.16 5236.90

5531

30491

0.54

3 BIRLA SUNLIFE

16388.3
4867.11
8

12647

62514

1.69

4 MAX NEW YORK

2152.72 8348.53

22546

85297

0.86

762.33 2967.84

8898

41934

0.31

40202 133666

1.11

5 ING VYSYA

6 HDFC STANDARD
7 MET LIFE

10733.3
1657.85
1
256.63 1331.90

2974

14304

0.14

8 ALLIANZ BAJAJ

1169.87 8024.66

16316 109958

0.83

ICICI
9 PRUDENTIAL

37844.4
7735.20
9

41845 207496

3.90

10 SBI

1759.95 7338.70

8933

45990

0.76

11 AVIVA

721.22 4152.63

7176

44674

0.43

12 AMP SANMAR

569.94 1586.81

10817

31320

0.16

83

TOTAL
13 LIC

GRAND TOTAL

23795.0 114526.
0
70 188227 917223

11.79

150845. 856794.
143442
01
33 2445742
12

88.21

174640. 971321.
152614
01
03 2633969
35

100.00

LIC clearly rules the roasts, being the single public

player and among private players ICICI Prudential has taken
the lead. It comes mainly due to the first-mover advantage
taken by it and its strong brand reputation in the life
insurance market and has become the fastest growing life
insurance company as well. It is expected out of ICICI
Prudential that it will further improve its market share and
continue to sustain the No. 1 position among the private
players in the life insurance market.
15. COMPARISON ON THE BASIS OF DISTRIBUTION
CHANNEL
INDIVIDUAL
AGENTS
LIC
ICICI PRU

TOTAL NO.
OF AGENTS
12,00,000
29,000

URBAN
AGENTS
667854
27,627

RURAL
AGENTS
532146
1,373

CORPORATE
AGENTS
LIC
ICICI PRU

20
80

19
80

1
0

LICs major chunk of business comes from its Agents

and Development Officers. The network of Agents is
excellent in case of LIC but it lacks professional approach.

84

Also, the control over Agents and D.O.s is difficult due to

LICs Bureaucratic Management Structure.
ICICI Prudential, on the other hand, has less than even
5% of Individual Agents than what LIC has. But, their Agents
have a professional approach towards their work and they
are committed to provide better services to their clients.
ICICI Prudentials Corporate Agent network is well-spread
these days. It is four times that of LIC and its Source of
Income from Corporate Agents comes as much as 20% of the
Total Income.

85