58

Review of Literature

Someone has greatly said that practical knowledge is far better than
classroom teaching. During this project, I fully realized this and come to
know about the present real world of Insurance sector. It includes all the
activities involved in providing insurance products to the final customers.
I am pleased to know about the consumers’ wants and competitors
activities in the real world of Insurance. The subject of my study is to
analyze the present insurance sector and products offered by LIC by
applying various tools like direct interaction with customers. The report
contains first of all brief introduction about the company. Then it
contains the various insurance plans/products offered by it to the general
public .I also put forward recommendations of the consumers and
conclusions that will help LIC to provide consumer satisfactory services
in the insurance sector.

7
58

Introduction

Insurance is a social device where uncertain risks of individuals may be

combined in a group and thus made more certain – small periodic
contributions by the individuals provide a found out of which those who
suffer losses may be reimbursed. In addition tobeing a means to protect
oneself, the insurance Industry is an efficient conduit for the saving of
people to be channeled towards economic growth. In India, the Insurance
Industry is more than 150 years old. Today, it is monopolized by two
PSUs in their respective fields of life and General Insurance. However,
with the successful passage IRDA Bill through both houses of parliament
in December 1999 the sector has been opened up to private players. This
will provided much. Needed impetus to the Industry and will improve the
quality of service and products and will also increase employment
opportunities. There are still some issues that need to be sorted out,
particularly with regard to the status of intermediaries as envisaged by
the Insurance Regulatory Authority.

7
58

Research Objective

The report gives the brief background of the sector and proceeds to
highlight the short comings of the existing setup and players. The
benefits of liberalized sector are enumerated. The report also tries to
identify the market potential for insurance products and the strategy that
we employed to exploit the same. The stress is also given on knowing the
awareness level of general public.

• First and foremost objective is to find out the reasons for using of
Different Products of LIC.
• To find out the services that other insurance companies are giving
to their customers.
• To build the relationship with the customers and to follow up them,
make sure that they are satisfied with the product.
• To maintain good relationships with the corporate employees.
• To get more references from the customers and generate new leads
by following a chain process.
• To place LIC Products ahead of the competitors.
• To find out the customer awareness on booming Advance Product
market and to find out the using patterns of the people.

Research Methodology

7
58

Basically there are 3 types of approaches used during the any research:
1. Exploratory

2. Descriptive

3. Experimental

During this research Descriptive and Exploratory approach is taken

into consideration because of the availability of relevant information
to describe the relationships between the marketing problem and the
available information.

Sampling Technique:
To study the Project, a Simple Random Technique is used in selecting
the sample size from a given population.

Data Collection:
Collection of data is done by:

• Primary Sources: The primary sources of data refer to the first

hand information.

Limitations of Study

7
58

• The major limitation faced is the time constraint. The time span of
8-10 weeks is too short for understanding the industry as a whole
and makes recommendations.
• The other limitation is the cost factor. The probability of biasness
cannot be ignored as questionnaires are used.
• Scope of this project is limited to Delhi and cannot be generalized
for the whole of India.
• Mostly, consumers are very reluctant to provide answers to the
questions as they find it boring and of no use.
• Mindset of the people may vary depending upon their age, gender,
income etc.

Company Profile

7
58

LIC – An Overview
The LIC is the largest state-owned life insurance company in India, and
also the country’s largest investor. The recent Economic Times Brand
Equity Survey rated LIC as the No. 1 Service Brand of the Country. Life
Insurance Corporation of India (LIC) was formed in September, 1956 by
an Act of Parliament, viz., Life Insurance Corporation Act, 1956, with
capital contribution from the Government of India. The, then, Finance
Minister, Shri C.D. Deshmukh, while piloting the bill, outlined the
objectives of LIC thus to conduct the business with the utmost economy,
and a spirit of trusteeship; to charge premium no higher than warranted
by strict actuarial considerations; to invest the funds for obtaining
maximum yield for the policy holders consistent with safety of the
capital; to render prompt and efficient service to policy holders, thereby
making insurance widely popular. Since nationalization, LIC has built up
a vast network of 2,048 branches, 101divisions and 8 zonal offices
located in different parts of India, along with satellite offices attached to
about some 50 branches, and has a network of around 1.2 million agents
for soliciting life insurance business from the public. The Life Insurance
Corporation of India also transacts business abroad and has offices in
Fiji, Mauritius and United Kingdom. LIC is associated with joint
ventures abroad in the field of insurance namely Ken-India Assurance
Company Limited, Nairobi; United Oriental Assurance Company
Limited, Kuala Lumpur and Life Insurance Corporation (International)
E.C.Bahrain. The Corporation has registered a joint venture company in
26th December,2000 in Katmandu, Nepal by the name of Life Insurance
Corporation (Nepal)Limited in collaboration with Vishal Group Limited,

7
58

a local industrial Group. An off-shore company L.I.C. (Mauritius) Off-

shore Limited has also been set up in 2001 to tap the African insurance
market.

Type Government-owned Corporation

Industry Insurance
Founded 1st September 1956
Headquarters Mumbai, India
Key people T. S Vijayan (Chairman)
D. K. Mehrotra, Thomas Mathew
And A. Dasgupta (MD)
Products Life Insurance
Pensions
Mutual Funds
Total Assets Rs. 9.31 trillion (US $ 202.03 billion)
Owner(s) Government of India
Employees 112,184(2008)
Subsidiaries LIC Housing Finance Limited
LIC (Nepal) Ltd
LIC (Lanka) Ltd
LIC (International) BSC(C)
Website LICindia.com

HISTORY

7
58

The Oriental Life Insurance Company, the first corporate entity in India
offering life insurance coverage, was established in Calcutta in 1818 by
Bipin Behari Dasgupta and others. Europeans in India were its primary
target market, and it charged Indians heftier premiums. The Bombay
Mutual Life Assurance Society, formed in 1870, was the first native
insurance provider. Others insurance companies established in the pre-
independence are included:

• Bharat Insurance Company (1896)

• United India (1906)
• National Indian (1906)
• National Insurance (1906)
• Co-operative Assurance (1906)
• Hindustan Co-operatives (1907)
• Indian Mercantile
• General Assurance
• Swadeshi Life (later Bombay Life)

The first 150 years were marked mostly by turbulent economic

conditions. It witnessed India’s First War of Independence, adverse
effects of the World War I and World War II on the economy of India,
and in between them the period of world wide economic crises triggered
by the Great Depression. The first half of the 20th century also saw a
heightened struggle for India’s Independence. The aggregate effect of
these events led to a high rate of bankruptcies and liquidation of life

7
58

insurance companies in adversely affected the faith of the general public

in the utility of obtaining life cover.
The Life Insurance Act and the Provident Fund Act were passed in 1912,
providing the first regulatory mechanism in the Life Insurance industry.
The Indian Insurance Companies Act of 1928 authorized the govt. to
obtain statistical information from companies operating in both life and
non-life insurance areas. The subsequent Insurance Act of 1938 brought
stricter state control over an insurance that had seen several financially
unsound ventures fail. A bill was also introduced in the Legislative
Assembly in 1944 to nationalize the insurance industry.

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
Bartleet Group of Companies, Sri Lanka.
• LIC Housing Finance: Incorporated in 19 June 1989, its main
objective is to provide long term finance for construction or
purchase of house or apartments. It has a Dubai office.

7
58

Insurance Plans Of LIC

Children Endowment Money Back Whole Life Term

Plan Assurance Plan Plan Assurance
Plan Plans
Jeevan The Endowment The Money The Whole Life 2yr Temporary
Anurag Assurance Policy Back Policy- Policy Assurance Policy
20yrs
Child Career The Endowment The Money The Whole Life The Convertible
Plan Assurance Policy- Back Policy- Policy-Limited Term Assurance
Limited Payment 25yrs Payment Policy
Marriage Jeevan Mitra Jeevan The Whole Life Anmol Jeevan-I
Endowment (Double Cover Surabhi-15yrs Policy-Single
Insurance Plan) Premium
Child Future Jeevan Mitra Jeevan Jeevan Anand Amulya Jeevan-I
Plan (Triple Cover Surabhi-20yrs
Insurance Plan)
Komal New Janaraksha Jeevan Jeevan Tarang
Jeevan Plan Surabhi-25yrs

Jeevan Jeevan Amrit Bima Bachat

Chhaya

Children Plans

Jeevan Anurag:

7
58

LIC Jeevan Anurag fit plan specifically designed to take care of the
educational needs of children. The plan can be taken by a parent on his or
her own life. Benefits under the plan are payable at pre-specified
durations irrespective of whether the Life Assured survives to the end of
the policy term or dies during the term of the policy. In addition, this plan
also provides for an immediate payment of Basic Sum Assured amount
on death of the Life Assured during the term of the policy.

Benefits

Death Benefit: Payment of an amount equal to Sum Assured

under the basic plan immediately on the death of the life
assured.
Eligibility Conditions:
For Basic Plan:
Age of the Life Assured- 20 to 60 years (age nearest
Age at entry
birthday)
Age of the Life
Maximum 70 years (age nearest birthday)
Assured at maturity
All terms from 10 to 25 years. In case of single
Term
premium mode minimum term shall be 5 Years.
Minimum Sum
Rs.50,000 /-
Assured
Maximum Sum No limit. Sum Assured will be in multiples of
assured Rs.5, 000 /- only.
Yearly, Half-yearly, Quarterly, Monthly or through
Mode
salary deductions in case of regular premiums.

7
58

For Term Assurance Rider:

Age at entry Age of the Life Assured- 20 to 50 years (age nearest

birthday)
Age of the Life
Assured at Maximum 60 years (age nearest birthday)
maturity
Term NIL
Minimum Sum
Rs.1,00,000 /-
Assured

An amount equal to the Sum Assured under Basic Plan

Maximum Sum subject to the maximum of Rs.25lakh overall limit
assured taking all term assurance riders availed under all
existing policies of the life assured and the term
assurance rider under the new proposal into
consideration.
Mode NIL

Rebates:

Mode rebate:
2% for yearly mode and 1% for half yearly mode on the tabular premium.
There are no rebates for quarterly and SSS modes. For monthly mode,
5% extra will be charged on the tabular premium.

7
58

Large Sum Assured Rebate:

2% of Sum Assured for Sum Assured Rs.1,50,000/- and above. No rebate
for Sum Assured up to and including Rs.1,00,000/-. No rebate is
available (either made) on the rider premiums.

Options of Payment of Premium:

Following premium paying terms are offered:

• Single Premium- One Year

• Regular Premium payable during (n-3) Years, where n is the policy
term
• Regular Premium payable throughout the policy term.

Child Career Plan:

This plan is specially designed to meet the increasing educational and

other needs of growing children. It provides the risk cover on the life of
child not only during the policy term but also during the extended term.
(i.e. 7 years after the expiry of policy term). A number of Survival
benefits are payable on surviving by the life assured to the end of the
specified durations.

Payment of Premiums:

7
58

You may pay the premiums regularly at yearly, half-

yearly, quarterly or through Salary deductions over the
term of policy. Premiums may be paid either for 6 years or
up to 5 years before the policy term.
Rebates:
Mode Rebate:
Yearly mode - 2% of Tabular Premium
Half-yearly mode - 1% of the tabular premium
Quarterly & Salary
- NIL
deduction

Sum Assured Rebate:

Sum Assured - Rebate (Rs.)

1,00,000 to 2,99,999 - Nil
3,00,000 to 4,99,999 1.5 %o S.A.
5,00,000 and above - 2 %o S.A.

Benefits:

7
58

Survival Benefit: On life assured surviving to the end of the specified

durations an amount specified below is payable:

30% of the Sum Assured along with

1 years before the date of
expiry of policy term
2 years before the date
- vested
Simple Reversionary Bonuses
- 15% of the Sum Assured

3 years before the date of

- 15% of the Sum Assured
expiry of policy term

4 years before the date of

- 15% of the Sum Assured
expiry of policy term
5 years before the date of
- 15% of the Sum Assured
expiry of policy term
6On the date of expiry of 15% of the Sum Assured along with
-
policy term Final (Additional) Bonus, if any.

Death Benefit:

On death (after the Date of Commencement of Risk):

(I) If death occurs within the period from date of commencement

of risk to 5 years before the date of expiry of policy term: Sum
Assured along with Vested Simple Reversionary Bonuses and
Final (Additional) bonus (if any) payable.
(II) If death occurs within 5 years before the date of expiry of
policy term: Sum Assured along with Final (Additional) bonus
(if any) is payable. On death during the Extended Term- Sum
Assured is Payable.All the premiums paid (excluding
extra premium and premium for premium waiver

7
58

benefit, if any,) along with interest of 3% p.a.

compounding yearly shall be payable.

Premium Waiver Benefit:

The proposer can opt for this benefit if aged between 18 and 55 and is
medically fit. It provides waiver of premiums on death of proposer.
Further t benefit remain in force during the Auto cover period.Any
premiums that have paid during the Auto Cover period also be waived.

Eligibility Conditions and Other Restrictions:

(a) Minimum Entry Age 0 years (last birthday)

(b) Maximum Entry Age 12 years (last birthday)
(c) Minimum Maturity Age 23 years (last birthday)
(d) Maximum Maturity Age 27 years (last birthday)
(e) Minimum Sum Assured Rs.1,00,000
(f) Maximum Sum Assured Rs.100,00,000
(g) Policy term 11 to 27 years
(h) Premium Paying term 6 years and Policy term less 5 years

Grace Period:

A grace period of one calendar month but not less than 30

days will be allowed for payment of premiums.

Revival:

If the policy is lapsed it can be revived by paying arrears

of premium together with interest within a period of five
years, subject to production of satisfactory evidence of

7
58

continued insurability. The rate of interest applicable will

be as fixed by the Corporation from time to time.

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.

Premiums:

Premiums are payable yearly, half-yearly, quarterly,

monthly or through Salary deductions throughout the
term of the policy or earlier death.

Bonuses:

This is a with profit plan and participates in the profits of the

Corporation’s life insurance business. It gets a share of the profit in the
form of bonuses. Simple Reversionary Bonuses are declared per thousand
Sum Assured annually at the end of each financial year. Once declared,
they form part of the guaranteed benefits of the plan. Such bonuses are to
be added till maturity even if the life assured dies before the maturity
date. Final (Additional) Bonus may also be payable provided a policy is
of a certain minimum term.

Benefits:

7
58

Death Benefit: The Sum Assured plus accrued bonuses up to maturity is

payable on maturity even though death occurs during policy term. This
may be paid in a lump sum or in ten half-yearly instalments at the option
of the beneficiary.

Maturity Benefits: The Sum Assured plus all bonuses declared up to

maturity date is payable on survival to the end of the term either in a
lump sum or in ten half-yearly instalments, as opted by you.

Supplementary/Extra Benefits: These are the optional benefits that can

be added to your basic plan for extra protection/option. An additional
premium is required to be paid for these benefits.

Surrender Value:

Buying a life insurance contract is a long-term commitment. However,

surrender value will be available under the plan on earlier termination of
the contract.

Guaranteed Surrender Value:

The policy may be surrendered after it has been in force for 3 years or
more. The guaranteed surrender value is 30% of the basic premiums paid
excluding the first year’s premium.

Endowment assurance plans he endowment assurance

policy

Features:

7
58

• High bonus
• High liquidity
• Savings oriented.
• Moderate premiums

This policy not only makes provisions for the family of the
Life Assured in event of his early death but also assures a
lump sum at a desired age. The lump sum can be
reinvested to provide an annuity during the remainder of
his life or in any other way considered suitable at that
time. Premiums are usually payable for the selected term
of years or until death if it occurs during the term period.

Suitable For:

Being an endowment assurance policy, this plan is apt for

people of all ages and social groups who wish to protect
their families from a financial setback that may occur
owing to their demise. The amount assured if not paid by
reason of his death earlier will payable at the end of the
endowment term where it can be invested in an annuity
provision for the rest of the policyholder's life or in any
other way he may think most suitable at that time.

Benefits:
This is the most popular form of life assurance since it not only makes
provision for the family of the Life Assured in the event of his early
death, but also assures a lump sum at any desired age. The amount

7
58

assured, if not paid by reason of his earlier death, becomes payable at the
end of the endowment term when it may be invested to provide an
annuity during the remainder of his life or in any other way he may think
most suitable at the time. Other benefits include:
Disability Benefit: In case policy holder becomes totally and
permanently disabled due to an accident before reaching the age of 70
and the policy is in full force, he will not be required to pay further
premiums, (the Disability Benefit is available in respect of the first Rs.20,
000 sum assured on any one
Accident Benefit: By paying a small extra premium of Rs.1 per
Rs.1000/- sum assured per year he or his family are entitled to the
following benefits on death or permanent disability caused by accident.
Even students above the age of 18 years can avail of this benefit.
Premium Stoppage:
If payment of premiums ceases after at least THREE years' premiums
have been paid, a free paid-up policy for a reduced sum assured will be
automatically secured provided the reduced sum assured, exclusive of
any attached bonus, is not less than Rs. 250/-. The reduced sum assured
will become payable on the event as stipulated in the policy.
Bonus:
Is there anything extra payable besides the sum assured at the time of
claim settlement? Yes, but only if it is a ‘with profits’ policy.

Plan Parameters:

7
58

INSURANCE Minimum Maximum

Entry Age 12 65
Sum Assured
50000 NO LIMIT
(Rs.)
Term (years) 5 55

Mode Of Maximum Premium Policy Loan

Payment Paying Period Available
Monthly,
Quarterly, Half-
Yearly, Yearly, 75 Years Yes
Salary Saving
Scheme.

Jeevan mitra (double cover endowment plan)

This is an Endowment Assurance plan that provides greater financial
protection against death throughout the term of plan. It pays the maturity
amount on survival to the end of the policy term.

Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through
Salary deductions, as opted by you, throughout the term of the policy or
earlier death.

Bonuses:
This is a with-profit plan and participates in the profits of the
Corporation’s life insurance business. It gets a share of the profits in the

7
58

form of bonuses. Simple Reversionary Bonuses are declared per thousand

Sum Assured annually at the end of each financial year. Once declared,
they form part of the guaranteed benefits of the plan. A Final
(Additional) Bonus may also be payable provided a policy has run for
certain minimum period.

Benefits:

Death Benefit:

Table No 88: Twice the Sum assured plus all bonuses on the basic sum
assured to date is payable in a lump sum upon the death of the life
assured. Table No 133: Thrice the Sum assured plus all bonuses on the
basic sum assured to date is payable in a lump sum upon the death of the
life assured.

Maturity Benefit: The Sum Assured plus all bonuses declared up to

maturity date is payable in a lump sum on survival to the end of the
policy term.
Supplementary/Extra Benefits: These are the optional benefits that can
be added to your basic plan for extra protection/option. An additional
premium is required to be paid for these benefits.

Surrender Value: Buying a life insurance contract is a long-term

commitment. However, surrender value will be available under the plan.

New janaraksha plan

7
58

This is an Endowment Assurance plan that provides financial protection

against death throughout the term of plan. It pays the maturity amount on
survival
Premiums
Premiums are payable yearly, half-yearly, quarterly, monthly or through
Salary deductions, as opted by you, throughout the term of the policy or
earlier death. After at least two full years’ premiums have been paid, full
insurance cover is available even when premiums are not paid for up to
three years.

Benefits:

Death Benefit: The Sum assured plus all bonuses to date is payable in a
lump sum upon the death of the life assured during the policy term.
Accident Benefit: The Sum assured (subject to a limit of Rs.5lakhs) is
payable in a lump sum on accidental death of the life assured during the
policy term. In case of permanent disability of the life assured due to
accident during the policy term, this benefit is payable in installments.
Maturity Benefit: The Sum Assured plus all bonuses declared up to
maturity date is payable in a lump sum on survival to the end of the
policy term.
Supplementary/Extra Benefits: These are the optional benefits that can
be added to your basic plan for extra protection/option. An additional
premium is required to be paid for these benefits.
Money back plans
The money back policy 20yrs

7
58

Unlike ordinary endowment insurance plans where the survival benefits

are payable only at the end of the endowment period, this scheme
provides for periodic payments of partial survival benefits as follows
during the term of the policy, of course so long as the policy holder is
alive.
In the case of a 20-year Money-Back Policy, 20% of the sum assured
becomes payable each after 5, 10, 15 years, and the balance of 40% plus
the accrued bonus become payable at the 20th year.

For a Money-Back Policy of 25 years , 15% of the sum assured becomes

payable each after 5, 10, 15 and 20 years, and the balance 40% plus the
accrued bonus become payable at the 25th year. An important feature of
this type of policies is that in the event of death at any time within the
policy term, the death claim comprises full sum assured without
deducting any of the survival benefit amounts, which have already been
paid. Similarly, the bonus is also calculated on the full sum assured.
These are Money Back type Assurance plans that provides financial
protection against death throughout the term of plan along with the
periodic payments on survival at specified durations during the term.

Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through
salary deductions as opted by you throughout the term of the policy.

Benefits

7
58

Death Benefit: The Sum assured plus all bonuses to date is payable in a
lump sum upon the death of the life assured during the policy term
irrespective of the Survival benefit /benefits paid earlier.
Survival Benefits: The percentage of Sum Assured as mentioned below
will be paid on survival to the end of specified durations:

% of Sum Assured paid at the end of specified duration

Plan
Duration
75 93
5 20% 15%
10 20% 15%
15 20% 15%
20 40% 15%
25 - 40%

All bonuses declared up to the maturity date will also be paid along with
the final survival benefit.
Supplementary/Extra Benefits: These are the optional benefits that can
be added to your basic plan for extra protection/option. An additional
premium is required to be paid for these benefits.
Surrender Value:
Buying a life insurance contract is a long-term commitment. However,
surrender values are available under the plan on earlier termination

Guaranteed Surrender Value:

The policy may be surrendered after it has been in force for 3 years or
more. The guaranteed surrender value is 30% of the basic premiums paid
excluding the first year’s premium and all survival benefits paid earlier.

7
58

Plan Parameters:

Minimum Maximum
Entry age 13 (lbd) 50
Sum assured (Rs.) 50,000 NO LIMIT
Fixed at 20 for
Term (years) plan 75 and 25 -
for plan 93

Maximum Maturity Policy loan

Mode of Payment
Age available
Yearly, Half-
yearly, Quarterly,
70 years No
Monthly, Salary
Saving Scheme

Jeevan surabhi
Jeevan Surabhi plan is similar to other money back plans. However, main
differences in regular money back plans and Jeevan Surabhi are as under:
• Maturity term is more than premium paying term.
• Early and higher rate of survival benefit payment.
• Risk cover increases every five years.

The actual term and the premium paying term for these plans are as
under:

7
58

Policy Premium Paying

Plan no.
Term Term
106 15 years 12 years
107 20 years 15 years
108 25 years 18 years

Full sum assured is paid back as survival benefit by the end of premium
paying term. However, the risk cover and additional risk cover continue
and the policy participates in profits till the end of policy term.
Accident Benefit is restricted to the premium paying period and to the
overall limit of Rs.5lakhs on a single life.
This is a with-profits plan available for three different terms of 15, 20 and
25 years with corresponding premium paying terms of 12, 15 and 18
years. The plan provides a specified percentage of Sum Assured on
survival.

Suitable For:
This plan holds special interest to people who besides wishing to provide
for their old age and family feel the need for lump sum benefits at
periodical intervals.
Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through
salary deductions as opted by you throughout the premium paying term
of the policy or till the earlier death.
Benefits:
Death Benefit: The Sum Assured along with the additional cover, if any,
plus all bonuses declared till death is payable in a lump sum upon the

7
58

death of the life assured during the policy term. The survival benefits
paid prior to death will not be deducted from the claim amount.
If death occurs at anytime during the term of a policy (provided the
policy has been kept in force by payment of all premiums that had fallen
due), the basic sum assured along with the vested bonus will be paid. The
survival benefits already paid, if any, will not be deducted from this
claim amount. An additional amount (depending on the duration of the
policy) will also be paid on death under such a policy. The additional
amounts payable, at various stages are shown in the table given below.

11th- 16th-
policy
1st year 15th 20th 21st-26th
Policy year
Policy policy policy policy year
6th-10th
year year
106 NIL 500 1000 NIL NIL
107 NIL 500 1000 1500 NIL
Maturity Benefit: The policy matures on your survival to the end of the
policy term. All bonuses declared up to maturity date will be paid in a
lump sum.
Supplementary/Extra Benefits: These are the optional benefits that can
be added to your basic plan for extra protection/option. An additional
premium is required to be paid for these benefits.
Surrender Value:
Buying a life insurance contract is a long-term commitment. However,
surrender values are available under the plan on earlier termination of the
contract.
Guaranteed Surrender Value:

7
58

The policy may be surrendered after it has been in force for 3 years or
more. The guaranteed surrender value is 30% of the basic premiums paid
excluding the first year’s premium in case no survival benefit payment
has already fallen due. Where one or more survival benefits have fallen
due, the guaranteed surrender value will be 30% of the premiums paid on
or after the due date of payment of latest survival benefit.

Bima bachat
LIC Bima Bachat is a money-back policy which offers financial security
and assurance to the policy holder and his family. Bima Bachat requires
the policy holder to pay only one premium. The amount paid for the
premium depends on the duration of the policy taken and life insurance is
available till the date of maturity.

For a term of 9 years: The policy holder will receive 15% of the sum
assured at the end of every 3rd and 6th policy year.

For a term of 12 years: The policy holder will receive 15% of the sum
assured at the end of every 3rd and 6th policy year.

For a term 15 years: The policy holder will receive15% of the sum
assured at the end of every 3rd, 6th, 9th and 12th policy year. If the
policy holder outlives the duration of the policy, at the time of maturity, a
single premium payment (excluding extra premium) is made along with
loyalty additions, if any. The guaranteed surrender value is available only
after completion of at least one policy year. This value is equal to 90 %
of the single premium paid (excluding extra premium). Bema Bachat is
the only money-back policy that offers a loan facility. The rate of interest

7
58

for this will be determined from time to time by the corporation.

Presently the rate of interest is 9% p.a. payable half-yearly. It also offers
other benefits like the 15 day cooling off period, grace period and revival.
The following are the requirements that one needs to be aware of before
applying for this policy:

• The person applying for the policy should have completed 15

years and should not be older than 66 years.
• The policy will mature when the person is 75 years old.
• There is a choice of three terms to choose from (9, 12 and 15
years) for the policy depending on the age and requirement of
the applicant.
• The minimum sum that needs to be assured is Rs 20,000/- and
there is no limit on the amount that can be assured.
• It is important to note that the sum assured should be in
multiples of Rs 5000/- only.
• The policy requires the holder to pay a single premium.

Premium Payment:
Let’s take an example of a 30 year old with a Bima Bachat policy for 12
years. If the sum assured is Rs 45,000 then he has to pay a premium of Rs
34800.75. But for a sum assured amount of Rs 50,000 he will have to pay
a premium of Rs 36734.13 only, thus getting a 5% rebate in premium.

Other Rebate Percentages:

Less than Rs. 50,000 NIL

7
58

Rs. 50,000 and Less than

5%
Rs.1lakh
Rs. 1lakh and Less than
7%
Rs.2lakh
Rs. 2lakh and above 8%

Whole Life Plans

The Whole Life Policy

This plan is mainly devised to create an estate for the heirs of the
policyholder as the plan basically provides for payment of sum assured
plus bonuses on the death of the policyholder. However, considering the
increased longevity of the Indian population, the Corporation has
amended the above provision, thereby providing for payment of sum
assured plus bonuses in the form of maturity claim on completion of age
80 years or on expiry of term of 40 years from date of commencement of
the policy whichever is later.

The premiums under the policy are payable up to age 80 years of the
policyholder or for a term of 35 years whichever is later.
If the payment of premium ceases after 3 years, a paid-up policy for such
reduced sum assured will be automatically secured provided the reduced
sum assured exclusive of any attached bonus is not less than Rs.250/-.

7
58

Such reduced paid-up policy is not entitled to participate in the bonus

declared thereafter but the bonuses already declared on the policy will
remain attach, provided the policy is converted in to a paid-up policy
after the premiums are paid for 5 years.

Suitable For:
This policy is suitable for people of all ages who wish to protect their
families from financial crises that may occur owing to the policyholder’s
premature death.
Premiums:

• The premiums are payable yearly, half-yearly, quarterly, monthly

or through Salary deductions, as opted by you. The premium is
payable in one lump sum (Single Premium).

• The premiums are payable for a period of 35 years or up to age 80

years, whichever is later. The premiums are payable up to the
selected premium paying period.

• The premiums are payable for a period of 35 years or up to age 80

years, whichever is later. The premiums are payable up to the
selected premium paying period.The premiums are payable for the
periods as specified above or up to earlier death.

Bonuses:
This is a with-profit plan and participates in the profits of the
Corporation’s life insurance business. It gets a share of the profits in the

7
58

form of bonuses. Simple Reversionary Bonuses are declared per thousand

Sum Assured annually at the end of each financial year. Once declared,
they form part of the guaranteed benefits of the plan. A Final
(Additional) Bonus may also be payable provided a policy has run for
certain minimum period.

Benefits:
Death Benefit: The Sum assured plus all bonuses to date is payable in a
lump sum upon the death of the life assured.
Maturity Benefit: This is a whole of life assurance plan and hence does
not have a maturity date. You, however, have the option to take the Sum
Assured plus all bonuses declared under the policy anytime after 40 years
from the date of commencement of the policy provided you have
attained, at least, 80 years of age.

Supplementary/Extra Benefits: These are the optional benefits that can

be added to your basic plan for extra protection/option. An additional
premium is required to be paid for these benefits.

Surrender Value:
Buying a life insurance contract is a long-term commitment. However,
surrender value is available under the plan on earlier termination of the
plan.

Guaranteed Surrender Value:

The policy may be surrendered after it has been in force for 3 years or
more. The guaranteed surrender value is 30% of the basic premiums paid

7
58

excluding the first year’s premium. In case of a single premium policy

the guaranteed surrender value is 90% of the single premium paid
excluding any extra/additional premium.

Whole Life Policy-Single Premium

This is the best form of life assurance for family provision since it
enables the Life Assured to pay the premium during the ordinarily
vigorous and most productive years of life, relieving him from the
necessity of making payments later in life when they might become a
burden. With Profits Single Premium policies do not cease to participate
in profits after completion of the period for which premium has been paid
,but continue to share in the periodical Bonus Distribution until the death
of the Life Assured. This is a whole of life assurance plan that provides
financial protection against death through out the lifetime of the Life
Assured.
Suitable For:
Being a limited-payment life assurance policy, this plan is suitable for
people of all ages and social groups who wish to protect their families
from a financial setback that may occur owing to their demise.
Plan parameters:

7
58

Minimum Maximum
Entry age 12 (Nearer Birthday) 60
Sum assured (Rs.) 30000 NO LIMIT
Term (years) N.A. N.A.

Jeevan Tarang
This is a with-profits whole of life plan which provides for annual
survival benefit at a rate of 5½ % 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.

Accumulation Period:
The plan offers three Accumulation periods – 10, 15 and 20 years. A
proposer may choose any of them.

Payment of Premium:
Premiums can be paid regularly at yearly, half-yearly, quarterly or
monthly intervals or through salary deductions over the Accumulation
Period. Alternatively, a Single Premium can be paid on commencement
of a policy.

Participation in Profits:

7
58

Policies under this plan shall participate in profits of the Corporation.

During the accumulation period policies shall be entitled to receive
simple reversionary bonuses which will be payable on survival to the end
of the accumulation period or on earlier death. After the accumulation
period, policies will be entitled to receive a Loyalty Addition payable on
maturity or earlier death. The amount of simple reversionary bonus and
Loyalty Addition will depend on the experience of the Corporation.

Benefits:

Survival Benefits:
• On survival to the end of the selected accumulation period: Vested
reversionary bonuses in a lump sum will be payable.
• On survival to the end of each year after the accumulation period:
5½% of the Sum Assured will be payable. The first survival
benefit will be payable on survival to one year after the end of the
accumulation period.

Maturity Benefit: On survival to the policy anniversary coinciding with

or immediately following the completion of age 100 years, the Sum
Assured along with Loyalty Addition, if any, will be payable.

Death Benefit:
• In case of death of the Life Assured during the Accumulation
Period, the Sum Assured along with vested reversionary bonuses is
payable.

7
58

• In case of death of the Life Assured any time after the

Accumulation Period, the Sum Assured along with Loyalty
Addition, if any is payable.

Other Benefits:

• Loan: Loan facility is available under this plan. However, the rate of
interest would be determined from time to time by the Corporation.
Presently the rate of interest is 9 % pa payable half-yearly.
• Grace period: A grace period of one month but not less than 30 days
will be allowed for payment of yearly, half-yearly or quarterly premiums
and 15 days for monthly premiums.

• Cooling-off period: If you are not satisfied with the terms and
conditions of the policy, you may return the policy to us within 15 days.

• Revival: Subject to satisfactory evidence of continued insurability, a

lapsed policy can be revived during the lifetime of the Life Assured but
before the expiry of the Accumulation Period within a period of five
years from the due date of first unpaid premium by paying arrears of
premium together with interest. The rate of interest applicable will be as
fixed by the Corporation from time to time.

Eligibility Conditions For This Plan:

7
58

Ages at entry: 0 to 60 years nearest birthday

Accumulation periods available: 10, 15 and 20 years
Maximum age at which premium payment ceases: 70 years nearest
birthday
Age up to which life cover available: 100 years
Minimum age at end of Accumulation Period: 18 years last birthday
Premium paying terms: Single Premium and, in case of regular
premiums, equal to the accumulation period, i.e. 10, 15 and 20 years
Modes of premium payment: Yearly, Half Yearly, Quarterly, Monthly,
SSS and Single PremiumSum Assured: Rs.1lakh and over in multiples of
Rs.5, 000/-.

Rebates/Extra for Mode of Premium Payment And High

Sum Assured:

• Mode Rebate:
Yearly mode: 2% of tabular Premium
Half-yearly mode: 1% of the tabular premium
Quarterly: NIL

In case of monthly mode other than SSS, an additional amount of 5% of

tabular premium will be charged.

• High Sum Assured Rebates:

For Annual premium
Rs.1.25% of Sum Assured for Sum Assured Rs 2 lakh and over;
Rs 2.25% of Sum Assured for Sum Assured Rs 5 lakh and over.

7
58

For Single premium

Rs.7.50% of Sum Assured for Sum Assured Rs 2 lakh and over;
Rs.12.50% of Sum Assured for Sum Assured Rs 5 lakh and over.

Term Assurance Plans

Two Year Temporary Assurance Policy

Features:
• The Two Year Temporary Assurance policy is designed for the
insuring public who requires risk cover for a maximum of two
years.
• Under the Two Year Temporary Assurance policy a single
premium is required to be paid at the outset of the policy to cover
the entire period of term.
• The proposer is required to pay the medical examination fee. The
proof of age must also accompany the proposal.
• The policy issued will be only under the 'Without Profits' plan.
• The policy is not entitled to any surrender value.
• No loan will be granted against the Two Year Temporary
Assurance policy.

Suitable For:
The Two Year Temporary Assurance policy caters to the individuals who
specifically require insurance cover against risk for a short period of two

7
58

years, for instance persons who are required to go on tours for instance
for a year or so.

Benefits:

Survival Benefit: Not applicable

Death Benefit: Total sum assured
Plan parameters:

Minimum Maximum
Entry age 18 60
Sum assured (Rs.) 50,000 1,00,000
Term (years) 6,12,18,24 months Not Applicable

Maximum premium Policy loan

Mode of Payment
paying period available
Single Premium 62 years No

Convertible Term Assurance Policy

This plan of assurance is designed to meet the needs of those who are
initially unable to pay the larger premium required for a Whole Life or
Endowment Assurance Policy, but hope to be able to pay for such a
policy in the near future. This plan would be found useful also in cases
where it is desired to leave the final decision as to the plan to a later date
when, perhaps a better choice could be made. Policy holders get an

7
58

option of converting a policy into endowment assurance or limited

payment whole life assurance.
SuitableFor:
For all people with earned income under Category I and unearned
incomes under Category II, basically Standard and sub-Standard lives
attracting EMR classes I and II.

Benefits:

SurvivalBenefit:NotApplicable

Death Benefit: The sum assured is payable only in the event of death of
the Life Assured before the expiry of the specified term.

Plan parameters:

Minimum Maximum
20 (nearer
Entry age 50
birthday)
Sum assured (Rs.) 50,000 1,00,00,000
Term (years) 5 7

Maximum premium Policy loan

Mode of Payment
paying period available

Anmol Jeevan-I

7
58

Benefits:

On Death during the

Sum Assured
Term of the Policy
On Maturity Nil

Restrictions:

Minimum age at entry 18 years (completed)

Maximum age at entry 55 years (nearer birthday)
Maximum age at maturity 65 years
Minimum Term 5 years
Maximum Term 25 years
Minimum Sum Assured Rs.5,00,000/-
Maximum Sum Assured Less than 25, 00, 000 .
Yearly, Half- Yearly and
Mode of Premium Payment*
Single premium

Note: The policy would be issued in multiples of Rs.1lakh for Sum

Assured above Rs.5lakh.

Rebate:
I ) Sum Assured Rebate: NIL in case of regular premium policies

7
58

II) Mode Rebate: 1 % of Annual premium for yearly mode and nil for
Half-Yearly mode.

Underwriting, Age Proof and Medical Requirements:

The plan is available to Standard and Sub-standard lives (up to Class VI
EMR). This plan is also available to female lives (category I and II lives
only) and to physically handicapped persons subject to certain conditions.
Standard age proof will have to be submitted along with the Proposal
Form.

Paid-up and Surrender Value:

• The policy will not acquire any paid-up value.
• No Surrender Value will be available under this plan.

Loan:
No loan will be granted under this plan.

Grace Period for Non-Forfeiture Provisions:

A grace period of 15 days will be allowed for payment of yearly or half-
yearly premiums. If death occurs within this period and before the
payment of the premium then due, the policy will still be valid and the
Sum Assured paid after deduction of the said premium as also unpaid
premiums falling due before the next policy anniversary of the Policy. If
the premium is not paid before the expiry of the days of grace, the Policy
lapses.
Revival:
If the Policy has lapsed, it may be revived during the life time of the Life

7
58

Assured, but before the date of expiry of policy term, on submission of

proof of continued insurability to the satisfaction of the Corporation and
the payment of all the arrears of premium together with interest at such
rate as may be prevailing at the time of the payment. The corporation
reserves the right to accept or decline the revival of discontinued policy.
The revival of the discontinued policy shall take effect only after the
same is approved by the Corporation and is specifically communicated to
the Life Assured. The cost of the Medical reports, including Special
Reports, if any, required for the purposes of revival of the policy, should
be borne by the Life Assured.

Payment Of claims:
No Claims concession will be applicable to this Policy.

Back-Dating Interest:
The policy can be back dated within the financial year. No dating back
interest shall be charged.

Achievements & Awards

• CNBC Awaaz Consumer awards 2010

7
58

• Reader Digest Trusted Brand Insurance category 2010

• Outlook money- NDTV Profit Award 2009 in "Best Life Insurance
Category”
• NDTV Profit Business Leadership Award, 2009
• CNBC Awaaz Consumer Award, 2009 for" Most preferred
insurance company "
• Reader's Digest Trusted Brand Award, 2009 (Platinum category )

Datagraphical Analysis & Interpreta-tion of

Representation of Data

7
58

Q1. According to you, which have played a major role in the field of Life

Insurance?
Insurance LIC HDFC ICICI Others
Pvt. Employees 40% 25% 20% 15%
Govt. 64% 12% 14% 10%

Employees
Business Man 55% 30% 12% 3%

70%
60%
50%
40% Pvt. Employees
30% Govt. Employees
Business Man
20%
10%
0%
LIC HDFC ICICI Others

After analyzing this data it is found that from the given three respective
level of Pvt., Govt. and Business employees, 40%, 64%, and 55% are in
favour of LIC, while 25%, 12%, and 30% are in favour of HDFC, 20%,
14%, and 12% are for ICICI and 15%, 10%, and 3% are in favors of
other Pvt. Companies respectively.

Q2. Which insurance companies have been successful to make strong

public base by advertisement?

Insurance LIC HDFC ICICI Others
Pvt. Employees 60% 15% 20% 5%
Govt. 70% 10% 15% 5%

Employees

7
58

Business Man 60% 20% 15% 5%

70%
60%
50%
40% Pvt. Employees
30% Govt. Employees
Business Man
20%
10%
0%
LIC HDFC ICICI Others

After analyzing this data it is found that from the given three respective
level of Pvt., Govt. and Business employees, 60%, 70%, and 60% are in
favour of LIC, while 15%, 10%, and 20% are in favour of HDFC, 20%,
15%, and 15% are for ICICI and 5%, 5%, and 5% are in favors of other
Pvt. Companies respectively. This is because of the fact that LIC is
exploiting the larger customer database through its heavy advertisements
campaign in different market segments.

Q3. Which insurance company has gained massive public support in

the current fiscal year?

Insurance LIC HDFC ICICI Others
Pvt. Employees 60% 15% 15% 10%
Govt. 70% 10% 10% 10%

Employees
Business Man 50% 25% 20% 5%

7
58

70%
60%
50%
40% Pvt. Employees
30% Govt. Employees
Business Man
20%
10%
0%
LIC HDFC ICICI Others

From the above data, it can be interpreted that from given three
respective level of Pvt., Govt. and Business employees, 60%, 70%, and
50% feel that it is LIC which has gained massive public support in the
current fiscal year, while 15%, 10%, and 25% are in favour of HDFC,
15%, 10%, and 20% are for ICICI and 10%, 10%, and 5% are in favors
of other Pvt. Companies respectively.

Q4. Do you think LIC’s various insurance plans are in the direction

of public welfare?
Insurance YES NO
Pvt. Employees 65% 35%
Govt. Employees 80% 20%
Business Man 60% 40%

7
58

80%
70%
60%
50%
Pvt. Sector
40%
Govt. Sector
30% Business Man
20%
10%
0%
YES NO

The above data shows that the 65% of Pvt. Employees agree that LIC’s
insurance plans are in the direction of public welfare and 35% disagree.
Similarly, 80% and 20% of Govt. Employees & 60% and 40% of
Business Man agree and disagree with the above statement respectively.

Q5. Do you think that risk coverage factor included in Insurance

policies attracts general public towards the policy?

Insurance YES NO
Pvt. Employees 60% 40%
Govt. Employees 80% 20%
Business Man 55% 45%

7
58

80%
70%
60%
50%
Pvt. Employees
40%
Govt. Employees
30% Business Man
20%
10%
0%
YES NO

From the above data, it can be interpreted that 60%, 80% and 55% from
the Pvt. Sector, Govt. Sector and Business Sector respectively think the
risk coverage factor in insurance policies attractive. While rest of the
40%, 20% and 45% from the Pvt. Sector, Govt. Sector and Business
Sector respectively don’t think so.

Q6. The buzzwords for Do you agree that customer-centricity and

Transparency are success in this evolving industry?

Insurance YES NO
Pvt. Employees 90% 10%
Govt. Employees 95% 5%
Business Man 93% 7%

7
58

100%

80%

60% Pvt. Employees

Govt. Employees
40% Business Man

20%

0%
YES NO

From the above data, it is found that 90% from Pvt. Sector, 95% from
Govt. Sector & 93% from Business man agree with the statement that to
success in this evolving industry, the products should be more transparent
& customer-centric whereas only 10% from Pvt. Sector, 5% from Govt.
Sector & 7% from Business man do not agree with the statement.

Suggestions & Recommendations

Recommendations:

In the modernized well advanced hi-tech approach to the customers,

every possible facilities and effort to build up the confidence of the rising

7
58

policy holders towards life insurance products are already being done.
But there are some recommendations that are intensely felt and highly
required for insures to sustain in the market. These are as follows:

• More and more transparency should be ascertained between

insurers and policy holders.
• Customer awareness programme is required so that more
people should attract towards the products of LIC.
• If there are any kind of hidden charges then that must be
disclosed to the policy holders before giving any policy or other
services to them.
• LIC should be more concerned about physical verification
rather than phone verification so as to avoid frauds or cheatings.
• The insurance products selling agents must not give any type of
wrong information regarding the particular policy which a
customer wants to buy.
• LIC customer grievance redresses mechanism should be more
concerned about the fastest settlement of policy holders’
problems and queries.
• Insurance Agents should be adequately trained & well educated
to convince the general public about different plans and offers.
• Particularly, in the emerging boom in the insurance company,
every insurance company should be customer centered, and
well versed in the handling of problem and grievances of the
policy holders.
• LIC must take feedbacks of policy holders regarding various
plan features & services.

7
58

• LIC should more focus on retaining existing customers.

• LIC must focus on segmentation based on customer knowledge.

IRDA should be more and more responsible to the insurance sector by

determining some standard. It should be mandatory to every insurer to
make more and more responsible and responsive to the policy holders so
that comprehensive understanding may be developed among policy
holders. It may be beneficial on both the sides.

Conclusions got by the Consumer Survey Analysis:

• Now a day, Insurance is most popular as more plain protection

against death and people are unaware about the other aspects of
insurance.
• According to the current scenario, life and motor Insurance are
the most popular ones followed by fire Insurance.

7
58

• Majority of people consider the Insurance premium paid by

them as reasonable.
• Only few counted people are unaware about the entry of private
players into the insurance industry and a very high majority of
people support their entry.
• By the entry of private players consumers are expecting the
premium to go down which would be the biggest blessing.
• A customer awareness programme should take place in rural
areas also to educate them about the benefits of taking an
insurance policy.

Conclusion:

After overhauling all the situations that boosted a number of Pvt.

Companies asociated with multinational in the Insurance Sector to give
befitting competition to the established behemoth LIC in public sector,
we come at the conclusion that :

7
58

• There is very tough competition among the private insurance

companies on the level of new trend of advertising to attract a
major market segment.
• LIC is not left behind in the present race of advertisement.
• The entry of the Pvt. Players in the Insurance Sector has
expanded the product segment to meet the different levels of
the requirements of the customers. It has brought about greater
choice to the customers.
• Private insurers have restricted reach to the customers.
• LIC has vast market and very firm grip on its traditional
customers and monopoly of life insurance products.
• Banc assurance - that allows life insurers to leverage on the risk
product through bank network, was adopted by private players.

BIBLIOGRAPHY

Text books:

• Wilson A. (2003), Marketing Research: An Integrated

Approach

7
58

• Dr. Gupta S.P & Dr. Gupta M.P., Business Statistics by

Addition 2004, New Delhi,

Internet:
• http://www.irdaindia.org/
• http://www.irda.gov.in/ADMINCMS/cms/NormalData_Layout.asp
x?page=PageNo4&mid=2
• http://www.asiainsurancereview.com/pages/e-Weekly-News.asp

Annexure (Questionnaire)

Name- ……………………………
Age- ………………………………
Occupation- ……………………..
Contact Details- …………………

Q. Accordin to you, which have played a major role in the field of

Life Insurance?

7
58

a) LIC
b) HDFC
c) ICICI
d) OTHERS Specify (………)

Q. Which insurance companies have been successful to make strong

public base by advertisement?
a) LIC
b) HDFC
c) ICICI
d) OTHERS Specify (………)

Q. Which insurance company has gained massive public support in

the current fiscal year?
a) LIC
b) HDFC
c) ICICI
d) OTHERS Specify (………)

Q. Do you think LIC’s various insurance plans are in the direction of

public welfare?
a) YES
b) NO

Q. Do you think that risk coverage factor included in Insurance

policies attracts general public towards the policy?
a) YES

7
58

b) NO