Executive Summary :

Life insurance in its modern form came to India from England in 1818 with the formation of Oriental Life Insurance Company. The Government of India nationalized the life insurance industry in January 1956 by merging about 245 life insurance companies and forming Life Insurance Corporation of India (LIC), which started functioning from 01.09.1956. For years thereafter, insurance remained a monopoly of the public sector. It was only after seven years of deliberation and debate that R. N. Malhotra Committee report of 1994 became the first serious document calling for the re-opening up of the insurance sector to private players. The sector was finally opened up to private players in [Link] Insurance Regulatory and Development Authority, an autonomous insurance regulator set up in 2000, has

extensive powers to oversee the insurance business and regulate in a manner that will safeguard the interests of the insured. Insurance is a federal subject in India. There are two legislations that govern the sector- The Insurance Act1938 and the IRDA Act-1999. The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. The objectives of the study are to compare cost efficiency and financial performance of Life Insurance Corporation of India and private sector life insurance companies in India, to understand the concept and mechanism of insurance and to predict the volume of new business and total premium of life insurance sector in India. The study is divided into six chapters. The first chapter is introductory in nature and deals with history of insurance,

meaning and concept of insurance principles of insurance, functions of insurance, importance of insurance, types of life insurance policies, features of life insurance contract and duties, power and functions of IRDA. The second chapter deals with literature review. Research Methodology is dealth with in the third chapter which includes research statement, hypothesis, objectives of the study, tools and methods of data analysis, scope and limitations of the study. The fourth chapter describes profile of twenty two private life insurance Companies and Life insurance corporation of India. The fifth chapter deals with data analysis. Linear trend, percentage, ANOVA (one-way) and DEA method were used. The sixth chapter gives the conclusion of the study and gives suggestions based on findings.

Both Life insurance density and penetration have increased from 2000-01 to 2009-10. The prediction of new business and total premium for both private and public sector life insurance companies in India for the year 2015 shows an upward trend. This signifies that there is a lot of scope for life insurance sector to develop in India. The financial performance of Life Insurance Corporation of India is better than private life insurance companies in India. The private life insurance sector has nearly grabbed 30% of the market share in terms of total premium income. LICs new business premium has fallen from 99.23% in 2000-01 to 65.08% in 2009-10. Unless Life Insurance Corporation of India is alive to the emerging trends, its performance may decline further. Hence, Life Insurance Corporation of India has to work with renewed vigor and enthusiasm so as to retain its market

share. The findings show a significant heterogeneity in the cost efficiency scores from 2000-01 to [Link] can be seen that Life Insurance Corporation of India has consistently secured a cost efficiency score of 1 in all the years from 2000-01 to 2009-10 and scored the highest rank for all the years under study. Thus Life Insurance Corporation of India has consistently been a cost efficient organization. While in the case of the private life insurance companies, the cost efficiency score has been inconsistent except for SBI Life insurance company which has secured a cost efficiency score of 1 in seven years out of ten years.

Conclusion
Insurance is an integral part of any personal financial plan. The type of insurance and the amount of coverage you obtain all depends on your unique financial and family circumstances, and must be evaluated carefully. When considering purchasing coverage, you should review all the potential risks and the financial impact of these risks on your financial health. This will help you determine what options to look for and what questions to ask. What you need to keep in mind is that you do not want to be underinsured or overinsured, which means you have to do your homework before you buy. And as with any type of financial product, you must read the fine print and consult with a competent advisor. Insurance is a form is risk management in which the insured transfers the cost of potential loss to another entity in exchange for monetary compensation known as the premium.

Insurance works by pooling risks. Because the number of insured individuals is so large, insurance companies

can use statistical analysis to project what their actual losses will be within the given class. This allows the insurance companies to operate profitably and at the same time pay for claims that may arise.

Underwriting is the process of evaluating the risk to be insured. This is done by the insurer when determining how likely it is that the loss will occur, how much the loss could be and then using this information to determine how much you should pay to insure against the risk. The insurance contract is a legal document that spells out the coverage, features, conditions and limitations of an insurance policy. Property and casualty insurance is insurance that protects against property losses to your business, home, or car and/or against legal liability that may result from injury or damage to the property of others. This type of insurance can protect a person or a business with an interest in the insured physical property against losses.

An auto insurance policy typically covers you and your spouse, relatives who live in your home and other licensed drivers to whom you give permission to drive your car. Homeowners insurance typically covers the dwelling (the structure), personal property and contents, and some forms of personal liability. The policy may cover direct and consequential loss resulting from damage to the property itself, loss or damage to personal property, and liability for unintentional acts arising out of the non-business, non-automobile activities of the insured and members of that insured's household. Umbrella insurance helps you protect your assets if you are [Link] you are worried that the liability insurance coverage you have through your auto or property policies is still not enough, you can consider adding an umbrella policy. Health insurance is a type of insurance that pays for medical expenses in exchange for premiums. The way it works is that you pay your monthly or annual premium

and the insurance policy contracts healthcare providers and hospitals to provide benefits to its members at a discounted rate.

An indemnity plan, sometimes called a fee-for-service plan, is a type of insurance that reimburses you according to a schedule for medical expenses, regardless of who provides the service. The HMO is the most common type of insurance policy people own and the one most frequently provided by employers. HMOs provide a wide range of comprehensive healthcare services to a group of subscribers in return for a fixed periodic payment. PPOs are a group of healthcare providers that contract with an insurance company, third-party administrators, or others (like employers) to provide medical care services at a reduced fee. A point of service plan is a hybrid plan that combines aspects of an HMO, PPO and indemnity plan. This type of plan is more flexible in that it allows you to decide at the time you need services to elect to use the POS plan's

physician to arrange in-network care (HMO feature), or to go outside the network or hospital and pay a higher portion of the cost.

Disability insurance can replace a portion of the salary you were making before you became disabled and unable to work after a serious injury or illness. Disability insurance providers rate their premiums based on your job and the level of risk involved in doing that job. The reason to buy long term care insurance is to protect your assets in case you need to pay for assisted living, home care or a nursing home stay. Life insurance provides you with the opportunity to protect yourself and your family from personal risk exposures like repayment of debts after death, providing for a surviving spouse and children, fulfilling other economic goals (such as putting your kids through college), leaving a charitable legacy, paying for funeral expenses, etc.