A

PROJECT REPORT ON

CAMPARATIVE STUDY OF
LIFE INSURANCE CORPORATION OF INDIA

Submitted to:
Mr. AMIT GUPTA

PROJECT GUIDE & FACULTY

(MAHARAJA AGRASEN INSTITUTE OF
MANAGEMENT STUDIES)

Submitted By:
VIPUL
SUBMITTED IN PARTIAL FULFILMENT OF

BACHELOR OF BUSINESS ADMINISTRATION

(GENERAL 5th Semester)
MAHARAJA AGRASEN INSTITUTE OF MANAGEMENT STUDIES

(AFFILIATED TO GURU GOBIND SINGH INDRAPRASTHA

UNIVERSITY, DELHI)
CONTENTS

 CERTIFICATE OF COMPANY………………….……….. i CERTIFICATE

OF INSTITUTE…………………………..

ii ACKNOWLEDGEMENT…………………………………...iii
1. EXECUTIVE SUMMERY
2 INTRODUCTION

[Link] OBJECTIVE & METHODOLOGY

[Link] OF THE COMPANY

[Link] OF LIC
6. GROWTH OF PVT. LIFE INSURANCE COMPANIES IN THELAST 5

YEARS

7. CURRENT STANDING OF PVT. LIFE INSURANCE COMPANIES IN

URBAN SECTOR

8. ROLE OF FOREIGN COMPANIES IN INDIA

9. FINDINGS

10. IMPORTANCE OF JOINT VENTURE

11. CONCLUSION

12. RECOMMENDATIONS

13. BIBLIOGRAPHY

RESEARCH METHODOLOGY

To conduct the market research first of all it is necessary to create a research

design.

A research design is basically a blue print of how a research is to be conducted,

it may

include;
1.
Choosing the approach
2.
Determining the types of data needed.
3.
Locating the source of data.
4.
Choosing a method of data.
8

RESEARCH DESIGN
Basically there are 3 types of approaches used during the any research:
1.
Exploratory
2.
Descriptive
3.

Experimental.

During this researchD es criptive andExploratory approach is taken into

consideration because of the availability of relevant information to describe the

relationships between the marketing problem and the available information.

9

TYPES OF DATA USED:

Both primary and secondary data is used in the research.
Data Collection Methods
To conduct the market research the data is collected by two sources.
SECONDARY DATA

Secondary data is one which already exists and is collected from the published

sources.

The sources from which secondary data was collected are:

•
Newspapers and Magazines like Economic Times, Insurance Times, and
Insurance Post.
•
Internet
PRIMARY DATA
The primary sources of data refer to the first handinformation Primary data is
collected during the survey with the help of Questionnaires.
10

INTRODUCTION OF THE COMPANY

“LIFE INSURANCE CORPORATION OF INDIA (LIC)

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,

100

divisions and 7 zonal offices spread over the country. 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, 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
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African insurance market.

General Insurance:

General insurance business in the country was nationalized with effect from 1st

January, 1973 by the General Insurance Business (Nationalization) Act, 1972.

More

than 100 non-life insurance companies including branches of foreign companies

operating within viz., the National Insurance Company Ltd., The New India

Assurance Company Ltd., The Oriental Insurance Company Ltd., and The United

India Insurance Company Ltd. with head offices at Calcutta, Bombay, New Delhi
and

Madras, respectively. General Insurance Corporation (GIC) which was the

holding

company of the four public sector general insurance companies has since been

delinked from the later and has been approved as the "Indian Reinsurer" since

3rd

November 2000. The share capital of GIC and that of the four companies are

held by

the Government of India. All the five entities are Government companies

registered

under the Companies Act, 1956. The general insurance business has grown in

spread

and volume after nationalization. The four companies have 2699 branch offices,

1360

divisional offices and 92 regional offices spread all over the country. GIC and its

subsidiaries have representation either directly through branches or agencies in

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countries and through associate locally incorporated subsidiary companies in 14

other

countries. A wholly- owned subsidiary company of GIC, i.e. Indian

InternationalPvt.
Ltd. is operating in Singapore and there is a joint venture company, viz. Ken-

India

Assurance Ltd. in Kenya. A new wholly owned subsidiary called New India

International Ltd., UK has also been registered.

12

PRODUCTS OF LIC
Whole Life with Profits Plan – 002
Features:

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 proving 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

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/-. 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.
13

BENEFITS
SURVIVAL BENEFIT:

Sum assured plus accrued bonuses and the terminal bonuses, if any; on the

policyholder attaining age 80 years or on expiry of term of 40 years from the date

of

commencement of the policy whichever is later.

DEATH BENEFIT:
Sum assured plus accrued bonuses and the terminal bonuses, if any, on the
death of
the policyholder are paid to his/her nominees/heirs.
LIMITED PAYMENT WHOLE LIFE - PLAN 005 (WITH PROFITS)
Features:

This is the best form of life assurance for family provision since it enables the Life

Assured to pay all the premiums during the ordinarily vigorous and most

productive

years of life. He need not pay any premium in the later stages of life if and when

his

conditions might become adverse.

With Profits Limited Payments Policies do not cease to participate in profits after

completion of the premium paying period but continue to share in the periodical

Bonus Distribution until the death of the Life Assured.

The Without-Profit option is available under Table no. 3. If the policyholder pays

at

least 3 years' premiums and then discontinues paying any more premiums, a

reduced

paid-up assurance policy comes into force. Such a reduced paid-up Policy will

not be

entitled to participate in the profits declared. Thereafter, but such Bonus as has

already been declared on the Policy will remain attached thereto. The premium

paying
14
term under this plan is five years minimum and 55 years maximum.
BENEFITS
Survival benefits

If the Life AsZsured survives the premium paying period and the policy continues

in

full force, provided all premiums have been paid, but no further premiums are

required to be paid.
Death Benefits:
Sum Assured plus Bonuses accrued and vested in the policy.
Plan Parameters:
Minimum
Maximum
Entry age
12 (nearer birthday)
60
Sum assured (Rs.)
50000
NO LIMIT
Term (years)
5
55 (Max. Premo ceasing
age is 70)
Mode of Payment
Maximum premium paying periodPolicy loan
available
Yearly, half yearly
80 yrs. of age or 40 [Link]
yes
,quarterly, monthly
premium paying term from the
, salary saving
date of commencement whichever
Scheme
is later.
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ENDOWMENT WITH PROFIT PLAN - 014
FEATURES:
•
Moderate Premiums
•
High bonus
•
High liquidity
•
Savings oriented

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.
16

BENEFITS
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.20000 sum assured on anyone life) and the policy will continue to be in force.
Accident Benefit:

By paying a small extra premium of Rs. l 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. Every year the Life

Insurance

Corporation distributes its surplus among policyholder to 'with profits' polices in

the

form of bonuses. Substantial bonuses have been declared in the past after each

valuation of policy liabilities.

17

BENEFITS
Survival benefits:
Payment of full Sum' Assured + Vested Bonus + Final Additional bonus, if any.
Death Benefits:
Payment of full sum assured + Vested Bonus.
Plan Parameters:
Minimum
Maximum
Entry Age (years)
12
65
Sum Assured (Rs.)
50000
no limit
Term (years)
5
55
Mode Of Payment
Max Maturity Age
Policy loan available
Monthly, Quarterly,
75 years

yes

Half Yearly, Yearly,

Salary Saving Scheme.

18