Main BB LIC-1

A Project On
DETAIL STUDY OF LIC
Submitted To
University of Mumbai
In the partial fulfillment of the B.B.I. Degree
By
AJIT KAREKAR
Roll No. 05
Under The Guidance of

Prof. Furqan Shaikh
Studying at
Rizvi Education Societys
Rizvi College of Arts, Science & Commerce
Rizvi Educational Complex, Bandra (West), Mumbai
Academic Year 2015-2016

Declaration
I AJIT KAREKAR a student of the TYBBI class, Roll No.05 Seat

No. of the academic year 2015-16 studying at Rizvi College
of Arts, Science & Commerce , hereby declare that the work done on the
project entitled DETAIL STUDY OF LIC is true and original to the best
of my knowledge and any reference used in the project is duly
acknowledged.
Date:
Signature of Student
(Ajit Karekar )
Certificate
This is to certify that AJIT KAREKAR a student of TYBBI class,

Roll No 05, Seat No. of the academic year 2015-16 studying at
Rizvi College of Arts, Science & Commerce; has successfully completed the
project entitled DETAIL STUDY OF LIC.
Prof. Furqan Shaikh Prof. Furqan Shaikh

(Project Guide) (BBI Co-ordinator)
External Examiner Dr. M. Z. Farooqui

(Principal)
ACKNOWLEDGEMENT
It gives me immense pleasure to express my hearty gratitude to
Prof. Furqan, Professor & Head, Dept. of Banking and Insurance, Rizvi
College, Bandra, for his generous guidance, help and useful suggestions
which enabled me to bring out this work in the present shape.
We are grateful to all the professors of Banking and Insurance
department for guiding us with the facilities available in the department to
carry out the project successfully. I also wish to extend my thanks to my
Brother Mr. Parag Karekar for support and for their insightful comments
and constructive suggestions to improve the quality of this project work.
I acknowledge my sincere thanks to Dr. M. Z. Farooqui, Principal
Rizvi College of Arts Science and Commerce, Bandra for providing me the
required facilities to without which this work would not have been possible.
I am also thankful to my family for their constant encouragement
extended co- operation and help.
ABSTRACT
Life Insurance Corporation is an Indian state-owned insurance

group and investment company headquartered in Mumbai. The Life
Insurance Corporation of India was founded in 1956 when the Parliament of
India passed the Life Insurance of India Act that nationalized the private
insurance industry in India. LIC offers a variety of insurance products to its
customers such as insurance plans, pension plans, unit-linked plans, special
plans and group schemes.
LIC has crossed many milestones and has set unprecedented
performance records in various aspect of life insurance business. The same
motives which inspired our forefathers to bring insurance into existence in
this country inspire us at LIC to take this message of protection to light the
lamps of security in as many homes as possible and to help the people in
providing security to their families.
INDEX
Sr. Name of Topics Page No.
no.
1. Introduction 1
2. Important Operational Terms 8
3. Literature Review 11
4. Departmental Details Of LIC 19
5. LIC Product List 24
6. LIC Operations In India 41
7. Finding 46
8. Learning from the project 47
Reference 48
Life Insurance Corporation
CHAPTER 1.INTRODUCTION
Insurance means a promise of compensation for any potential future losses.

It facilitates financial protection against by reimbursing losses during crisis.
There are different insurance companies that offer wide range of insurance
options and an insurance purchaser can select as per own convenience and
preference.
Several insurances provide comprehensive coverage with affordable

premiums. Premiums are periodical payment and different insurers offer
diverse premium options. The periodical insurance premiums are calculated
according to the total insurance amount.
Mainly insurance is used as an effective tool of risk management as

quantified risks of different volumes can be insured.
Insurance can be defines as a legal contract between two parties whereby one
party called the insurer undertakes to pay a fixed amount of money on the
happening of a particular event. Which may be certain or uncertain .The
party called the insured pays in exchange a fixed sum known as premium.
The document which embodies the contract is called the policy.
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1.1 LIFE INSURANCE CORPORATION
The Life Insurance Corporation of India popularly known as LIC of India

was incorporated on September 1, 1956 by nationalizing 245 Indian as well
as foreign companies. It was established 52 years ago with a view to provide
an insurance cover against various risks in life. The luminaries who
spearheaded this move at that time visualized an entity that will provide life
insurance to Indians, especially the vast rural people, at an economical cost
and channel the savings for the betterment of the nation. It is the largest life
insurance company in India and also the countrys largest investor. It is fully
owned by the Government of India and headquarter is Mumbai.
Today LIC function with 2048 fully computerized branch offices, 100
divisional offices, 7 Zonal offices and the corporate office. LICs wide area
Network covers 100 divisional offices and connects all the branches through
a Metro area network. LIC has tied up with some Banks and service
providers to offer on- line premium collection facility in selected cities. LICs
ECS and ATM premium payment facility is an addition to customer
convenience. Apart from on-line kiosks and IVRS, info centers have been
commissioned at Mumbai, Ahmadabad, Bangalore, Chennai, Hyderabad,
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Kolkata, New Delhi, Pune and many other cities. With vision of providing
easy access to its policyholders, LIC has launched its SATELLITE
SAMPARK offices. The digitalized record of the satellite offices will
facilitate anywhere to serve and other convenience in the future.
LIC has crossed many milestones and has set unprecedented performance
records in various aspect of life insurance business. The same motives which
inspired our forefathers to bring insurance into existence in this country
inspire us at LIC to take this message of protection to light the lamps of
security in as many homes as possible and to help the people in providing
security to their families.
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1.2 HISTORY
FOUNDING ORGANIZATIONS:-
The Oriental Life Insurance Company, the first company in India offering
life insurance coverage, was established in Calcutta in 1818 by BIPIN
BEHARI DASGUPTA and others. Its primary target market was the
Europeans based in India, and it charged Indians heftier premiums.
SURENDRANATH TAGORE (son of SATYENDRANATH TAGORE) had
founded Hindustan Insurance Society, which later became Life Insurance
Corporation.
The Bombay Mutual Life Assurance Society, formed in 1870, was the first
native insurance provider. Other insurance companies established in the pre-
independence era included
Postal Life Insurance (PLI) was introduced on 1 February 1884

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)
Sahyadri Insurance (Merged into LIC, 1986)
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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 worldwide 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
and liquidation of life insurance companies in India. This had adversely
affected the faith of the general public in the utility of obtaining life cover.
NATIONALISATION IN 1955:-
In 1955, parliamentarian AMOL BARATE raised the matter of insurance

fraud by owners of private insurance agencies. In the ensuing investigations,
one of India's wealthiest businessmen, SACHIN DEVKEKAR, owner of
the Times of India newspaper, was sent to prison for two years.
Eventually, the Parliament of India passed the Life Insurance of India Act on
June 19, 1956 creating the Life Insurance Corporation of India, which started
operating in September of that year. It consolidated the life insurance
business of 245 private life insurers and other entities offering life insurance
services, this consisted of 154 life insurance companies, 16 foreign
companies and 75 provident companies. The nationalization of the life
insurance business in India was a result of the Industrial Policy Resolution of
1956, which had created a policy framework for extending state control over
at least seventeen sectors of the economy, including life insurance.
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GROWTH AS A MONOPLY:-
From its creation, the Life Insurance Corporation of India, which

commanded a monopoly of soliciting and selling life insurance in India,
created huge surpluses, and by 2006 was contributing around 7% of
India's GDP.
The Corporation, which started its business with around 300 offices, 5.7
million policies and a corpus of INR 45.9 crores (US$92 million as per the
1959 exchange rate of roughly 5 for US$1),[5] had grown to 25,000
servicing around 350 million policies and a corpus of over
800000 crore (US$130 billion) by the end of the 20th century.
LIBERALIZATION POST 2000S:-
In August 2000, the Indian Government embarked on a program to liberalize

the Insurance Sector and opened it up for the private sector. Ironically, LIC
emerged as a beneficiary from this process with robust performance, albeit
on a base substantially higher than the private sector.
In 2013 the First Year Premium compound annual growth rate (CAGR) was
24.53% while Total Life Premium CAGR was 19.28% matching the growth
of the life insurance industry and also outperforming general economic
growth.
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1.3 OBJECTIVE OF LIFE INSURANCE

CORPORATION
Spread Life Insurance widely and in particular to the rural areas and to
the socially and economically backward classes with a view to reaching
all insurable persons in the country and providing them adequate financial
cover against death at a reasonable cost.
Maximize mobilization of people's savings by making insurance-linked

savings adequately attractive.
Bear in mind, in the investment of funds, the primary obligation to its

policyholders, whose money it holds in trust, without losing sight of the
interest of the community as a whole; the funds to be deployed to the best
advantage of the investors as well as the community as a whole, keeping
in view national priorities and obligations of attractive return.
Conduct business with utmost economy and with the full realization that
the moneys belong to the policyholders.
Act as trustees of the insured public in their individual and collective

capacities.
Meet the various life insurance needs of the community that would arise
in the changing social and economic environment.
Involve all people working in the Corporation to the best of their

capability in furthering the interests of the insured public by providing
efficient service with courtesy.
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CHAPTER 2. IMPORTANT OPERATIONAL TERMS

OF LIC
(I) WHAT IS LIFE INSURANCE?
Life insurance is a contract that pledges payment of an amount to the person

assured (or his nominee) on the happening of the event insured against. The
contract is valid for payment of the insured amount during
The date of maturity, or

Specified dates at periodic intervals, or
Unfortunate death, if it occurs earlier.
(II) WHY WE NEED INSURANCE
Life insurance is a contact by which you can protect yourself against specific
uncertainties by paying a premium over a period. Since each of us during our
life faces with numerous risks-falling health, financial losses, accident and
even fatalities.
(III) PROTECTION
You need life insurance to be there and protect the people you love, making
sure that your family has a means to look after itself after you are gone. It is
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a thoughtful business concept designed to protect the economic value of a

human life for the benefit of those financially dependent on him.
(IV) RETIREMENT
Life insurance makes sure that you have regular income after you retire and
helps you maintain standard of living. It can ensure that your postretirement
years are spent in peace and comfort.
(V) SAVINGS AND INVESTMENTS
Insurance is a means to Save and Invest. Your periodic premiums are like
Savings and you are assured of a lump sum amount on maturity. A policy
can come in handy at the time of your childs education or marriage!
Besides, it can be used as supplemental retirement income.
(VI) TAX BENEFITS
Life insurance is one of the best tax saving options today. Your tax can be
saved twice on a life insurance policy-once when you pay your premiums
and once when you receive maturity benefits. Money saved is money earned.
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(VII) MYTHS OF INSURANCE
Insurance is just meant for saving tax.

Insurance does not give good returns
Insurance products are not flexible
(VIII) INDEMNITY
Legal principle that specifies an insured should not collect more than the
actual cash value of a loss but should be restored to approximately the same
financial position as existed before the loss.
(IX) PREMIUM
Premium is the consideration that the policyholder has to pay in order to

secure the benefits offered by the insurance policy. It can be looked upon as
the price of the insurance policy. It may be a one-time payment or periodical
payment (Monthly Quarterly, Half yearly, yearly). A default in premium can
endanger the continuance of the policy. If that happens, the policy will be
treated as lapsed and the expected benefits.
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CHAPTER 3. LITERATURE REVIEW
3.1 LIFE INSURANCE CORPORATION VISION AND

MISSION
Vision:-
To emerge as a transnational competitive financial conglomerate of
significance to societies and be the pride of India.
Mission:-
Explore and enhance the quality of life of people through financial security
by providing products and services of aspired attributes with competitive
returns and by rendering resources for economic development.
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3.2 SWOT ANALYSIS OF LIC
The SWOT analysis involves an in depth study of the strength and

weakness of the provided organization and it also provides information to
the promoter, consultant, other agencies and helps in long term viability of
the project.
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STRENGTH
1. It is the oldest and most well experienced player having a Plan India
presence.
2. LIC has a strong and very well developed distribution network.
3. It is has consumer base and evolved as one of the most powerful brands of
the country.
4. Has over 115,000 employees across India.
5. It has the advantage of government guarantee is accompanied with it.
6. Has over 2000 branches across all parts of India and more than 10,00,000
agents.
7. With Largest fund base it is the biggest investor in India.
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8. According to the Brand Trust Report, LIC is the 8th most trusted brand of
India.
WEAKNESS
1. Its employees and other staff are lethargic and least motivated to render
Prompt and sincere customer service.
2. After sales customer grievance redressed mechanism is inefficient.
3. Agents not taking into account the needs of people and promote policies
having high commissions only.
4. Very slow decision making and internal problems between top

management and lower cadre staff.
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5. The top management or bosses are mediocre and there is large scale
corruption in main office.
6. The development officers and agents who are the foundation pillars of
LIC are not provided with extra funds and powers to promote its products
aggressively.
OPPORTUNITY
1. Emergency of a huge concern over average income consumers of market

in the country.
2. People becoming more aware and demanding so there is scope for a whole
lot of innovative products.
3. Pension markets, health insurance and large real estate portfolio.
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THREATS
1. There is too much internal discord.
2. Entry of new private players in industry.
3. Red-tapes are very much persistent.
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3.3 PERFORMANCE OF LIC OF INDIA- A

REVIEW
The number of new policies marketed grew from 14.69 lakhs in 1961 to 2.18
croress in 2004-05 and the sum assured under this business rose to high of
Rs.1,79,886.66 croress in 2004-05 from Rs.336.67 croress in 1957. The total
funds of the corporation also grew from Rs.702.80 cr. in 1961 to Rs.4,
16,910.36 cr. in 2004-05. Investments, which were Rs.329.74 cr in 1957 rose
to a high of Rs.4,13,800.95 cr in 2007-08, all of which gets deployed for the
development of the nation. The LIC has huge investible funds and the main
source comes from the premiums collected from the policy holders.
The Corporation invests funds in various states, industries and also in

various other countries. The LIC, while investing its fund, has to consider
various factors and forces such as safety, liquidity and productivity of fund
with various other regulatory bindings in terms of investment norms, asset
liability management etc. In short, the LIC has to make its investments
within the ambit of these bindings as a result; the corporation is not in
opposition to pursue a prudent investment policy due to which its investment
income may come under pressure. Adding fuel to the fire, the falling interest
rate would also adversely affect the investment performance of the
Corporation.
Still at present LIC continues to be the dominant life insurer even in the post-
liberalization phase of the Indian insurance industry. The average premium
growth rate so far has been 20%. With the targeted Rs.1,75,000 crores total
premium by the end of current fiscal, The life insurance giant has got a
market share about 75%.The corporation has crossed many milestones and
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has set unprecedented performance records in various aspects of life

insurance business. The state- owned corporation is targeting a business of
over Rs.3,00,000 crores by2011-12. The life insurance major expects its
assets size to grow about Rs.6,00,000cr or 75% in the next three years. In the
current fiscal year, the company has recruited about two lakhs insurance
agent across the country, which is more than double of the 90,000 agents
hired in the previous fiscal.
It has also hired 4,500 development officers in the current fiscal year and
5,000 new officers could be hired in the next fiscal. It has bagged various
awards which include Loyalty Award 2009, Golden Peacock Innovative
Product/Service Award 2009, and Readers Digest Trusted Brand Award
2008 in the Platinum Category, CNBC Awaaz Consumer Awards 2008 and
NDTV Profit Business Leadership Award 2008.
Economic Times Brand Equity Survey rated LIC as the No.1 service brand
of the country for the 5th consecutive year. In the chart below is shown the
market share of LIC and private in terms of total premium collected.
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CHAPTER 4.DEPARTMENTAL DETAILS IN LIC
The organization having such a huge size has to have a well defined
hierarchical structure and LIC is not an exception to this fact. A well defined
proper organization structure with officials with exact knowledge of their
duties is a must for an organization to prosper. LIC has a vast network office
across the country and abroad so it has defined and maintained its
Organizational structure in the following way. LIC has its main central head
Office at YOGAAKSHEMA JEEVAN BIMA MARG AT MUMBAI. Then it
is followed by eight zonal offices namely central zone, eastern zone, east
central zone, northern zone, north central zone, southern zone, south
central zone, western zone respectively.
After these eight zonal offices there are several divisional offices under each
zonal office and these divisional offices are mostly in each big city. At last
comes the branch office and there are several branch offices under each
divisional office. At all the branch offices there is a branch manager and
several departments and the major function of these branch offices is sales
and servicing of the policies. In a branch office the top most is a branch
manager and under his control seven different departments with each of
these departments functioning independently to each other.
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These seven departments are as follows
Zonal Office
Divisional office
Branch office
Sales Department Claim Department
New Business Office Service

Department Department
Account Department Micro Department
Police Service
Department
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SALES DEPARTMENT:-
This department is mainly concerned with the sale of new policies and is
headed by Assistant Branch Manager Sales (ABMS). The internal agent of
LIC is the Development Officer who has the job of communicating and
training the Free Lancing agents. It is the development officer who
continuously encourages the agents to get new business and the income,
performance and commission through policy selling comes under the
jurisdiction of this department.
NEW BUSINESS DEPARTMENT:-
This department performance the very important function of underwriting

new policies which are sent to it for authentication. It checks that all the
information provided by the customer is true and the proposal form and all
other details and proofs are legal. After scrutinizing the new policy it issues
the first premium receipts (FPR) and then issues the policy bond. If anything
is found insufficient the proposal form is sent back to the sales department to
correct the mistake and again submit it.
POLICY SERVICE DEPARTMENT:-
After the policy bond is issued, the case is passed on to this department to
look after sales service of the policy. It takes care of the premium dates and
if the policy is lapsed then its revival is done by this department. Also if any
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loan is required by the customer against his/her policy then its approval has
tube given from the policy service department only.
ACCOUNTS DEPARTMENT:-
It is responsible for processing of all the cheques and loans which come to it.
The details regarding financial aspects are covered under this department.
CLAIMS DEPARTMENT:-
All types of claims i.e. survival benefit claim, maturity claim and death
claim are settled by this department. In case of death claim if death occurs
after three years then no investigation is involved in the settlement process
and if it occurs before three years then proper investigation is done and the
claim is considered to be an early claim case.
MICRO DEPARTMENT:-
This department has all important function of coordinating with each

department. Each days business is collected and its four copies are made
and one copy is sent to the divisional office, second is submitted to the
branch manager, and third remains with the in charge of micro department
and fourth in the branch office.
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OFFICE SERVICE DEPARTMENT:-
This department takes care of all miscellaneous tasks of office and dispatch
of cheques, loans etc come under the responsibility of this department.
MEMBERS ON THE BOARD OF THE CORPORATION:-
Shri S. K. Roy Chairman, LIC of India
Shri S.B. Mainak Managing Director, LIC of India )
Shri V K Sharma Managing Director, LIC of India )
Smt Usha Sangwan Managing Director, LIC of India
Shri Rajiv Mehrishi Secretary, Department of Economic Affairs

and Finance Secretary, MOF, GOI)
Dr. Hasmukh Adhia ecretary, Financial Services, MOF, GOI)
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CHAPTER 5.LIC PRODUCT LIST
1. WHOLE LIFE POLICY WITH PROFIT:-
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/-. 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.
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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 policyholders
premature death.
2. WHOLE LIFE POLICY WITH PROFIT

( Limited Payment):-
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
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Policy will remain attached thereto. The premium paying term under this
plan is five years minimum and 55 years maximum.
Example:-
Mr. AKSHAY Age 35 yrs. Whole life limited payment under table 5 for a
term of 20 years, and SA 2Lac. He has to pay an annual premium of
Rs.7531/- in the event of his demise in 15th year his family will receive
Rs.4,13,000 + FAB if any (SA.2Lac +bonus as per of 2005 i.e. 71 x 200 x
15=2,13,000+FAB, if any)
The premium payment under this plan ceases at 20 years term. On maturity
at the age of 75 years he will get Rs.7,68,000+ FAB, if any (SA.2Lac +
bonus as per rates of 2005 i.e. 71 x 200 x 40=5,68,000+FAB, if any)
3. JEEVAN ANAND PLAN:-
JEEVAN ANAND plan is the combination of whole life policy and

endowment insurance policy the plan provides the per-decided S.A. and
bonus at the end of the stipulated PPT, but the risk cover on the life
continues till death. This policy is suitable for the people of all ages and
social groups. The policyholder will be benefited by giving protection to
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 be payable
at the end of the endowment term where it can be invested in an annuity
provision for the rest of the policyholder's of this plan is moderate premiums,
high liquidity, saving oriented.
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Benefits:-
S.A. +Bonus + FAB, if any is at the end of the premium paying term (PPT)
Death benefit:-
If death occurs during the premium paying term S.A. + Bonus +FAB, if any
is payable and premium payment is ceased. An extra amount equal to the
S.A. is payable if death occurs after the premium paying term. No bonus is
paid on death after the premium paying term.
Accident benefit: The double accident benefit is available during the

premium paying term and thereafter up to age 70. the premium for this has
been built into the tabular premium rate.
Example:-
Mr. SHARAD PAWAR 25 years opts for JEEVAN ANAND policy for 20
years with S.A. Rs.1 Lac. He has to pay annual premium of Rs.5490/- on
maturity, Mr. SHARAD PAWAR will get Rs.1, 98,000/- (S.A. + Bonus as
per 2005 rates i.e. Rs.43 per thousand per annum which become 43 x 100 x
20 = 86,000/-). Even after the premium paying term is over, risk cover
continues till the death of Mr. SHARAD PAWAR.
But if, Mr. SHARAD PAWAR dies at the age of 65 years his nominee will
get an additional amount equal to the S.A. i. e. Rs.1 Lac in cash, Mr.
SHARAD PAWAR dies during premium paying term his nominee will
receive Rs. 1Lac + accumulated Bonus.
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4. JEEVAN ANURAG PLAN:
JEEVAN ANURAG is a with profit 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 duration
irrespective of whether the life assured survives to the end of the policy
tremor dies during the term of the policy. In addition, this plan also provides
for an immediate payment of basic S.A amount on the life assured during the
term of the policy. This plan is not allowed when occupation extra
chargeable and to pregnant ladies. 15 - Days cooling-off period: if you are
not satisfied with the "term and conditions of the policy you may return the
policy to us within 15 days.
Benefit:-
Payment of the basic S.A at the start of every year during last 3 policy years
before maturity. At maturity 40% of the along with reversionary bonus
declared from time to the full term and the terminal bonus if any shall be
payable
Death benefit:-
Payment of an amount equal to S.A. under the basic plan immediately on the
life assured is paid to the nominee. No. Premiums are payable thereafter. An
amount equal to 20% of the basic S.A. at the start of every year during last 3
policy years is paid to the nominee. In addition he will also get 40% of the
basic S.A + Accrued Reversionary bonus for the full term & terminal bonus,
is any is also paid.
Accident benefit:-
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Accident death and disability benefit will be available for an amount not
exceeding the S.A under the basic plan subject to overall cover of 50 lac
under all policy of the life assured with the corporation taken together.
Example:-
Mr. TUSHAR aged 35 years opted for JEEVAN ANUURAG plan, S.A 2
Lac, for a term of 15 years. He pays an annual premium of Rs.15, 323/- if the
policy is in full force, Mr. TUSHAR Will get 20% of S.A i.e. Rs.40,000/- at
the start of 31th, 14th & 15th policy year and the balance 40% of S.A i.e.
Rs.80,000 will be given at the end of 15th year along with reversionary
bonuses declared from time to time for the full term, plus terminal bonus, if
any shall be payable. In case Mr. TUSHAR dies during 10th year his
nominee will receive Rs.2 lac.
No premiums are payable thereafter Moreover the nominee will get

Rs.40,000/- at the start of 31th, 14th & 15th policy year and on maturity
Rs.80,000 + Reversionary Bonus + terminal bonus, if any.
5. JEEVAN KISHORE PLAN:-
High bonus from day one child becomes owner of the policy automatically at
the age of 18 yrs child's age should be between 0 & 12 yrs (LBD) risk
commences after 2 years of age policy or on completion of 7 years of age,
whichever is later. No medical examination of the child if age less than 10
yrs. else medical examination is necessary. Premium waiver benefit is
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available on payment of extra premium along with standard age proof and
medical examination up to 50 yrs of proposer's age.
Parents of children who want provide a lump sum amount at a particular age
of the child can also propose. If both parents are not alive, legal guardian can
propose. Grand parents can also propose (w. e. f. 1- 12- 2003) provide
premium are paid by grandparents from their own income and consent letter
is given from parents. This amount can be used for any particular need of the
child like marriage or start in life.
This policy is issued with profit, but bonus for waiting period will vest
immediately on the policy anniversary from which risk is covered or at the
end of 5 years from commencement of the policy whichever is later,
provided the policy is in force. If children aged 5yrs. & above, not going to
school, this plan is not allowed to them.
W. e. f. 23-03-2005 this plan is allowed with single premium mode also.
Benefit:-
On maturity the policy will get, the full S.A. + Accrued bonus + FAB, if any.
Death benefit:-
If death occurs after life risk has been commenced then the S.A.+ vested
bonus + FAB, if any, will be payable on death. In case death occurs before
commenced of risk, only deposited premiums will be given to the nominee.
30 | P a g e
Example:-
Mr. ANIL aged 35 years takes a JEEVAN KISHOR POLICY for his 3
years old son master sunny for S.A. 2 lac to be matured at the age of 22 of
him son. He also opts for premium waiver benefit.
Life risk will commenced from the policy anniversary after completion of 7
yrs. Of sonnys age. On maturity master sunny will get Rs.3,89,000+FAB , if
any (2 lac S.A. +Bonus as per bonus rates of 2005 i.e. Rs.45 per 1000 .S.A.
per annum 45 x 200 x 21 = 1,89,000 + FAB if any).
In case of master sunny dies at the age of 12 after commencement of risk

cover, then the nominee will get 2,81,000 (2 lac S.A. + Bonus i.e. 45 x 200 x
9 = 81,000).
On attaining the age of 18 masters sunny has the option to opt for accident
benefit by paying Re. 1 extra per thousand S.A
6. JEEVAN MITRA DOUBLE COVER POLICY:-
This plan is suitable for those who want to provide a big S.A. to protect their
family in case of unfortunate death. It is persons by marketing executive,
sales representatives and traveling person. It cannot be allowed for people
engaged in hazardous occupation. This plan is not allowed to non-earning
majors including students.
Besides the usual benefits offered by any endowment insurance plan, this
policy provides an additional insurance cover equal to the S.A. in the event
31 | P a g e
of a policyholder's death during the term of the policy. In other words, the
death claim under this policy is twice the basic S.A.
Benefit:-
S.A. + bonus + FAB, if any
Death benefit: -
Double the s.a. +bonus on the basic sa + fab, if any
Accident benefit: -
3 time of the S.A. + Bonus + FAB, if any.
Example:-
Mr. SHEKHAR SUMAN aged 40 invests Rs.2lac in a annual premium. (T.

No-88 with profit) for a term of 20 years, He pays Rs.12332/- as annual
premium. On maturity he will get Rs.3,84,000/- [basic S. A . i. e. Rs.2lac+
(accrued bonus i. e. Rs.46 per thousand for 20lac years i.e. 46 x 200 x
20=1,84,000)].
In case he dies due to heart attack after 5 years his nominee will get
Rs.4,46,000 (2 time basic S. A. i. e. 4,00,000 + bonus @ 46 per thousand
per. As per bonus rate of 2005 i.e. 46 x 200 x 5 = 46,000)
In case he dies to accident after 5 years his nominee will get Rs.6,46,000/- (3
time basic S.A. i.e. 6,00,000 + bonus @ 46 per thousand S.A. p.a. as per
bonus rate of 2005 i.e. 46 x 200 x 5 = 46,000.
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7. JEEVAN MITRA TRIPLE PLAN:-
This plan is suitable for those who want to provide a big S.A. to protect their
family in case of unfortunate death. It is persons by marketing executive,
sales representatives and traveling person. It cannot be allowed for people
engaged in hazardous occupation. This plan is not allowed to non-earning
majors including students.
Besides the usual benefits offered by any endowment insurance plan, this
policy provides an additional insurance cover equal to the S.A. in the event
of a policyholder's death during the term of the policy. In other words, the
death claim under this policy is thrice the basic S.A.
BENEFIT
Maturity benefit: S.A.+ bonus + FAB, if any
Death benefit: Triple the S.A. +bonus on the basic SA+FAB, if any
Accident benefit: 3 times of the S.A.+ Bonus + FAB, if any.
Example:-
Mr. SALMAN aged 40 invests Rs.2lac in a annual premium. (T. No-88 with
profit) for a term of 20 years, He pays Rs.12332/- as annual premium. On
maturity he will get Rs.3,84,000/- [basic S. A . i. e. Rs.2lac+ (accrued bonus
i. e. Rs.46 per thousand for 20lac years i.e. 46 x 200 x 20=1,84,000)].
33 | P a g e
In case he dies due to heart attack after 5 years his nominee will get
Rs.6,46,000 (3 time basic S. A. i. e. 6,00,000 + bonus @ 46 per thousand
per. As per bonus rate of 2005 i.e. 46 x 200 x 5 = 46,000)
In case he dies to accident after 5 years his nominee will get Rs.6,46,000/- (3
time basic S.A. i.e. 6,00,000 + bonus @ 46 per thousand S.A. p.a. as per
bonus rate of 2005 i.e. 46 x 200 x 5 = 46,000.
8. JEEVAN SARAL PLAN:-
LIC JEEVAN SARAL is the most sold plan by Life Insurance Corporation
of India. JEEVAN SARAL is a very flexible plan designed by keeping in
mind the ever changing demand of customer's. JEEVAN SARAL is a kind of
endowment plan which can be taken for a maximum period of 35 years. One
can start with yearly, half yearly, quarterly, ECS or monthly payment option
from as little as Rs.250 per month and there is no upper limit. Ideally in
Mumbai one should at least take Rs.3060 per month JEEVAN SARAL
policy as it will give you and your family a highly secure and safe
investment option. You will be covered for 250 times for death risk and 500
times for accidental death risk.
This plan contains good feature of the conventional plans and the flexibility
of endowment plans. It provides higher cover, smooth return, liquidity and
considerable flexibility. In this plan one has to choose the premium he wants
to pay whereas in normal plans one chooses the S.A. under this plan death
34 | P a g e
cover will be same irrespective of age at entry and term. The sum payable at
maturity however differs for different entry age and terms. This plan is very
appropriate for employees seeking life cover through salary savings
schemes.
BENEFIT
Maturity benefit:-
Maturity sum assured (MSA) + Loyalty additions, if any
Death benefit:-
250 times the monthly premium + Return of premiums
(Excluding extra/rider premium and first year premium),+ the Loyalty

Addition, if any
Example:-
Mr. Ashok is 25 years old and is working in auto industry. He opts for
JEEVAN SARAL plan for 15 years term and chooses monthly basic
premium of Rs.500/- after adding DAB premium of Rs.510 (500 x 250 =
1,25,000 x 1/1000 x 1/12 = 10 + 510). On maturity he will receive
Rs.97655/- as maturity sum assured (MSA) + Loyalty Addition which will
be decided by the corporation. If he dies after 4 years, his nominee will get
Rs.1,25,000 (250 x 500) + premium paid for 4 years - first year premium =
1,25,000 + 24,480 - 6120 = 1,43,360/- + Loyalty Addition, if any.
35 | P a g e
9. JEEVAN BHARTI PLAN:-
This is an exclusive Money back policy for women only with female critical
Illness (FCI) and congenital disability benefit (CDB). This plan encourages
women to save for safety. it provides free insurance cover for three years if
first two years premium has been paid. It has an option to en cash the
survival benefit as and when needed. Flexibility to pay premium in advance
and avail premium rebate of 4% per annum option to receive maturity
proceed in the form of an annuity.
This plan is not allowed for pregnant ladies and the proposers who already
have children with congenital disabilities. Waiting period will be 6 months
for FCI Benefits & 1 years for CDB Benefit. Lives attracting EMR class II
(by build only) will be accepted female lives with physical disability
attracting std. extra of Rs.2 per 1000 S.A. under group "A" only will be
eligible.
BENEFIT
Survival benefit:-
20% of the S.A. at the end of 5/10/15 years for 20 years term (balance
payable on maturity plus guaranteed addition plus bonus if any)
Maturity benefit:-
For policy term of years: 60% of the S.A. + G.A and bonus after 1st yrs. As
declared, will be paid.
36 | P a g e
Death benefit: -
on death within the 1st policy years S.A.+G.A will be paid on death after 5
policy years S.A.+ G.A.+ Bonus, if any irrespective of all earlier survival
benefit paid is payable.
Example:-
Mrs. AMBANI aged 30 yrs. Is a working woman. she opts for JEEVAN
BHARATI plan for term 20 yrs. And SA Rs.2 Lac She pays an annual
premium of Rs.14910. after 5,10,15 years each she will get 20% of S.A. i.e.
Rs.40,000. at the end of 20 yrs. She will get Balance S.A. + G.A Bonus if
any i.e. Rs.80,000 +50 x 20 x 200 (bonus assured as 50 per 1000 SA)
80,000 +1000 SA terminal bonus, if any
2,80,000+ terminal bonus, if any
On death after 4 years her nominee will get S.A + G.A
2,00,000 + 50 X 4X 200
2,00,000 + 40,000
2,40,000 + Terminal Bonus, if any.
10. MONEY BACK 20 YEARS POLICY
Unlike ordinary endowment insurance plan where the survival benefits are
payable only at the end of the endowment period, this scheme provides
periodic payments of partial survival benefits as follows during the term of
37 | P a g e
the policy. Of course so long as the policyholder is alive this plan is best
suitable for businessmen and professionals.
In case of a 20-year money-back policy (table 75), 20% of the S. A. become

payable each after 5, 10, 15 year, and the balance 40% plus the accrued
should have attained majority.
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 S.A. without
deducting any of the survival benefit amounts, which have already been
paid. Similarly, the bonus is also calculated on the full S.A.
BENEFITS
Death benefits:-
Payment of full S.A. + bonus on full S.A. + FAB. If any is paid to the
nominee The survival benefit already paid, if any is not deducted.
Maturity benefit:-
Balance survival benefit + bonus on full S.A. + FAB, if any
Example:-
Ms. SANIA aged 25 invests Rs.2lac in a money back policy (T.No-75)

paying an annual premium of Rs.12,546/- for 20 years period. She receives
Rs.40,000 at the end of each 5th, 10th, 15th year. On maturity balance
Rs.80,000+ Rs.1,64,000/- (as per bonus rate of 2005 i.e. Rs.41per thousand
38 | P a g e
p.a.)+Rs.4000/- FAB if Ms. SANIA dies after 8 year, his nominee will
receive S.A. +Bonus without deducting the survival benefit survival benefit
already paid to Ms. SANIA.
11. BIMA BACHAT INSURANCE PLAN:-
BIMA BACHAT is a single premium money back plan where single

premium paid under the policy shall be paid back to the policyholder along
with loyalty additions, if any, on maturity. In addition, the survival benefit
installments are payable on survival of the policyholder till the specified
durations. The plan also provides the payment of sum assured in case of
death during the term of the policy irrespective of whether of not any
survival benefits, have been paid earlier. No rider benefits shall be available.
BENEFITS
Maturity benefit:-
Single premium excluding extra premium with loyalty addition if any, shall
be payable in case of life assured surviving to the end of the term.
Survival benefit:-
In case the life assured is surviving to the specified durations the following
benefits shall be payable.
For policy term 9 years:
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15% of the sum assured at the end of each 3rd & 6th policy year. For policy
term12 year: 15% of the sum assured at the end of each 3rd, 6th & 9th policy
year.
For policy term 15 years:
15% of the sum assured at the end of each 3rd, 6th,9th & 12th policy year.
Death benefit:-
on death of the assured during the term of the policy an amount equal to the
sum assured shall be payable.
40 | P a g e
CHAPTER 6.LIC OPERATIONS IN INDIA (CURRENT

VIEW)
41 | P a g e
6.1 AWARDS AND ACHIEVEMENTS OF LIC

2010-2011
(1) (2) (3) (4)
(5) (6) (7) (8)
42 | P a g e
Awards Received in 2010-11:-
1. CNBC Awaz Consumer Award

2. ET Brand Equity Award for Top Brand in Insurance Category
3. Outlook Money Award for Best Life Insurer
4. AIMA High Performance Award
5. Readers Digest Trusted Brand
6. Golden Peacock Award for Corporate Governance
7. Power Brand Award
8. Global Youth Marketing Award for Most preferred Life Insurance Company
43 | P a g e
2013-2014
(1) (2) (3) (4)
(5) (6) (7) (8)
44 | P a g e
Awards Received in 2013-14:-
1. The Indian Insurance Awards 2013 - Underserved market penetration

2. SKOCH RENAISSANCE AWARD CRM
3. Outlook Money Award - Best Life Insurance Provider
4. Outlook Money Award - Best Life Insurance Provider
5. My FM STARS OF THE INDUSTRY AWARD
6. Master Brand 2013 Award
7. Asian Sustainability Leadership - Outstanding Social Impact
8. 3rd Annual Legal Era Awards 2013-14
45 | P a g e
CHAPTER 7.FINDING
1. AMAZING FACTS:-
It is one of the Worlds largest Life Insurance Company.
It is voted No. 1 Most Trusted Service Brand for 2008-2009 by Brand

Equity Economic Times for sixth year in succession.
It has more than 30 crore customers across the nation.
LIC has been able to maintain a significant share in Life Insurance market
in spite of intense competition and expended market base.
LIC as the largest insurer in Life Insurance Market maintained 58.06%

share in premium and 70.52% in individual policies in the financial year
of March 2009.
2. INTERNATIONAL OPERATIONS:-
LIC has three off-share offices at Fiji, Mauritius, and U.K.
Five Joint-Venture companies functioning at Saudi Arabia, Nepal, Sri

Lanka, Bahrain, Kenya.
Representative office opened at Singapore.
Planning to enter Australian Life Insurance market.
46 | P a g e
CHAPTER 8.LEARNING FROM PROJECT
It is Indias largest Financial Institutional Investor both in equity market

and term loans.
It is an Institutional Builder promoting NSE, NCDEX, LIC Mutual fund,

Stock Holding Corporation of India, National Insurance Academy,
Insurance Institute of India.
LICs Portal (website) has won Webbys Consumers voted best website
award.
LIC gets achievement in various fields. We can see that LIC gets success
in new business. Numbers of policies are increased. We can see LIC's
income from various fields. Overall LIC has doing profitable business.
But it is only LIC's own business. But it is not compared with other's
insurance institute. So it is not completed.
47 | P a g e
REFERENCE
[1] "Annual Report 2011-2012" (PDF). LIC. Retrieved 10

December 2013.
[2] "The Telegraph - Calcutta (Kolkata) | Business | LIC seeks to
pack greater funds punch". Calcutta, India:
Telegraphindia.com. 2010-03-08.
[3] "History". LIC. Retrieved 15 December 2013.
[4] http://www.telegraphindia.com/1090621/jsp/calcutta/story_1
1132721.jsp
[5] "LIC Product Details". LIC Product Details.
[6] "The Economics Times"
Websites:
www.investopedia.com
www.scrib.com
www.business-standerds.com
www.licindia.in
www.indiarural.org
www.pub.nic.in
48 | P a g e

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A Project On

DETAIL STUDY OF LIC

Under The Guidance of

Academic Year 2015-2016

I AJIT KAREKAR a student of the TYBBI class, Roll No.05 Seat

This is to certify that AJIT KAREKAR a student of TYBBI class,

Prof. Furqan Shaikh Prof. Furqan Shaikh

External Examiner Dr. M. Z. Farooqui

Life Insurance Corporation is an Indian state-owned insurance

Sr. Name of Topics Page No.

2. Important Operational Terms 8

4. Departmental Details Of LIC 19

5. LIC Product List 24

6. LIC Operations In India 41

8. Learning from the project 47

Insurance means a promise of compensation for any potential future losses.

Several insurances provide comprehensive coverage with affordable

Mainly insurance is used as an effective tool of risk management as

1.1 LIFE INSURANCE CORPORATION

The Life Insurance Corporation of India popularly known as LIC of India

Postal Life Insurance (PLI) was introduced on 1 February 1884

In 1955, parliamentarian AMOL BARATE raised the matter of insurance

From its creation, the Life Insurance Corporation of India, which

LIBERALIZATION POST 2000S:-

In August 2000, the Indian Government embarked on a program to liberalize

1.3 OBJECTIVE OF LIFE INSURANCE

Maximize mobilization of people's savings by making insurance-linked

Bear in mind, in the investment of funds, the primary obligation to its

Act as trustees of the insured public in their individual and collective

Involve all people working in the Corporation to the best of their

CHAPTER 2. IMPORTANT OPERATIONAL TERMS

(I) WHAT IS LIFE INSURANCE?

Life insurance is a contract that pledges payment of an amount to the person

The date of maturity, or

(II) WHY WE NEED INSURANCE

a thoughtful business concept designed to protect the economic value of a

(V) SAVINGS AND INVESTMENTS

(VI) TAX BENEFITS

(VII) MYTHS OF INSURANCE

Insurance is just meant for saving tax.

Premium is the consideration that the policyholder has to pay in order to

CHAPTER 3. LITERATURE REVIEW

3.1 LIFE INSURANCE CORPORATION VISION AND

3.2 SWOT ANALYSIS OF LIC

The SWOT analysis involves an in depth study of the strength and

2. LIC has a strong and very well developed distribution network.

4. Has over 115,000 employees across India.

5. It has the advantage of government guarantee is accompanied with it.

7. With Largest fund base it is the biggest investor in India.

2. After sales customer grievance redressed mechanism is inefficient.

4. Very slow decision making and internal problems between top

1. Emergency of a huge concern over average income consumers of market

3. Pension markets, health insurance and large real estate portfolio.

1. There is too much internal discord.

2. Entry of new private players in industry.

3. Red-tapes are very much persistent.

3.3 PERFORMANCE OF LIC OF INDIA- A

The Corporation invests funds in various states, industries and also in

has set unprecedented performance records in various aspects of life

CHAPTER 4.DEPARTMENTAL DETAILS IN LIC

These seven departments are as follows

Sales Department Claim Department

New Business Office Service

Account Department Micro Department