FYBAF/ SEM I/ EFS/ UNIT 3/ INSURANCE/ RS

Insurance:
Insurance is a contract, represented by a policy, in which an individual or entity receives financial
protection or reimbursement against losses from an insurance company. The company pools clients'
risks to make payments more affordable for the insured.

Insurance policies are used to hedge against the risk of financial losses, both big and small, that may
result from damage to the insured or her property, or from liability for damage or injury caused to a
third party.

There is a multitude of different types of insurance policies available, and virtually any individual or
business can find an insurance company willing to insure them—for a price. The most common types
of personal insurance policies are auto, health, homeowners, and life. Most individuals in the United
States have at least one of these types of insurance, and car insurance is required by law.

Businesses require special types of insurance policies that insure against specific types of risks faced
by a particular business. For example, a fast food restaurant needs a policy that covers damage or
injury that occurs as a result of cooking with a deep fryer. An auto dealer is not subject to this type of
risk but does require coverage for damage or injury that could occur during test drives.

There are also insurance policies available for very specific needs, such as kidnap and ransom (K&R),
medical malpractice, and professional liability insurance, also known as errors and omissions
insurance.

Insurance Policy Components

When choosing a policy, it is important to understand how insurance works.

[Important: Three crucial components of insurance policies are the premium, policy
limit, and deductible.]

A firm understanding of these concepts goes a long way in helping you choose the policy that best
suits your needs.

Premium
A policy's premium is its price, typically expressed as a monthly cost. The premium is determined by
the insurer based on your or your business's risk profile, which may include creditworthiness. For
example, if you own several expensive automobiles and have a history of reckless driving, you will
likely pay more for an auto policy than someone with a single mid-range sedan and a perfect driving
record. However, different insurers may charge different premiums for similar policies. So finding
the price that is right for you requires some legwork.

Policy Limit
The policy limit is the maximum amount an insurer will pay under a policy for a covered
loss. Maximums may be set per period (e.g., annual or policy term), per loss or injury, or over the life
of the policy, also known as the lifetime maximum.

Typically, higher limits carry higher premiums. For a general life insurance policy, the maximum
amount the insurer will pay is referred to as the face value, which is the amount paid to a beneficiary
upon the death of the insured.

Deductible
The deductible is a specific amount the policy-holder must pay out-of-pocket before the insurer pays
a claim. Deductibles serve as deterrents to large volumes of small and insignificant
claims. Deductibles can apply per-policy or per-claim depending on the insurer and the type of
policy. Policies with very high deductibles are typically less expensive because the high out-of-pocket
expense generally results in fewer small claims.

PRIMARY AND SECONDARY FUNCTIONS OF INSURANCE

Insurance is defined as a co-operative device to spread the loss caused by a particular risk over a
number of persons who are exposed to it and who agree to ensure themselves against that risk. Risk
is uncertainty of a financial loss. It should not be confused with the chance of loss which is the
probable number of losses out of a given number of exposures.

It should not be confused with peril which is defined as the cause of loss or with hazard which is a
condition that may increase the chance of loss.

Finally, risk must not be confused with loss itself which is the unintentional decline in or
disappearance of value arising from a contingency. Wherever there is uncertainty with respect to a
probable loss there is risk.

Every risk involves the loss of one or other kind. The function of insurance is to spread the loss over a
large number of persons who are agreed to co-operate each other at the time of loss. The risk cannot
be averted but loss occurring due to a certain risk can be distributed amongst the agreed persons.
They are agreed to share the loss because the chances of loss, i.e., the time, amount, to a person are
not known.
Anybody of them may suffer loss to a given risk, so, the rest of the persons who are agreed will share
the loss. The larger the number of such persons the easier the process of distribution of loss, In fact;
the loss is shared by them by payment of premium which is calculated on the probability of loss.

In olden time, the contribution by the persons was made at the time of loss. The insurance is also
defined as a social device to accumulate funds to meet the uncertain losses arising through a certain
risk to a person insured against the risk.

The functions of insurance can be studied into two parts (i) Primary Functions, and (ii) Secondary
Functions.

Primary Functions:
(i) Insurance provides certainty:
Insurance provides certainty of payment at the uncertainty of loss. The uncertainty of loss can be
reduced by better planning and administration. But, the insurance relieves the person from such
difficult task. Moreover, if the subject matters are not adequate, the self-provision may prove costlier.

There are different types of uncertainty in a risk. The risk will occur or not, when will occur, how
much loss will be there? In other words, there are uncertainty of happening of time and amount of
loss. Insurance removes all these uncertainty and the assured is given certainty of payment of loss.
The insurer charges premium for providing the said certainty.

(ii) Insurance provides protection:

The main function of the insurance is to provide protection against the probable chances of loss. The
time and amount of loss are uncertain and at the happening of risk, the person will suffer loss in
absence of insurance. The insurance guarantees the payment of loss and thus protects the assured
from sufferings. The insurance cannot check the happening of risk but can provide for losses at the
happening of the risk.

(iii) Risk-Sharing:
The risk is uncertain, and therefore, the loss arising from the risk is also uncertain. When risk takes
place, the loss is shared by all the persons who are exposed to the risk. The risk-sharing in ancient
time was done only at time of damage or death; but today, on the basis of probability of risk, the
share is obtained from each and every insured in the shape of premium without which protection is
not guaranteed by the insurer.

Secondary functions:
Besides the above primary functions, the insurance works for the following functions:
(i) Prevention of Loss:
The insurance joins hands with those institutions which are engaged in preventing the losses of the
society because the reduction in loss causes lesser payment to the assured and so more saving is
possible which will assist in reducing the premium. Lesser premium invites more business and more
business cause lesser share to the assured.

So again premium is reduced to, which will stimulate more business and more protection to the
masses. Therefore, the insurance assist financially to the health organisation, fire brigade,
educational institutions and other organisations which are engaged in preventing the losses of the
masses from death or damage.

(ii) It Provides Capital:

The insurance provides capital to the society. The accumulated funds are invested in productive
channel. The dearth of capital of the society is minimised to a greater extent with the help of
investment of insurance. The industry, the business and the individual are benefited by the
investment and loans of the insurers.

(iii) It Improves Efficiency:

The insurance eliminates worries and miseries of losses at death and destruction of property. The
carefree person can devote his body and soul together for better achievement. It improves not only
his efficiency, but the efficiencies of the masses are also advanced.

(iv) It helps Economic Progress:

The insurance by protecting the society from huge losses of damage, destruction and death, provides
an initiative to work hard for the betterment of the masses. The next factor of economic progress, the
capital, is also immensely provided by the masses. The property, the valuable assets, the man, the
machine and the society cannot lose much at the disaster.

3) Other Functions:
(i) Insurance is a tool used for saving and investments:
By purchasing any Insurance Policy it becomes completion by the purchaser to make payment of the
insurance policy. This completion is blessing in disguise. Most of the policy buyers particularly
individuals do not know the purpose of payment of premium. They know only one thing that paying
premium is compulsory for them. The fact is otherwise true.

Once an insurance policy is purchased it assume the compulsory way of savings. Not only savings but
such funds collected by insurance companies are further invested to the benefit of insured.
Because it is compulsory it restricts the unnecessary expenses by the insured’s on one hand and on
the other hand insurance provides them the opportunity to avail Income tax exemption for the
amount paid as insurance premium. Some prudent people take up insurance as good investment
option also.

Such savings help growth in national economy.

(ii) It is one of sources to earn Foreign Exchange:

The business of insurance has crossed the national borders of any country. While traveling by Air one
needs aviation insurance. While on board at sea whether humans or cargo it needs marine insurance
which is also spread over across the boarders of any country. In simple words the insurance has
become an international business and is necessary also.

It being an international business any country is free to earn foreign exchange as much as per the
polices of insurance devised in a way to attract more and more foreign business. It is a good source of
earning foreign exchange for any country.

(iii) Risk Free Trade:

Insurance promotes export insurance, which makes the foreign trade risk free with the help of
different types of polices under marine insurance cover.

(iv) Subrogation:
In its most common usage refers to circumstances in which an insurance company tries to recoup
expenses for a claim it paid out when another party should have been responsible for paying at least a
portion of that claim.

Ongoing through the functions of insurance there appear that the business of insurance has inherited
certain character sticks as well.

OBJECTIVE OF INSURANCE COMPANIES

Insurance companies generate a profit when they sell more in policy dollar amounts than they pay
out in insured claims. As such, insurance companies have an objective of using a process called
underwriting to examine every insurance applicant. They then make a determination about whether
that client will be an asset or a liability, and make coverage offers accordingly. Insurance companies
also utilize deductibles - the amount of money you have to pay out-of-pocket before insurance kicks
in with the rest, and co-pays, or the portion of coverage you have to pay before insurance covers the
remainder.
Many types of insurance have qualifiers that affect eligibility and premiums. For example, if you are
95 years old and in poor health, a life insurance or health insurance policy may not be available -- if it
is, you will be required to take a physical exam and will likely be charged very high premiums.
Insurers are, after all, trying to mitigate their own risk in covering you. Likewise, if you have a
terrible driving record, with numerous collisions and citations, auto insurance will cost you
significantly more than someone who has never had an accident.

LIC LIFE INSURANCE PLANS & POLICIES: CHECK & COMPARE ONLINE

Life Insurance Corporation (LIC), the biggest public sector insurance company in India, provides a
wide range of life insurance policies to its customers. These LIC life insurance plans offer financial
support to the family in case of the sudden demise of the main earning member of the family.

Table of Contents:

 Types of LIC Life Insurance Plans

 LIC Life Insurance Plans
 How to buy LIC Life Insurance?
 Social Security Schemes
 Claim Process
 What is not covered in LIC Life Insurance? (Exclusions)
 How to Renew LIC Life Insurance Policy?
 Customer Care Details

Types of LIC Life Insurance Plans

Various types of LIC life insurance plans provide not only financial security to the policy holder and
the family in times of crisis, but also a means to create wealth in the long run. These policies can be
grouped under individual and group plans. Various types of individual plans are:

 Term plans
 Endowment plans
 Money Back plans
 Pension plans
 ULIPs
 Whole life plans
  Micro insurance plans

Documents Required to Buy LIC Life Insurance Plans

 Address Proof
 Income Proof
 Identity Proof
 Age Proof

LIC LIFE INSURANCE PLANS

LIC Individual Plans

Term Plans: LIC term insurance plans offer life cover at an affordable cost. If the policyholder dies
during the term of the policy, the nominee receives monetary benefits based on the insurance policy.
This helps them in rebuilding their life after the demise of the policyholder. But if the insured
survives the plan, the plan terminates and no body gets any benefit.

Name of (Max) (Min) Sum

Entry Age Policy Term
Plans Maturity Age Assured

LIC Anmol
18-55 years 5-25 years 65 years Rs. 6,00,000
Jeevan II

LIC Amulya
18-60 years 5-35 years 70 years Rs. 25,00,000
Jeevan II

LIC e-Term 18-60 years 10-35 years 75 years Rs. 25,00,000

Endowment Plans: Endowment plans take the term plans to the next level and provide maturity
benefits along with death benefits. Maturity benefit is the money given to the policyholder or the
nominee on the maturity of the insurance plan. Thus, these insurance policies also help in saving
money. In some plans, the insurance company also gives dividends to the policyholder.

(Max) (Min) Sum

Name of Plans Entry Age Policy Term
Maturity Age Assured
LIC Jeevan
12 years 12-20 years 65 years Rs. 1,50,000
Pragati

LIC Jeevan
8 years 16/21/25 years 75 years Rs. 2,00,000
Labh

LIC Single
Premium
90 days 10-25 years 75 years Rs. 50,000
Endowment
Plan

LIC New
Endowment 8 years 12-35 years 75 years Rs. 1,00,000
Plan

LIC New Jeevan

18 years 15-35 years 75 years Rs. 1,00,000
Anand

LIC Jeevan
8 years 10-20 years 70 years Rs. 75,000
Rakshak

LIC Limited
Premium
18 years 12/16/21 years 75 years Rs. 3,00,000
Endowment
Plan

LIC Jeevan
18 years 13-25 years 65 years Rs. 1,00,000
Lakshya

LIC Aadhaar
8 years 10-20 years 70 years Rs. 75,000
Shila

LIC Aadhaar
8 years 10-20 years 70 years Rs. 75,000
Stambh

LIC Jeevan 6 years 12 years 47 years Rs. 75,000

Utkarsh

Pension Plans: Various retirement plans by LIC help provide regular income to policyholders
during the retirement phase when the earning sources might dry up. Thus, the retirement plans help
carry on with life by providing a means to manage the daily expenses and other financial
requirements. LIC pension plans help maintain good standard of living even during retirement.

Policy (Max) Maturity (Min) Sum

Name of Plans Entry Age
Term Age Assured

Jeevan Depends on the

30 – 85 years 10 years NA
Akshay-VI policy

 Single Pay: Rs.

LIC Jeevan 5 – 35 1,50,000
20 – 60 years 65 years
Nidhi years  Regular Pay:
Rs. 1,00,000

Pradhan
Mantri Vaya
60 years 10 years 70 years NA
Vandana
Yojana

ULIPs:Unit Linked Insurance Plans (ULIPs) are insurance products that give coverage and a
means to create wealth through investment. Here a part of the premium is used for insurance, while
the rest is invested in funds.Thus, you can use this investment for fulfilling various financial
requirements of life.

Read About:What is Unit Linked Insurance Plan(ULIP), Coverage, Claim and Exclusions

Name of (Max) Maturity

Entry Age Policy Term (Min) Sum Assured
Plans Age

LIC (Policy term + 1) times

7 – 60 10 – 20 years 70 years
Endowment the annualized
Plus years premium

Micro Insurance Plans: These are regular insurance plans that cater to the insurance needs of
the under served sections of the country. It is ideal for people in the low-income section. The plans
offer them protection against specific perils such as the death of the breadwinner of the family, etc.
The premiums are generally lower than those of regular insurance plans and are proportional to the
cost of the risks involved.

Name of (Max) Maturity (Min) Sum

Entry Age Policy Term
Plans Age Assured

 10-15
years
(Regular
Premium
LIC New
)
Jeevan 18 – 55 years 65 years Rs. 10,000
 5 to 10
Mangal
years
(Single
Premium
)

LIC Bhagya
Lakshmi 18 – 55 years 7 – 15 years 65 years Rs. 20,000
Plan

Health Plans: Sedentary lifestyle and growing stress are leading to various health problems not
only among the adult population but also among children. Sudden medical expenses can drain the
savings you have. Thus, a health insurance plan helps manage emergency medical spendings.

Whole Life Plans: Whole life plans are an improvised version of the term insurance plans because
they offer protection and financial support to the nominee(s) of the policyholder after the latter’s
death. Some plans may also offer survival benefits to the policyholder.
 Policy (Max) Maturity (Min) Sum
Name of Plans Entry Age
Term Age Assured

LIC Jeevan 91 days-65 Depends on the

35 years 60 years
Arogya years policy

LIC Cancer 10-30

20-65 years 75 years Rs. 10,00,000
Cover years

Whole Life Policy (Max) Maturity (Min) Sum

Entry Age
Plan Term Age Assured

LIC Jeevan 90 days – 100 minus

100 years Rs. 2,00,000
Umang 55 years at entry

Money Back Plans: These insurance plans give back money at certain intervals to manage various
financial responsibilities. The money can be used for providing financial support to the family and
meeting various responsibilities. Here, the plan also provides maturity amount, i.e. lump sum money
to the policyholder in case he/she survives the plan till maturity.

LIC Group Plans

Large organisation or groups can also opt for insurance plans such as the LIC group plans under the
employer-employee and non-employer-employee groups.

Name of (Max) Maturity (Min) Sum

Entry Age Policy Term
Plans Age Assured

LIC Bima
14-50 years 16/20/24 years 66 years Rs. 1,00,000
Diamond

LIC New
Money Back
13-50 years 20 years 70 years Rs. 1,00,000
Plan – 20
Years
LIC New
Money Back
13-45 years 25 years 70 years Rs. 1,00,000
Plan – 25
Years

LIC New
15-66 years 9/12/15 years 75 years Rs. 35,000
Bima Bachat

LIC Jeevan 90 days – 12 25 years –

25 years Rs. 75,000
Tarun years entry age

LIC Jeevan 14/16/18/20

18 -55years 69 years Rs. 1,00,000,000
Shiromani years

(Max) (Min) Sum

Name of Plans Entry Age Policy Term
Maturity Age Assured

18 – 60 years
LIC Group Credit
5 – 35 years 65 years Rs. 4,00,000
Life Insurance (Minimum
50 members)

LIC Single 18 – 60 years

Rs. 5,000
Premium Group 2 – 7 years 65 years
(Minimum
Insurance (per member)
50 members)

18 – 75 years
LIC Group Leave 1 year Rs. 1,000
80 years
Encashment Plan (minimum
(renewable) (per member)
50 members)

LIC Group
18 – 75 years
Superannuation 1 year Depends on the
85 years
Cash (minimum policy
(renewable)
Accumulation Plan 50 members)

LIC One Year 8 – 75 years 1 year 80 years Rs. 1,000

Renewable Group (minimum 25 (renewable) (per member)
Term Assurance members)
Plan I

LIC One Year

8 – 75 years
Renewable Group 1 year Rs. 1,000
80 years
Term Assurance (minimum 25
(renewable) (per member)
Plan II members)

LIC Group 18 – 75 years

1 year Rs. 1,000
Gratuity Cash 80 years
(minimum 10
Accumulation Plan (renewable) (per member)
members)

LIC Social Security Schemes

The Government of India initiates social security schemes for the welfare of the under served
sections of the society. Aam Aadmi Bima Yojana (AABY) is a social security scheme to provide
coverage to the head of the family or one earning member in the family. The insured person does not
have to pay the premium, as the premium is paid annually by the Central Government and State
Government.

Name of Policy (Max) Maturity (Min) Sum

Entry Age
Plan Term Age Assured

Aam Aadmi
Bima 18- 59 years NA NA Rs. 30,000
Yojana

LIC Life Insurance Online Plans

Customers comfortable with using internet can buy LIC plans online. The plans available online
are: Jeevan Shanti, Jeevan Akshay VI, Cancer Cover, E-term, Navjeevan and Pradhan Mantri Vaya
Vandana Yojana.
Various schemes in GIC:

Ensuring the safety of your valued assets is your utmost concern. An asset can be your newly bought
car, bike, home, valuable metals like gold, silver, money etc. These items can be safeguarded in some
war or other. Here general insurance comes into the picture!

General Insurance or non-life-insurance provides insurance of property against fire, burglary, etc.
personal insurance such as Accident and Health Insurance, and liability insurance, which covers
legal liabilities. Errors and Omissions insurance for professionals, credit insurance, etc. are also
covered under the general insurance policy. There are top insurance companies in India that offer
comprehensive insurance policies to the individual.

TYPES OF GENERAL INSURANCE POLICIES:

There are different types of General Insurance Policies offered by various insurance companies in
India. They are discussed in detail below:

Motor Insurance
Motor insurance policy provides a complete and cost-effective insurance plans for two-wheeler and
car including commercial and private vehicles, with the optimum coverage.

Health Insurance
Health insurance policy is an insurance scheme that provides its customer with financial cover
against the medical cost for any individual or family.

Travel Insurance
Travel insurance policy is designed for the people to provide financial support in case of any mishap
such as the loss of luggage, passport or any other belongings while travelling.

Home Insurance
Home insurance policy is a type of insurance policy that offers cover for home and its contents to stay
safe and secure from the perils of damages and losses that might arise due to any unforeseen event.

List of General Insurance Companies in India

Hordes of insurance companies in India offer general insurance to cater to the needs of different
individuals. Here’s the list of the best insurance companies in India:

Apollo Munich Insurance (Claim Ratio - 62.47%)

When it comes to offering quality healthcare, Apollo has become synonymous in India by setting a
status quote in the national and international level. In order to ensure world-class health care easily
accessible to everyone, Apollo Hospital Group joined hands with Munich Health- a world-class
leader in health insurance, this joint venture is known as Apollo Munich. Since its inception, the
insurer never fails to satisfy its customers. One of the leading general insurance companies in India,
Apollo Munich comes with a handsome claim settlement ratio and claims settled within 30 days of
duration. Various insurance products offered by the insurer include health, motor, travel, personal
accident etc.

New India Assurance (Claim Ratio - 85.66%)

One of the best insurance companies in India, New India Assurance was founded by Sir Dorabji Tata
in 1919. It is a multinational general insurance company of India, which serves in 28 countries and
headquartered in Mumbai. The global business of the company is more than Rs. 22,270 Crore. In
India, it has 2452 offices, including more than 1339 micro offices. With over 230 products, the
insurer believes in providing comprehensive insurance solutions to its customers. The services
ranging from insurance in motor, health, travel, rural and marine, the company has been leading the
market as one of the best insurance companies in India.

National Insurance Company (Claim Ratio - 114.24%)

One of the best insurance companies in India, National Insurance Company started its operations in
the year 1906. Headquartered in Kolkata, the insurer offers insurance solutions into various
categories including motor, health, home, travel, business etc. Car insurance offered by the insurer is
quite famous in the market. It has been rewarded as the Best Auto Insurer in 2017 for car insurance.

The Oriental Insurance (Claim Ratio - 85.39% )

Headquartered in New Delhi, Oriental Insurance has been serving this sector since 1947 and has
made mark in the top insurance companies in India. With 31 regional offices and more than 1800
operational branches across India, the company offers complete insurance solutions to its customers.
Oriental Insurance is not only in India flourishing in India, but also has expanded its services Nepal,
Kuwait, and Dubai. Various insurance products offered by the insurer include: motor insurance,
mediclaim insurance, personal accident insurance, travel insurance, overseas mediclaim insurance,
fire insurance, shopkeeper’s policy, householder policy etc.

United India Insurance (Claim Ratio - 94.38%)

Started its operations in the year 1938, United India Insurance Company is one of the best insurance
companies in India. The insurer has its head office in Chennai. Since its inception, the company has
emerged leaps and bound to be one of the renowned insurers. Today, it has 18300 workforces spread
through 1340 branches across India offering insurance solutions to around 1 Crore policyholders.
Ranked amongst the top insurance companies in India, this insurer has a variety of insurance
products including motor, health, personal accident, travel, shopkeeper’s insurance etc. Among its
other product category, there are fire insurance, marine insurance, liability insurance, industrial
insurance, credit, micro insurance etc.

Bajaj Allianz General Insurance (Claim Ratio - 66.72%)

Bajaj Finserv Limited and Allianz SE joined hands in the year 2001 and formed Bajaj Allianz General
Insurance Company. The services offered by the company are IRDA certified and cater to the various
insurance needs of the people. This makes it one of the best insurance companies in India. The
insurer offers insurance solutions in the both life and non-life category. The most famous products
include health, travel, motor, home, life insurance etc.

Tata AIG Insurance (Claim Ratio - 71.12% )

Headquartered in Mumbai, TATA AIG General Insurance was founded in the year 2001 and is now
counted in the best insurance companies in India. The company is a result of the collaboration with
American International Group and is considered among the best insurance companies. The insurer
introduced a range of innovative products to cater to the different needs of its customers. Tata AIG is
famous for motor insurance, health insurance, and travel insurance. It also offers insurance to
Private Client Group, which includes clients like artists, entrepreneurs and royal families.

HDFC General Insurance (Claim Ratio - 74.36%)

A joint venture between HDFC Ltd., Housing Finance Institution in India and ERGO International
AG, the primary insurance entity of Munich Re Group, HDFC General is one of the most popular and
best insurance companies in India. The insurer offers complete insurance solutions by categorising
its products into motor, health, travel, home in the personal insurance space while property, marine,
liability insurance into corporate insurance space. In the year the company merged into L&T General
Insurance. With 120+ branches and more than 3000 employees, the insurer has its presence in more
than 106 cities across India.

Reliance General Insurance (Claim Ratio - 84.71%)

With its 139 branches and more than 28,900 intermediaries all over the country, Reliance General
Insurance is one of the renowned names in the list of best insurance companies in India. The
insurance products offered by the insurer can be categorised into health travel, motor, home marine,
etc. The insurer doesn’t limit itself to insurance and claims but also encourages the people to follow a
healthy standard of living. The company believes in making affordable insurance accessible to all.

IFFCO Tokio General Insurance Company Ltd (Claim Ratio - 82.89%)

Laid its foundation stone in the year 2000, IFFCO Tokio is collaboration between Tokio Marine,
Farmer Fertilizers Co-operative and Nichido Fire Group, a famous fire insurance group in Japan.
Since its inception, the insurer has been serving with various non-life insurance products including
health, motor, home, travel, SME etc. and is now counted amongst the best insurance companies in
India.

Future Generali General Insurance Company Ltd (Claim Ratio - 75.72%)

Future Generali India is a joint venture between Generali Group and Future Group. The company
provides comprehensive insurance solutions through a range of personal, retail, commercial and
rural insurance products. Incorporated in 2007, the company was formed with the motive to help its
clients to mitigate their financial needs. Over 15 lakh customers, the insurer claims to have settled
around 2,10,000 claims every year. Marking its presence in more than 125 cities in India the various
insurance products of the insurer, it offers motor, health, travel, home, PMFBY, lifestyle,
commercial, rural etc.

Liberty General Insurance (Claim Ratio - 69.60%)

Liberty General Insurance has started its operations in the year 2013. It is a joint venture between
Liberty Citystate Holdings PTE Ltd, Liberty Industries Limited and Liberty Mutual Insurance Group.
The insurer, being one of the best insurance companies in India strives for providing retail,
commercial and industrial insurance solutions. Insurance products like car insurance, two-wheeler
insurance, commercial insurance, and health insurance are among the sought-after products in the
market.

Max Bupa Health Insurance Company (Claim Ratio - 50.19%)

Max India Limited and the UK based healthcare services expert, Bupa joined hands to form Max
Bupa Health Insurance Company. With 29 million customer-bases in over 190 countries, the
insurer’s vision is to become the most admired health insurance company in India. The company
specialises in both health and insurance related services including hospitals, clinical research and life
insurance and ranks in the list of the best insurance companies in India.

Cholamandalam MS General Insurance (Claim Ratio - 50.19%)

Formed as collaboration between Murugappa Group and Mitsui Sumitomo Insurance Company
Limited, Japan, Cholamandalam MS General Insurance offers a range of insurance products to cater
to the different needs of the individual. The insurance products offered by the company can be
categorised into health insurance, motor insurance, personal accident insurance, travel insurance,
marine insurance, liability insurance etc. With 87 branches and over 34,000 agents across India, the
company claimed to achieve GWP of Rs. 41,026 million last year.

ManipalCigna Health Insurance Company Ltd

Formerly known as CignaTTK Health Insurance Company, ManipalCigna Health Insurance
Company Limited is collaboration between Manipal Group, a leader in healthcare delivery and Cigna
Corporation, a global health services company. With the motive of spreading wellness and good
healthcare, ManipalCigna offers a handful of insurance products ranging from health, travel,
personal accident, SME, insurance for employer-employee, and non-employer-employee. The
insurer offers quality healthcare and safeguards long term financial goals of its users and hence is
one of the leading and best insurance companies in India.

Star Health and Allied Insurance (Claim Ratio - 61.76%)

Commenced its operations in the year 2006, Star Health and Allied Insurance company has spread
its services in health insurance, overseas medical insurance, and personal accident Insurance. The
insurer is famous for its service excellence. The insurer offers a wide range of insurance products,
whole-heartedly dedicated to health insurance. With a decent claim settlement ratio it ranks amongst
the best insurance companies in India.

Go Digit General Insurance (Claim Ratio - 93.95%)

India’s first digital insurer backed by Fairfax, Digit General Insurance is also known as Go Digit. The
insurer offers a range of non-life insurance products in the category car, two-wheelers, travel, health,
home and mobile insurance. The insurer has tie-ups with market leaders such as Policybazaar.com,
PayTM, Tanishq, and Cleartrip to ensure a wider audience.

Raheja QBE General Insurance Company Ltd (Claim Ratio - 76.46%)

Raheja QBE is the joint venture of Prism Cement Limited, India and QBE Holdings (AAP) Pty
Limited, a wholly owned subsidiary of QBE Insurance Group Limited. Headquartered in Mumbai,
the insurer received its Certificate of Registration from IRDA in 2008 and is now considered as one
of the best insurance companies in India. Since then, it has been serving the industry with an A+
rating for excellence. The various insurance products offered by the insurer include Health
insurance, corporate insurance, health insurance, motor insurance etc.

Religare Health Insurance (Claim Ratio - 51.97%)

Awarded as the ‘Best Health Insurance Company’ at the ABP News-BFSI Awards & ‘Claims Service
Leader of the Year, Religare Health Insurance currently offers insurance products in the retail
segment for health insurance, personal accident, critical Illness, top-up coverage, international travel
insurance and maternity insurance along with group health insurance and group personal accident
insurance for corporate houses.

Royal Sundaram General Insurance Co. Limited (Claim Ratio - 80.41%)

Royal Sundaram General Insurance, formerly known as Royal Sundaram Alliance Insurance, is the
first of its kind to be licensed in October 2000 under IRDA. It holds a rank in the list of best
insurance companies in India. The insurer was initially a joint venture of Sundaram Finance, a
famous non-banking institute and other Indian Shareholders. Ageas Insurance International N.V.
acquired 40% of the equity stake and left 10% for Indian Shareholders. The insurer offers a range of
insurance products with over 200 employees and 143 branches across the country. The most sought-
after products include-car, health home, travel, bike, personal accident, commercial vehicle, business
etc.

SBI General Insurance Company Ltd (Claim Ratio - 71.47%)

Founded in the year 2010, SBI General Insurance is a joint venture between two financial giants -
State Bank of India (SBI) and Insurance Australia Group (IAG). The insurer offers a range of
insurance products in commercial and retail space at affordable premiums and ranks amongst the
best insurance companies in India. The comprehensive range of products includes- health, motor,
personal accident, travel, home insurance etc.

Shriram General Insurance Company Ltd (Claim Ratio - 93.75%)

The insurance company is the result of the collaboration between Joint Venture between Shriram
Capital Ltd. and Sanlam Limited (South Africa). The insurer started its operations in 2012. The
company believes in providing comprehensive insurance solutions through its innovative products in
the category car, two-wheelers, travel, home, personal accident, commercial vehicle insurance,
business insurance etc.

Bharti AXA General Insurance Company (Claim Ratio - 82.97%)

Bharti AXA General Insurance Company Ltd. is a collaboration of AXA – world pioneer in financial
protection and Bharti Enterprise – a leading Indian business group. Established in 2008, the general
insurance company is licensed with Insurance Regulatory and Development Authority of India
(IRDA). The insurance provider offers a wide range of general insurance products including Health,
Motor, Home, Travel, etc.

Universal Sompo General Insurance Company (Claim Ratio - 56.30%)

Universal Sompo General Insurance Company Ltd. is a private-public joint venture between three
public-sector banks namely, Indian Overseas Bank (IOB), Allahabad Bank, and Karnataka Bank;
Dabur India Ltd. – one of the leading FMGC Companies of India, and Sompo Japan Nipponkoa – a
private Japanese insurance company based out in Tokyo. Sompo is Fortune 500 Company that has a
capital of 70 Billion Yen. Universal Sompo got 5th position in the list of top 15 for providing general
insurance products as per a survey conducted by ICMR-BFM.

UNIT TRUST OF INDIA: OBJECTIVES, FUNCTIONS AND SCHEMES

Unit Trust of India (UTI) is a statutory public sector investment institution which was set up in
February 1964 under the Unit Trust of India Act, 1963.
UTI began operations in July 1964. It provides opportunity for small-savers to invest in areas where
their risk is diversified.

The Unit-holders, if necessary, can sell their units to UTI at the prices determined by UTI. One of the
attractions is that the investment in UTI has an income-tax rebate and the income from the UTI is
exempted; from income-tax subject to certain limits.

Objectives:
The primary objectives of the UTI are:
(i) To encourage and pool the savings of the middle and low income groups.

(ii) To enable them to share the benefits and prosperity of the industrial development in the country.

Organisation and Management:

UTI was established with an initial capital of Rs. 5 crore, contributed by the RBI, LIC, SBI and its
subsidiaries and scheduled banks and financial institutions. The initial capital of Rs. 5 crore was
divided into 1,000 certificates of Rs. 50,000 each. To supplement its financial resources, the trust
can borrow from the Reserve Bank of India, the amount being repayable on demand’ or within a
period of 18 months.

UTI is managed by a Board of Trustees, consisting of a chairman and four members nominated by
Reserve Bank of India, one member nominated by LIC, one member nominated by the State Bank of
India, and two members elected by the contributing institutions.

Functions of UTI:
The UTI functions are discussed below:
(i) To accept discount, purchase or sell bills of exchange, promissory note, bill of lading, warehouse
receipt, documents of title to goods etc.,

(ii) To grant loans and advances.

(iii) To provide merchant banking and investment advisory service.

(iv) To provide leasing and hire purchase business.

(v) To extend portfolio management service to persons residing outside India.

(vi) To buy or sell or deal in foreign exchange dealings.

(vii) To formulate unit scheme or insurance plan in association with or as agent of GIC.

(viii) To invest in any security floated by the Central Government, RBI or foreign bank.

Activities of UTI:
The UTI can sell and purchase the units issued by it, investing, acquire, hold or dispose off securities.
Keep money on deposit with the scheduled banks and undertake related functions incidental or
consequential to that. All the units issued by the UTI are of the value of Rs. 10 each. These units were
put on sale at face value and thereafter at prices fixed daily by the UTI. Units can be purchased in ten
or multiples of ten.

Schemes of UTI:
The familiar schemes of UTI are given below:
(i) Unit scheme—1964.

(ii) Unit Linked Insurance Plan—1971.

(iii) Children Gift Growth Fund Unit Scheme—1986.

(iv) Rajyalakhmi Unit Scheme—1992.

(v) Senior Citizen’s Unit Plan—1993.

(vi) Monthly Income Unit Scheme.

(vii) Master Equity Plan—1995.

(viii) Money Market Mutual Fund—1997.

(ix) UTI Growth Sector Fund—1999.

(x) Growth and Income Unit Schemes.

Advantages of Unit Trust:

The advantages of Unit Trust are:
(i) The investment is safe and the risk is spread over a wide range of securities.

(ii) The Unit-holders will be getting regular and good income, as 90 percent of its income will be
distributed.
(iii) Dividends up to Rs. 1,000 received by the individual are exempt from income-tax.

(iv) There is a high degree of liquidity of investment as the units can be sold back to the trust at any
time at prices fixed by trust.

ROLE OF UTI