ARYABHATTA COLLEGE

UNIVERSITY OF DELHI

PROJECT ON:
LIFE INSURANCE

ORGANISATION SELECTED:
LIFE INSURANCE CORPORATION OF INDIA

PROJECT BY-

RAKSHIT SHARMA
ROLL NO. 17/BMS/049
COURSE: BMS
 DECLARATION

I hereby declare that the project entitled “LIFE INSURANCE”

submitted to Department of Commerce , Aryabhatta College ,
Delhi University is prepared by me . All the information
submitted herein is to the best of my knowledge.

RAKSHIT SHARMA
Roll No. 17/BMS/049
 PREFACE

The project entitled “Life Insurance“ will be covering basic idea

of life insurance and how LIC covers the same.

The field of insurance has taken a giant leap at the threshold

of twentieth century. Insurance has become an integral part of
life of man all over the globe. The proverb “Need is the mother
of invention” is proven equally right in case of insurance.

Insurance has already had a considerable impact on many

aspects of our society. This project on “Life Insurance” deals
with the various policies of life insurance available to the
customer.
 ACKNOWLEDGE.MENT

I would like to express my special thanks of gratitude to my teacher Ms.

Anchal Gupta as well as our principal Mr. Manoj Sinha who gave me the
golden opportunity to do this wonderful project on the topic “Life
Insurance”, which also helped me in doing a lot of Research and I came
to know about so many new things, I am really thankful to them.

Secondly I would also like to thank my parents and friends who helped
me a lot in finalizing this project within the limited time frame and Mr.
Purushotam Sharma, Developing Officer, LIC for providing me with the
knowledge of various life insurance policies.
 TABLE OF CONTENT

1. Introduction and Objectives

2. Review of Literature

3. Research Methodology

4. Data Analyses

5. Results and Findings

6. Conclusion

7. References and Bibliography

 INTRODUCTION
LIFE INSURANCE

Life Insurance, usually referred to as 'life assurance' insures the

insured against the happening of certain event, i.e., death through the
time when it may happen is uncertain. The life insurance contract
can be described as 'contingent contracts' because the loss of life
cannot be compensated and only a specified sum of money is paid if
the insured dies. In addition to this, life insurance is considered a
better way of making investment along with the benefits of
protection against the risks of death. Section 2 of the Indian
Insurance Act, 1938 has defined life insurance as: "Life Insurance
business is the business of effecting contracts upon human life.”

A life insurance contract may be defined as 'a contract whereby the

insurer, in consideration of a premium paid either in lump sum or in
periodic installments, undertakes to pay an annuity or a certain sum
of money, either on the death of the insured or on the expiry of a
certain number of years.

LIC

The Insurance Act 1938 was the first legislation governing not only
life insurance but also non-life insurance to provide strict state
control over insurance business. The demand for nationalization of
life insurance industry was made repeatedly in the past but it
gathered momentum in 1944 when
a bill to amend the Life Insurance Act 1938 was introduced in the
legislative Assembly. However, it was much later on the 19th of
January 1956 that life insurance in India was nationalized. About
154 Indian insurance companies, 16 non-Indian companies and 75
provident were operating in India at the time of nationalization.
Nationalization was accomplished in two stages; initially the
management of the companies was taken over by means of
an Ordinance, and later, the ownership too by means of a
comprehensive bill. The Parliament of India passed the Life
Insurance Corporation Act on the 19th of June 1956, and the Life
Insurance Corporation of India was created on 1st September, 1956,
with the objective of spreading life insurance much more widely and
in particular to the rural areas with a view to reach all
insurable persons in the country, providing them adequate financial
cover at reasonable cost.

Today LIC functions with 2048 fully computerized branch offices, 10

0divisional offices, 7 zonal offices and the corporate office. LIC’s
Wide Area Network covers 100 divisional offices and connects all
the branches through a Metro Area Network.

OBJECTIVES OF LIC

 Spread Life Insurance widely and in particular to the rural areas

and 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’ 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 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.
 Promote amongst all agent and employees of the corporation a
sense of participation, pride and job towards achievement of
corporate objective.
 REVIEW OF LITERATURE

This review of literature helps to identify and understand the implications

of different issues related to consumer behavior and life insurances in
India. A comprehensive review of related past studies helps the
researcher to adopt, modify and improve the conceptualization of
framework and provide a link with past approaches.

Khan, M.K. (1978)

Attempts to know the opportunities and prospects in the career of a life
insurance sector. He explains about what a good career is and how a
good career should be for selling of life insurance products. There is no
age barrier and it requires no previous occupational experience but one
must be a professional and capable of creating opportunities in building
personality.
The relationship of Life Insurance agent with clients is not temporary and
the service rendered has no substitutes. He also observes that life
insurance agent remains, in a sense, permanent server to the clients.

Ramesh Jain (1980)

Conducted a case study at Sagar branch, Calcutta, of Life
Insurance Company view the spread of life insurance in a particular area
and to channelize the mobilized saving for nation building activities.
Analyzing the processing of procurement of insurance business and
administration of Life Insurance
Company in branch level, the study also brings out the growth of total
new business and about 30% of Life Insurance Companies individual
assurance business originated from the rural sector - it adds to the
privilege of Life Insurance Company to contribute their investments to
many of the vital projects and schemes under 20 point programs. The
findings of the study were to establish servicing center to have continuous
interaction with the policyholders and the sagar branch has still greater
potentialities of expansion in rural area.

Rajkumar (1985)
Views that advertising is to influence a customer, who has a limited
spending power and it seems to operate through familiarizing spreading
news over cog inertia and image building improving market share,
educating, informative and to have staff support. As far as insurance
industry is concerned, misconception is a common problem and the pre-
testing revealed that most of the rich people are associated with insurance
and he viewed that the treatment of Life Insurance Company to the public
is always unfair.

Rajan Saxena (1986)

In his article entitled “Life Insurance Services” discusses various issues
relating to life insurance. The author insists on the importance of life
insurance and discusses on various strategies of life insurance.

RESEARCH METHODOLOGY
 TYPE OF RESEARCH-Exploratory research conclusive
o Primary data: through observation
as well as personal interview

o Secondary data: through journal,

research paper, monthly reports
and financial report.

 SAMPLING METHOD- through judgment and convenience

method.

 SAMPLING UNIT- LIC , Mehrauli, Delhi

 DATA ANALYSIS

After going through the LIC brochures and asking about the various
options that are available to an individual to take up a life insurance I
got to know about a lot of life insurance policies offered by LIC which
are as follows:

1.Endowment Plan: An endowment policy is a life insurance

contract designed to pay a lump sum after a specific term (on its
'maturity') or on death. Typical maturities are ten, fifteen or twenty
years up to a certain age limit. Some policies also pay out in the
case of critical illness.

 » LIC's Jeevan Utkarsh

 » Lic's Jeevan Pragati
 » Lic's Jeevan Labh
 » Lic's Single Premium Endowment Plan
 » Lic's New Endowment Plan
 » Lic's New Jeevan Anand
 » LIC's Jeevan Rakshak
 » LIC's Limited Premium Endowment Plan
 » LIC's Jeevan Lakshya
 » LIC's Aadhaar Shila
 » LIC's Aadhaar Stambh

2.Whole Life Plans: Whole Life plan is also called as straight life,
ordinary life. It remains throughout the insured whole lifetime
provided the premiums are paid. A certain aforementioned amount
is paid to the nominee in the event the insured dies. The
policyholder at any time withdraws the policy or borrows against it.
The maturity age for this policy is 100 years. If the insured lives
past the maturity age, the policy will become matured endowment.
The death benefit under this plan is tax-free.
 » LICs Jeevan Umang

3.Money Back Plans: In Money Back Plans, the money comes back
to the Life Insured after a specific interval of time as Survival
Benefit. However, if the Life Insured dies during the policy term,
then the Death Benefit would be paid to the nominee and the
policy would be terminated and no further money would be paid to
him on the intervals.

 » LIC's NEW MONEY BACK PLAN - 20 YEARS

 » LIC's NEW MONEY BACK PLAN - 25 YEARS

 » LIC's NEW BIMA BACHAT

 » LIC's NEW CHILDREN'S MONEY BACK PLAN

 » LIC's Jeevan Tarun

4.Term Assurance Plans: An endowment policy is a life insurance

contract designed to pay a lump sum after a specific term (on its
'maturity') or on death. Typical maturities are ten, fifteen or twenty
years up to a certain age limit. Some policies also pay out in the
case of critical illness. An endowment policy is a life insurance
contract designed to pay a lump sum after a specific term (on its
'maturity') or on death. Typical maturities are ten, fifteen or twenty
years up to a certain age limit. Some policies also pay out in the
case of critical illness.

 » LIC's Anmol Jeevan II

 » LIC's Amulya Jeevan II

 » LIC's NEW TERM ASSURANCE RIDER

 QUESTIONNAIRE

Q1) Is there any limit in the amount of insurance policy that I can
take?

Ans: No, there is no such limit. However having too many policies will
increase costs and it will difficult to manage them.

Q2) Why is LIC preferred by many?

Ans: Many due to its brand name prefer LIC and the trust people have in
it. Also it has one of the highest settlement ratios in India.

Q3) Are there any eligibility criteria for term insurance plan?

Ans: The eligibility criterion for term insurance plan varies

according to the insurers, the minimum age of entry is 18 years and the
maximum age limit is 65 years.

Q4) Can I surrender an insurance plan?

Ans: Yes, you can surrender an insurance plan that is to exit from a plan
before maturity. From this the surrender charges would be deducted
which varies from policy to policy. No charges are levied if the surrender
is done after five years.

Q5 )Do term insurance plan have an option to convert it to other

traditional plans?

Ans: The convertible option is provided to you in term insurance plan,

and you can convert it to the whole life insurance policy or the
endowment plan any time during policy tenure without additional
charges.
Q6) How to choose a best term plan?

Ans: To choose best term plan you should consider important factors
like:
a) How good is the insurance company

b) How much cover do you need

c) Check the claim settlement ratio

d) The factors of inflation in paying the premium and coverage

benefits

e) Compare the terms and conditions of various insurance companies

f) You can take two term insurance plans from two different
insurance companies; it will save you in case of rejection of claim
from one of either two companies

g) Do not just look for the low term insurance plan as they might be
an important factor but may have several conditions attached for
the time of claim.
 RESULTS AND FINDINGS

1. LIC offers large variety of policies for its customers

fulfilling their varies needs

2. It has one of the largest claim settlement ratios in India.

3. It employs over 10 lakh agents. Hence it helps in tackling

the unemployment effectively.

4. Insurance is a very important and necessary tool to

minimize risk in your life and a person should take life
insurance as per their needs.

5. As the government owns it, it has the sovereign guarantee

of the government of India.

6. It is advisable to get insurance early and to not take a lot of

policies, as it will become more difficult to pay premium as
well as to handle the same.
 CONCLUSION

“Fun is like life insurance; the older you get,

the more it costs. “
-Kin Hubbard

Whenever you decide to take a life insurance policy do so only after

conducting thorough checking of the various types of policies
available and after analyzing all the factors of these policies.

It is always recommended to take insurance policy early in your life

as it will be less expensive and also you can eliminate some degree of
risk that the support you provide to those dependent on you is
completely vanished.

LIC has proven to be a trustworthy insurance company with

various policies available to the customer to choose from. With all
new companies coming into the market LIC stands firm as one of
the most secure and most customer friendly company.
 REFERENCES AND BIBLIOGRAPHY

1. Khan, M.K., “Prospects of a Career in Life Insurance Business in

India - An Analysis, Indian Journal of Marketing, Volume 7, No. 6, Feb
1978, P. 23-31.

2.Ramesh Jain, A Project on “The Organization and Working of Life

Insurance Corporation of India: A Case Study of Sagar Branch,
Jabalpur”, Jan-June 1980

3.Rajkumar, “The Role of Insurance Advertising”, Indian Journal of

Marketing, Vol. 15, No.2, July 1985, P. 21-23.

4. Rajan Saxena, “Marketing of Life Insurance Services”, Yogakshema,

December 1986, P.15

5. www.policybazaar.com

6. www.wikipedia.com

7. www.moneycontrol.com

8. Essentials of Insurance and Risk Management by- Dr. P. K. Gupta