LIC: A STUDY OF ITS POLICIES
-
Upload
mohit-bhansali -
Category
Documents
-
view
223 -
download
0
Transcript of LIC: A STUDY OF ITS POLICIES
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
1/34
Project Report on
LIC- A Study of Its Policies
Submitted in the partial fulfillment of the award of the degree of
B.Com. (H) 3rd yr paper no. XXXVII.
Submitted to:
Ms. Tanusree Jain Vikas Jindal
Roll No. 717B.Com. (H) 3rd yr.
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
2/34
Declaration
I Vikas Jindal hereby declare that this project report entitled LIC-A STUDY OF ITS
POLICIES is based on original research work carried out by me under the guidanceof Ms. Tanusree Jain in lieu of Paper No. XXXVII B.Com . (H) 3rd yr. Ramjas College,
University of Delhi. I have duly acknowledged all the resources used by me in the
preparation of this project report.
Signature of Mentor Vikas Jindal
Roll No. 717
B.Com. (H) 3rd yr.
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
3/34
Acknowledgement
I feel immense pleasure in taking opportunity to express my sincere indebtednessand deep sense of gratitude towards my academic mentor Ms. Tanusree Jain for herconstant guidance and valuable advice throughout the project.
I would like to thank teacher -in-charge and commerce faculty of RamjasCollege for their constant cooperation and encouragement. I wish their friendlyapproach towards me forever.
Vikas Jindal
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
4/34
INDEX
Chapter No. Title Page No.1. Introduction
2. LIC and its history
3. Products offered by LIC
3.3.1 Endowment Plan
3.3.2 Term Plan
3.3.3 Whole Life Plan
3.3.4 Pension Plan
4. Analysis of lic policies
5. Conclusion
6. References
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
5/34
CHAPTER- 1
INTRODUCTION
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
6/34
Introduction of Insurance
In law and economics, insurance is a form of risk management primarily
used to hedge against the risk of a contingent, uncertain loss. Insurance
is defined as the equitable transfer of the risk of a loss, from one entity toanother, in exchange for payment. An insurer is a company selling the
insurance; an insured, or policyholder, is the person or entity buying the
insurance policy. The insurance rate is a factor used to determine the
amount to be charged for a certain amount of insurance coverage, called
the premium. Risk management, the practice of appraising and
controlling risk, has evolved as a discrete field of study and practice.
The transaction involves the insured assuming a guaranteed and known
relatively small loss in the form of payment to the insurer in exchange for
the insurer's promise to compensate (indemnify) the insured in the caseof a financial (personal) loss. The insured receives a contract, called
the insurance policy, which details the conditions and circumstances
under which the insured will be financially compensated.
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
7/34
Background
The problems in the insurance industry stemmed mainly from the
introduction in the early 1990's of new insurance products which offeredcustomers not only life insurance products but investment opportunities.
The new products, popularly known as investment or lump-sum policies,allowed the insurance companies to take in deposits under the guise ofinsurance premiums. A small amount of the premiums would go towardslife insurance, with the majority being used mainly to invest in real estate,
stocks, bonds and securities.
Policyholders, who were in effect investors, received a variable return ontheir investment on a monthly basis and if they did not touch their policiesfor three years, did not have to pay tax on the interest.
Prudent management required that insurance companies keep liquidassets to meet withdrawal demands of their clients, should policyholdersdecide to surrender their policies. However this was not the reality.Policyholders funds were tied up in long term investments and poorly
performing funds.
As such, when policyholders surrendered their investment policies or madewithdrawals the companies had liquidity problems. In simple terms, they
had no cash with which to meet demands. Increasingly, they turned to twostrategies to ease their cash crunch both of which began to deepen the
problem they faced.
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
8/34
PURPOSE OF INSURANCE
The basic purpose of insurance is to anticipate catastrophic losses thatcould financially impair your future. Insurance should not be purchased forsmall exposures as the cost of premiums i s prohibitive and may waste
dollars you'll need to cover your major exposures. Three basic proceduresfor determining your insurance needs are to
1. eliminate or reduce your risk by properly managing maintenance,repair, training, and safety programs;
2. assume the risk yourself by paying small losses and buying highdeductibles; and
3. transfer the risk by buying the proper amounts of insurance tailored
to your specific needs.
A small business cannot operate without insurance. It allows owners to
minimize risk of loss from circumstances beyond their control. The first stepis to identify the risks of the business that need to be covered and
determine the largest amount of possible loss.
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
9/34
CHAPTER- 2
LIC AND ITS HISTORY
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
10/34
ABOUT LIC
Every day they wake up to the fact that more than 250 million lives are part of our
family called LIC. They are humbled by the magnitude of the responsibility we carry
and realise the lives that are associated with us are very valuable indeed. Though
the journey started over five decades ago, they are still conscious of the fact that,
while insurance may be a business for us, being part of millions of lives every day for
the past 52 years has been a process called TRUST, A True Saga of Trust.
OBJECTIVES OF LIC
y 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 coveragainst death at a reasonable cost.
y Maximize mobilization of people's savings by making insurance -linked savings
adequately attractive.
y Bear in mind, in the investment of funds, the primary obligation to its
policyholders, whose money it holds in trust, without losing sigh t 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.
y Conduct business with utmost economy and with the full realization that the
moneys belong to the policyholders.
y Act as trustees of the insured public in their individual and collective
capacities.
y Meet the various life insurance needs of the community that would arise in the
changing social and economic environment.
y 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 agents and employees of the Corporation a sense of
participation, pride and job satisfaction through discharge of their duties with
dedication towards achievement of Corporate Objective.
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
11/34
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."
VISION
"A trans-nationally competitive financial conglomerate of significance to societies and
Pride of India."
BOARD OF DIRECTORS
Members on The Board Of The Direction
Shri. T.S. Vijayan (Chairman) Shri. D.K. Mehrotra (Managing Director - LIC)
Shri. Thomas Mathew T. (Managing Director - LIC)
Shri. A.K. Dasgupta (Managing Director - LIC)
Shri. Ashok Chawla (Finance Secretary, Ministry of Finance, Govt. of India)
Shri. R. Gopalan (Secretary, Department of Financial Services, Ministry of
Finance, Govt. of India.) Shri. Yogesh Lohiya (Chairman cum Managing Director, GIC of India)
Shri S.Sridhar, Chairman & Managing Director, Central Bank of India
Shri D.L. Rawal (Chairman & Managing Director, Dena Bank)
Dr. Sooranad Rajashekhran
Shri. Monis R. Kidwai
Lt. General Arvind Mahajan (Retd.) Shri Anup Prakash Garg
Shri Sanjay Jain
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
12/34
OPE IONS
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
13/34
HISTORY OF INSURANCE
In India, insurance has a deep-rooted history. It finds mention in the writings ofManu ( Manusmrithi), Yagnavalkya (Dharmasastra ) and Kautilya ( Arthasastra ).The writings talk in terms of pooling of resources that could be re -distributed intimes of calamities such as fire, floods, epidemics and famine. This was probably a
pre-cursor to modern day insurance. Ancient Indian history has preserved theearliest traces of insurance in the form of marine trade loans and carrierscontracts. Insurance in India has evolved over time heavily drawing from othercountries, England in particular.1818 saw the advent of life insurance business in India with the establishment
of the Oriental Life Insurance Company in Calcutta. This Company however failedin 1834. In 1829, the Madras Equitable had begun transacting life insurancebusiness in the Madras Presidency. 1870 saw the enactment of the BritishInsurance Act and in the last three decades of the nineteenth century, the BombayMutual (1871), Oriental (1874) and Empire of India (1897) were started in theBombay Residency. This era, however, was dominated by foreign insurance officeswhich did good business in India, namely Albert Life Assurance, Royal Insurance,Liverpool and London Globe Insurance and the Indian offices were up for hardcompetition from the foreign companies.
In 1914, the Government of India started publishing returns of InsuranceCompanies in India. The Indian Life Assurance Companies Act, 1912 was the firststatutory measure to regulate life business. In 1928, the Indian InsuranceCompanies Act was enacted to enable the Government to collect statisticalinformation about both life and non -life business transacted in India by Indian andforeign insurers including provident insurance societies. In 1938, with a view toprotecting the interest of the Insurance public, the earlier legislation was
consolidated and amended by the Insurance Act, 1938 with comprehensiveprovisions for effective control over the activities of insurers.The Insurance Amendment Act of 1950 abolished Principal Agencies. However,
there were a large number of insurance companies and the level of competitionwas high. There were also allegations of unfair trade practices. The Government ofIndia, therefore, decided to nationalize insurance business.
An Ordinance was issued on 19th January, 1956 nationalising the LifeInsurance sector and Life Insurance Corporation came into existence in the sameyear. The LIC absorbed 154 Indian, 16 non -Indian insurers as also 75 providentsocieties245 Indian and foreign insurers in all. The LIC had monopoly till the late
90s when the Insurance sector was reopened to the private sector.
The history of general insurance dates back to the Industrial Revolution in thewest and the consequent growth of sea-faring trade and commerce in the17th century. It came to India as a legacy of British occupation. General Insurancein India has its roots in the establishment of Triton Insurance Company Ltd., in theyear 1850 in Calcutta by the British. In 1907, the Indian Mercantile Insurance Ltd,was set up. This was the first company to transact all classes of general insurancebusiness.
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
14/34
1957 saw the formation of the General Insurance Council, a wing of the InsuranceAssociation of India. The General Insurance Council framed a code of conduct forensuring fair conduct and sound business practices.
In 1968, the Insurance Act was amended to regulate investments and setminimum solvency margins. The Tariff Advisory Committee was also set up then.
In 1972 with the passing of the General Insurance Business (Nationalisation)
Act, general insurance business was nationalized with effect from 1st January,1973. 107 insurers were amalgamated and grouped into four comp anies, namelyNational Insurance Company Ltd., the New India Assurance Company Ltd., theOriental Insurance Company Ltd and the United India Insurance Company Ltd. TheGeneral Insurance Corporation of India was incorporated as a company in 1971and it commence business on January 1sst 1973.
This millennium has seen insurance come a full circle in a journey extending tonearly 200 years. The process ofre-opening of the sectorhad begun in the early1990s and the last decade and more has seen it been opened up substantially. In1993, the Government set up a committee under the chairmanship of RN Malhotra,former Governor of RBI, to propose recommendations for reforms in the insurancesector. The objective was to complement the reforms initiated in the financialsector. The committee submitted its report in 1994 wherein , among other things, itrecommended that the private sector be permitted to enter the insurance industry.They stated that foreign companies are allowed to enter by floating Indiancompanies, preferably a joint venture with Indian partners.
Following the recommendations of the Malhotra Committee report, in 1999, theInsurance Regulatory and Development Authority (IRDA) was constituted as anautonomous body to regulate and develop t he insurance industry. The IRDA was
incorporated as a statutory body in April, 2000. The key objectives of the IRDAinclude promotion of competition so as to enhance customer satisfaction throughincreased consumer choice and lower premiums, while ensuring the financialsecurity of the insurance market.
The IRDA opened up the market in August 2000 with the invitation forapplication for registrations. Foreign companies were allowed ownership of up to26%. The Authority has the power to frame regulati ons under Section 114A of theInsurance Act, 1938 and has from 2000 onwards framed various regulationsranging from registration of companies for carrying on insurance business toprotection of policyholders interests.
In December, 2000, the subsidiaries of the General Insurance Corporationof India were restructured as independent companies and at the same time GICwas converted into a national re-insurer. Parliament passed a bill de-linking the foursubsidiaries from GIC in July, 2002.
Today there are 24 general insurance companies including the ECGC andAgriculture Insurance Corporation of India and 23 life insurance companiesoperating in the country.
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
15/34
The insurance sector is a colossal one and is growing at a speedy rate of 15-20%. Together with banking services, insurance services add about 7% to thecountrys GDP. A well-developed and evolved insurance sector is a boon foreconomic development as it provides long- term funds for infrastructuredevelopment at the same time strengthening the risk taking ability of the country.
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
16/34
CHAPTER- 3
PRODUCTS OFFERED BY
LIC
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
17/34
Main Products offered to customer by LIC are:
I. ENDOWMENT PLAN
II. TERM PLANIII. WHOLE LIFE PLAN
IV. PENSION PLAN
Endowment Plan
IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS
BORNE BY THE POLICYHOLDER
This is a unit linked Endowment plan which offers investment cum insurance cover
during the term of the policy. You can choose the level of insurance cover within the
limits, which will depend on the mod e and level of premium you agree to pay.
You have a choice of investing your premiums in one of the four types of investment
funds available. Premiums paid after deduction of allocation charge will purchase
units of the Fund type chosen. The Unit Fund is subject to various charges and value
of units may increase or decrease, depending on the Net Asset Value (NAV).
Whole life, an endowment life insurance policy is designed primarily to provide a
living benefit. Thus, it is more of an investment than a whole life policy. Endowment
life insurance pays the face value of the policy either at the time of death of the
policyholder or at the time of maturity of the policy. The policy is a method of
accumulating capital for a specific purpose and protecting this sav ings program
against the saver's premature death. Many investors use endowment life insurance
to fund anticipated financial needs, such as college education or retirement.
Premium for an endowment life policy is much higher than that of a whole life policy .
Endowment policy covers risk for a specified period, at the end of which the sum
assured is paid back to the policyholder, along with the bonus accumulated duringthe term of the policy. An endowment life insurance policy is designed primarily to
provide a living benefit and only secondarily to provide life insurance protection.
Therefore, it is more of an investment than a whole life policy. Endowment life
insurance pays the face value of the policy either at the insured's death or at a
certain age or after a number of years of premium payment. Endowment policy is an
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
18/34
instrument of accumulating capital for a specific purpose and protecting this savings
program against the saver's premature death. Premium on endowment policies is
payable for the full term of the endowment policy unless, the insurer dies earlier.
When compared to whole life policies, the premium rates for endowment policies are
higher and the bonus rates lower. But one of the major attractions of endowment
policies is that they provide a return on premium payments, when the policy comes
to an end. The endowment received at the maturity of the policy can be used for
buying an annuity policy to generate a monthly pension for the whole life.
Features:-
Moderate Premiums
High bonus
High liquidity
Savings oriented.
Endowment insurance are policies that cover the risk for a specified period and atthe end the sum assured is paid back to the policyholder along with all the bonusaccumulated during the term of the policy. The Endowment insurance policies workin two ways, one they provide life insurance cover and on the other hand as avehicle for saving. They are more expensive than Term policies and Whole lifepolicies. Normally the bonus in calculated on the sum insured but th e only drawbackis that the bonuses are not compounded. Endowment insurance plans are best forpeople who do not have a saving and an investing habit on a regular basis.Endowment Insurance Plans can be bought for a shorter duration period.
Endowment Plan Benefits
Survival Benefits :-
Payment of full Sum Assured plus bonus plus final additional bonus.
Death Benefits :-
Payment of full Sum Assured plus accrued bonus.
Suitable for :-
Being an endowment assurance policy, this plan is apt for people of all ages andsocial groups who wish to protect their families from a financial setback that mayoccur owing to their demise. The amount assured if not paid by reason of hisdeath earlier will payable at the end of the endowment term wher e it can beinvested in an annuity provision for the rest of the policyholder's life or in any otherway he may think most suitable at that time.
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
19/34
Term Plan
Term life insurance policy covers risk only during the selected term period. If thepolicyholder survives the term, the risk cover comes to an end. Term life policies areprimarily designed to meet the needs of those people who are initially unable to pay
the larger premium required for a whole life or an endowment assurance policy.No surrender, loan or paid-up values are granted under term life policies becausereserves are not accumulated. If the premium is not paid within the grace period, thepolicy lapses without acquiring any paid-up value. A lapsed policy can be revivedduring the lifetime of the life assured but before the expiry of the period of two yearsfrom the due date of the first unpaid premium on the usual terms. Accident and / orDisability benefits are not granted on policies under the Term plan.Term life policies are the cheapest form of insurance. Premiums in a term policy payfor the insurance and no part of the premium in a term life insurance policy is usedfor investment purposes. Term life policies are the cheapest form of insurance.Premiums in a term policy pay for the insurance and no part of the premium in a termlife insurance policy is used for investment purposes. The length of a term lifeinsurance policy varies from 5 to 30 years.Many people prefer term insurance to provide their families with the security cover,and then use the additional funds they would have paid into an endowment or otherlife insurance policy to make investments of their own choosing. Term life policiesare suitable for those who need to provide financial security to their family but areunable to pay the larger premium required for a Whole Life or Endowment policy.A term life insurance policy is very different as compared to a regular life insurancepolicy as it is for a specific period of time. After the term gets over such type of
insurance can either be cancelled or renewed. The cancellation and renewaldecision depends totally on the policyholder and he may do so depending on hiscircumstances.
Who offers term life plan?
Most insurance companies today offer term life insurance policies, bu t many agentswould bereluctant to provide this policy. This is because generally the risk involvedis more and the agent will not get much commission by selling a term life insuranceas compared to what he will get on selling a regular life insurance policy.
Types of Term plan:-
y
Straight Term: The insurance premiums and benefits remain constantthroughout the term of the policy.
y Renewable Term: Can be renewed every time the coverage period lapses,irrespective of the status of the persons health. In this policy, one can optfor annual renewable term, wherein the policy is taken for a year and isrenewed annually for a total term ranging from 10 to 30 years.
y Level Term: Ensures a fixed premium until the end of the policy period,
which can range from five years to 30 years.
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
20/34
y Decreasing Term: The amount for which you are insured falls over the
course of the term of the policy. The premium, however, remains constant.This term policy is used when one needs to protect mortgage or income.
y Convertible Term: Can be converted from a term policy into a permanent
one.
y Adjustable Premium: Allows insurance companies to offer lower premiums
using less conservative estimates of mortality and administrative andinterest costs.
Whole Life Plan
What is whole life plan?
A whole life insurance policy covers you for your entire life, not just for a specificperiod such as term insurance. Your death benefit and premium in most cases will
remain the same. Whole life insurance also builds cash value, which is a return on aportion of your premiums that the insurance company invests. Your cash value istax-deferred until you withdraw it and you can borrow against it. As the namesuggests, whole life insurance is for the whole life and not just for a specified period,as in term insurance. As there is no fixed end date for the policy, only the deathbenefit exists and is paid to the named beneficiary. The policyholder is not entitled toany money during his or her own lifetime... You can opt for whole life policies afterthe age of 45 either for the purpose of leaving behind an estate for one's heirs or forcovering the possibility of premature stoppage of pension income in the case ofrelatively early death after retirement. This plan is mainly devised to create an estatefor the heirs of the policyholder as the plan basically provides for payment of sumassured plus bonuses on the death of the policyholder.
Features:-
This plan is mainly devised to create an estate for the heirs of the policyholder as theplan basically provides for payment of sum assured plus bonuses on the death of thepolicyholder. However, considering the increased longevity of the Indian population,the Corporation has amended the above provision, thereby providing for payment ofsum assured plus bonuses in the form of maturity claim on completion of age 80years or on expiry of term of 40 years from date of commencement of the policywhichever is later. The premiums under the policy are payable up to age 80 years ofthe policyholder or for a term of 35 years whichever is later. If the payment ofpremium 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 attachedbonus is not less than Rs.250/ -. Such reduced paid-up policy is not entitled toparticipate in the bonus declared thereafter but the bonuses already declared on thepolicy will remain attach, provided the policy is converted in to a paid -up policy afterthe premiums are paid for 5 years.
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
21/34
A whole life policy for an investment?
The rate of return on a whole life insurance policy is very low compared to otherinvestments, even with the tax savings factored in. Most investment professionalswould agree that life insurance should not be used solely as an invest ment tool and
you should judge your policy choices on the protection and not the rate of return.But, if you are in need of life insurance, the tax benefits and cash value is an addedbonus when purchasing protection for your loved ones.
Pension Plan
A pension plan or an annuity is an investment that is made either in a single lumpsum payment or through instalments paid over a certain number of years, in returnfor a specific sum that is received every year, every half-year or every month, either
for life or for a fixed number of years. Annuities differ from all the other forms of lifeinsurance in that an annuity does not provide any life insurance cover but, instead,offers a guaranteed income either for life or a certain period. Typically annuities arebought to generate income during one's retired life, which is why they are also calledpension plans. By buying an annuity or a pension plan the annuitant receivesguaranteed income throughout his life. He also receives lump sum benefits for theannuitant's estate in addition to the payments during the annuitant's lifetime. Pensionplans are perfect investment instrument for a person who after retiring from servicehas received a large sum as superannuation benefit. He can invest the proceeds in apension plan as it is safest way of secured income for the rest of his life. One canpay for a pension plan either through an annuity or through instalments that areannual in most cases. Pension Plans are Individual Plans that gaze into your
future and foresee financial stability during your old age. These policies aremost suited for senior citizens and those planning a secure future, so that younever give up on the best things in life.
Types of Pension Plans
Life Annuity :-Guarantees you a specified amount of income for your life. After death, the amountinvested is refunded to your nominee.
Guaranteed Period Annuity :-
Provides specified income for your lifetime and guarantees that your nominee willreceive payments for a certain minimum number of years, even if you should dieearlier. In case you live longer than the specified minimum number of years, you areentitled to receive annuity payments for your lifetime.
Annuity Certain :-Under this plan, the stipulated annuity is paid for a fixed number of years. Theannuity payments stop at the end of that period, irrespective of how much longeryou may live.
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
22/34
Deferred Annuities :-The premiums paid into such plans may be deducted from ones taxable income atthe time of payment. In addition, the interest earned on the annuities is not taxedimmediately. But the proceeds of the annuity will be taxable when they are paid toyou.
Endowment insurance are policies that cover the risk for a specified period and atthe end the sum assured is paid back to the policyholder along with all the bonusaccumulated during the term of the policy. The Endowment insurance policies workin two ways, one they provide life insurance cover and on the other hand as avehicle for saving. They are more expensive than Term policies and Whole lifepolicies. Normally the bonus in calculated on the sum insured but the only draw backis that the bonuses are not compounded. Endowment insurance plans are best forpeople who do not have a saving and an investing habit on a regular basis.Endowment Insurance Plans can be bought for a shorter duration period.
Key Benefits:--y Dream Life Pension enhances your retirement kitty by providing special
addition, starting from the end of 10th policy year
y Change your planned retirement age any time during the policy termy Obtain tax benefits as per the prevailing tax laws on the premiums paid and
the benefits received under the policy.
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
23/34
CHAPTER- 4
ANALYSIS OF LIC
POLICIES
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
24/34
I. NALYSIS OF VARIOUS POLI IES ON E ASIS
OF EIROTALOMPOSITION.
`
ANALYSIS
Endowment
Term
Whole life
Pension
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
25/34
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
26/34
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
27/34
IV. ANALYSIS OFTERM POLI YHOLDERS ONTHE
ASIS OFTHEIRAGE GROUP.
AgeGroup RespondentsUp to Years
Years
years
andabove
Total 100
ANALYSIS
emaximumbuyersof term life insuranceproductsaspert esurveyshows that
thecustomers from theagegroupof and . hepeople fromagegroup
below andabove are lessbuyersof this life insurancepolicy.
0
5
10
15
20
25
30
35
Respondents
35
30
15
12
8
Upto25 Years
26 35 Years
36 45 ears
46 60
60 anda o ve
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
28/34
IV. ANALYSIS OF HOLE LIFE POLI YHOLDERS
ONTHE ASIS OFTHEIRAGE GROUP
AgeGroup Respondents
Up to Years
Years
years
andabove
Total 100
ANALYSIShemaximumbuyerofwhole life insuranceproductsasperthesurveyshows that
thecustomers from theagegroupof and andabove. hepeople fromage
groupbelow and are lessbuyersof this life insurancepolicy.
0
5
10
15
20
25
30
35
Respondents
3
11
22
34
30
Upto25 Years
26 35Y
ears36 45 ears
46 60
60 andabove
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
29/34
V. ANALYSIS OF PENSIONLIFE POLI YHOLDERS
ONTHE ASIS OFTHEIRAGE GROUP
AgeGroup Respondents
Up to Years
Years
years
andabove
Total 100
ANALYSIShemaximumbuyerofpension life insuranceproductsasperthesurveyshows
that thecustomers from theagegroupof and andabove. hepeople from
agegroupbelow and are lessbuyersof this life insurancepolicy.
0
5
10
15
20
25
30
35
Respondents
2
7
35
31
25
Upto25 Years
26 35 Years
36 45 ears
46 60
60 anda ove
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
30/34
CHAPTER-
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
31/34
CONCLUSION
LIC is owned by the government and therefore it is the only company besides the
PPF that has the sovereign guarantee of the govt. of India. It is a different story that
today LIC has become so powerful that the govt. leans on LIC every time that the
Stock Market crashes. Imagine having an Asset base of over Rs 6 Lac Crore. .
Thats a 14 digit number! No company in India can boast of such figures. LIC has
the worlds largest sales force, yes over 10 lac agents and now universities in
western countries are trying to study how a company managed to appoint such a
large sales force. A sales force of over 1 million! Truly a remarkable achievement.
In our project we have seen basically the four types of plan which the people of India
mostly prefer and we have seen that though in the recent 4 -5 years market has
changed drastically but the peoples preferences in terms of LIC plans has not
changed so far.
From above analysis we have concluded that:
Endowment plan is the first choice of every person and the people
prefer Whole life and term plan.
Pension plan is taken mainly by old aged people.
The middle aged people are more concerned about taking a policy.
Expected return is also the major factor which determines which plan is
to be opted.
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
32/34
Many people argue that LIC has not been able to penetrate the market as it has
insured only 15% of the population. My point is, in a poor country like India where
there are so many people living below the poverty line, so many people who die of
starvation, so many people who dont have access to basic medication, so many
people who dont have basic necessities of life like food, shelter, education andclothing. Will such a person first feed his children or buy Insurance? Lets not forget
that a majority of the Indian population is poor and a substantial percentage is living
below the poverty line. At a personal level I feel that LIC has done a satisfactory job
of insuring people.
CHAPTER
REFERENCES
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
33/34
BOOKS
y Yogkshem, LIC 3rd edition, 2007, Publishing House Pvt. Ltd, New Delhi
y Raghunathan V, Stock Exchanges, Investments And Derivatives Rd Edition,Tata McGraw Hills, New Delhi
y Narula Avinash, Unhappy Customer, Merx Equity Printers, Mumbai
Web Sites
y www.mckinsey.com/locations/india/mckinseyonindia/pdf/insurance_a_summary.pdf
y www.domain-b.com/finance/insurance/lic/index.html
y www.evaluatelifeinsurance.org/y www.licindia.com
-
8/7/2019 LIC: A STUDY OF ITS POLICIES
34/34
Questionnaire
Name:
Address:
Contact No.: .
Age Group:
Below 25 yrs. 25-45 yrs.
45-60 yrs. Above 60 yrs.
Q. Which plan would you prefer?
Endowment Plan Term Plan
Whole Life Plan Pension Plan
Q. You are taking the LIC plan for which purpose:
Investment
Reducing Risk
Security