Presents

Disclaimer

Preface

Contents

Appendix

Contents

Full Index

1. About LIC of India

2. Principles and Practice of Life Insurance

3. Selling Process

4. Underwriting Aspects

5. Basic Insurance Contracts and Riders

6. Individual Insurance Plans

7. Business Insurance

8. Group Insurance

9. Financial Tables

10. Appendix

FULL INDEX

Part-I About LIC of India

1. Brief History of Life Insurance in India.

2. Objective, Vision and Mission of LIC of India.

3. Profile of LIC of India as on 31.03.2015.

4. Grievance Redressal Policy of LIC of India.

Part-II Principles and Practice of Life Insurance

1. What is Life Insurance

2. Principles of Life Insurance Life Insurance Contract Principles of Utmost Good Faith Insurable Interest Principles of Indemnity Different Risks Needs & Insurance

3. How Surplus is Generated

4. Vesting and Distribution of Bonuses.

Continued…

5. Solvency margin and its impact on bonus rates.

6. Role of an Agent.

7. Code of conduct for agents.

8. IRDA policyholder’s protection act 2002.

Part-III Selling Process

1. The Common Denominator of Success

2. 5 Basic Requirements for Success

3. Need Based Selling Steps.

4. Prospecting.

5. 20 Point Activity System

6. Concepts of Life Insurance Family Protection An Aid to Thrift Easier Terms Estate Creation An Investment A Device for Business Finance A Complete Financial Programme A Way of Life

Continued…

7. Human Life Value

8. Capital Need Analysis

Part-IV Underwriting Aspects

1. Selection and Classification and of Risk

(Underwriting)

2. Age Proofs

3. SUC and TRSA

4. Non-Medical Rules

5. Non-Medical Rules under Single Premium

and Bima Bachat

6. Medical Examination Rules including TPA

7. Special Medical Reports Rules

8. Validity of Medical Reports

9. Minimum waiting period for Certain Ailments

10. Personal History of Certain Diseases

Continued…

11. List of Ailments for Branch Decision

12. Insurance on Female Lives

13. Insurance on Minor Lives

14. Insurance on Lives of Major Students

15. Insurance on Physically Handicapped Lives

16. Insurance on NRI Lives

17. Residence Groups and ratings for NRI’s

18. RBI Foreign Exchange Management – Life Insurance Memorandum (LIM)

19. Occupational Ratings

20. Financial Underwriting

21. Summary of Financial Underwriting

22. Example of Financial Underwriting

Continued…

Part-V

Basic Insurance Contracts and Riders

1. Basic Insurance Contracts

2. Accident & Disability Benefit Rider

3. Linked Accidental Death Benefit Rider

4. New Term Assurance Rider

5. Premium Waiver Benefit Rider

Part-VI Individual Insurance Plans

Plan No. Name of Plan

TERM INSURANCE PLANS

822. Anmol Jeevan - II

823. Amulya Jeevan- II

825. e-Term

Comparison 823 v/s 825 Continued…

ENDOWMENT TYPE PLANS

814. New Endowment Plan

815. New Jeevan Anand

Paid and SV under 815

827. Jeevan Rakshak

830. Limited Payment Endowment

833. Jeevan Lakshya

836. Jeevan Labh

MONEY BACK PLANS

820. New Money Back Plan – 20 years

821. New Money Back Plan- 25 years

CHILDREN PLANS

832. Children Money Back

834. Jeevan Tarun

Continued…

PENSION PLANS 818. New Jeevan Nidhi

189. New Jeevan Akshay – VI

828. Varishtha Pension Bima Yojana

SINGLE PREMIUM PLANS

816. New Bima Bachat

817. Single Premium Endowment Plan

837. Jeevan Shikhar

ULIP PLANS

835. New Endowment Plus

HEALTH INSURANCE PLANS

904 Jeevan Arogya

Continued…

Part-VII Business Insurance

1. Key Man Insurance

2. Partnership Insurance

3. Employer Employee Insurance

4. Employee Retention Scheme

5. Salary Saving Scheme

Part-VIII Group Insurance

1. New Group Gratuity cash accumulation

plan

2. New Group Superannuation cash accumulation plan

3. New Group Leave Encashment plan

4. New One Year Renewable Group Term

Assurance Plan- I

5. New One Year Renewable Group Term

Assurance Plan- II

6. Single Premium Life Insurance

7. Group Credit Life Insurance

8. Social Security Scheme :

Aam Admi Bima Yojana Pradhan Mantri Jan Dhan Yojana Pradhan Mantri Jeevan Jyoti Yojana

Part-IX Financial Tables

1. Future Value of Single Payment

(Compound Interest) 2. Future Value of Annual Payment (Sinking

Fund) 3. Present Value of Annual Payments

(Discounting Factors)

4. Effective interest rate

Continued…

Part-X Appendix

1. Non- Medical Charts

2. Special Medical Reports Chart

3. Medical Chart for Minors

4. Jeevan Arogya Medical Report Chart

5. Bonus Rates as on 31.03.2015

6. Bonus rates with FAB as on 31.03.2015

7. MHR Limits

8. KYC Norms

9. Rate of interest for FY 2015-16

10. Settlement Options

11. Back Dating Rules

12. Tax Laws and Life Insurance (A.Y. 2016 – 17)

13. Attachment of Policy

14. MWP Act Policies

15. HUF Policies

16. Check List before submitting proposal form

17. Commission rates

18. Results of LIC 2014-15

19. Death Claim analysis 2013-14

Part-VI Individual Insurance Plans

1. TERM INSURANCE PLANS

2. ENDOWMENT TYPE PLANS

3. MONEY BACK PLANS

4. CHILDREN PLANS

5. PENSION PLANS

6. SINGLE PREMIUM PLANS

7. HEALTH INSURANCE PLAN

ENDOWMENT TYPE PLANS

814. New Endowment Plan

815. New Jeevan Anand

Paid and SV under 815

827. Jeevan Rakshak

830. Limited Payment Endowment

833. Jeevan Lakshya

836. Jeevan Labh

PLAN 833 – Jeevan Lakshya

(1) Details & Benefits

(2) Examples

(3) Features & Conditions

(4) Underwriting Rules

PLAN 833 LIC’s JEEVAN LAKSHYA

(Cir: PD/67 Dtd 11/03/2015, U&R/121 Dtd 11/03/2015, Launch

Date: 12/03/2015) DETAILS:

This is a limited premium, non-linked, with profits Endowment Plan.

Premiums are payable for 3 years less than policy term.

DEATH BENEFIT:

Sum Assured on Death (Should not be less than 105% of total

premiums paid):

i) 10% of Basic S.A will be paid from policy Anniversary after

death of life assured till policy anniversary prior to

Maturity and

ii) 110% of Basic S.A. + Bonus for full term + FAB, if any, will

be paid on date of Maturity.

MATURITY BENEFIT:

Basic Sum Assured + Vested Bonus + FAB if any.

UIN No: 512N297V01

Example*: (Plan 833)

Age- 35, S.A.- `5,00,000, Policy Term - 21 years,

PPT- 18 years ( 21-3), Basic Yearly Premium: `25,757

*Bonus and FAB rates given under example are for illustration purpose only.

Client Specific Benefit illustration @4% & 8% gross investment return must be provided to Prospect.

Entry Maturity at Age 35 Age 53 Age 56

= Basic S.A. + Vested Bonus + FAB = `5,00,000 + `5,04,000 ( 48x500x21) + `50,000 (100x500)

=`10,54,000 i. 10% of S.A. i.e `50,000 will be paid from 6th to 20th Policy Anniversary.

i.e for 15 years. Total Amount `50,000 x 15 =`7,50,000 ii. At Maturity : 110 % of S.A + Vested Bonus for 21 years + FAB = `5,50,000 + `5,04,000 (48x500x21) + `50,000 (100x500) = `11,04,000 Total Death Benefit =`7,50,000 + `11,04,000 =`18,54,000

105% of Total Basic Premiums Paid= `25,757x 6 x 1.05 = `1,62,269 Death benefit payable is more than 105% of total Basic Premiums Paid.

In case of death where Term Rider and Accident Rider are opted: Under Natural Death : Term Rider S.A opted will be paid immediately. Under Accidental Death : Term Rider S.A + Accidental Rider S.A opted will be paid immediately.

Maturity Benefit

Premium Stops

In case of Death at age 40 (6th Policy year)

Death Benefit

Features & Conditions: (Plan 833)

Minimum age at entry : 18 years lbd Maximum age at entry : 50 years nbd Maximum maturity age : 65 years nbd Policy Term : 13 to 25 years. Premium Paying Term :( Policy Term -3) Years Minimum S.A. : `1,00,000/- & in multiples of ` 10,000 thereafter. Maximum S.A. : No limit

Available Riders: 1. Accident & Permanent Disability Benefit for full policy term/age 65- Max

1 Crore. 2. Term Assurance Rider.

Mode of Payment: Yearly, Half Yly, Qly & Mly ( SSS & ECS)

Rebates: Mode Rebate Yearly : 2%, Half Yly : 1 %

High Basic S.A. Rebate Upto 1,90,000 : Nil 2,00,000 to 4,90,000 : `2.00 %o Basic SA 5,00,000/- & above : `3.00 %o Basic SA

Paid Up/ Surrender/Policy Loan: After payment of premium of 3 full years.

Revivals: Within 2 years of FUP.

Back Dating: Allowed with lean Month’s benefits.

Proposal Form: Revised 300.

Service Tax: 1st Year of Policy : 3.625% 2nd Year onwards : 1.8125%

Tax Benefits : On Basic Premiums : u/s 80C Maturity/Death claim : u/s 10(10D)

Underwriting Rules: (Plan 833)

Without Term Rider:

Non -Medical Schemes: All Allowed.

Non-Standard Age Proofs: All Allowed.

Female Lives : All Allowed. Pregnant ladies: Cat I & II only up to 24 weeks of pregnancy.

Major Students: Max rated up S.A. inclusive of all plans `1crore. S.A. beyond `1 crore at ZUS/CUS with MM’s recommendation.

Sub-Standard Major lives: Up to EMR Class Ten only. Physically Handicapped lives should be gainfully employed.

Occupation/Residence Extra: Policy term

Rating Up Factor

Policy term

Rating Up Factor

10 Yrs 1.35 11 yrs 1.30

12 yrs 1.25 13-15 yrs 1.20

16-18 yrs 1.15 19-25 yrs 1.10

Actual Sum Assured (ASA) for SUC: For FMR, Special Reports, MHR & TRSA: Basic S.A. only.

Keyman/Partnership/Empl-Employee: Allowed only under Employer-Employee

NRIs & FNIOs Residence Group: Group I & II : Not Allowed. Group III to VI : Allowed with extra. Group VII : Allowed without extra. House wives and NMS Scheme: Group V, VI and VII only. Mail Order : Only NRIs of Group III to VII.

With Term Rider: U/W Rules of Term Rider will apply.

Non Medical Charts

Non Medical General

Age (NBD)

Sum Under Consideration (SUC)

Standard Age proof

NSAP – I NSAP - II NSAP- III

18 to 35 5 lakhs 5 lakhs 3 lakhs 2 lakhs

36 to 45 3 lakhs 3 lakhs 2 lakhs 1.50 lakhs

46 to 50 2 lakhs 2 lakhs 1.25 lakhs 1.25 lakhs

Plans

Allowed

814,815,816,817,818, 820, 821, 830, 833, 835,

836 & 837

814,815,816, 817,818,820

821, 830, 833, 835, 836 & 837

814,815,816, 817,818, 820, 821, 833, 835

& 836

*SUC= 1.25 times of S.A under plans 815,820, 821 & 830

NMS/NMG Professional/NRIs & FNIO’s

Non Medical for Minors and Major Students

Age SUC Plans Allowed Major

Students up to age 25 yrs

15 lakhs 814,815,816,817,818,820,821, 830, 833,

835, 836 & 837

0 to 9 years 25 lakhs 814, 817, 832, 834, 835, 836 & 837

10 to 17 years 8 lakhs 814, 816, 817, 820, 821, 832, 834, 835,

836 & 837

*SUC= 1.25 times of S.A under plans 815,820, 821 & 830

Age (NBD) as on date of Proposal

Sum Under Consideration (SUC)

Non-Medical Special

NMG for Professionals

NRI’s & FNIOs under NMS/Professional of

Group V, VI & VII Countries only.

18 to 35 Rs-20 lakhs Rs-15 lakhs Rs-20 lakhs

36 to 45 Rs-15 lakhs Rs-10 lakhs Rs-15 lakhs

46 to 50 Rs-5 lakhs Rs-5 lakhs Rs-5 lakhs

Plans Allowed 814,815,816,817,818,820,821,830, 833, 835, 836 & 837

Term Rider & PWB

*SUC= 1.25 times of S.A under plans 815,820, 821 & 830

SPECIAL MEDICAL REPORT CHART Applicable to proposals under medical category for all plans

(Cir: U&R/4/2008 dt. 15/01/2008)

Notes: For Critical Illness Rider: Age 36 and above, ECG, Hb% & FBS are compulsory for any SA.

For Revivals age 56 and above: Special Reports are not required for sum to be revived upto` 50,000/-.

Sum Under

Consideration

Age at Entry (Last Birthday)

Upto 35 years

36 to 45 years 46 to 55 years 56 & above

Upto 2,00,000 Nil Nil Nil Rest ECG, FBS

(Rs.150/-)

2,00,001 to 5,00,000

Nil Nil Rest ECG ,FBS

(Rs.150/-)

Rest ECG, FBS,

Lipidogram, RUA, Hb%

( Rs. 380/-)

5,00,001 to 10,00,000

Nil Nil

Rest ECG, FBS, Lipidogram, RUA,

Hb%

( Rs.380/-)

Rest ECG, FBS, Lipidogram, RUA,

Hb%

( Rs.380/-)

10,00,001 to

15,00,000 Nil

Lipidogarm, FBS, RUA ,

Elisa for HIV, Hb%

(Rs.520/-)

Rest ECG, SBT-13, RUA,

Hb% (Rs. 1,170/-)

Rest ECG, Haemogram,

SBT-13, CTMT, RUA,

(Rs. 2,020/-)

15,00,001 to

35,00,000

Lipidogarm, FBS, Elisa

for HIV, Hb% (Rs. 490/-)

Rest ECG, SBT-13, RUA,

Hb% ( Rs. 1,170/-)

Rest ECG, Haemogram, SBT-13, RUA,

CTMT, (Rs. 2,020/-)

Rest ECG, Haemogram, SBT-13, RUA,

CTMT, HbAlc (Rs. 2,270/-)

35,00,001 to

50,00,000

Rest ECG, SBT-13,

RUA, Hb%

( Rs. 1,170/-)

Rest ECG, Haemogram,

SBT-13, RUA, CTMT,

(Rs. 2,020/-)

Rest ECG, Haemogram,

SBT-13, RUA, CTMT, HbAlc (Rs. 2,270/-)

Rest ECG, Haemogram, SBT-13, RUA,

CTMT, HbAlc, Chest X-Ray (Rs. 2,370/-)

50,00,001 and Above

Rest ECG,

Haemogram, SBT-13,

RUA.

(Rs. 1,220/-)

Rest ECG,

Haemogram, SBT-13, RUA, CTMT, HbAlc

(Rs. 2,270/-)

Rest ECG,

Haemogram, SBT-13, RUA, CTMT, HbAlc,

Chest X-Ray (Rs. 2,370/-)

Rest ECG,

Haemogram, SBT-13, RUA, CTMT, HbAlc,

Chest X-Ray (Rs. 2,370/-)

Results of LIC of India For the year 2014-15

Valuation Surplus after Tax Govt. Share @ 5% 95% to be distributed to Policy Holders (Investment by Govt in LIC in 1956 was ` 5.00 crores)

: ` 36,060 Crores : ` 1,803 Crores : ` 34,257 Crores

Total Number of Policies in force-Individual (More than Population of Many Countries)

: 29.01 Crores

Total Premium Income (The daily collection of Corporation is ` 656 Crores)

: ` 2,39,482 Crores

Total Policy Payments : ` 1,46,025 Crores

Total Gross Income for the year (Four Times the income of leading Bank in India)

: ` 4,07,546 Crores

Total Number of Claims Settled Total Amount paid towards claims

: 2,32,32,000 : ` 90,458 Crores

Percentage of Death Claim Settled Percentage of Maturity Claims Settled

: 99.51% : 99.78%

First Year Premium Income : ` 78,302 Crores

Total Life Fund : ` 18,24,194 Crores

Total Assets of Corporation : ` 20,31,116 Crores

Investment in Govt/Infra/Social Sector : ` 12,86,770 Crores

LIC’s Market Share as on 31/03/2015 (Remaining 23 private companies Market share: 30.79% on premium and 22.15% on policies)

: 69.21% on Premium : 77.85% on Policies

Death Claim Analysis of All Life Insurers for the Year 2013-14

Source: IRDA's Annual Report 2013-2014, Page no 113, Available at www.irda.gov.in

Company

% of Claims Paid

% of Claims Repudiated

% of Claims Pending

Number Amount Number Amount Number Amount

Aegon Religare 81.00 81.61 19.00 18.39 0.00 0.00

Aviva 84.01 71.63 15.84 27.70 0.15 0.67

Bajaj Allianz 91.29 81.68 6.30 13.03 2.41 5.29

Bharati AXA 88.13 77.35 9.74 16.75 2.13 5.90

Birla Sunlife 87.76 77.76 9.57 16.43 2.67 5.81

Canara HSBC 86.76 76.25 10.69 11.78 2.55 11.97

DLF Pramerica 22.14 22.61 23.78 23.16 53.96 54.05

Edelweiss Tokio 60.00 43.69 22.50 43.50 17.50 12.82

Future Generali 74.88 60.18 14.76 19.89 10.36 19.94

HDFC Life 94.01 85.30 4.70 9.00 1.29 5.69

ICICI Prudential 94.10 78.82 4.98 12.73 0.92 8.45

IDBI Federal 90.34 82.68 5.47 11.06 4.18 6.26

India First 73.13 55.39 22.97 37.64 3.90 6.97

Exide Life 83.16 64.60 10.13 17.79 5.53 15.08

Kotak Mahindra 90.69 80.05 7.66 15.21 1.65 4.74

Max Life 93.86 85.84 6.10 14.03 0.04 0.14

Met Life 90.24 76.18 9.40 14.15 0.32 9.65

Reliance Life 81.97 68.01 10.87 20.82 7.16 11.17

Sahara 90.19 86.74 7.89 10.58 1.91 2.68

SBI Life 91.06 88.47 5.23 2.62 3.71 8.90

Shriram Life 67.69 52.35 18.99 27.82 13.31 19.83

Star Union Dai-ichi 92.86 77.92 6.26 20.99 0.88 1.09

Tata AIA 89.68 83.08 7.22 11.18 3.10 5.74

Private Total 88.31 78.13 8.03 14.52 3.63 7.30

LIC of India 98.14 95.17 1.10 2.04 0.52 2.56

Notes:

1. More Number of claims are repudiated by the private

companies as compared with LIC of India.

2. Claim Amount Repudiated is even more; this shows that more

High Sum Assured claims are being repudiated by private

companies. ( Look at the figures of Aviva, Birla, HDFC, ICICI,

Kotak, Max, Reliance and others)

3. During the year 2013-14 Claim settlement performance of Big

Private Companies has reduced as compared with last year.

4. The Pending claims of private companies are also on higher

side; this shows delay in settlement of claims by private

companies.