The document provides an overview of life insurance, including: - The history of life insurance dates back thousands of years, originating in ancient cultures like India, China, and Rome. Modern life insurance began in 17th century England. - The key parties in a life insurance contract are the insured (the person whose life is insured) and the policy owner or beneficiary (the person who pays the premiums and receives the payout). - A life insurance policy provides a payout to beneficiaries if the insured passes away during the policy term. Premiums are based on actuarial tables that estimate mortality rates at different ages. Underwriting examines an applicant's health and risk factors. - Upon the

1. CHAPTER-1
INTRODUTION OF LIFE INSURANCE
In any activity of life there is a possibility that a desired event may fail
to occur and that pecuniary (financial) loss may arise. In adventures by sea
the ship may fail to make the port (remember Titanic!); or the cargo may be
damaged or lost. In the adventure of life itself, the life may fail and death
may occur, causing suffering to dependants. Death comes to all sooner or
later, and it is the only truth in this world. The rest as they say is all maya
(illusion). So if death is the only truth, then why do we ignore the
implications of the event? Because of the nature of its permanence, and all
pervasive; death requires understanding the financial implications on the
dependents. Life insurance is therefore the most important of all forms of
insurance. It’s significance pales the other forms of not just insurance but also
all investment instruments. The theory of insurance, in general terms, may be
expressed to mean that the good fortune of the many compensates for the
misfortune of the few. The consequences of such misfortunes cannot be in
many instances borne by the individual, and so the insurance company is
prepared to shoulder the burden of these consequences in exchange for an
assessed payment for the risk undertaken. Those who avail themselves of this
service know that such misfortunes will occur but do not know to whom, and
when, and they are willing to make such contributions to a common fund to
buy the right to be compensated of misfortunes if they should befall them.

2. From the collation of a vast amount of data, an assessment can be made
of the rate of mortality or the likelihood of death occurring at each age.
Numbers can be quoted, but which individuals will die at each age cannot be
stated. Consequently, all who pay life insurance premiums to the common
fund do so with the same willingness that the fund shall be used to
compensate the estates of those contributors at whatever age in life they may
die, within their respective contract period. This is the basic theory of life
insurance. However increasing emphasis on investment aspects has tended to
overshadow the primary purpose of protection against premature death.

3. CHAPTER-2
HISTORY OF LIFE INSURANCE
The history of life insurance dates back to 3000 BC. Learned scholars
are of the view that the expression ‘YOGAKSHEMAM’ found in the Rig
Veda refers to a sort of social welfare insurance; the ancient Aryans seem to
have developed such a concept. Edwin W Kopf in his treatise – ‘Origin,
Development and Practices of Livestock Insurance’ credits India with being the
mother of insurance practices, and opines that the development started in India
and after that spread to ancient Babylon. He refers to the Bridari system of
India as the most ancient institution formed for the mutual help of the
members during the contingencies of daily life.
Insurance began as a way of reducing the risk of traders, as early as
5000 BC in China and 4500 BC in Babylon. Life insurance dates only to
ancient Rome; "burial clubs" covered the cost of members' funeral expenses
and helped survivors monetarily. Modern life insurance started in late 17th
century England, originally as insurance for traders: merchants, ship owners
and underwriters met to discuss deals at Lloyd's Coffee House, predecessor to
the famous Lloyd's of London.
The growth of life insurance as a tool of family security, synchronized
with the growth of affluent families in England during the industrial
revolution. As a result of the economic boom brought in by the industrial
revolution, the merchants and manufacturers of England became a wealthy,
important and influenced section of the community. They enjoyed a standard
of living which their families would have found difficult to maintain at the
event of their death, unless special provisions were made. To such people, life
assurance offered a special attraction as a provider and protector of family
financial security.
The first life insurance company, The Society for the Assurance of
Widows and Orphans, was founded in London in 1699. After the repel of the
Royal Charter oft 1720 providing monopoly to the London Assurance and the
Royal Exchange Assurance in 1824 in the UK, the growth of life insurance

4. companies was phenomenal. Competing companies started launching many new
and attractive life insurance plans.
The first life insurance company of the United States of America was
the ‘Corporation for the Relief of the Poor and Distressed Presbyterian
Ministers and for the Poor and Distressed Widows and children of
Presbyterian Ministers’; it was started in 1775 by Benjamin Franklin. This is
the oldest life insurance company in the world today, and is now known as
the Convent Life Insurance Company. Benjamin Franklin played a significant
in forming many life insurance companies in the US.
Insurance as an organizational effort came to India in its present form in
1818, and the first insurance company in India was the Oriental Life Insurance
Company, which was started in Calcutta by the Europeans mainly for the
benefit of the European Community in India. In the initial years, the Company
did not consider Indian lives worthy of underwriting. However, due to the
persistent effort of Babu Muttyal Seal, the newly formed Oriental Insurance
Company consented to consider lives for underwriting and insurance cover.
POSTAL LIFE INSURANCE – EXEMPTED INSURER
The Postal Life Insurance popularly known as the PLI was established in
1884 initially to provide life insurance security to the postal employees.
Subsequently the benefits were extended to the telegraph employees and
gradually to all government employees. In 1956, when the government
nationalized the life insurance business in India, PLI was not taken over and
was permitted to transact business with postal employees and government
servants. At present the PLI covers central and state government employees,
various public undertakings; government aided institutions and nationalized
banks.

5. Some Of The Important Milestones In The Life Insurance Business In
India Are:
 1818: Oriental Life Insurance Company, the first life insurance company
on Indian soil started functioning.
 1870: Bombay Mutual Life Assurance Society, the first Indian life
insurance company started its business.
 1912: The Indian Life Assurance Companies Act enacted as the first
statute to regulate the life insurance business.
 1928: The Indian Insurance Companies Act enacted to enable the
government to collect statistical information about both life and non-life
insurance businesses.
 1938: Earlier legislation consolidated and amended to by the Insurance
Act with the objective of protecting the interests of the insuring public.
 1956: 245 Indian and foreign insurers and provident societies are taken
over by the central government and nationalised. LIC formed by an Act
of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5
crore from the Government of India.
 1999: IRDA Act 1999 passed in Parliament. IRDA is new regulator for
entire Insurance industry.
 2000: Private insurance companies begin operations in India

6. CHAPTER-3
CONCEPT OF LIFE INSURANCE
Life insurance is a contract under which the insurer (Insurance Company)
in consideration of a premium paid undertakes to pay a fixed sum of money
on the death of the insured or on the expiry of a specified period of time
whichever is earlier. In case of life insurance, the payment for life insurance
policy is certain. The event insured against is sure to happen only the time of
its happening is not known. So life insurance is known as ‘Life Assurance’.
The subject matter of insurance is life of human being. Life insurance
provides risk coverage to the life of a person. On death of the person
insurance offers protection against loss of income and compensate the
titleholders of the policy. Basic Principles of Life Insurance contract.
1. Insurable Interest
The insured must have insurable interest in the life assured. In absence
of insurable interest, Contract of insurance is void. Insurable interest must be
present at the time of entering into contract with insurance company for life
insurance. It is not necessary that the assured should have insurable interest at
the time of maturity also. Insurable interest exists in the following cases:
a) Person has an unlimited insurable interest in his/her own life.
b) A person has an insurable interest in the life of his/her spouse.
c) A father has an insurable interest in the life of his son or daughter on whom
he is dependent. Likewise a son may have insurable interest in life of his
parents.
d) A creditor has an insurable interest in the life of the debtor, to the extent of
the debt.
e) A servant employed for a specified period has insurable interest in the life of
his employer.

7. 2. Utmost Good Faith
The contract of life insurance is a contract of utmost good faith. The
insured should be open and truthful and should not conceal any material fact
in giving information to the insurance company, while entering into a contract
with insurance company. Misrepresentation or concealment of any fact will
entitle the insurer to repudiate the contract if he wishes to do so.
3. Not A Contract Of Indemnity
A Contract of life insurance is not a contract of indemnity. The loss of
life cannot be compensated and only a fixed sum of money is paid in the
event of death of the insured. So, the life insurance contract is not a contract
of indemnity. The loss resulting from the death of life assured cannot be
calculated in terms of money.

8. CHAPTER-4
OVERVIEW OF LIFE INSURANCE
4.1 PARTIES TO CONTRACT
CHART OF A LIFE INSURANCE
There is a difference between the insured and the policy owner, although
the owner and the insured are often the same person. For example, if Joe
buys a policy on his own life, he is both the owner and the insured. But if
Jane, his wife, buys a policy on Joe's life, she is the owner and he is the
insured. The policy owner is the guarantor and he will be the person to pay
for the policy. The insured is a participant in the contract, but not necessarily
a party to it. Also, most companies allow the payer and owner to be
different, e. g. a grandparent paying premiums for a policy on a child, owned
by a grandchild.

9. In cases where the policy owner is not the insured (also referred to as
the celui qui vit or CQV), insurance companies have sought to limit policy
purchases to those with an insurable interest in the CQV. For life insurance
policies, close family members and business partners will usually be found to
have an insurable interest. The insurable interest requirement usually
demonstrates that the purchaser will actually suffer some kind of loss if the
CQV dies. Such a requirement prevents people from benefiting from the
purchase of purely speculative policies on people they expect to die. With no
insurable interest requirement, the risk that a purchaser would murder the CQV
for insurance proceeds would be great. In at least one case, an insurance
company which sold a policy to a purchaser with no insurable interest (who
later murdered the CQV for the proceeds), was found liable in court for
contributing to the wrongful death of the victim (Liberty National Life v.
Weldon, 267 Ala.171 (1957)).
4.2 CONTRACT TERMS
Special exclusions may apply, such as suicide clauses, whereby the
policy becomes null and void if the insured commits suicide within a specified
time (usually two years after the purchase date; some states provide a
statutory one-year suicide clause). Any misrepresentations by the insured on
the application may also be grounds for nullification. Most US states specify a
maximum contestability period, often no more than two years. Only if the
insured dies within this period will the insurer have a legal right to contest
the claim on the basis of misrepresentation and request additional information
before deciding whether to pay or deny the claim.
The face amount of the policy is the initial amount that the policy will
pay at the death of the insured or when the policy matures, although the
actual death benefit can provide for greater or lesser than the face amount.
The policy matures when the insured dies or reaches a specified age (such as
100 years old).

10. 4.3 COSTS, INSURABILITY AND UNDERWRITING
The insurer (the life insurance company) calculates the policy prices with
intent to fund claims to be paid and administrative costs, and to make a
profit. The cost of insurance is determined using mortality tables calculated by
actuaries. Actuaries are professionals who employ actuarial science, which is
based on mathematics (primarily probability and statistics). Mortality tables are
statistically based tables showing expected annual mortality rates. It is possible
to derive life expectancy estimates from these mortality assumptions. Such
estimates can be important in taxation regulation.
The three main variables in a mortality table are commonly age, gender,
and use of tobacco, but more recently in the US, preferred class-specific tables
have been introduced. The mortality tables provide a baseline for the cost of
insurance, but in practice these mortality tables are used in conjunction with
the health and family history of the individual applying for a policy to
determine premiums and insurability. Mortality tables currently in use by life
insurance companies in the United States are individually modified by each
company using pooled industry experience studies as a starting point. In the
1980s and 1990s, the SOA 1975–80 Basic Select & Ultimate tables were the
typical reference points, while the 2001 VBT and 2001 CSO tables were
published more recently. The newer tables include separate mortality tables for
smokers and non-smokers, and the CSO tables include separate tables for
preferred classes.
Recent US mortality tables predict that roughly 0.35 in 1,000 non-smoking
males aged 25 will die during the first year of coverage after
underwriting. Mortality approximately doubles for every extra ten years of age,
so the mortality rate in the first year for underwritten non-smoking men is
about 2.5 in 1,000 people at age 65. Compare this with the US population
male mortality rates of 1.3 per 1,000 at age 25 and 19.3 at age 65 (without
regard to health or smoking status).

11. Underwriters will determine the purpose of insurance; the most common
being to protect the owner's family or financial interests in the event of the
insured's death. Other purposes include estate planning or, in the case of cash-value
contracts, investment for retirement planning. Bank loans or buy-sell
provisions of business agreements are another acceptable purpose.
4.4 DEATH PROCEEDS
Upon the insured's death, the insurer requires acceptable proof of death
before it pays the claim. The normal minimum proof required is a death
certificate, and the insurer's claim form completed, signed (and typically
notarized). If the insured's death is suspicious and the policy amount is large,
the insurer may investigate the circumstances surrounding the death before
deciding whether it has an obligation to pay the claim.
Payment from the policy may be as a lump sum or as an annuity, which
is paid in regular installments for either a specified period or for the
beneficiary's lifetime.
4.5 INSURANCE VS ASSURANCE
The specific uses of the terms "insurance" and "assurance" are sometimes
confused. In general, in jurisdictions where both terms are used, "insurance"
refers to providing coverage for an event that might happen (fire, theft, flood,
etc.), while "assurance" is the provision of coverage for an event that is
certain to happen. In the United States both forms of coverage are called
"insurance" for reasons of simplicity in companies selling both products. As
per some theories, the term "insurance" is used where the financial losses are
assessed after happening of the event and the amount to be paid is decided.
Whereas in "assurance" the amount is predefined irrespective of the losses
occurred.

12. CHAPTER-5
LIFE INSURANCE – FAQ
1. Why Do I Need Life Insusrance
Typical reasons include:
 To replace lost salary or income
 Burial expenses
 Family needs
 Buying out a partner's interest in a business
 Providing for a partner
 Estate needs
 Charitable giving
In general, the purpose of life insurance is to cover any unexpected
costs that a family unit cannot afford or that would put the family's financial
situation in peril.
If you're the sole breadwinner for a large family, with little savings,
then term life insurance is essential. Once basic items such as shelter and
food are covered, life insurance should be next on your list of priorities.
What would be the immediate impact on your family should you not be
there to support them tomorrow? Are they counting on your paycheck in the
years ahead to cover basic needs and future savings goals? Could they afford
the funeral costs? Who would pay the home mortgage? Would your family be
able to survive economically without you?
If you fit this profile and don't have life insurance, you might want to
consider it and perhaps discuss it with your family.

13. 2. When Should I Review My Life Insurance?
It's important to review your life insurance at the following:
 You are getting married
 You are getting divorced
 The birth of a child
 The adoption of a child
 Buying a new home
 Starting a business
 Buying an existing business
 Taking out a large loan
 Starting a new higher paying job
 Leaving a job and losing insurance benefits
 Your existing insurance premium is going to increase
 You bought insurance while a tobacco user and now you have quit for more
than one year
 You were charged a higher premium on a policy because of health or
activities and your situation has improved
 You find that you have an estate tax problem
 Your health has deteriorated
 You or a relative can no longer make decisions for themselves
 Every few years just to be safe
3. How Do I Pay My First Premium?
All checks must be made payable to the insurance company you chose.
Premium checks are routed by to the insurance company. Some life insurance
company does not accept any premium checks that are not made payable
directly to the insurance company. Some companies will accept a premium
with the application.

14. 4. How Do I Obtain Coverage?
Once you decide which policy is right for you simply complete a simple
online Coverage Request, or e-mail us with your specific request. A complete
application kit will be promptly sent to you. Your kit will include all forms
and consumer information required in your state. You will be contacted by the
medical exam service to schedule an exam at your convenience. Life insurance
company will send you periodic reminders by e-mail if you have any
outstanding requirements.
Life insurance will handle all the details to obtain your coverage as
quickly as possible. Once you have been approved, your policy will be
delivered to you for inspection. State consumer laws require a "free-look"
period. This means if, for any reason, during the free-look period, you change
your mind, you may return your policy and receive a full refund from the
insurance company. company makes insurance buying simple and trouble
FREE. Approval of an application is solely at the discretion of the insurance
company and is not guaranteed.
5. When Is Term Insurance The Right Choice?
If the lowest dollar outlay is your main concern, and your insurance
need is for a few years or for a certain time period, term may be the best
option. If you need lifetime coverage, an affordable Universal Life policy or
other permanent policy may be a better solution.

15. 6. What Are Some Key Insurance Terms I Should Know?
 Conditional Coverage
Sometimes a person applying for insurance wants the coverage to begin
immediately. At the time you are first applying for a policy, the insurance
company has not yet had an opportunity to review all the pertinent
information regarding your application. The insurance company may only
provide " conditional coverage" under the terms stipulated in their "conditional
receipt" page of the application. Each insurance company has it´s own specific
rules regarding conditional coverage. Inside the insurance application is a
conditional receipt page. Please read it carefully. This page includes the exact
rules and conditions that the insurance company requires you to meet if you
are to qualify for conditional coverage. Companies limit the amount of
conditional coverage they offer and in most cases, a full initial premium is
required to accompany the application if conditional coverage is being
requested.
Since coverage under this feature is conditional, you may not qualify
and the company may not pay a claim. Never cancel existing insurance until
you have new coverage properly in place.
 Limited Payment
Cash values, excess interest earnings, and dividends can be used to pay
premiums beyond a specified date for Whole Life and Universal Life policies.
This is a way to pay for ongoing coverage over a limited number of years.
"Limited Payment" is a program design, not an insurance policy feature. A
limited payment design is based on a projection of future cash value or
dividend growth. The projection is typically based on insurance company
current investment experience and assumptions and is more than likely to
change over time. If performance is less favorable than expected, additional
premium will be required. Limited payment designs are not guaranteed by
insurance companies

16.  Loans
Universal and Whole Life policies allow you to utilize some of your
policy cash value for current needs in the form of a loan. The insurance
company will charge a low interest rate that is often less than current bank
rates. You may elect to pay loan interest or to have it deducted from future
cash values. Outstanding loan amounts and unpaid loan interest will reduce
death benefits and cash surrender values.
 Re-Entry
On many term policies, you can qualify for lower future premiums if
you submit new evidence of insurability (usually a new medical exam) on the
renewal date. Of course, qualification for a lower premium depends upon your
insurability. You may be better off purchasing a policy with a longer level
premium guarantee rather than taking the risk that your health may change.
 Life Insurance Company Ratings
There are five major insurance industry rating services: A.M. Best,
Standard & Poor´s, Moody´s, Fitch (formerly Duff & Phelps), and Weiss.
These independent services provide information on insurance company financial
performance, stability, claims paying ability, and more. Each ratings service
has a different set of criteria and may focus on one or more aspects of a
company´s financial performance. For more information on the ratings services,
consumers can contact them directly. Most have web sites. The top ratings
are: A.M. Best A++; Standard & Poor´s AAA; Moody´s AAA; Fitch AAA;
Weiss A+. Generally, companies that carry at least an A+ rating from A.M.
Best. Occasionally, an A rated company may be quoted if price and company
performance justifies the selection.

17. 7. Can I use my last exam?
Doctors see patients for a variety of reasons. Sometimes it may be a
blood pressure check- other times to follow up on a certain condition. The
insurance exam asks and looks for specific questions that relate to risk in
overall medical condition, and give the underwriter what he needs to proceed.
8. Can I Use My Doctor For a Life Insurance Exam?
An insurance exam has to be impartial and provide objective information
relative to risk assessment. Often a personal doctor is a patient advocate- and
wants the client to do well. So do insurance companies, but with all the
accurate information needed to make a fair decision. Additionally, a client can
ask a personal doctor not to disclose certain information (doctor-patient
privilege), which may be a conflict of interest for the doctor to act as both an
agent for the company and the potential insured.

18. CHAPTER-6
IMPORTANCE OF LIFE INSURANCE
Life Insurance is of great importance to individuals, groups, business
community and general public. Some of the main benefits of life insurance are
given below.
i. Protection Against Untimely Death
Life insurance provides protection to the dependents of the life insured
and the family of the assured in case of his untimely death. The dependents
or family members get a fixed sum of money in case of death of the assured.
ii. Saving for old age
After retirement the earning capacity of a person reduces. Life insurance
enables a person to enjoy peace of mind and a sense of security in his/her
old age.
iii. Promotion of savings
Life insurance encourages people to save money compulsorily. When a
life policy is taken, the assured is to pay premiums regularly to keep the
policy in force and he cannot get back the premiums, only surrender value
can be returned to him. In case of surrender of policy, the policyholder gets
the surrendered value only after the expiry of duration of the policy.
iv. Initiates investments
Life Insurance Corporation encourages and mobilizes the public savings
and channelizes the same in various investments for the economic development
of the country. Life insurance is an important tool for the mobilization and
investment of small savings.

19. v. Credit worthiness
Life insurance policy can be used as a security to raise loans. It
improves the credit worthiness of business.
vi. Social Security
Life insurance is important for the society as a whole also. Life
insurance enables a person to provide for education and marriage of children
and for construction of house. It helps a person to make financial base for
future.
vii. Tax Benefit
Under the Income Tax Act, premium paid is allowed as a deduction
from the total income under section 80C.

20. CHAPTER-7
TYPES OF LIFE INSURANCE
If there is one feature of life insurance that is refreshingly simple, it is
the fact that there are basically two types – term life insurance and permanent
(or cash value) life insurance. The type you choose will depend on your
unique financial situation and the length of time you need coverage.
Given below are the basic types of life insurance policies. All other life
insurance policies are built around these basic insurance policies by
combination of various other features.
1. TERM LIFE INSURANCE
Term Insurance is the simplest and least expensive policy option due to
its pure death benefit. In the event of death while covered by the “term” of
the policy, the predetermined monetary benefit will be paid to the named
beneficiary if you have paid the insurance premium. Most often, term life
insurance is the best value for your money, as it retains the entire premium
amount. The entire life insurance premium is used to pay the life insurance
expense. In short, you pay the premiums in a term policy and there is no
financial benefit other than the pure death benefit to those you leave behind.
By the way, the death benefit paid to your beneficiaries is tax free
Term Life Premiums may be based on monthly, annual or quarterly
renewable arrangements including:
 05 year term level
 10 year term level
 15 year term level
 20 year term level
 25 year term level
 30 year term level

21. For longer periods of time, the following term life plans are often the best
option:
 15 year term level premium
 20 year term level premium
 25 year term level premium
 30 year term level premium
Term Life Insurance Note: In some states, level premium term may be
limited in the number of years of coverage, or it may not be available above
a certain age. If the type of term life plan you request is not available in
your state, company will provide you with a comparable quote to meet your
needs. To get an idea of how much term life insurance you need, use our life
insurance calculator to estimate your specific needs and determine the coverage
amount.
2 .UNIVERSAL LIFE COVERAGE
Universal life insurance (UL) is a relatively new insurance product,
intended to combine permanent insurance coverage with greater flexibility in
premium payment, along with the potential for greater growth of cash values.
There are several types of universal life insurance policies which include
interest sensitive (also known as "traditional fixed universal life insurance"),
variable universal life (VUL), guaranteed death benefit, and equity indexed
universal life insurance.
3. LIMITED-PAYMENT LIFE POLICY
Another type of permanent insurance is Limited-pay life insurance, in
which all the premiums are paid over a specified period after which no
additional premiums are due to the policy in force. Common limited pay
periods include 10-year, 20-year, and are paid out at the age of 65.

22. 4. WHOLE LIFE POLICY
A whole life policy covers a policyholder against death, throughout his
life term. The advantage that an individual gets when he / she opts for a
whole life policy is that the validity of this life insurance policy is not
defined and hence the individual enjoys the life cover throughout his or her
life.
Under this life insurance policy, the policyholder pays regular premiums
until his death, upon which the corpus is paid to the family. The policy does
not expire till the time any unfortunate event occurs with the individual.
5. ENDOWMENT POLICY
Combining risk cover with financial savings, endowment policies are
among the popular life insurance policies. Policy holders benefit in two ways
from a pure endowment insurance policy. In case of death during the tenure,
the beneficiary gets the sum assured. If the individual survives the policy
tenure, he gets back the premiums paid with other investment returns and
benefits like bonuses.
The concept of providing the customers with better returns has
been gaining importance in recent times. Hence, insurance companies have
been coming out with new and better ULIP versions of endowment policies.
6. MONEY BACK POLICY
This life insurance policy is favoured by many people because it gives
periodic payments during the term of policy. In other words, a portion of the
sum assured is paid out at regular intervals. If the policy holder survives the
term, he gets the balance sum assured.
In case of death during the policy term, the beneficiary gets the full
sum assured. New ULIP versions of money back policies are also being
offered by various life insurers.
The premiums paid and the returns accumulated though a money back
policy or its ULIP variants are tax exempt.

23. 7. ULIPs
ULIPs are market-linked life insurance products that provide a
combination of life cover and wealth creation options. A part of the amount
that people invest in a ULIP goes toward providing life cover, while the rest
is invested in the equity and debt instruments for maximising returns.
ULIPs can be useful for achieving various long-term financial goals such
as planning for retirement, child’s education, marriage etc.
8. ANNUITIES AND PENSION
In these types of life insurance policies, the insurer agrees to pay the
insured a stipulated sum of money periodically. The purpose of an annuity is
to protect against financial risks as well as provide money in the form of
pension at regular intervals.

24. CHAPTER-8
LIFE INSURANCE IN
LIFE INSURANCE CORPORATION OF INDIA
LIFE INSURANCE CORPORATION OF INDIA
Type State-owned
Industry Financial services
Founded 1 September 1956
Headquarters Mumbai, India
Key People D. K. Mehrotra,(Chairman)
Products Life and Health insurance , Investment, Management,
mutual fund
Total Assets 13.25 trillion (US$241.15 billion)(2010)
Owner(S) Government of India
Employees 115,966 (2010)
Subsidiaries LIC Housing Finance
LIC Cards Services
LIC Nomura Mutual Fund
Website www.licindia.in

25. Life Insurance Corporation of India (LIC) (Hindi: भारतीय जीवन बीमा
ननगम) is the largest insurance group and investment company in India. Its a
state-owned where Government of India has 100% stake. LIC also funds close
to 24.6% of the Indian Government's expenses. It has assets estimated of
13.25 trillion (US$241.15 billion). It was founded in 1956 with the merger of
243 insurance companies and provident societies.
Headquartered in Mumbai, financial and commercial capital of India, the
Life Insurance Corporation of India currently has 8 zonal Offices and 113
divisional offices located in different parts of India, around 3500 servicing
offices including 2048 branches, 54 Customer Zones, 25 Metro Area Service
Hubs and a number of Satellite Offices located in different cities and towns
of India and has a network of 13,37,064 individual agents, 242 Corporate
Agents, 79 Referral Agents, 98 Brokers and 42 Banks (as on 31.3.2011) for
soliciting life insurance business from the public.
The slogan of LIC is "YOGAKSHEMAM VAHAMYAHAM" which
translates from Sanskrit to "Your welfare is our responsibility". The slogan is
derived from the Ancient Hindu text, the Bhagavad Gita's 9th Chapter, 22nd
verse. The literal translation from Sanskrit to English is "I Carry What You
Require". The slogan can be seen in the logo and is written in Devanagiri
script below the hands holding the lamp.

26. HISTORY OF LIC
LIC Zonal Office, Night View Frrom Connaught Place Park
The Oriental Life Insurance Company, the first corporate entity in India
offering life insurance coverage, was established in Calcutta in 1818 by Bipin
Behari Dasgupta and others. Europeans in India were its primary target
market, and it charged Indians heftier premiums. The Bombay Mutual Life
Assurance Society, formed in 1870, was the first native insurance provider.
Other insurance companies established in the pre-independence era included
 Bharat Insurance Company (1896)
 United India (1906)
 National Indian (1906)
 National Insurance (1906)
 Co-operative Assurance (1906)

27.  Hindustan Co-operatives (1907)
 Indian Mercantile
 General Assurance
 Swadeshi Life (later Bombay Life)
The first 150 years were marked mostly by turbulent economic
conditions. It witnessed, India's First War of Independence, adverse effects of
the World War I and World War II on the economy of India, and in between
them the period of world wide economic crises triggered by the Great
depression.
The first half of the 20th century also saw a heightened struggle for
India's independence. The aggregate effect of these events led to a high rate
of bankruptcies and liquidation of life insurance companies in India. This had
adversely affected the faith of the general public in the utility of obtaining life
cover.

28. CURRENT STATUS
LIC ZONAL OFFICE, AT CONNAUGHT PLACE, NEW DELHI,
DESIGNED BY CHARLES CORREA, 1986.
Over its existence of around 50 years, Life Insurance Corporation of
India, which commanded a monopoly of soliciting and selling life insurance in
India, created huge surpluses, and contributed around 7% of India's GDP in
2006.
The Corporation, which started its business with around 300 offices, 5.7
million policies and a corpus of INR 459 million (US$ 92 million as per the
1959 exchange rate of roughly Rs. 5 for a US $, has grown to 25000
servicing around 350 million policies and a corpus of over 8 trillion
(US$145.6 billion).

29. CHAPTER-9
LIFE INSURANCE PLAN PROVIDE BY LIC
1.
BE THE ONE TO ENJOY THE FRUITS OF YOUR INVESTMENTS
YOURSELF
Term Plan is a part of life insurance which provides coverage at a fixed
rate of payments for a limited period of time i.e relevant tenure. It’s a pure
death benefit plan, its primary aim is to provide coverage of financial
responsibilities of the insured.
Following Are Type Of Term Assurance Plans
 Two Year Temporary AssurancePolicy
 Anmol Jeevan-I
 Amulya Jeevan-I

30. Table No. 43
(Single Premium Term Assurance without Profit)
This Plan is designed to cater to the need of insuring public who
require risk cover for short period of two years or less. The Sum Assured
will be payable only in the event of the Life assureds death occurring within
the selected period from the commencement of the Policy. A single premium
is required to be paid at the outset.
 BENEFITS:
 Maturity Benefits:
No Maturity Benefits available.
 Death Benefits:
Sum Assured is receivable on death
 Mode Benefit:
No Mode Benefits
 FEATURES:
 Minimum Sum Assured - Rs. 50,000/-
 No Maximum Limit
 Minimum age at entry - 18 years LBD
 Maximum age at entry - 60 years NBD
 Maximum age at maturity -62 years
 Allowed Terms - 0.5, 1, 1.5,
 Minimum Term - 0.5 year
 Maximum Term - 2 years

31.  Modes Allowed - Single Premium Only
 Policy Loan available
 Age Proof Compulsory
Table No. 164
( Term Assurance Plan)
You realise that life is full of uncertainties. You want to be financially
prepared to ensure that life continues smoothly for your family in the event
that some thing unfortunate befalls you. Term assurance is the answer; an
ideal plan for providing insurance protection at a low cost. You can choose
from 2 options under this category viz Single premium Term Insurance, which
involves a one time payment of premium and Regular Premium Level Term
Assurance in which premiums are paid throughout the term of the policy for
5 to 25 years. The main focus of this plan is on protection to your family in
the event of your death at a very low cost.
 BENEFITS:
 On Maturity - Nil.
 On Death - Sum Assured is paid to your beneficiary.
 FEATURES:
 Minimum Age at Entry - 18 yrs (Completed)
 Maximum Age at Entry - 55 yrs (nearer Birth Day)
 Maximum Maturity Age - 65 yrs
 Minimum Sum Assured - 5,00,000
 Maximum Sum Assured - 24,00,000 (In Multiple of Rs. 1,00,000)

32.  Modes Allowed - Yearly, Half yearly and Single Premium
 No Loan available
 Policy will not acquire any paid up value
 No surrender value will be available under this plan
Table No. 190
( Term Assurance Plan)
You realise that life is full of uncertainties. You want to be financially
prepared to ensure that life continues smoothly for your family in the event
that some thing unfortunate befalls you. Term assurance is the answer; an
ideal plan for providing insurance protection at a low cost.
You can choose from 2 options under this category viz Single premium
Term Insurance, which involves a one time payment of premium and Regular
Premium Level Term Assurance in which premiums are paid throughout the
term of the policy for 5 to 35 years. The main focus of this plan is on
protection to your family in the event of your death at a very low cost.
 BENEFITS:
 On Maturity - Nil.
 On Death - Sum Assured is paid to your beneficiary.

33.  FEATURES:
 Minimum Age at Entry - 18 yrs (Completed)
 Maximum Age at Entry - 60 yrs (nearer Birth Day)
 Maximum Maturity Age - 70 yrs
 Minimum Sum Assured - 25,00,000
 Maximum Sum Assured No Upper Limit (In Multiple of Rs. 1,00,000)
 Modes Allowed - Yearly, Half yearly and Single Premium
 No Loan available

34. 2.
PROTECT YOUR LOVED ONES FROM ANY UNEXPECTED
SURPRISES IN LIFE ANYTIME
Whole Life is the policy where benefits are payable only on the death
of the policy holder within the term, you have to pay a fixed premium
depending upon your age & other factors, you also earn interest on the
policy’s cash value as the years roll by and your beneficiary gets a fixed
amount at the time of your death. It provides permanent protection by
accumulating cash values that can be used during emergency. Moreover the
Surrender value provides you an extra source of retirement money.
Following Are The Type Of Whole Life Policy
 Jeevan Tarang
 The Whole Life Policy
 Jeevan Anand

35. Table No. 178
(Whole Life Plan with Survival Benefits)
This Plan is a whole life plan which provides continuous income after
the chosen period (Accumulation Period). The accumulation period can be
chosen from 10, 15 and 20 years. After the accumulation period, bonus
accumulated will be paid in one lump sum immediately. One year after
accumulation period, 5.5% of the sum assured will be paid every year till Age
100 or up-to death whichever is earlier. It is important to note that the life
risk cover continues for life long up-to age 100. After completion of Age 100,
on policy anniversary, full sum assured along with loyalty addition, if any,
will be paid.
This plan will be useful for people who are looking at a regular income
(Pension) after certain age.
 BENEFITS:
 Survival benefits
 Bonus will be paid in one lump sum on survival to the end of the
selected Accumulation Period.
 5.5% of the Sum assured will be paid every year, one year after
accumulation period till age 100 or earlier death.
 Death benefit
 During the accumulation period, sum assured along with vested
bonus will be paid provided risk cover has commenced. The risk
cover commences immediately if the age of policy holder is more
than 12 years. In case where the policy holder is less than or equal
to 12 years at the time of taking the policy, risk cover will
commence after 2 years or from policy anniversary when the policy
holder completes Age 7, whichever is later.

36.  After the accumulation period, sum assured along with loyalty
addition, if any, is payable in case of death of the policy holder.
 Maturity Benefit
 The sum assured along with loyalty addition, if any, will be payable
on survival of the life assured to the policy anniversary coinciding
with or immediately following the completion of 100 years of age.
 FEATURES:
Age At Entry 0 To 60 Years ( Nearest Birthday )
Premium Ceasing Age 70 Years ( Nearest Birthday )
Modes Allowed Yly, Hly, Qly, Mly, SSS And Single Premium
18 Years ( Completed )
Minimum Sum Assured Rs. 1,00,000/- Thereafter in Multiplies Of
5,000/-
TABLE NO. 2
FEATURES
Min Age At The End Of
Accumulation Period
Loan Available
This is a whole life policy suitable for people who are looking for high
risk cover & financial security to family at a lower premium. In this plan,
premiums are payable up to age 80 or for 35 years term whichever is more.
The low premium and high risk cover is an important advantage of this
policy. The bonus declared is substantially higher. Hence, the death claim
amount would be useful for surviving dependents.

37.  BENEFITS:
 MATURITY BENEFITS:
Basic Sum Assured + Bonus + Final Additional Bonus.
 DEATH BENEFITS:
Basic Sum Assured + Bonus + Final Additional Bonus.
(Final Additional Bonus is applicable only if policy completes 15 years)
 MODE BENEFIT:
The following table shows the rebate available on the mode of premium
payment.
Mode Rebate
Yearly 3% of tabular premium
Half - Yearly 1.5% of tabular premium
Quarterly Nil
 SUM ASSURED BENEFIT:
The following table shows the rebate available on the sum assured.
Sum Assured Rebate
Up To Rs. 50,000 Nil
Rs. 50,001 To Rs. 1,00,000 Re. 1 Per Thousand
Rs. 1,00,001 And Above Re. 2 Per Thousand
 FEATURES:
 Minimum Sum Assured - Rs. 50,000/-
 No Maximum Limit
 Minimum age at entry - 15 years (Completed)
 Maximum age at entry - 60 years
 Modes Allowed - All

38.  General Loan available only after 3 years has been completed.
 Housing Loan available
Table No. 149
Jeevan Anand is a plan introduced from 1st February, 2002. This plan is
a combination of the Whole life plan and the most popular Endowment
Assurance Plan.
The plan provides the pre-decided Sum Assured and Bonuses at the end
of the stipulated premium paying term, but the risk cover on the life
continues till death. The premium is paid till the premium paying term or till
the death of the life assured, whichever is earlier.
 BENEFITS:
 Survival Benefits
Sum Assured plus vested bonus is paid at the end of the premium
paying term.
 Bonus:
Bonus is paid during the premium paying term. Bonus is also paid if
the death occurs before the premium paying term, along with Final
Additional Bonus, if any.
 Death Benefits:
In case of Live Assures unfortunate death before the premium paying
term an then, Sum Assured plus vested bonus is paid.

39. In case of Lives Assures unfortunate death after the premium paying
term then, an amount equal to Sum Assured is paid.
 Accident Benefits:
Double accident benefits is available during the premium paying term
and thereafter up to age 70. The premium for this has been built into
the tabular premium rates. Maximum Accident cover available under
this plan will be Rs.5,00,000 (this limit excludes accident benefit taken
under other plans).
 Sum Assured Benefit:
Rs. 3,00,000 To Rs.4,99,999 Re. 1 Per Thousand
Rs. 5,00,000 To Rs. 9,99,999 Rs. 1.50 Per Thousand
 P
r
Sum Assured Rebate
Rs. 10,00,000 And Above Rs. 1.75 Per Thousand
 Premium Paying Term Benefit:
Premium Paying Term Rebate
5 - 9 Years Rs. 2.25 Per Thousand
10 - 14 Years Rs. 1.50 Per Thousand
15 - 19 Years Rs. 1.25 Per Thousand
20 - 24 Years Rs. 1.15 Per Thousand
25 And Above Rs. 1.00 Per Thousand
 FEATURES:
 Minimum age at entry : 18 (Completed)
 Maximum age at entry : 65 (Near birthday)
 Maximum age at the end of Premium paying term : 75 (Near birthday)
 Premium Paying Term : 5 years to 57 years
 Minimum Sum Assured : Rs. 1,00,000

40. 3.
MAKE PROVISION FOR LOVED ONES WHILE ENJOYING
THE LONG TERM BENEFITS
Endowment Policy provides with an Insurance coverage and at the same
time acts as a Savings instrument, a plan where the benefits are paid on death
within the term or at the time of maturity of the policy whichever is earlier.
Unlike Whole life it is a policy designed principally for providing Living
benefit. Thus it is more of an Investment policy and premium for an
endowment life policy is much higher than that of a whole life policy.
Following are the type of Endowment Assurance Plan
 The Endowment Assurance Policy With Profit
 New Janaraksha Plan
 Jeevan Amrit

41. Table No. 14
This is a fixed term policy. The premium has to be paid till the end of
the term or till the death of the policy holder whichever is earlier. In case the
policy holder dies before the end of the policy term, the sum assured plus the
accumulated bonus is paid to the nominee. If the policy holder survives till
the end of the term, he gets sum assured plus bonus.
The endowment policy fulfils many of the long term financial needs of
a person. The short term needs may be, to provide for family expenses ( this
is possible by raising a loan on policy after the policy has run for 3 years).
The long term needs may be, to provide for education of dependent children,
their marriage, or for old age provision for self or spouse. This is the most
popular form of life assurance since it not only makes provision for the
family of the life assured in the event of his early death, but also assures a
lump sum at any desired .
If payment to the premiums ceases after at least three years premium
have been paid, a free paid-up policy for an amount bearing the same
proportion to the sum assured as the number of premiums actually paid bears
to the number stipulated for in the policy, will be automatically secured
provided the reduced sum assured, exclusive of any attached bonus, is not less
than Rs. 250.
 BENEFITS:
 Maturity Benefits:
Sum Assured + Bonus
 Death Benefits:
Sum Assured + Accumulated Bonus.

42.  Mode Benefit:
The following table shows the rebate available on the mode of premium
payment.
Mode Rebate
Yearly 3% of tabular premium
Half - Yearly 1.5% of tabular premium
Quarterly Nil
 Sum Assured Benefit:
The following table shows the rebate available on the sum assured.
Sum Assured Rebate
Up To Rs. 50,000 Nil
Rs. 50,001 To Rs.
1,00,000
Re. 1 Per Thousand
Rs. 1,00,001 And Above Re. 2 Per Thousand
 FEATURES:
 Minimum Sum Assured - Rs. 50,000/-
 No Maximum Limit
 Minimum age at entry - 12 years
 Maximum age at entry - 65 years
 Maximum age at maturity -75 years
 Minimum Term - 5 years
 Maximum Term - 55 years
 Modes Allowed - All
 Policy Loan available
 Age Proof Compulsory
 No medical examination is required if the conditions applicable under
Non Medical Schemes are satisfied.

43. Table No. 91
(Endowment Policy With Profits)
This Plan is best suited for people with irregular income and whose job
is not secured. Example farmers, milk vendors, petty business men. Financial
security for the family, in case of unfortunate death of the policy holder, as
risk is covered even during lapsed period of the policy (up to 3 years), after
the premiums are paid for two years. This plan is a boon for persons who
find it difficult to produce age proof. No premium extra is charged for self
declaration, if term is 20 years and age is 40 years or less.
This plan provides payment of sum assured along with accrued bonuses
on maturity date to the live assured or to his nominee in the event of his
premature death. All policies issued under this plan will be, covered for
accident benefit. This benefit will also be admissible during the period of
extended cover of three years. At any time during the first 36 months from
date of first unpaid premium, the policy holder can revive the policy without
the evidence of good health by paying the arrears of the premium in full with
interest or arrears of first two unpaid premiums with interest or arrears of first
unpaid premium with interest .
 BENEFITS;
 Maturity Benefits
Basic Sum Assured + Bonus
 Death Benefits:
Death Benefits:
Normal Sum Assured + Accumulated
Bonus
Accident 2 * Sum Assured + Accumulated
Bonus

44.  Inbuilt Accident benefit
All policies issued under this plan will be covered for accident benefit.
 Sum Assured Benefit:
Sum Assured Rebate
Up To Rs. 50,000 Nil
Rs. 50,001 To Rs.
1,00,000
 Continued Risk Cover in the lapsed period
 Even if the policy holder is not able to pay further premiums after
paying first two years
 Premiums, the risk cover continues for 3 more years from the date of
premium unpaid.
 FEATURES:
 Minimum Sum Assured - Rs. 30,000/-
 Maximum Sum Assured - Rs. 10,00,000/-
 Minimum age at entry - 18 years
 Maximum age at entry - 50 years, 40 years in case of non medical
(General).
 Maximum age at maturity -70 years
 Minimum Term - 12 years
 Maximum Term - 30 years, 20 in case of non standard age proof.
 Modes Allowed - All
 Policy Loan, Housing Loan available
 Non medical allowed.
Re. 1 Per Thousand
Rs. 1,00,001 And Above Re. 2 Per Thousand

45. Table No. 186
(Limited Payment Endowment Policy With Profit)
Jeevan Amrit is a fixed term policy with option to pay premiums for
3, 4 or 5 years. The premium payable during the first year is higher than the
premiums payable in subsequent years. The premium has to be paid till the
end of the premium paying term or till the death of the policy holder
whichever is earlier. The allowed terms are between 10 to 30 years. In case,
the policy holder dies before the end of the policy term, the sum assured
along with bonus is paid to the nominee.
If the policy holder survives till the end of the term, he gets total
Premiums paid excluding extra premium plus bonus. This endowment policy
fulfils many of the long term financial needs of a person. The short term
needs may be, to provide for family expenses (this is possible by raising a
loan on policy). The long term needs may be, to provide for education of
dependent children, their marriage, or for old age provision for self / spouse.
This plan is designed to meet the needs of persons having a very short
span of high earnings, where after the income decreases or stops. The
premium paying capacity of such persons (Film artists, cricketers, models,
professionals on foreign assignments etc.) is quite high during the period of
high income.

46.  BENEFITS:
 Maturity Benefits:
Premiums Paid (Excluding Extra Premium) + Bonus.
 Death Benefits:
Sum Assured + Accumulated Bonus.
 Mode Benefit:
The following table shows the rebate available on the mode of premium
payment.
Mode Rebate
Yearly 2% of tabular premium
Half - Yearly Mil
 FEATURES:
 Minimum Sum Assured - Rs. 1,00,000/-
 No Maximum Limit
 Minimum age at entry - 12 years (Last Birthday)
 Maximum age at entry - 60 years (Near Birthday)
 Maximum age at maturity -70 years (Near Birthday)
 Minimum Term - 10 years
 Maximum Term - 30 years
 Premium paying Term - 3, 4 or 5 years.
 Modes Allowed - Yearly, Half-Yearly
 Policy Loan available

47. 4.
The Plan Provides Financial Protection Of Husband And Wife Lives
Joint Life policies are similar to Endowment Policies but are categorized
as they cover two lives simultaneously, thus offering a unique advantage in
some cases, notably, for a married couple or for partners in a business firm.
Following are the some of the one joint life plan
Table No. 89
(Double Cover Joint Life Plan - With Profits)
Marriage is a sacred bond that unites a man and a woman. It makes
each one of them responsible for their mutual welfare and for the welfare of
their children. Traditionally, it was a man’s responsibility to protect his wife
and children. But now economic constraints and necessity to maintain a better
standard of living. Thus today in many families, both husband and wife
assume the role of bread winner.
The loss of income of any one of the partners, economically affects the
family and their standard of living. It is offset this loss that the corporation
has brought out JEEVAN SAATHI, a novel joint life plan which covers both
husband and wife under one policy. This is a joint life plan with a difference.
The plan is designed to give total protection to families.

48. Under the old joint Life Plan, two persons lives can be jointly covered
and the sum assured becomes payable on the death of one of the partners . If
both survive, the sum assured is paid on the maturity of the policy at the end
of the selected term.
Family gets a lump sum immediately if one of the partners dies, to help
the surviving partner maintain a certain level of economic stability. Once
again, the basic sum assured is paid to the surviving partner on maturity or in
the event of his/her death earlier, to the nominee. Thus, this plan gives total
and complete insurance protection to the whole family.
 ELIGIBILITY
Policies under this plan will be on the lives of husband and wife,
provided both partners are earning members as specified by the corporation for
the purpose of underwriting. However , in case of housewives Jeevan Saathi
can be purchased jointly with their earning husbands, up to a limited amount.
 BENEFITS
 Maturity Benefits:
Basic Sum Assured + Bonus
 Death Benefits:
 The sum assured is immediately payable to the surviving partner.
 The surviving partner will continue to earn bonuses declared on the basis of
yearly valuations.
 The basic sum assured with bonuses is payable to the surviving partner on the
date of maturity or to the nominee in the event of death of surviving partner
before the date of maturity.
 If both partners survive the selected term, the basic sum assured with bonus is
paid on the date of maturity

49.  Mode Benefit:
The following table shows the rebate available on the mode of premium
payment.
Mode Rebate
Yearly 3% of tabular premium
Half - Yearly 1.5% of tabular
premium
Quarterly Nil
 Sum Assured Benefit:
The following table shows the rebate available on the sum assured.
Sum Assured Rebate
Up To Rs. 50,000 Nil
Rs. 50,001 To Rs.
1,00,000
Re. 1 Per Thousand
Rs. 1,00,001 And Above Re. 2 Per Thousand
 Features
 Ideal insurance for earning couple
 Both insured in single plan
 Insurance of surviving partner continued
 Instead of taking two Endowment Policies on the lives of husband and wife,
one Jeevan Saathi can be taken. The premium payable is much lesser.
 The sum assured is immediately payable in the event of the death of the one
of the partners. Premium waived for surviving partner
 Minimum sum assured Rs. 50,000/-
 No maximum limit.
 Minimum age at entry - 20 years
 Maximum age at entry - 50 years
 Maximum maturity age - 70 years
 Minimum Term - 15 years
 Maximum Term - 30 years

50.  Modes allowed - Yearly, Half Yearly, Quarterly, Monthly
 Standard age proof Compulsory
 Both partners should be earning members. However in case of house wives
Jeevan Saathi can be purchased jointly with their earning husbands, up to a
limited amount
 For the calculation of premium etc, joint age is considered.
 Policy Loan available
 Non Medical Special scheme will be entertained with restrictions

51. 5.
Simple Plans For ‘Not So‘ Simple Needs
Table No. 192
UIN :- 512N247V01
(Today's woman deserves something special)
The woman of India takes care of so many lives that she's hardly even
left with time for her own. So, to protect and nurture her life, LIC presents
Jeevan Bharati, a life insurance scheme designed by LIC after researching
and understanding the specific needs of Indian women.
 UNIQUE FEATURES
 Periodic returns of Sum Assured with facility to en cash at will. Attractive
benefits if retained with LIC.
 Participation in the profit. Life cover continues despite non-payment of
premium for a limited period.
 Critical Illness Benefits for policyholder and Congenital Disability Benefits for
children born to the policyholder.

52.  BENEFITS
 Survival Benefit for 20 Years Term:
20% of the Sum Assured payable at the end of 5th year, 10th Year & 15th
Year.
40% of the Sum Assured payable along with vested bonuses and Final
Additional Bonus, if any, at the end of 20 years.
 Survival Benefit for 15 Years Term:
20% of the Sum Assured payable at the end of 5 years and 10th Year.
60% of the Sum Assured payable along with vested bonuses and Final
Additional Bonus, if any, at the end of 15 years.
 Death Benefit :
In case of death during the policy term, the full sum assured is payable in
addition to survival benefits paid earlier. The accrued bonuses, if any, are also
payable.
 Special Benefit :
Critical Illness (CI) and Congenital Disability Benefit (CDB) cover will be
available.
A benefit equal to the Sum Assured (subject to a maximum of Rs. 5,00,000)
will be available under this plan on the occurrence of defined critical Illness.
 Congenital Disability Benefit (CDB)
If a child born to the policy holder, suffers from any one of the specified
congenial disabilities, a benefit equal to 50% of the Sum Assured (subject to
a maximum of Rs. 5,00,000) will be available under this plan. This benefit is
available for two children and will not be payable if birth of the child occurs
after the proposer attains the age of 40 years. This benefit will be payable
only if age at entry is up to age 35 years.
 Free Insurance Cover :
After the first 2 years premium has been paid, even if premium payments is
discontinued, the risk cover for full sum assured will continue for 3 years
from the due date of the first unpaid premium. However, this cover is not
available for accident benefit. Special benefits (CI & CDB) described above
will not be paid during the period.

53.  OPTIONS
 Encashment Of Survival Benefits As And When Needed:
The policyholder at her option may avail the survival benefit any time on or
after its due date. If opted to avail later, increased survival benefit at such
rate of interest decided by the Corporation will be payable. Present interest
rate is 4% per annum.
 Flexibility to pay premium in advance:
The policyholder will have the flexibility to pay the next yearly premium in
advance (in not more than three installments) during the year. She will be
eligible for a premium rebate of 5% p.a. Corporation reserves the right to
change the rate of interest from time to time.
 Option to receive maturity proceeds in the form of an annuity:
Provided the policy is in full force on the stipulated date of maturity, the
policy holder if she so desires will have the option to receive the maturity in
the form of any immediate annuity. This option shall be exercised 6 months
before the date of maturity. The rate of annuity will be based on the
immediate annuity rates prevalent at the time of stipulated date of maturity.
 FEATURES
 Money back policy with a fixed term of 15 & 20 years.
 Minimum Sum assured - Rs. 50,000/- thereafter in multiple of Rs. 5,000
 Maximum Sum Assured - Rs. 25,00,000/-
 Minimum Age at entry - 18 years last Birthday
 Maximum Age at entry- 55 years near Birthday
 Maximum Age at maturity - 70 years near Birthday
 Modes Allowed - Yearly
 The Accident Benefit coverage is available subject to payment of Re 1/- per
thousand

54. 6.
Enjoy Insurance Benefits And Get Your Money Back
Under Money back policy, survival benefits are spread over the term of
the policy i.e. certain percentage of sum assured is paid at regular intervals
before the maturity date. Full sum assured is payable on death within the term
irrespective of earlier survival benefits i.e. even after payment of survival
benefits the risk cover on the life continues for the full sum assured and
bonus is also calculated on the full sum assured. If the policyholder survives
till the end of the policy term, the survival benefits are deducted from the
maturity value.
Following Are The Some Money Back Policy:
 Jeevan Surabhi-25 Years
 Bima Bachat
 New Bima Gold

55. Table. 108
(Money Back Policy With 25 Years Fixed Term)
Jeevan Surabhi is an improved version of Money Back Plan with an
added element of increasing term insurance cover. The survival benefits
received by the policy holder takes care of his short term financial needs like
buying house hold durables or any such needs like educational expenses of
children. The regular increase in life risk cover available to the policy holder
without payment of extra premium or even without under going other
formalities like medical exams or special medical report.
After some time, after taking the policy, the policy holder may be in
need of more insurance due to increase in responsibility like expanded family,
increase in liability or income in which case he may have to take a new
policy after fulfilling all the formalities like medical examination. In case of
Jeevan Surabhi , this hassle of taking the new policy is avoided.
The shorter premium paying term helps the policy holder to restrict the
payment of premium to his productive years and simultaneously continue the
life risk cover to desired age, depending on the needs of the family. The
survival benefit received may be reinvested. If not required at that moment, in
any safe and high interest yielding investments so that one can have handsome
amount at the end of the policy term.

56.  BENEFITS
 Survival Benefits:
The following table shows the survival benefit payable to the policy holder for
1 lakh sum assured.
At The End Of Amount Receivable
4 Years Rs. 20,000
8 Years Rs. 20,000
12 Years Rs. 20,000
15 Years Rs. 20,000
18 Years Rs. 20,000
 Death Benefit:
In case the policy holder dies before the term of the policy, the sum payable
to the nominee is according to the following table:
Years Benefit
0 To 5 Years Only Sum Assured
6 To 10 Years 1.5 Times Of Sum Assured
11 To 15 Years 2 Times Of Sum Assured
16 To 20 Years 2.5 Times Of Sum Assured
21 To 25 Years 3 Times Of Sum Assured
 Mode Benefit:
The following table shows the rebate available on the mode of premium
payment.
Mode Rebate
Yearly 3% of tabular premium
Half - Yearly 1.5% of tabular premium
Quarterly Nil

57.  Sum Assured Benefit:
The following table shows the rebate available on the sum assured.
Sum Assured Rebate
Up To Rs. 50,000 Nil
Rs. 50,001 To Rs. 1,00,000 Re. 1 Per Thousand
Rs. 1,00,001 And Above Re. 2 Per Thousand
 FEATURES
 Minimum Sum Assured - Rs. 50,000/-
 No Maximum Limit
 Minimum age at entry - 14 years
 Maximum age at entry - 45 years
 Maximum age at maturity -70 years
 Modes Allowed - All
 Non Medical Special will be entertained with restriction
 Housing Loan available
 Premium Paying Term is 18 years. The shorter premium paying term helps
the policy holder to restrict the payment of the premium to his productive
years.
 Age Proof Compulsory

58. Table No. 175
(Single Premium Money Back Plan)
LIC’s Bima Bachat is a single premium money back type plan. This is the
best form of life assurance for family provision since it enables the life assured to
pay the premiums only once relieving him from the necessity of making payments
later. Under this plan, a part of sum assured is paid to the policy holder
periodically and on maturity, Single Premium paid under the policy is paid back
along with Loyalty Additions, if any. The plan also provides for payment of Sum
Assured in case of earlier death irrespective of whether or not any survival benefits
have been paid earlier.
The shorter premium paying term helps the policy holder to restrict the
payment of premium to his productive years and simultaneously continue the life
risk cover to desired age, depending on the needs of the family. The survival
benefit received may be reinvested, If not required at that moment, in any safe and
high interest yielding investments so that one can have handsome amount at the
end of the policy term.
 BENEFITS:
 Survival Benefits:
The following table shows the survival benefit payable for different policy terms:
Term Year Survival Benefit Receivable
9 Yrs End Of 3rd & 6TH Year 15% Of Sum Assured
12 Yrs End Of 3rd, 6TH & 9th Year 15% Of Sum Assured
15 Yrs End Of 3rd, 6TH & 9th & 12th Year 15% Of Sum Assured

59.  Death Benefit:
On death of the Life Assured during the term of the policy, an amount equal to
the Sum Assured shall be payable. The survival benefit already paid will not be
deducted from the death claim.
 Maturity Benefit:
On Maturity of the Policy, Single Premium Paid along with Loyalty Addition
(excluding extra premium) will be paid in case of Life Assured surviving to the
end of the term.
 Sum Assured Benefit:
The following table shows the rebate available on the sum assured.
Up To Rs. 49,000 Nil
Rs. 50,000 To Rs. 99,000 5%
Rs. 1,00,000 To Rs. 1,99,000 7%
Rs. 2,00,000 And Above 8%
 FEATURES:
Sum Assured Rebate( % Of Basic Premium)
 Minimum Sum Assured - Rs. 20,000/- and in multiple of Rs. 5,000
 No Maximum Limit
 Minimum age at entry - 15 years (Completed)
 Maximum age at entry - 66 years (nearer birthday)
 Maximum age at maturity -75 years (nearer birthday)
 Term - 9, 12 and 15 Years
 Loan Available

60. Table No. 179
New Bima Gold is a Money Back type plan where total premiums paid
under the policy shall be paid back to the policyholder in installments at the
specified durations in case of survival and Sum Assured shall be paid in case of
death during the term of the policy irrespective of whether or not any survival
benefits have been paid earlier.
Since this is a high risk cover low premium policy, it is highly recommended
for young people with high responsibility with lower income. Though the maturity
benefits are not attractive, the short term financial needs of the family in case of
premature death will be taken care of . Being a Money Back type Plan, the money
becomes available at regular intervals.
The amount may be used for short term financial needs like, purchase of
household durables or for children’s education. Or the amount received as survival
benefit can be re invested in any secured investment so that the policy holder will
have a substantial lump sum amount at the end of the term of the policy.
BENEFITS:
 Maturity Benefits:
Total Premiums Paid + Loyalty Addition - (Less) Survival benefits paid earlier.
 Death Benefit:
Sum Assured shall be payable provided life cover is in force.

61.  Survival Benefit:
The below table shows the survival benefits payable for available terms.
Term Survival Benefit Duration Survival Benefit Amount
12 Yrs 4th, 8th Year 15% Of Sum Assured
16 Yrs 4th, 8th , 12th Year 15% Of Sum Assured
20 Yrs 4th, 8th ,12th , 16th Year 10% Of Sum Assured
 Loyalty Addition:
This is a with-profit plan and the policy shall participate in the profits of the
Corporation's with-profits assurance business. The policy shall, however, be eligible
to a share of profits in the form of Loyalty Addition (one time) only payable on
maturity. On the Life Assured surviving the stipulated date of maturity, the policy
may be eligible for payment of Loyalty Addition, if any, depending upon the
experience of the Corporation at such rate and on such terms as may be declared
by the Corporation.
 Auto-Cover
If at least two full years premiums have been paid, full death cover shall continue
for a period of two years from the date of First Unpaid Premium. This period of 2
years from First Unpaid Premium is called Auto-Cover Period.
 Extended Risk Cover
The risk cover as a percentage of sum assured continues for even after maturity.
This percentage and duration depends on term of the policy as shown in the
following table
Term % Of Basic Sum Assured Extended Term In Years
12 Yrs 50% 6 Years
16 Yrs 50% 8 Years
20 Yrs 50% 10 Years

62.  Mode Rebate:
The following table shows the rebate available on the mode of premium payment.
Mode Rebate
Yearly 2.0% of tabular premium
Half - Yearly 1% of tabular premium
 Sum Assured Rebate:
The following table shows the rebate available on the Large Sum Assured
Sum Assured Rebate
0 To 99,999 Nil
1,00,000 To 1,99,999 Re. 5 Per Thousand
Rs. 2,00,000 And Above Re. 7.5 Per Thousand
 FEATURES
 Minimum Sum Assured - Rs. 50,000/-
 Maximum Sum Assured - No Limit
 Minimum age at entry - 14 years (Completed)
 Maximum age at entry - 57 years (nearer birthday) for 12 years Term, 51 years
(nearer birthday) for 16 years terms and 45 years (nearer birthday) for 20 years
term.
 Maximum age at expiry of extended term - 75 years (nearer birth day)
 Term - 12, 16, 20 years
 Modes Allowed - Yly, Hly, Qly, Mly & SSS
 Loan available
 Accident Benefit Available from 18 years.
 Sum Assured Must be in Multiple of Rs. 5,000

63. CHAPTER-10
WORKING OF LIC IN INDIA AND ABROAD
1. OFFICES IN INDIA
As on 31st March 2005, the Corporation has 7 Zonal Offices, Divisional
Offices and 2,048 Branch Offices in India.
2. FOREIGN OPERATIONS
The Corporation operates directly through its Branch offices in Mauritius
at Port Louis, Fiji at Suva & Lakota, and United Kingdom at Wimbledon
(during the year 2004-05, these three foreign branches together issued 13830
policies with sum assured of US $ 94.17 million and first premium income of
US $ 1.70 million) The total business of these foreign branches as at 31st
March 2005 was US $ 436.50 million sum assured under 99,998 policies.
3. FOREIGN SUBSIDIARIES
The overseas subsidiary of the corporation, LIC International BSC (c)
Bahrain, which was established in Bahrain in 1989, caters to the life insurance
needs of NRIs in the Gulf by issuing policies in US dollars. During the year
ended 31st December 2004, the company booked a total of 10852 policies for
a sum assured of US $ 106.11 million with first premium income of US $
15.5 million.
4. Joint Venture Companies
A) LIC (Nepal) Ltd:
LIC (Nepal) Ltd. a joint venture between LIC of India and M/s. Vishal
Group of companies in the kingdom of Nepal was launched on 3rd December
2001. The company for the year ended on 15th July 2004, completed 20985
policies with sum assured of NRs 252.19 crore. And first premium income of

64. NRs 11.54 crore, surpassing the annual budget on all the counts with a
splendid margin.
B) LIC (Lanka) Ltd.
LIC (Lanka) Ltd. a joint venture company between LIC of India and
M/s. Bar Heet Group of Cos. Ltd. was launched on 1st March 2003. In the
very next year the company completed record business of 8958 policies for a
sum of SLR 136.50 crore with first premium income of SLR 6.85 crore
surpassing the annual target by 157 percent in number of policies, 178 percent
in sum assured and 296 percent in first premium income.
C) LIC (Mauritius) Ltd.
A new joint venture offshore company promoted by LIC of India and
General Insurance Corporation of India is likely to commence its operations
shortly.

65. CHAPTER-11
THE LIFE INSURANCE INDUSTRY
1. TOTAL NO. OF AGENTS OF LIC IN INDIA
The total number of agents on LIC roll was 40,41,737 as at 31/03/2005
against 10,98,910 as on previous year.
2. CAREER AGENT SCHEMES:
The LIC Corporation has a scheme of urban career agents and rural
career agents, to promote the cause of professionalizing the agency force. They
are given stipends at the start of their career to enable them to settle down in
profession. At the end of March 2005 there were 25,865 urban career agents
and 46,418 rural career agents.
3. LICENSED AGENTS
Table 1 embodies data pertaining to area wise (urban-rural) licensed
agent by authority as on March 2004. It may be noted from the table that the
authority has a large number of private life insurer companies’ agents working
in urban areas and very few agents are in rural areas, but LIC agents in rural
areas are more than in urban areas.
Table 1 - Agents Licensed By The Authority, March 2004
Insurer Urban Rural
Allianz Bajaj 34367 1975
ING Vysya 11602 230
AMP Sanmar 4902 1522
SBI Life 4001 280
TATA AIG 32949 127

66. HDFC STD LIFE 18140 1069
ICIC PRU 46318 500
BSLI 13059 148
AVIVA 4388 656
OM KOTAK 6280 456
MNYL 10225 83
METLIFE 3133 63
LIC 627533 714666
Total 816897 721755
Source: I.R.D.A Annual Report 2003-2004, pg. 135
11.1 SERVICING OF POLICYHOLDERS
A) SETTLEMENT OF CLAIMS
Settlement of claims is a very important aspect of the service to the
policyholders. Hence the Corporation has laid great emphasis on expenditure
and settlement of maturity as well as death claims. During the year 2004-05,
the Corporation settled 115.04 lakh claims for Rs. 23642.54 crore compared to
103.53 lakh claim for Rs. 19607.20 crore in the previous year. The percentage
of claims outstanding at the end of the year to the claims payable during the
year was 0.14 percent by number and 08.80 percent by amount as on 31st
March 2005 compared to 0.15 percent and 0.80 percent respectively in the
previous year.
The figures in respect of settlement of claims for the last 3 years are
given in Table
Claims settlement 2002-03 to 2004-05
Year At Maturity Death
Number
In
Lakhs
Amount
In Rs.
Crore
Number
In
Lakhs
Amount
In Rs.
Crore

67. 2002-03 92.45 14497.35 4.46 2564.4
2003-04 98.73 16660.96 4.8 2946.24
2004-05 109.83 20355.18 5.22 3287.36
B) CUSTOMER COMPLAINT SOLUTION (GRIEVANCE REDRESSAL)
Out of the large number of claims settled every year, only a few claims
are repudiated by the Corporation, mainly in cases of suppression of material
facts. Claimants under such cases are given an opportunity to make
representation before Zonal/Central Claims Review Committee. A former High
Court/District Court judge is a sitting member of the Review Committee. Out
of 3751 cases reviewed during 2004-05, 751 were paid (including ex-gratia
payments.)
11.2 EMPLOYMENT CREATED BY LIC
A. STAFF STRENGTH
The number of employees of the Corporation as on 31/03/2005 was
1,14,588 as against 1,15,715 at the end of the previous financial year.
B. EMPOWERMENT OF WOMEN
Women contributed to the growth and development of the Corporation in
a significant way. Out of 19,160 Class I Officers of the Corporation, 3017 are
lady officer. There are 8 lady officers in the senior rank of Zonal Manager.
Out of 19230 Development Officers, 285 are ladies and there are 20333 lady
class III/IV employees as against a total of 76198 class III/IV employees.
C. SOCIAL SECURITY SCHEMES
Through Janashree Bima Yojana 7538 schemes covering 18.20 lakh lives
were finalized under 43 approved occupations. There are 23.93 lakh new lives
covered under existing social security schemes.
Insurance to the total business completed for the year comes to 78.79 percent
and 74.60 percent in respect of number of policies and sum assured
respectively.

68. CHAPTER-12
MARKET SHARE OF PRIVATE AND
GOVERNMENT SECTOR IN LIFE INSURANCE
Today life insurance is almost entirely in the hands of LIC. The Post &
Telegraph Department conducts some business in the area for its employees,
but the volume of this business in relation to that of LIC is negligible.
Recently the life insurance sector has been opened up for private players.
Following table shows the shares of the Government and private sector in life
insurance business in India.
Following Table Related With Share Of Private And Government Sector In
Life Insurance
(Figures In %)
Insurer 2001-02 2002-03 2003-04
First Year Premium
LIC 98.65 94.3 87.44
Private Sector 1.35 5.7 12.56
Total 100 100 100
Renewal Premium
LIC 99.99 99.6 98.55
Private Sector 0.01 0.4 1.45
Total 100 100 100
Total Premium
LIC 99.46 97.19 95.29
Private Sector 0.56 2.01 4.71
Total 100 100 100

69. CHAPTER-13
APPENDIX
Public Sector Private Player
1. Life Insurance
Corporation of
India (LIC)
• Bajaj Allianz life Insurance Co. Ltd.
• Birla Sun Life Insurance Co. Ltd. (BSLI)
• HDFC Standard Life Co. Ltd. (HDFC STD LI)
• ICICI Prudential Life Insurance co. Ltd (ICICI PRU)
• ING Vysya Life Insurance CO. Ltd. (ING Vysya Ltd.)
• Max New York Life Insurance CO. Ltd.
• Met life India Insurance Co. Pvt. Ltd. (METLIFE)
• Kotak Mahindra Old Mutual Life Insurance Co. Ltd
• SBI Life Insurance Co. Ltd. (SBI Life)
• TATA AIG Life Insurance Co. Ltd. (TATA AIG)
• AMP Sanmar Assurance Co. Ltd.
• Aviva Life Insurance Co. Pvt. Ltd. (AVIVA)
• Sahara Indian Life Insurance Co. Ltd. ( Sahara Life)

70. CONCLUSION
In India, life insurance business existed even before nationalization. After
nationalization, the Constitution set up the LIC of India. Due to the impact of
globalization, privatization and liberalization policy in the present era, LIC has
opened many branches inside and outside India. Insurance companies from
other countries have also come to India. In recent years the growth rate of
insurance business of private sector companies has been higher than that of
LIC. The competition between the two will ultimately benefit the consumer.

71. RECOMMENDATIONS
1. LIC should develop and market long-term unit life insurance plans with
uniform risk cover.
2. LIC should examine allowing conditional assignment of life insurance policies
at the time proposals are made.
3. LIC should pay interest for the period of delay exceeding say 50 days from
the date of maturity or intimation of death in settlement of claims irrespective
of the cause of delay. The rate of interest should be around the average rate
earned on the life insurance fund.
4. The life insurance contract presumes existence of insurable interest in the life
insured. This distinguishes it from a wager policy, which is not valid in law.
 The presence of insurable interest is assumed in several type of cases such as
 Insurance by individual on own life.
 Insurance by a woman on the life of her husband
 Insurance by a man on the life of his wife.
 Miscellaneous insurance, particularly those relating to children for education,
marriage etc.
 Other categories that have been added to the above from time to time include
 Creditor on the life of his debtor
 Sureties of the life of the principal
 Trustees in respect of the legal right or interest in the trust properly rested
in them
 Firm on the lives of key employees or representatives
 Business partner on the life of a key partner
 One more category may be introduced under the insurable interest, viz.
 The state has insurable interest in it citizens
Life insurance is not simply a business proposition. It is not just a
question of mobilization of resources for development; it is a question of citizen’s
sense of security. It provides a link between the present and the future.

72. CASE STUDY
SINGLE AND WORKING
Bob is a 25 year old qualified carpenter
who is a subcontractor to various builders.
He is earning $70,000 gross but pays
$20,000 in expenses, most which are fixed
expenses that is a leased car and leased equipment. Bob rents an apartment
and spends the rest of his earnings of $50,000 on living and entertainment
expenses. Bob has little in the way of savings.
1. WHAT IF BOB DOESN'T HAVE INSURANCE?
Bob has a car accident and is hospitalised for one month. He then faces
a long and painful rehabilitation process of 12 months to try to regain the use
of one of his arms. Even with private health insurance there are medical bills
to be paid particularly for physiotherapy and rehabilitation sessions. Bob has
no income for 13 months but must continue to pay his lease costs of $20,000
per annum. What little money Bob receives in disability payments from the
government won't cover his rental costs. Bob has to move back home and
borrow money from his parents. If he doesn't recover the use of his arm Bob
will never be able to work as a carpenter again and will have to retrain into
a potentially lower paid job.
2. WHAT INSURANCES COULD BOB HAVE TAKEN OUT?
 Income Protection - Bob could have taken out income protection for 75%
of his net income of $50,000 which would provide him with a monthly
benefit of $3,125.
 Claims Escalation/Indexation - so when on claim payments keep pace with
inflation
 Specified injury benefit - pays a set benefit for certain fractures or injuries

73.  Lump sum TPD benefit - pays a lump sum in event of a total and
permanent disability
 Future guaranteed insurability - allow increases to cover for certain life
event
 Severity benefit - increases benefit by 33% if serious disability is suffered
3. BUSINESS EXPENSES COVER
As his income protection will not cover his $20,000 of fixed expenses
Bob could have taken out 12 months cover for this so that he did not have
to meet these expenses out of the $3125 he received from his income
protection.
4. WHAT IF BOB HAD THESE INSURANCES?
If Bob's policy had a 30 day waiting period he would normally not be
entitled to receive payments until 30 days after his injury (or later depending
on insurer processing dates) and so he would might have to draw down on
savings or seek support from his family for this period. However Bob's
income protection policy included a Bed Confinement/Nursing Care benefit
payable within the waiting period so he received a benefit while he was
hospitalised for the first month and then his normal payments commenced.
After 30 days Bob also started receiving benefits from his Business Expenses
policy to cover his lease payments.

74. NEWSPAPER CUUTING RELATED WITH LIFE
INSURANCE SCHEME IN LIC

75. BIBLIOGRAPHY
Reference Book’s:
Book Author Publication
New Life Insurance Investment Advisor Ben G. Baldwin Gyan Books (P)
Ltd.
Insurance In India : Development, Risk
Management, Performance
Dr. Sajid Ali, Riyaz
Mohammad
Narosa Publishing
House Private
Limited
Life Insurance Corporation Of India Rakesh Agarwal Unique Publishers
Life Insurance In India
Prof. R.Haridas
Manish Publication
INSURANCE - Fundamentals, Environment
and Procedures
B.S.Bodla, M.C.Garg
& K.P.Singh
Orient Paperbacks
Web Site’s:
 www.ertirement.com/services-life insurance.aspx
 www.licindia.com
 en.wikipedia.org/wiki/life insurance
 www.preservearticles.com