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1.

1)INTRODUCTION

Insurance is a cover used for protecting oneself from the risk of a financial
loss. It is important to understand that risk is a part of any person’s life and
that it increases as a person increases in age, responsibility and wealth.
Insurance is risk coverage against financial losses and should not be taken as an
investment instrument.
There are mainly two parties involved in this – the insurer and the insured. The
insurer is the insurance company who will provide the cover to the insured against
any financial losses. The insured may be an individual person or a group of people
like an employer, members of a society, etc.
A policy is the contract between the insurer and the insured, which states the
risks covered, the exclusions, if any, and the benefits reimbursed on the
happening of an event like death, illness etc. The policy is paid through what is
called a premium, which is a set amount that must be paid by the insured on a
monthly, semi-annual or annual basis. On the happening of an event like death,
disability, fire, etc, for which the insured is covered, the benefit amount stated
in the policy contract can be claimed by the insured.
1.2)Classification of Insurance
There are mainly two broad classes of Insurance – Life and Non Life.
• Life insurance products include Term Life policies, which give a pure risk
coverage of only the death benefit, whereas endowment or money back policies have
a risk as well as savings component i.e. death as well as maturity benefit. Also
coming under the life insurance umbrella are the Unit – Linked Policies in which
there is a risk component and a savings component, which is invested in equity,
debt or gilt funds, depending on the insurance company.
• Non Life insurance products include property or casualty, health insurance
or house, fire, marine insurance etc. This insurance class deals with all the non-
life aspects of an insured like his/her house, health, land, office, cargo, etc
which might bring financial loss.

1.3)WHAT IS INSURANCE
Insurance is a form of risk management in which the insured transfers the cost of
potential loss to another entity in exchange for monetary compensation known as
the premium. (For background reading, see The History Of Insurance In America.)

Insurance allows individuals, businesses and other entities to protect themselves


against significant potential losses and financial hardship at a reasonably
affordable rate. We say "significant" because if the potential loss is small, then
it doesn't make sense to pay a premium to protect against the loss. After all, you
would not pay a monthly premium to protect against a $50 loss because this would
not be considered a financial hardship for most.
Insurance is appropriate when you want to protect against a significant monetary
loss. Take life insurance as an example. If you are the primary breadwinner in
your home, the loss of income that your family would experience as a result of our
premature death is considered a significant loss and hardship that you should
protect them against. It would be very difficult for your family to replace your
income, so the monthly premiums ensure that if you die, your income will be
replaced by the insured amount. The same principle applies to many other forms of
insurance. If the potential loss will have a detrimental effect on the person or
entity, insurance makes sense. (For more insight, see 15 Insurance Policies You
Don't Need.)

Everyone that wants to protect themselves or someone else against financial


hardship should consider insurance. This may include:
• Protecting family after one's death from loss of income
• Ensuring debt repayment after death
• Covering contingent liabilities
• Protecting against the death of a key employee or person in your business
• Buying out a partner or co-shareholder after his or her death
• Protecting your business from business interruption and loss of income
• Protecting yourself against unforeseeable health expenses
• Protecting your home against theft, fire, flood and other hazards
• Protecting yourself against lawsuits
• Protecting yourself in the event of disability
• Protecting your car against theft or losses incurred because of accidents

1.4)FUNDAMENTAL OF INSURANCE
1.4.1)How does insurance work?

Insurance works by pooling risk.What does this mean? It simply means that a large
group of people who want to insure against a particular loss pay their premiums
into what we will call the insurance bucket, or pool. Because the number of
insured individuals is so large, insurance companies can use statistical analysis
to project what their actual losses will be within the given class. They know that
not all insured individuals will suffer losses at the same time or at all. This
allows the insurance companies to operate profitably and at the same time pay for
claims that may arise. For instance, most people have auto insurance but only a
few actually get into an accident. You pay for the probability of the loss and for
the protection that you will be paid for losses in the event they occur.

1.4.2)Risks

Life is full of risks - some are preventable or can at least be minimized, some
are avoidable and some are completely unforeseeable. What's important to know
about risk when thinking about insurance is the type of risk, the effect of that
risk, the cost of the risk and what you can do to mitigate the risk. Let's take
the example of driving a car. (For more insight on the concept of risk, see
Determining Risk And The Risk Pyramid.)

1.4.3)Type of risk: Bodily injury, total loss of vehicle, having to fix your car

The effect: Spending time in the hospital, having to rent a car and having to make
car payments for a car that no longer exists

The costs: Can range from small to very large


Mitigating risk: Not driving at all (risk avoidance), becoming a safe driver (you
still have to contend with other drivers), or transferring the risk to someone
else (insurance)
Let's explore this concept of risk management (or mitigation) principles a little
deeper and look at how you may apply them. The basic risk management tools
indicate that risks that could bring financial losses and whose severity cannot be
reduced should be transferred. You should also consider the relationship between
the cost of risk transfer and the value of transferring that risk.

1.5)TYPES OF INSURANCE

2.1)Brief History Of LIC

The story of insurance is probably as old as the story of mankind. The same
instinct that prompts modern businessmen today to secure themselves against loss
and disaster existed in primitive men also. They too sought to avert the evil
consequences of fire and flood and loss of life and were willing to make some sort
of sacrifice in order to achieve security. Though the concept of insurance is
largely a development of the recent past, particularly after the industrial era –
past few centuries – yet its beginnings date back almost 6000 years.
Life Insurance in its modern form came to India from England in the year 1818.
Oriental Life Insurance Company started by Europeans in Calcutta was the first
life insurance company on Indian Soil. All the insurance companies established
during that period were brought up with the purpose of looking after the needs of
European community and Indian natives were not being insured by these companies.
However, later with the efforts of eminent people like Babu Muttylal Seal, the
foreign life insurance companies started insuring Indian lives. But Indian lives
were being treated as sub-standard lives and heavy extra premiums were being
charged on them. Bombay Mutual Life Assurance Society heralded the birth of first
Indian life insurance company in the year 1870, and covered Indian lives at normal
rates. Starting as Indian enterprise with highly patriotic motives, insurance
companies came into existence to carry the message of insurance and social
security through insurance to various sectors of society. Bharat Insurance Company
(1896) was also one of such companies inspired by nationalism. The Swadeshi
movement of 1905-1907 gave rise to more insurance companies. The United India in
Madras, National Indian and National Insurance in Calcutta and the Co-operative
Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative
Insurance Company took its birth in one of the rooms of the Jorasanko, house of
the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General
Assurance and Swadeshi Life (later Bombay Life) were some of the companies
established during the same period. Prior to 1912 India had no legislation to
regulate insurance business. In the year 1912, the Life Insurance Companies Act,
and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912
made it necessary that the premium rate tables and periodical valuations of
companies should be certified by an actuary. But the Act discriminated between
foreign and Indian companies on many accounts, putting the Indian companies at a
disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance
business. From 44 companies with total business-in-force as Rs.22.44 crore, it
rose to 176 companies with total business-in-force as Rs.298 crore in 1938. During
the mushrooming of insurance companies many financially unsound concerns were also
floated which failed miserably. The Insurance Act 1938 was the first legislation
governing not only life insurance but also non-life insurance to provide strict
state control over insurance business. The demand for nationalization of life
insurance industry was made repeatedly in the past but it gathered momentum in
1944 when a bill to amend the Life Insurance Act 1938 was introduced in the
Legislative Assembly. However, it was much later on the 19th of January, 1956,
that life insurance in India was nationalized. About 154 Indian insurance
companies, 16 non-Indian companies and 75 provident were operating in India at the
time of nationalization. Nationalization was accomplished in two stages; initially
the management of the companies was taken over by means of an Ordinance, and
later, the ownership too by means of a comprehensive bill. The Parliament of India
passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life
Insurance Corporation of India was created on 1st September, 1956, with the
objective of spreading life insurance much more widely and in particular to the
rural areas with a view to reach all insurable persons in the country, providing
them adequate financial cover at a reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from
its corporate office in the year 1956. Since life insurance contracts are long
term contracts and during the currency of the policy it requires a variety of
services need was felt in the later years to expand the operations and place a
branch office at each district headquarter. re-organization of LIC took place and
large numbers of new branch offices were opened. As a result of re-organisation
servicing functions were transferred to the branches, and branches were made
accounting units. It worked wonders with the performance of the corporation. It
may be seen that from about 200.00 crores of New Business in 1957 the corporation
crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for
LIC to cross 2000.00 crore mark of new business. But with re-organisation
happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore
Sum Assured on new policies.
Today LIC functions with 2048 fully computerized branch offices, 100 divisional
offices, 7 zonal offices and the Corporate office. LIC’s Wide Area Network covers
100 divisional offices and connects all the branches through a Metro Area Network.
LIC has tied up with some Banks and Service providers to offer on-line premium
collection facility in selected cities. LIC’s ECS and ATM premium payment facility
is an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info
Centres have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai,
Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of
providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK
offices. The satellite offices are smaller, leaner and closer to the customer. The
digitalized records of the satellite offices will facilitate anywhere servicing
and many other conveniences in the future.
LIC continues to be the dominant life insurer even in the liberalized scenario of
Indian insurance and is moving fast on a new growth trajectory surpassing its own
past records. LIC has issued over one crore policies during the current year. It
has crossed the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005,
posting a healthy growth rate of 16.67% over the corresponding period of the
previous year.
From then to now, LIC has crossed many milestones and has set unprecedented
performance records in various aspects of life insurance business. The same
motives which inspired our forefathers to bring insurance into existence in this
country inspire us at LIC to take this message of protection to light the lamps of
security in as many homes as possible and to help the people in providing security
to their families.

2.2)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.
The General insurance business in India, on the other hand, can trace its roots to
the Triton Insurance Company Ltd., the first general insurance company established
in the year 1850 in Calcutta by the British.

2.3)Some of the important milestones in the general insurance business in India


are:
1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact
all classes of general insurance business.
1957: General Insurance Council, a wing of the Insurance Association of India,
frames a code of conduct for ensuring fair conduct and sound business practices.
1968: The Insurance Act amended to regulate investments and set minimum solvency
margins and the Tariff Advisory Committee set up.
1972: The General Insurance Business (Nationalisation) Act, 1972 nationalised the
general insurance business in India with effect from 1st January 1973.
107 insurers amalgamated and grouped into four companies viz.
the NationalInsurance Company Ltd., the New India Assurance Company Ltd.,
theOriental Insurance Company Ltd. and the United India Insurance Company
Ltd. GIC incorporated as a company.
2.4)OBJECTIVE OF LIC

• Spread Life Insurance widely and in particular to the rural areas and to the
socially and economically backward classes with a view to reaching all insurable
persons in the country and providing them adequate financial cover against death
at a reasonable cost.
• Maximize mobilization of people's savings by making insurance-linked savings
adequately attractive.
• Bear in mind, in the investment of funds, the primary obligation to its
policyholders, whose money it holds in trust, without losing sight of the interest
of the community as a whole; the funds to be deployed to the best advantage of the
investors as well as the community as a whole, keeping in view national priorities
and obligations of attractive return.
• Conduct business with utmost economy and with the full realization that the
moneys belong to the policyholders.
• Act as trustees of the insured public in their individual and collective
capacities.
• Meet the various life insurance needs of the community that would arise in
the changing social and economic environment.
• Involve all people working in the Corporation to the best of their
capability in furthering the interests of the insured public by providing
efficient service with courtesy.
• Promote amongst all agents and employees of the Corporation a sense of
participation, pride and job satisfaction through discharge of their duties with
dedication towards achievement of Corporate Objective.

2.5)MISSION/VISION
2.5.1)Mission
"Explore and enhance the quality of life of people through financial security by
providing products and services of aspired attributes with competitive returns,
and by rendering resources for economic development."
2.5.2)Vision
"A trans-nationally competitive financial conglomerate of significance to
societies and Pride of India."

2.6)BORD OF DIRECTORS

Members On The Board Of The Corporation


Shri. T.S. Vijayan (Chairman)

Shri. D.K. Mehrotra (Managing Director - LIC)

Shri. Thomas Mathew T. (Managing Director - LIC)

Shri. A.K. Dasgupta (Managing Director - LIC)

Shri. Ashok Chawla (Finance Secretary, Ministry of Finance, Govt. of India)


Shri. G.C. Chaturvedi (Additional Secretary, Department of Financial Services,
Ministry of Finance, Govt. of India.)
Shri. Yogesh Lohiya (Chairman cum Managing Director, GIC of India)

Dr. Sooranad Rajashekhran Shri. Monis R. Kidwai


2.7)We Operate All Over India

3.1)KNOW ABOUT YOUR LIFE INSURANCES


Life insurance in India made its debut well over 100 years ago.

In our country, which is one of the most populated in the world, the prominence of
insurance is not as widely understood, as it ought to be. What follows is an
attempt to acquaint readers with some of the concepts of life insurance, with
special reference to LIC.

It should, however, be clearly understood that the following content is by no


means an exhaustive description of the terms and conditions of an LIC policy or
its benefits or privileges.

For more details, please contact our branch or divisional office. Any LIC Agent
will be glad to help you choose the life insurance plan to meet your needs and
render policy servicing.

3.2)What Is Life Insurance?


Life insurance is a contract that pledges payment of an amount to the person
assured (or his nominee) on the happening of the event insured against.

The contract is valid for payment of the insured amount during:


• The date of maturity, or
• Specified dates at periodic intervals, or
• Unfortunate death, if it occurs earlier.
Among other things, the contract also provides for the payment of premium
periodically to the Corporation by the policyholder. Life insurance is universally
acknowledged to be an institution, which eliminates 'risk', substituting certainty
for uncertainty and comes to the timely aid of the family in the unfortunate event
of death of the breadwinner.
By and large, life insurance is civilisation's partial solution to the problems
caused by death. Life insurance, in short, is concerned with two hazards that
stand across the life-path of every person:
1. That of dying prematurely leaving a dependent family to fend for itself.
2. That of living till old age without visible means of support.

3.3)Life Insurance Vs. Other Savings


3.3.1)Contract Of Insurance:
A contract of insurance is a contract of utmost good faith technically known as
uberrima fides. The doctrine of disclosing all material facts is embodied in this
important principle, which applies to all forms of insurance.

At the time of taking a policy, policyholder should ensure that all questions in
the proposal form are correctly answered. Any misrepresentation, non-disclosure or
fraud in any document leading to the acceptance of the risk would render the
insurance contract null and void.
3.3.1)Protection:
Savings through life insurance guarantee full protection against risk of death of
the saver. Also, in case of demise, life insurance assures payment of the entire
amount assured (with bonuses wherever applicable) whereas in other savings
schemes, only the amount saved (with interest) is payable.

3.3.3)Aid To Thrift:
Life insurance encourages 'thrift'. It allows long-term savings since payments can
be made effortlessly because of the 'easy instalment' facility built into the
scheme. (Premium payment for insurance is either monthly, quarterly, half yearly
or yearly).
For example: The Salary Saving Scheme popularly known as SSS, provides a
convenient method of paying premium each month by deduction from one's salary.
In this case the employer directly pays the deducted premium to LIC. The Salary
Saving Scheme is ideal for any institution or establishment subject to specified
terms and conditions.

3.3.4)Liquidity:
In case of insurance, it is easy to acquire loans on the sole security of any
policy that has acquired loan value. Besides, a life insurance policy is also
generally accepted as security, even for a commercial loan.

3.3.5)Tax Relief:
Life Insurance is the best way to enjoy tax deductions on income tax and wealth
tax. This is available for amounts paid by way of premium for life insurance
subject to income tax rates in force.
Assessees can also avail of provisions in the law for tax relief. In such cases
the assured in effect pays a lower premium for insurance than otherwise.
3.3.6)Money When You Need It:
A policy that has a suitable insurance plan or a combination of different plans
can be effectively used to meet certain monetary needs that may arise from time-
to-time.
Children's education, start-in-life or marriage provision or even periodical needs
for cash over a stretch of time can be less stressful with the help of these
policies.
Alternatively, policy money can be made available at the time of one's retirement
from service and used for any specific purpose, such as, purchase of a house or
for other investments. Also, loans are granted to policyholders for house building
or for purchase of flats (subject to certain conditions).

3.3.7)Who Can Buy A Policy?

Any person who has attained majority and is eligible to enter into a valid
contract can insure himself/herself and those in whom he/she has insurable
interest.

Policies can also be taken, subject to certain conditions, on the life of one's
spouse or children. While underwriting proposals, certain factors such as the
policyholder’s state of health, the proponent's income and other relevant factors
are considered by the Corporation.

3.3.8)Insurance For Women

Prior to nationalisation (1956), many private insurance companies would offer


insurance to female lives with some extra premium or on restrictive conditions.
However, after nationalisation of life insurance, the terms under which life
insurance is granted to female lives have been reviewed from time-to-time.

At present, women who work and earn an income are treated at par with men. In
other cases, a restrictive clause is imposed, only if the age of the female is up
to 30 years and if she does not have an income attracting Income Tax.

3.3.9)Medical And Non-Medical Schemes

Life insurance is normally offered after a medical examination of the life to be


assured. However, to facilitate greater spread of insurance and also to avoid
inconvenience, LIC has been extending insurance cover without any medical
examination, subject to certain conditions.
3.3.10)With Profit And Without Profit Plans

An insurance policy can be 'with' or 'without' profit. In the former, bonuses


disclosed, if any, after periodical valuations are allotted to the policy and are
payable along with the contracted amount.

In 'without' profit plan the contracted amount is paid without any addition. The
premium rate charged for a 'with' profit policy is therefore higher than for a
'without' profit policy.

3.3.11)Keyman Insurance

Keyman insurance is taken by a business firm on the life of key employee(s) to


protect the firm against financial losses, which may occur due to the premature
demise of the Keyman.
INSURANCE PLANS
As individuals it is inherent to differ. Each individual?s insurance needs and
requirements are different from that of the others. LIC?s Insurance Plans are
policies that talk to you individually and give you the most suitable options that
can fit your requirement.

Jeevan Anurag

Komal Jeevan

CDA Endowment Vesting At 21

Marriage Endowment Or
Educational Annuity Plan

CDA Endowment Vesting At 18

Jeevan Kishore

Jeevan Chhaya

Child Career Plan

Child Future Plan

Child Fortune Plus

Jeevan Aadhar

Jeevan Vishwas
The Endowment Assurance Policy

The Endowment Assurance Policy-Limited Payment

Jeevan Mitra(Double Cover Endowment Plan)

Jeevan Mitra(Triple Cover Endowment Plan)

Jeevan Anand

New Janaraksha Plan

Jeevan Amrit

Jeevan Shree-I

Jeevan Pramukh

The Money Back Policy-20 Years

The Money Back Policy-25 Years

Jeevan Surabhi-15 Years

Jeevan Surabhi-20 Years

Jeevan Surabhi-25 Years

Bima Bachat
Jeevan Bharati - I

The Whole Life Policy

The Whole Life Policy- Limited Payment

The Whole Life Policy- Single Premium

Jeevan Anand

Jeevan Tarang

Two Year Temporary Assurance Policy

The Convertible Term Assurance Policy

Anmol Jeevan-I

Amulya Jeevan-I

Jeevan Saathi Plus

Jeevan Saathi
Jeevan Bharati - I

FEATURES:-
Introduction
LIC’s Jeevan Bharati-I – is a plan exclusively for women. It is a with profit plan
having special features considering the needs of women. The plan also provides for
Accident Benefit, Critical Illness Benefit and Congenital Disability Benefit as
optional Riders

1. SPECIAL FEATURES

1. Encashment of Survival Benefit 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 the rate
decided by the corporation from time to time will be payable.

2. Flexibility to pay premiums in advance:


The mode of premium payment is only yearly under this plan. However, policyholder
may pay the next yearly premium in advance in instalments (maximum upto 3
instalments) during the year. If premiums are paid in advance a premium rebate may
be allowed as may be decided by the Corporation from time to time

3. Option to receive maturity proceeds in the form of an annuity: :


The policyholder shall have the option to receive the maturity proceeds in the
form of annuity. The rate of annuity will be based on the annuity rates prevalent
at the time of stipulated Date of Maturity.

4. Auto Cover::
After two years premiums have been paid, whenever premium payment is discontinued,
the life cover for full sum assured will continue for 3 years from the due date of
first unpaid premium.

If death occurs during the Auto Cover period, then death benefit after deducting
unpaid premiums, with interest is payable along with the vested bonus, if any.

2. OPTIONAL RIDERS:
The following riders are available under this plan:

A. CRITICAL ILLNESS (CI) RIDER :


An amount equal to the Critical Illness Rider Sum Assured will be payable in case
of diagnosis of defined categories of critical illnesses. A person is eligible for
this benefit upto a maximum age of 60 years but subject to a maximum of the policy
term. This benefit can be availed for a minimum Sum of Rs 50000 and for a maximum
Sum equal to the Sum assured under the basic plan subject to the maximum of Rs 5
lakh overall limit taking all critical illness riders under all existing policies
of the Life Assured.
(For details refer the sales brochure of Critical Illness rider)

B. ACCIDENT BENEFIT RIDER:


An additional amount equal to the Accident Benefit Rider Sum Assured is payable
upon death or total and permanent disability due to accident during the policy
term.
This benefit can be availed for a minimum sum of Rs 50000 and for a maximum sum
equal to the Sum Assured under the Basic Plan subject to the maximum of Rs.50
lakhs.

C. CONGENITAL DISABILITIES BENEFIT (CDB) RIDER:


This rider can be opted for by a female between the ages of 18yrs and 35 years.
An amount equal to 50% of the CDB Sum Assured is payable if the Life Assured
gives birth to a child with specified congenital disabilities. This benefit is
available for a maximum of two such children and this benefit ceases at the age of
40 years.
This benefit can be availed for a minimum Sum of Rs 50000 and a maximum sum of Rs
500000.
(For details refer the sales brochure of Congenital Disability Benefit Rider)

3. ELIGIBILITY CONDITIONS (For Basic Plan):


Minimum age at entry : 18 years (completed)
Maximum age at entry : 55 years (nearest birthday)
Maximum age at maturity : 70 years (nearest birthday)
Policy term : 15 and 20 years
Minimum Sum Assured : Rs. 50,000/-
Maximum Sum Assured : Rs. 25,00,000/-
(Sum Assured shall be in multiples of Rs.5,000/-)
4. SAMPLE PREMIUM RATES FOR BASIC PLAN :
Tabular Annual Premium per 1000 SA
AGE/TERM 15 20
20 79.35 63.90
25 79.45 64.10
30 79.70 64.55
35 80.25 65.45
36 80.45 65.70
37 80.60 66.00
40 81.35 67.00
45 83.15 69.50
50 86.05 73.50
5. HIGH SUM ASSURED REBATES:
Sum Assured (in Rs) Rebate per thousand Sum Assured
1,00,000 to 4, 99,999 Rs 2.00
5, 00,000 and above Rs 4.00
6. LOAN:
Loan is available under the plan after the policy acquires paid-up value.
7. GRACE PERIOD:
A grace period of one-month but not less than 30 days will be allowed for payment
of premium .
8. REVIVAL:
A. REVIVAL DURING THE AUTO COVER PERIOD:
(i) If Critical Illness Rider is not opted for:
During the Auto Cover Period, the Life Assured can pay one or more instalments of
premiums with interest without submission of any evidence of health. On payment of
part or full arrears of premiums with interest, the Auto Cover Period of 3 years
from the due date of new FUP shall again be available during the term of the
Policy.

If any survival benefit falls due during the above 3-year auto cover period the
same will be paid after deduction of unpaid premiums with interest until the due
date of the survival benefit, provided it is more than the unpaid premiums with
interest. If the survival benefit is insufficient to cover the arrears of premiums
with interest up to the due date of such survival benefit, then the survival
benefit will be payable only on payment of such arrears of premiums with
interest , during the period of the aforesaid 3 years or on revival of the policy
thereafter.
(ii) If Critical Illness Rider is opted for:
During the auto cover period, the policy can be revived by payment of full arrears
of premium together with interest and subject to submission of proof of continued
insurability of the Life Assured to the satisfaction of the Corporation. The
Corporation reserves the right to accept at original terms, accept at revised
terms or decline the revival of the policy. The revival of the policy shall take
effect only after the same is approved by the Corporation and is specifically
communicated to the Life Assured.
If any survival benefit falls due during the above 3-year auto cover period the
same will be paid only after revival of the policy as stated above.

B. REVIVAL OTHER THAN DURING AUTO COVER PERIOD :


If the Policy has lapsed, and the policy is not under the period of auto cover,
the policy can be revived within a period of 5 years from the date of first unpaid
premium and before the date of maturity by payment of full arrears of premium
together with interest and subject to submission of proof of continued
insurability of the Life Assured to the satisfaction of the Corporation. The
Corporation reserves the right to accept at original terms, accept at revised
terms or decline the revival of a discontinued policy. The revival of discontinued
policy shall take effect only after the same is approved by the Corporation and is
specifically communicated to the Life Assured.
The Rider/s shall be revived along with the Basic plan and not in isolation.
9. PAID UP VALUE:
If after at least three full years’ premiums have been paid and any subsequent
premium not paid, this policy shall not be wholly void after the expiry of three
years Auto Cover Period ,but shall continue as a paid up policy. The Sum Assured
of the policy shall be reduced in the same proportion as the number of premiums
actually paid bears to the total number of premiums stipulated for in the policy ,
less any survival benefit paid. This reduced Sum is called the paid up value.

The policy thereafter shall be free from all liabilities for payment of the
premiums, but shall not be entitled to the future bonuses. The existing vested
reversionary bonuses, if any, will remain attached to the reduced paid-up Policy.
This paid up value shall be payable on the date of maturity or at Life Assured’s
prior death. No survival benefit shall be payable under paid up policies.
The rider benefits will cease to apply if the policy is in lapsed condition and
will not acquire any paid up value.
10. SURRENDER VALUE:
The Guaranteed Surrender value will be available after the expiry of 3 policy
years provided the premiums have been paid for at least three years. The
Guaranteed Surrender Value is equal to 30% of the total amount of premiums paid
excluding the premiums paid for the first year, any premiums paid towards riders,
all extra premiums that may have been paid less the amount of survival benefits
paid earlier. The cash value of any existing bonuses, if ,any will also be paid .
Corporation may, however, pay special surrender value as the discounted value of
Paid up sum assured and vested bonus, if any, as applicable on date of surrender,
provided the same is higher than guaranteed surrender value.
11. EXCLUSIONS:
Suicide: This policy shall be void if the Life Assured commits suicide (whether
sane or insane at that time) at any time on or after the date on which the risk
under the policy has commenced but before the expiry of one year from the date of
commencement of risk under the policy and the Corporation will not entertain any
claim by virtue of this policy except to the extent of a third party’s bonafide
beneficial interest acquired in the policy for valuable consideration of which
notice has been given in writing to the branch where the Policy is being presently
serviced (where the policy records are kept), at least one calendar month prior to
death.
12. COOLING OFF PERIOD:
If you are not satisfied with the “Terms and Conditions” of the policy, you may
return the policy to us within 15 days.

BENEFITS

A. Survival Benefits:
On Survival the following benefits are payable:

For 15 Years Term


20% of the Sum Assured payable at the end of 5 years.
20% of the Sum Assured payable at the end of 10 years.
60% of the Sum Assured payable together with vested bonus, and Final Additional
Bonus, if any, at the end of 15 years.

For 20 Years Term


20% of the Sum Assured payable at the end of 5 years.
20% of the Sum Assured payable at the end of 10 years.

20% of the Sum Assured payable at the end of 15 years.


40% of the Sum Assured payable together with vested bonus and Final Additional
Bonus, if any at the end of 20 years.
B. Death Benefit:
In case of death of the life assured during the policy term, the full sum assured
is payable irrespective of the survival benefits paid earlier. The vested bonuses
and Final Additional Bonus, if any are also payable.
BENEFIT ILLUSTRATION
Statutory warning:
“Some benefits are guaranteed and some benefits are variable with returns based on
the future performance of your Insurer carrying on life insurance business. If
your policy offers guaranteed returns then these will be clearly marked
“guaranteed” in the illustration table on this page. If your policy offers
variable returns then the illustrations on this page will show two different rates
of assumed future investment returns. These assumed rates of return are not
guaranteed and they are not the upper or lower limits of what you might get back,
as the value of your policy is dependent on a number of factors including future
investment performance.”
Benefit Illustration
Age of LA (Yrs.) 35
Term (Yrs.) 20
Sum Assured(Rs.) 100000
Annual Premium 6345

End
of
Year Total premiums paid till end of year Death Benefit during the year
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 6345 100000 2200 4500 102200 104500
2 12690 100000 4400 9000 104400 109000
3 19035 100000 6600 13500 106600 113500
4 25380 100000 8800 18000 108800 118000
5 31725 100000 11000 22500 111000 122500
6 38070 100000 13200 27000 113200 127000
7 44415 100000 15400 31500 115400 131500
8 50760 100000 17600 36000 117600 136000
9 57105 100000 19800 40500 119800 140500
10 63450 100000 22000 45000 122000 145000
15 95175 100000 36667 75000 136667 175000
20 126900 100000 48900 100000 148900 200000

End
of
Year Total premiums paid till end of year BENEFIT ON SURVIVAL / MATURITY AT
THE END OF YEAR
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 6345 0 0 0 0 0
2 12690 0 0 0 0 0
3 19035 0 0 0 0 0
4 25380 0 0 0 0 0
5 31725 20000 0 0 20000 20000
6 38070 0 0 0 0 0
7 44415 0 0 0 0 0
8 50760 0 0 0 0 0
9 57105 0 0 0 0 0
10 63450 20000 0 0 20000 20000
15 95175 20000 0 0 20000 20000
20 126900 40000 48900 100000 88900 140000
Note: i)his illustration is applicable to a standard (from medical, life style and
occupation point of view) life.
i) The non-guaranteed benefits (1) and (2) in above illustration are calculated so
that they are consistent with the Projected Investment Rate of Return assumption
of 6% p.a.(Scenario 1) and 10% p.a. (Scenario 2) respectively. In other words, in
preparing this benefit illustration, it is assumed that the Projected Investment
Rate of Return that LICI will be able to earn throughout the term of the policy
will be 6% p.a. or 10% p.a., as the case may be. The Projected Investment Rate of
Return is not guaranteed.
Section 45 of Insurance Act, 1938:
No policy of life insurance shall after the expiry of two years from the date on
which it was effected, be called in question by an insurer on the ground that a
statement made in the proposal for insurance or in any report of a medical
officer, or referee, or friend of the insured, or in any other document leading to
the issue of the policy, was inaccurate or false, unless the insurer shows that
such statement was on a material matter or suppressed facts which it was material
to disclose and that it was fraudulently made by the policyholder and that the
policyholder knew at the time of making it that the statement was false or that it
suppressed facts which it was material to disclose. Provided that nothing in this
section shall prevent the insurer from calling for proof of age at any time if he
is entitled to do so, and no policy shall be deemed to be called in question
merely because the terms of the policy are adjusted on subsequent proof that the
age of the life assured was incorrectly stated in the proposal.

Prohibition of Rebates (Section 41 of INSURANCE ACT ,1938) :


(1) No person shall allow or offer to allow, either directly or indirectly, as an
inducement to any person to take out or renew or continue an insurance in respect
of any kind of risk relating to lives or property in India, any rebate of the
whole or part of the commission payable or any rebate of the premium shown on the
policy nor shall any person taking out or renewing or continuing a policy accept
any rebate except such rebates as may be allowed in accordance with the published
prospectuses or tables of the insurer provided that acceptance by an insurance
agent of commission in connection with a policy of life insurance taking out by
himself on his own life shall not be deemed to be acceptance of a rebate of
premium within the meaning of this sub-section if at the time of such acceptance
the insurance agent satisfies the prescribed conditions establishing that he is a
bona fide insurance agent employed by the insurer.
(2) Any person making default in complying with the provision of this Section
shall be punishable with a fine, which may extend to 500 rupees

PENSION PLAN
Pension Plans are Individual Plans that gaze into your future and foresee
financial stability during your old age. These policies are most suited for senior
citizens and those planning a secure future, so that you never give up on the best
things in life.

Jeevan Nidhi

Jeevan Akshay-VI

New Jeevan Dhara-I

New Jeevan Suraksha-I

Jeevan Nidhi

FEATURE
LIC's JEEVAN NIDHI is a with profits Deferred Annuity (Pension) plan. On survival
of the policyholder beyond term of the policy the accumulated amount (i.e. Sum
Assured + Guaranteed Additions + Bonuses) is used to generate a pension (annuity)
for the policyholder. The plan also provides a risk cover during the deferment
period. The USP of the plan being the pension can commence at 40 years. The
premiums paid are exempt under Section 80CCC of Income Tax Act.
Salient Features:
a . Guaranteed Additions: Guaranteed Additions @ Rs.50/- per thousand Sum assured
for each completed year, for the first five years.

b. Participation in profits: The policy shall participate in profits of the


Corporation from the 6th year onwards and shall be entitled to receive bonuses
declared as per the experience of the Corporation.

c. Benefit On Vesting:
1. Option to commute up to 1/3rd of the amount available on vesting, which shall
include the Sum Assured under the Basic Plan together with accrued Guaranteed
Additions, simple Reversionary Bonuses and Terminal Bonus, if any.
2 . Annuity as per the option selected: Annuity on the balance amount if
commutation is exercised, otherwise annuity on the full amount.
d. Annuity Options:
On vesting, the annuity instalment, mode of annuity payment and type of annuity
which shall be made available to the Life Assured (Annuitant) / Nominee will
depend upon the then prevailing Immediate Annuity plan of the Life Insurance
Corporation of India and its terms and conditions.

Currently the following options are available under LIC’s immediate annuities:

1. Annuity for life: The annuity is paid to the life assured as long as he/she is
alive.

2. Annuity Guaranteed for certain periods: The annuity is paid to the life assured
for periods of 5 or 10 or 15 or 20 years as chosen by him/her, whether or not
he/she survives that period. After the chosen period, the annuity is paid to the
life assured as long as he/she is alive.

3. Annuity with return of purchase price on death: The annuity is paid to the life
assured as long as he/she is alive. On the death of the life assured, the purchase
price of the annuity is paid as death benefit. The purchase price includes the Sum
Assured under the Basic Plan, the accrued Guaranteed Additions and any accrued
bonuses, excluding the commuted value, if any.

4. Increasing annuity: The annuity is paid to the life assured as long as he/she
is alive. The amount of annuity increases every year at a simple rate of 3% per
annum.

5. Joint Life Last Survivor Annuity: The annuity is paid to the life assured as
long as he/she is alive. On death of the life assured, 50% of the annuity is
payable to the nominated spouse as long as the spouse is alive.

e. Death Benefit on death before annuity vests: On the death of the Life Assured
during the deferment period of the policy, i.e. before the annuity vests, an
amount equal to the Sum Assured under the Basic plan along with the accrued
Guaranteed Additions, simple Reversionary Bonuses and Terminal Bonus, if any, will
be paid in a lump sum to the appointed nominee, provided the policy is in force
for full Sum Assured. Nominee will also have the option to purchase an annuity
with this amount.
BENEFITS:-
Eligibility Conditions And Other Restrictions Under This Plan:

For Basic Benefit:


a) Minimum age at entry: 18 years (completed)
b) Maximum age at entry: 65 years
c) Minimum age at vesting: 40 years
d) Maximum age at vesting 75 years
e) Policy terms: 6 to 35 years under Single Premium policies and 5 to 35
years under Regular Premium policies
f) Modes of premium payment: Yearly, Half-yearly, Quarterly, SSS & Single
Premium
g) Sums Assured allowed: Rs.50,000/- and in multiples of Rs.5,000/-
thereafter, with no upper limit.
h) Minimum Annual Premium: Rs.3,000/-
i) Minimum Single premium: Rs.10,000/-
For Term Assurance Rider Option:
a) Minimum age at entry: 18 years (completed)
b) Maximum age at entry: 50 years
c) Maximum age at vesting 60 years
d) Policy terms: 6 to 35 years under Single Premium mode and 10 to 35 years
under regular premium mode
e) Minimum Sum Assured: Rs.1,00,000/-
f) Maximum Sum Assured: An amount equal to the Sum Assured under the Basic
plan subject to a limit of
Rs.25,00,000/- taking all Term Assurance Rider Sum Assured under all policies of a
life assured.
g) Multiples of Sum Assured: Rs.25,000/-

For Critical Illness Rider Option:


a) Minimum

age at entry: 20 years (completed)


b) Maximum age at entry: 50 years
c) Maximum age at vesting 60 years
d) Policy terms: 10 to 35 years
e) Minimum Sum Assured: Rs.50,000/-
f) Maximum Sum Assured: An amount equal to the Sum Assured under the Basic
plan subject to a limit of Rs.5,00,000/- taking all Critical Illness Rider Sum
Assured under all policies of a life assured
g) Multiples of Sum Assured: Rs.10,000/-

Rebates:

Rebate for Mode of Premium Payment:


Yearly 2% of tabular premium
Half-Yearly 1% of tabular premium
Quaterly Nil
Monthly 5% extra of tabular premium
Large Sum Assured Rebates:
For Regular Premium Policies
Sum Assured Rebate
50,000 to 1,00,000 Nil
1,05,000 to 3,00,000 1%o S.A.
3,05,000 and above 2%o S.A.
For Single Premium Policies
Sum Assured Rebate
50,000 to 1,00,000 Nil
1,05,000 to 3,00,000 5%o S.A.
3,05,000 and above 10%o S.A.

f. Grace Period:
A grace period of 30 days will be available for payment of yearly, half-yearly or
quarterly premiums and 15 days for monthly premiums.

g. 15 – days Cooling-off period:


If policyholder is not satisfied with the “Terms and Conditions” of the policy,
he/she may return the policy to us within 15 days.

h. Paid-up Value:
The policy will acquire paid-up value after at least 3 full year’s premiums have
been paid.

i. Guaranteed Surrender Value:


Before the annuity vests, the policy can be surrendered at any time after the
completion of 3 policy years. For a regular premium policy, the Guaranteed
Surrender value is available provided 3 years’ premiums are paid, and it is 30% of
the premiums paid excluding premiums paid in the first year. For a Single Premium
policy, the Guaranteed Surrender Value available after completion of 3 policy
years is 90% of the Single Premium. Any extra premiums and premiums for Term
Assurance Rider Option, Critical Illness Rider option and Accident Benefit, if any
will be excluded.

j. Revival: The policyholder can revive his lapsed policy by paying arrears of
premium together with interest within a period of five years from the date of
first unpaid premium subject to satisfactory evidence of health. The rate of
interest for this purpose will be decided by the Corporation from time to time.
The present rate of interest is 9% pa.

k. Options:
Accidental Death and Disability Benefit:

In case of death due to accident (within 180 days) an additional amount equal to
the Accident Benefit Sum assured will be payable. In case of Total and Permanent
disability arising due to accident an amount equal to accident benefit sum assured
will be payable over a period of 10 years in monthly instalments. However, the
payment of accident benefit will be subject to an overall limit of Rs.25 lakh
under all policies of the Life Assured with the Corporation taken together.

The disability due to accident should be total and such that the Life Assured is
unable to carry out any work to earn a living. Following disabilities due to
accident are also covered -

a) irrevocable loss of the entire sight of both eyes or


b) amputation of both hands at or above the wrists or
c) amputation of both feet at or above ankles, or
d) amputation of one hand at or above the wrist and one foot at or above the
ankle.

No benefit will be paid in case of accidental death or disability due to accident


in case of

a) intentional self-injury, attempted suicide, insanity or immorality or the Life


Assured is under the influence of intoxicating liquor, drug or narcotic,
b) engagement in aviation or aeronautics other than that of a passenger in any air
craft,
c) injuries resulting from riots, civil commotion, rebellion, war, invasion,
hunting, mountaineering, steeple chasing or racing of any kind,
d) accident resulted from committing any breach of law.
e) accident arising from employment in armed forces or military services or police
organisation.
Term Assurance Rider Option: Term Assurance as optional rider will be available
under this plan. Premiums for this option are payable during the premium paying
term and an amount equal to Term Assurance Sum Assured will be payable on death
during the policy term. The maximum cover for this rider will be Rs.25 lakh under
all policies of the Life Assured with the Corporation taken together.
Critical Illness Rider Option: An amount equal to the Critical Illness Rider Sum
Assured as optional rider will be payable in case of diagnosis of defined
categories of Critical Illness subject to certain terms and conditions. The
maximum cover for this rider will be Rs.5 lakh under all policies of the Life
Assured with the Corporation taken together.
If opted for Premium Waiver Benefit, then in case the Life Assured is diagnosed
with any of the Critical Illnesses covered under the policy, the total future
premiums in respect of the policy will be waived. Sum Assured under all such
policies with the Corporation taken together will not exceed Rs.5 lakh.

Loan / Assignment:
No Loan/Assignment will be available by the Corporation to the policyholders under
this plan.

EXCLUSIONS:

Suicide: This policy shall be void if the Life Assured commits suicide (whether
sane or insane at the time) at any time on or after the date on which the risk
under the policy has commenced but before the expiry of one year from the date of
commencement of risk under the policy and the Corporation will not entertain any
claim by virtue of this policy except to the extent of a third party’s bonafide
beneficial interest acquired in the policy for valuable consideration of which
notice has been given in writing to the office in which the policy is being
serviced, at least one calendar month prior to death.

Specimen Premium Rates per Rs.1000/- Sum Assured

Single Premium
Age at entry Policy Term
10 15 20 25 30 35
20 - - 616.40 523.40 446.50 384.35
25 - 727.30 617.30 525.35 450.30 390.70
30 856.45 728.05 619.25 529.40 457.45 401.85
35 857.10 730.10 623.70 537.50 470.35 420.80
40 858.40 733.85 631.60 550.95 490.95 450.35
45 860.70 740.35 644.15 571.80 522.35 -
50 864.55 750.40 663.30 603.10 - -
55 869.95 764.85 691.20 - - -
60 878.30 787.25 - - - -
65 892.25 - - - - -

Annual Premium
Age at entry Policy Term
5 10 15 20 25 30 35
20 - - - 52.45 40.30 32.35 26.90
25 - - 72.75 52.55 40.55 32.75 27.45
30 - 113.05 72.90 52.90 41.05 33.45 28.40
35 231.90 113.40 73.45 53.60 42.05 34.80 30.15
40 232.35 114.05 74.40 54.95 43.80 37.05 33.05
45 233.05 115.25 76.10 57.15 46.65 40.70 -
50 234.45 117.40 78.85 60.75 51.30 - -
55 236.55 120.45 83.05 66.40 - -
60 239.55 125.40 90.15 - - - -
65 245.00 134.55 - - - - -

BENEFIT ILLUSTRATION

Insurance Regulatory & Development Authority (IRDA) requires all life insurance
companies operating in India to provide official illustrations to their customers.
The illustrations are based on the investment rates of return set by the Life
Insurance Council (constituted under Section 64C(a) of the Insurance Act 1938) and
is not intended to reflect the actual investment returns achieved or may be
achieved in future by Life Insurance Corporation of India (LICI).

For the year 2004-05 the two rates of investment return declared by the Life
Insurance Council are 6% and 10% per annum.

Product summary:

This is a with-profits pension plan which provides for death cover during the
deferment period and on survival to the date of vesting, the maturity proceeds are
compulsorily to be used for purchase of annuity.

Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through Salary
deduction, as opted by you, throughout the term of the policy or till earlier
death. Alternatively, the premium may be paid in one lump sum (single premium).

Tax Benefits:
Tax relief under Section 80CCC(1) is available on premiums paid under this policy.

Guaranteed Additions during the first five years:


The policy provides for the Guaranteed Additions at the rate of Rs.50/- per
thousand Sum Assured during first five years of the policy. The Guaranteed
Additions are payable along with the basic Sum Assured on vesting or on earlier
death.
Bonuses after the first 5 years:
This is a with-profit plan and participates in the profits of the Corporation’s
life insurance business after 5 years. It gets a share of the profits in the form
of bonuses. Simple Reversionary Bonuses are declared per thousand Sum Assured
annually at the end of each financial year. Once declared, they form part of the
guaranteed benefits of the plan. A Final (Additional) Bonus may also be payable
provided a policy has run for certain minimum period.
Death Benefit:
The Sum Assured along with accrued guaranteed additions and vested simple
reversionary bonuses and Final (Additional) Bonus, if any, is payable in a lump
sum on death of the life assured during the deferment period of the policy.
Benefit on vesting:
On the date of vesting you can encash up to a maximum of 1/3rd of the amount
consisting of the Sum Assured along with accrued guaranteed additions, vested
simple reversionary bonuses and Final (Additional) Bonus, if any as a tax-free
lump sum. The balance amount shall be compulsorily converted into an annuity at
the option and the rates applicable at the time of vesting of the annuity.
Supplementary/Extra Benefits:
These are the optional benefits that can be added to your basic plan for extra
protection/option. An additional premium is required to be paid for these
benefits.

Surrender Value:
Buying a life insurance contract is a long-term commitment. However, surrender
value is available on the plan on earlier termination of the contract.
Guaranteed Surrender Value:
The policy may be surrendered for cash after the policy is kept in force by
payment of premiums for at least three years. The guaranteed surrender value
available under this plan for all modes, except the single premium mode, will be
equal to 30% of the total amount of premiums paid excluding the first year’s
premium and the extra premiums. In case of single premium mode, The guaranteed
surrender value will be 90% of the premium paid excluding all extra premiums.
Corporation’s policy on surrenders:
In practice, the Corporation will pay a Special Surrender Value – which is either
equal to or more than the Guaranteed Surrender Value. The benefit payable on
surrender reflects the discounted value of the reduced claim amount that would be
payable on death or at maturity. This value will depend on the duration for which
premiums have been paid and the policy duration at the date of surrender. In some
circumstances, especially in case of early termination of the policy, the
surrender value payable may be less than the total premium paid.
The Corporation reviews the surrender value payable under its plans from time to
time depending on the economic environment, experience and other factors.
Note: The above is the product summary giving the key features of the plan. This
is for illustrative purpose only. This does not represent a contract and for
details please refer to your policy document. Further, the tax benefits are as per
present Tax Laws.

Benefit Illustration:
Statutory Warning
“Some benefits are guaranteed and some benefits are variable with returns based on
the future performance of your insurer carrying on life insurance business. If
your policy offers guaranteed returns then these will be clearly marked
“guaranteed” in the illustration table on this page. If your policy offers
variable returns then the illustrations on this page will show two different rates
of assumed future investment returns. These assumed rates of return are not
guaranteed and they are not upper or lower limits of what you might get back as
the value of your policy is dependent on a number of factors including future
investment performance.”

Illustration 1:
Age at entry: 35 years
Policy Term: 25 years
Premium paying term: 25 years
Sum Assured (Rs.): 100000
Yearly Premium (Rs.): 4121
End of year Total premiums paid till end of year Benefit payable on death /
Amount available on survival up to the date of vesting for purchase of annuity
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 4,121 1,00,000 0 0 100000 100000
2 8,242 1,05,000 0 0 105000 105000
3 12,363 1,10,000 0 0 110000 110000
4 16,484 1,15,000 0 0 115000 115000
5 20,605 1,20,000 0 0 120000 120000
6 24,726 1,25,000 2300 7300 127300 132300
7 28,847 1,25,000 4600 14600 129600 139600
8 32,968 1,25,000 6900 21900 131900 146900
9 37,089 1,25,000 9200 29200 134200 154200
10 41,210 1,25,000 11500 36500 136500 136500
15 61,815 1,25,000 23000 73000 148000 198000
20 82,420 1,25,000 48500 157500 173500 282500
25 1,03,025 1,25,000 63500 206000 188500 331000

Illustration 2:
Age at entry: 35 years
Policy Term: 25 years
Sum Assured (Rs.): 100000
Single Premium (Rs.): 53750
End of year Total premiums paid till end of year Benefit payable on death /
Amount available on survival up to the date of vesting for purchase of annuity
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 53,750 1,00,000 0 0 100000 100000
2 53,750 1,05,000 0 0 105000 105000
3 53,750 1,10,000 0 0 110000 110000
4 53,750 1,15,000 0 0 115000 115000
5 53,750 1,20,000 0 0 120000 120000
6 53,750 1,25,000 2500 12400 127500 137400
7 53,750 1,25,000 5000 24800 130000 149800
8 53,750 1,25,000 7500 37200 132500 162200
9 53,750 1,25,000 10000 49600 135000 174600
10 53,750 1,25,000 12500 62000 137500 187000
15 53,750 1,25,000 25000 124000 150000 249000
20 53,750 1,25,000 53500 268000 178500 393000
25 53,750 1,25,000 70000 350500 195000 475500
i) This illustration is applicable to a non-smoker male/female standard (from
medical, life style and occupation point of view) life.

ii) The non-guaranteed benefits (1) and (2) in above illustration are calculated
so that they are consistent with the Projected Investment Rate of Return
assumption of 6% p.a.(Scenario 1) and 10% p.a. (Scenario 2) respectively. In
other words, in preparing this benefit illustration, it is assumed that the
Projected Investment Rate of Return that LICI will be able to earn throughout the
term of the policy will be 6% p.a. or 10% p.a., as the case may be. The Projected
Investment Rate of Return is not guaranteed.

iii) The main objective of the illustration is that the client is able to
appreciate the features of the product and the flow of benefits in different
circumstances with some level of quantification.

iv) Future bonus will depend on future profits and as such is not guaranteed.
However, once bonus is declared in any year and added to the policy, the bonus so
added is guaranteed.

v) The Maturity benefit is the amount shown at the end of the Policy term.

UNIT PLANS
Unit plans are investment plans for those who realise the worth of hard-earned
money. These plans help you see your savings yield rich benefits and help you save
tax even if you don't have consistent income.

Market Plus I

Profit Plus

Money Plus-I

Child Fortune Plus


Jeevan Saathi Plus

SPECIAL PLANS
LIC’s Special Plans are not plans but opportunities that knock on your door once
in a lifetime. These plans are a perfect blend of insurance, investment and a
lifetime of happiness!

Jeevan Nischay

New Bima Gold

Health Protection Plus

Bima Nivesh 2005

Jeevan Saral

Jeevan Madhur
Jeevan Mangal

4.1)INCOME-TAX AND TAX BENEFITS FROM LIFE INSURANCE

A] INCOME-TAX RATES FOR ASSESSMENT YEAR 2010-2011 (FINANCIAL YEAR 2009-2010)


Income Slabs Tax RatesNil
Individual & HUF below age of 65 years Woman below age of 65 years Individual
above age of 65 years
Income upto Rs.1,60,000 Income upto Rs.1,90,000 Income upto Rs.2,40,000 NIL
Rs.1,60,001 to Rs.3,00,000 Rs.1,90,001 to Rs.3,00,000 Rs.2,40,001 to
Rs.3,00,000 10%
Rs.3,00,001 to Rs.5,00,000 Rs.3,00,001 to Rs.5,00,000 Rs.3,00,001 to
Rs.5,00,000 20%
Above Rs.5,00,001 Above Rs.5,00,001 Above Rs.5,00,001 30%
Education Cess : An additional surcharge called as ‘Education Cess’ is levied at
the rate of 2% on the amount of Income tax and surcharge (if any) in all cases
shall be levied.
Secondary and Higher : An additional surcharge, called the “Secondary and Higher
Education Cess on income- tax” at the rate of 1% of income-tax and surcharge (not
including the “Education Cess on Income-tax”) in all cases shall be levied.
B] SOME IMPORTANT INCOME TAX BENEFITS AVAILABLE UNDER VARIOUS PLANS OF LIFE
INSURANCE ARE HIGHLIGHTED BELOW:
4.1.1) Deduction allowable from Income for payment of Life Insurance Premium
(Sec. 80C).
a) Life Insurance premia paid in order to effect or to keep in force an insurance
on the life of the assessee or on the life of the spouse or any child of assessee
& in the case of HUF, premium paid on the life of any member thereof, Provided
premium paid is not in excess of 20% of capital sum assured.
b) Contribution to deferred annuity Plans in order to effect or to keep in force a
contract for deferred annuity, on his own life or the life of his spouse or any
child of such individual, provided such contract does not contain a provision to
exercise an option by the insured to receive a cash payment in lieu of the payment
of annuity is eligible for deduction.
c) Contribution to Pension/Annuity Plans – New Jeevan Dhara-I.
4.1.2) Jeevan Nidhi Plan & New Jeevan Suraksha – I Plan (U/s. 80CCC)
A deduction to an individual for any amount paid or deposited by him from his
taxable income in the above annuity plans for receiving pension (from the fund set
up by the Corporation under the Pension Scheme) is allowed.
NOTE: The premium can be paid upto Rs.1,00,000/- to avail deduction u/s.80C, 80CCC
& 80CCD. However, there is no sectoral cap i.e. the limit of Rs.1,00,000/- can be
exhausted by paying premium under of the said sections.
4.1.3) Deduction under section 80D
1. Deduction allowable upto Rs.15,000/- if an amount is paid to keep in force
an insurance on health of assessee or his family (i.e. Spouse & children)
2. Additional deduction upto Rs.15,000/- if an amount is paid to keep in force
an insurance on health of parents
3. In case of HUF, deduction allowable upto Rs.15,000/- if an amount is paid
to keep in force an insurance on health of any member of that HUF
Note: If the sum specified in (a) or (b) or (c) is paid to effect or keep in
force an insurance on the health of any person specified therein who is a senior
citizen, then the deduction available will be upto Rs.20,000/-. provided that such
insurance is in accordance with the scheme framed by
a) the General Insurance Corporation of India as approved by the Central
Government in this behalf or;
b) Any other insurer and approved by the Insurance Regulatory and Development
Authority.
4.1.4)Jeevan Aadhar Plan (Sec.80DD):
Deduction from total income upto Rs.50000/- allowable on amount deposited with LIC
under Jeevan Aadhar Plan for maintenance of an handicapped dependent
(Rs.1,00,000/- where handicapped dependent is suffering from severe disability)
4.1.5)Exemption in respect of commutation of pension under Jeevan Suraksha &
Jeevan Nidhi Plans:
Under Section 10(10A) (iii) of the Income-tax Act, any payment received by way of
commutations of pension out of the Jeevan Suraksha & Jeevan Nidhi Annuity plans
is exempt from tax under clause (23AAB).
4.6)Income tax exemption on Maturity/Death Claims proceeds under Section 10(10D)
Under the provisions of section 10(10D) of the Income-tax Act, 1961,
Maturity/Death claims proceeds of life insurance policy, including the sum
allocated by way of bonus on such policy (other than amount to be refunded under
Jeevan Aadhar Insurance Plan in case of handicapped dependent predeceases the
individual or amount received under a Keyman Insurance Plan) is exempted from
income-tax. However any sum (not including the premium paid by the assessee)
received under an insurance policy issued on or after the 1st day of April, 2003
in respect of which the premium payable for any of the years during the term of
the policy exceeds 20% of the actual capital sum assured will no longer be
exempted under this section.
5.1)HELP US TO SERVE U BETTER
5.1.1)Admission Of Age:

Age is the main basis of calculation of premium under life insurance policies. The
following are accepted as evidence of age:
• Certified extract from Municipal or Local Body’s records made at the time of
birth.
• Certificate of Baptism or Certified Extract from Family Bible, if it
contains age or date of birth.
• Certified Extract from School or College records, if age or date of birth is
stated therein.
• Certified Extract from Service Register in the case of Govt. employees and
employees of Quasi-Govt. Institutions or
• Passport issued by the Passport Authorities in India.
5.1.2)Payment Of Premium:
• By cash, local cheque (subject to realization of cheque), Demand Draft at
Branch Office.
• The DD and cheques or Money Order may be sent by post.
• You can pay your premiums at any of our Branches as 99% of our Branches are
networked.
• Many Banks do accept standing instructions to remit the premiums. So by
providing a standing instruction to your Bank to debit your account for the
premium amount and send it vide a banker’s cheque to LIC, on the due dates and
months mentioned on your policy bond.
• Through Internet : Payment of premiums can be made through Internet through
Service Providers viz.HDFC Bank, ICICI Bank, Times of Money, Bill Junction, UTI
Bank, Bank of Punjab, Citibank, Corporation Bank, Federal Bank and BillDesk.
• Premium payment can also be made through ATMs of Corporation Bank and UTI
Bank.
• Premium payment can also be made through Electronic Clearing Service (ECS)
which has been launched at Mumbai, Hyderabad, Chennai, Kolkata, New Delhi, Kanpur,
Bangalore, Vijaywada, Patna, Jaipur, Chandigarh, Trivandrum, Ahmedabad, Pune, Goa
and Nagpur, Secunderabad & Visakhapatnam. A policyholder having an account in any
Bank which is a Member of the local Clearing House can opt for ECS debit to pay
premiums. The policyholders wishing to use this system would have to fill up a
Mandate Form available at our Branches/DO and get it certified by the Bank. The
certified Mandate Forms are to be submitted to our BO/DO.
Policy can be anywhere in India.
• Citibank Kiosks at Industrial Assurance Building, Churchgate, New India
Building, Santacruz, Jeevan Shikha Building, Borivili are dedicated for collection
of premiums through cheques.
5.1.3)Days Of Grace:
• Policyholder should pay the premiums on due dates. However, a grace period
of one month but not less than 30 days will be allowed for payment of yearly/half-
yearly/quarterly premiums and 15 days for monthly premiums.
• When the days of grace expire on a Sunday or a public holiday, the premium
may be paid on the following working day to keep the policy in force.
• If the premium is not paid before the expiry of the days of grace, the
policy lapses.
5.1.4)Revival Of Lapsed Policy:
• If the policy has lapsed, it can be revived during the life time of the life
assured, within a period of five years from the date of the first unpaid premium
but before the date of maturity subject to certain conditions.
• The Corporation offers three convenient schemes of revival viz., Ordinary
Revival, Special Revival and Installment Revival. Policies can also be revived
under Loan-cum-Revival and SB-cum-Revival schemes.
• Request for revival may be made to the Branch Office servicing the policy.
Change Of Address And Transfer Of Policy Records:
• The policyholder should immediately intimate the change of his/her address
to the Branch Office servicing the policy. The correct address facilitates better
service and quicker settlement of claims.
• Policy records can also be transferred from one Branch Office to another for
servicing, as requested by the policyholder.
5.1.5)Loss Of Policy Document:
• The Policy Document is an evidence of the contract between the Insurer and
the Insured. Hence the policyholder should preserve the Policy Bond till the
contracted amount under it is settled.
• Loss of the Policy Document should be immediately intimated to the Branch
Office where it is serviced.
5.1.6)Loans:
• Loans are granted on policies to the extent of 90% of Surrender Value of the
policies which are in force and 85% of the Surrender Value in case of policies
which are paid-up, inclusive of the cash value of bonus. The rate of interest
charged at present is 9% p.a. payable half-yearly.
• Loans are not granted for a period shorter than six months. The Conditions
and Privileges printed on the back of the Policy Bond states whether a particular
policy is with or without the loan facility.
5.1.7)Relief To Policyholders:
• The Corporation generally allows concessions on payment of premiums,
settlement of claims, issue of duplicate policies, etc when the policyholder are
affected by natural calamities such as droughts, cyclones, floods, earthquakes,
etc.
5.1.8)Nomination:
• Nomination is a right conferred on the holder of a Policy of Life Assurance
on his own life to appoint a person/s to receive policy moneys in the event of the
policy becoming a claim by the assured’s death. The Nominee does not get any other
benefit except to receive the policy moneys on the death of the Life Assured. A
nomination may be changed or cancelled by the life assured whenever he likes
without the consent of the Nominee.
Ensure nomination exists in the policy for easy settlement of claims.
5.1.9)Assignment:
• Assignment means transfer of rights, title and interest. When an assignment
is executed, all rights, title and interest in respect of the property assigned
are immediately transferred to the Assignee/s and the Assignee/s become the
owner/s of the policy subject to any lawful condition made in the assignment.
• Assignment can be either conditional or absolute. On assignment (other than
to LIC), Nomination automatically stands cancelled. Hence, when such a policy is
reassigned, the policyholder will have to make a fresh nomination to avoid delay
in settlement of claim.
5.1.10)Survival Benefit/Maturity Claims:
• LIC settles survival benefit/maturity claims on or before the due date.
• Policyholder are intimated well in advance by the Branch Office which
services the policy regarding the payment, and the necessary Discharge Voucher is
also sent for execution by the assured. In case the policyholder does not get any
intimation from the Branch Office concerned, he/she should contact them, quoting
the Policy Number.
• Survival Benefit payment up to Rs.60,000/- are settled without insisting for
Policy Bond and Discharge Voucher.
5.1.11)Death Claims:
• If the life assured dies during the term of the policy, death claim arises.
The death of the policyholder should be immediately intimated in writing to the
Branch Office where the policy is serviced along with the following particulars:
1. The No./s of the policy/ies
2. The name of the policyholder
3. Death Certificate issued by concerned Authority
4. The date of death
5. The cause of death and
6. Claimant’s relationship with the deceased
• On receipt of the intimation of death, necessary claim forms are sent by the
Branch Office for completion along with instructions regarding the procedure to be
followed by the claimant.
• The claims which have arisen after a period of three years are treated as
non-early claims and settled within 30 days from the date of receipt of all
requirements.
• The claims that have arisen within a period of two years from the date of
commencement of the policy, are treated as early claims and investigation is
compulsory in such cases.
• The claim is usually payable to the nominee/assignee or the legal heirs, as
the case may be. However, if the deceased policyholder has not nominated/assigned
the policy or if he/she has not made a suitable provision regarding the policy
moneys by way of a Will, the claim is payable to the holder of a Succession
Certificate or some such evidence of title from a Court of Law.
• The Corporation grants claims concessions under certain Plans whereby
payment of full sum assured is made, subject to the deduction of unpaid premiums
with interest till the date of death and unpaid premiums falling due before the
next anniversary of the policy, in the event of the death of the life assured
within a period of six months or one year from the date of the first unpaid
premium, provided premiums have been paid for at least three years and five years
respectively.
5.1.12)Claim Review Committee:
The Corporation settles a large number of Death Claims every year. Only in case of
fraudulent suppression of material information is the liability repudiated. This
is to ensure that claims are not paid to fraudulent persons at the cost of honest
policyholders. The number of Death Claims repudiated is, however, very small. Even
in these cases, an opportunity is given to the claimant to make a representation
for consideration by the Review Committees of the Zonal office and the Central
Office. As a result of such review, depending on the merits of each case,
appropriate decisions are taken. The Claims Review Committees of the Central and
Zonal Offices have among their Members, a retired High Court/District Court Judge.
This has helped providing transparency and confidence in our operations and has
resulted in greater satisfaction among claimants, policyholders and public.

5.1.13)Insurance Ombudsman:
• The Grievance Redressal Machinery has been further expanded with the
appointment of Insurance Ombudsman at different centers by the Government of
India. At present there are 12 centres operating all over the country.
• Following type of complaints fall within the purview of the Ombdusman
a) any partial or total repudiation of claims by an insurer;
b) any dispute in regard to premiums paid if payable in terms of the policy;
c) any dispute on the legal construction of the policies in so far as such
disputes relate to claims;
d) delay in settlement of claims;
e)non-issue of any insurance document to customers after receipt of premium.
• Policyholder can approach the Insurance Ombudsman for the redressal of their
complaints free of cost.
5.1.14)Initiatives In Policy Servicing Areas:
• All 2048 Branches of LIC are fully computerized covering all policy
servicing aspects to give prompt computerized services from new policy
introduction, acceptance of renewal premium, revivals, loans, etc to final claims
settlement.
• Green Channel facility has been introduced for the speedy completion of
proposals.
• Payment of premiums can be made through internet through service providers,
viz., HDFC Bank, ICICI Bank, Times of money, Bill Junction, UTI Bank, Bank of
Punjab,Citi Bank, Corporation Bank, Federal Bank and Billdesk.
5.1.15)Grievance Redressal Machinery:
• A machinery for redressal of policyholders? grievances exist in all the
offices of the Corporation. These are headed by designated Officers who are
available at their respective Offices every Monday between 2.30 pm and 4.30 pm.
except holidays. Policyholder can approach these officers to get their grievances
redressed.
• The Designated Officers at the various offices of the Corporation are :
At Branch Office --- Sr./Branch Manager
At Divisional Office --- Marketing Manager
At Zonal Office --- Regional Manager (Mktg)
At Central Office --- Executive Director (Mktg/IO/CRM)
5.1.17)Citizens’ Charter:
• Citizens' Charter was presented to the Nation in November, 1997. In the
Charter the bench marks were prescribed for 30 servicing areas.

6.1)INFORMATION TECHNOLOGY & LIC


LIC has been one of the pioneering organizations in India who introduced the
leverage of Information Technology in servicing and in their business. Data
pertaining to almost 10 crore policies is being held on computers in LIC. We have
gone in for relevant and appropriate technology over the years.

1964 saw the introduction of computers in LIC. Unit Record Machines introduced in
late 1950’s were phased out in 1980’s and replaced by Microprocessors based
computers in Branch and Divisional Offices for Back Office Computerization.
Standardization of Hardware and Software commenced in 1990’s. Standard Computer
Packages were developed and implemented for Ordinary and Salary Savings Scheme
(SSS) Policies.

6.2)FRONT END OPERATIONS


With a view to enhancing customer responsiveness and services , in July 1995, LIC
started a drive of On Line Service to Policyholders and Agents through Computer.
This on line service enabled policyholders to receive immediate policy status
report , prompt acceptance of their premium and get Revival Quotation, Loan
Quotation on demand. Incorporating change of address can be done on line. Quicker
completion of proposals and dispatch of policy documents have become a reality.
All our 2048 branches across the country have been covered under front-end
operations. Thus all our 100 divisional offices have achieved the distinction of
100% branch computerisation. New payment related Modules pertaining to both
ordinary & SSS policies have been added to the Front End Package catering to Loan,
Claims and Development Officers’ Appraisal. All these modules help to reduce time-
lag and ensure accuracy.

6.3)METRO AREA NETWORK


A Metropolitan Area Network, connecting 74 branches in Mumbai was commissioned in
November, 1997, enabling policyholders in Mumbai to pay their Premium or get their
Status Report, Surrender Value Quotation, Loan Quotation etc. from ANY Branch in
the city. The System has been working successfully. More than 10,000 transactions
are carried out over this Network on any given working day. Such Networks have
been implemented in other cities also.

6.5)WIDE AREA NETWORK


All 7 Zonal Offices and all the MAN centres are connected through a Wide Area
Network (WAN). This will enable a customer to view his policy data and pay premium
from any branch of any MAN city. As at November 2005, we have 91 centers in India
with more than 2035 branches networked under WAN.

6.6)INTERACTIVE VOICE RESPONSE SYSTEMS (IVRS)


IVRS has already been made functional in 59 centers all over the country. This
would enable customers to ring up LIC and receive information (e.g. next premium
due, Status, Loan Amount, Maturity payment due, Accumulated Bonus etc.) about
their policies on the telephone. This information could also be faxed on demand to
the customer.

6.7)LIC ON THE INTERNET


Our Internet site is an information bank. We have displayed information about LIC
& its offices . Efforts are on to upgrade our web site to make it dynamic and
interactive.The addresses/e-mail Ids of ur Zonal Offices, Zonal Training Centers,
Management Development Center, Overseas Branches, Divisional Offices and also all
Branch Offices with a view to speed up the communication process.

6.8)PAYMENT OF PREMIUM AND POLICY STATUS ON INTERNET


(You have to register for these services)
LIC has given its policyholders a unique facility to pay premiums through Internet
absolutely free and also view their policy details on Internet premium
payments.There are 11 service providers with whom L I C has signed the agreement
to provide this service.

6.9)INFORMATION KIOSKS
We have set up 150 Interactive Touch screen based Multimedia KIOSKS in prime
locations in metros and some major cities for dissemination information to general
public on our products and services. These KIOSKS are enable to provide policy
details and accept premium payments.

6.10)INFO CENTRES
We have also set up 8 call centres, manned by skilled employees to provide you
with information about our Products, Policy Services, Branch addresses and other
organizational information.
AWARDS

World Brand Congress Award OUTLOOK MONEY -- NDTV PROFIT AWARD 2009 in
" BEST LIFE INSURER CATEGORY "

NDTV PROFIT BUSSINESS LEADERSHIP, AWARDS 2009 CNBC AWAAZ CONSUMER AWARD 2009 for
" Most preferred insurance company "

ASIA PACIFIC HRM Congress, 2009 Award for INNOVATIVE HR PRACTICES Brand Equity
Most Trusted Brand 2009 Top in Insurance Category

Golden Peacock Innovative Product / Service Award - 2009 Loyalty Award - 2009

Reader's Digest Trusted Brand Award, 2009 ( Platinum category ) CNBC Awaaz
Consumer Awards 2008

NDTV Profit Business Leadership Award 2008 INDY's Silver Award for Best
Corporate Film

INDY's Silver Award for Best


" In-house Magazine " NASCOM IT USER Award 2008
Business Superbrand India 2009 ASIA BRAND CONGRESS BRAND LEADERSHIP AWARD,
2008

HONOURED BY YOU
Dr.Manmohan Singh
Prime Minister of India

Shri.P.Chidambaram
Union Finance Minister

“In the year 1956, 245 Indian and foreign companies were nationalized and today,
the three letters ‘LIC’, stands as a synonym for insurance, for services, for
excellence in strengthening the economic fibre of this country. I dare to say that
no other three letters taken together are more recognised to the length and
breadth of India than LIC.”

“The performance figures of LIC give an indication why LIC is dear to us, why LIC
is a Jewel in our crown and why we will continue to nurture LIC and grow it into a
great organization rendering service to the people of India.”

“LIC’s footprints are now to be found in many other countries in the world.
Wherever Indians go - and they go everywhere now, wherever Indians are welcome -
and they are welcome in every part of the world, wherever Indians settle down –
they have found many new homes, wherever Indians excel – and they excel in every
walk of life, they want LIC – they want LIC to protect them, to look after their
savings, and provide for protection as well as their retirement.”

P. Chidambaram
Union Finance Minister
Excerpts from speeches at the inaugural function of LIC’s Golden Jubilee
Celebrations.
Lucknow, September 1, 2005.
CONCLUSION

Insurance is an integral part of any personal financial plan. The type of


insurance and the amount of coverage you obtain all depends on your unique
financial and family circumstances, and must be evaluated carefully. When
considering purchasing coverage, you should review all the potential risks and the
financial impact of these risks on your financial health. This will help you
determine what options to look for and what questions to ask. What you need to
keep in mind is that you do not want to be underinsured or overinsured, which
means you have to do your homework before you buy. And as with any type of
financial product, you must read the fine print and consult with a competent
advisor.

Let's review what we've learned:


• Insurance is a form is risk management in which the insured transfers the
cost of potential loss to another entity in exchange for monetary compensation
known as the premium.

• Insurance works by pooling risks. Because the number of insured individuals


is so large, insurance companies can use statistical analysis to project what
their actual losses will be within the given class. This allows the insurance
companies to operate profitably and at the same time pay for claims that may
arise.

• Underwriting is the process of evaluating the risk to be insured. This is


done by the insurer when determining how likely it is that the loss will occur,
how much the loss could be and then using this information to determine how much
you should pay to insure against the risk. .
9.1)REFERENCE WEBSITE

WWW.LICINDIA.COM

WWW.HK-FD.COM

WWW.GOOGLE.CO.IN

http://realneo.us/system/files/Ag-show-hail-insurance

9.2)REPORTS:-

World Insurance Report 2009

1.1)INTRODUCTION

Insurance is a cover used for protecting oneself from the risk of a financial
loss. It is important to understand that risk is a part of any person’s life and
that it increases as a person increases in age, responsibility and wealth.
Insurance is risk coverage against financial losses and should not be taken as an
investment instrument.
There are mainly two parties involved in this – the insurer and the insured. The
insurer is the insurance company who will provide the cover to the insured against
any financial losses. The insured may be an individual person or a group of people
like an employer, members of a society, etc.
A policy is the contract between the insurer and the insured, which states the
risks covered, the exclusions, if any, and the benefits reimbursed on the
happening of an event like death, illness etc. The policy is paid through what is
called a premium, which is a set amount that must be paid by the insured on a
monthly, semi-annual or annual basis. On the happening of an event like death,
disability, fire, etc, for which the insured is covered, the benefit amount stated
in the policy contract can be claimed by the insured.
1.2)Classification of Insurance
There are mainly two broad classes of Insurance – Life and Non Life.
• Life insurance products include Term Life policies, which give a pure risk
coverage of only the death benefit, whereas endowment or money back policies have
a risk as well as savings component i.e. death as well as maturity benefit. Also
coming under the life insurance umbrella are the Unit – Linked Policies in which
there is a risk component and a savings component, which is invested in equity,
debt or gilt funds, depending on the insurance company.
• Non Life insurance products include property or casualty, health insurance
or house, fire, marine insurance etc. This insurance class deals with all the non-
life aspects of an insured like his/her house, health, land, office, cargo, etc
which might bring financial loss.

1.3)WHAT IS INSURANCE
Insurance is a form of risk management in which the insured transfers the cost of
potential loss to another entity in exchange for monetary compensation known as
the premium. (For background reading, see The History Of Insurance In America.)

Insurance allows individuals, businesses and other entities to protect themselves


against significant potential losses and financial hardship at a reasonably
affordable rate. We say "significant" because if the potential loss is small, then
it doesn't make sense to pay a premium to protect against the loss. After all, you
would not pay a monthly premium to protect against a $50 loss because this would
not be considered a financial hardship for most.

Insurance is appropriate when you want to protect against a significant monetary


loss. Take life insurance as an example. If you are the primary breadwinner in
your home, the loss of income that your family would experience as a result of our
premature death is considered a significant loss and hardship that you should
protect them against. It would be very difficult for your family to replace your
income, so the monthly premiums ensure that if you die, your income will be
replaced by the insured amount. The same principle applies to many other forms of
insurance. If the potential loss will have a detrimental effect on the person or
entity, insurance makes sense. (For more insight, see 15 Insurance Policies You
Don't Need.)

Everyone that wants to protect themselves or someone else against financial


hardship should consider insurance. This may include:
• Protecting family after one's death from loss of income
• Ensuring debt repayment after death
• Covering contingent liabilities
• Protecting against the death of a key employee or person in your business
• Buying out a partner or co-shareholder after his or her death
• Protecting your business from business interruption and loss of income
• Protecting yourself against unforeseeable health expenses
• Protecting your home against theft, fire, flood and other hazards
• Protecting yourself against lawsuits
• Protecting yourself in the event of disability
• Protecting your car against theft or losses incurred because of accidents
1.4)FUNDAMENTAL OF INSURANCE
1.4.1)How does insurance work?

Insurance works by pooling risk.What does this mean? It simply means that a large
group of people who want to insure against a particular loss pay their premiums
into what we will call the insurance bucket, or pool. Because the number of
insured individuals is so large, insurance companies can use statistical analysis
to project what their actual losses will be within the given class. They know that
not all insured individuals will suffer losses at the same time or at all. This
allows the insurance companies to operate profitably and at the same time pay for
claims that may arise. For instance, most people have auto insurance but only a
few actually get into an accident. You pay for the probability of the loss and for
the protection that you will be paid for losses in the event they occur.

1.4.2)Risks

Life is full of risks - some are preventable or can at least be minimized, some
are avoidable and some are completely unforeseeable. What's important to know
about risk when thinking about insurance is the type of risk, the effect of that
risk, the cost of the risk and what you can do to mitigate the risk. Let's take
the example of driving a car. (For more insight on the concept of risk, see
Determining Risk And The Risk Pyramid.)

1.4.3)Type of risk: Bodily injury, total loss of vehicle, having to fix your car

The effect: Spending time in the hospital, having to rent a car and having to make
car payments for a car that no longer exists

The costs: Can range from small to very large


Mitigating risk: Not driving at all (risk avoidance), becoming a safe driver (you
still have to contend with other drivers), or transferring the risk to someone
else (insurance)
Let's explore this concept of risk management (or mitigation) principles a little
deeper and look at how you may apply them. The basic risk management tools
indicate that risks that could bring financial losses and whose severity cannot be
reduced should be transferred. You should also consider the relationship between
the cost of risk transfer and the value of transferring that risk.

1.5)TYPES OF INSURANCE
2.1)Brief History Of LIC

The story of insurance is probably as old as the story of mankind. The same
instinct that prompts modern businessmen today to secure themselves against loss
and disaster existed in primitive men also. They too sought to avert the evil
consequences of fire and flood and loss of life and were willing to make some sort
of sacrifice in order to achieve security. Though the concept of insurance is
largely a development of the recent past, particularly after the industrial era –
past few centuries – yet its beginnings date back almost 6000 years.
Life Insurance in its modern form came to India from England in the year 1818.
Oriental Life Insurance Company started by Europeans in Calcutta was the first
life insurance company on Indian Soil. All the insurance companies established
during that period were brought up with the purpose of looking after the needs of
European community and Indian natives were not being insured by these companies.
However, later with the efforts of eminent people like Babu Muttylal Seal, the
foreign life insurance companies started insuring Indian lives. But Indian lives
were being treated as sub-standard lives and heavy extra premiums were being
charged on them. Bombay Mutual Life Assurance Society heralded the birth of first
Indian life insurance company in the year 1870, and covered Indian lives at normal
rates. Starting as Indian enterprise with highly patriotic motives, insurance
companies came into existence to carry the message of insurance and social
security through insurance to various sectors of society. Bharat Insurance Company
(1896) was also one of such companies inspired by nationalism. The Swadeshi
movement of 1905-1907 gave rise to more insurance companies. The United India in
Madras, National Indian and National Insurance in Calcutta and the Co-operative
Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative
Insurance Company took its birth in one of the rooms of the Jorasanko, house of
the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General
Assurance and Swadeshi Life (later Bombay Life) were some of the companies
established during the same period. Prior to 1912 India had no legislation to
regulate insurance business. In the year 1912, the Life Insurance Companies Act,
and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912
made it necessary that the premium rate tables and periodical valuations of
companies should be certified by an actuary. But the Act discriminated between
foreign and Indian companies on many accounts, putting the Indian companies at a
disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance
business. From 44 companies with total business-in-force as Rs.22.44 crore, it
rose to 176 companies with total business-in-force as Rs.298 crore in 1938. During
the mushrooming of insurance companies many financially unsound concerns were also
floated which failed miserably. The Insurance Act 1938 was the first legislation
governing not only life insurance but also non-life insurance to provide strict
state control over insurance business. The demand for nationalization of life
insurance industry was made repeatedly in the past but it gathered momentum in
1944 when a bill to amend the Life Insurance Act 1938 was introduced in the
Legislative Assembly. However, it was much later on the 19th of January, 1956,
that life insurance in India was nationalized. About 154 Indian insurance
companies, 16 non-Indian companies and 75 provident were operating in India at the
time of nationalization. Nationalization was accomplished in two stages; initially
the management of the companies was taken over by means of an Ordinance, and
later, the ownership too by means of a comprehensive bill. The Parliament of India
passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life
Insurance Corporation of India was created on 1st September, 1956, with the
objective of spreading life insurance much more widely and in particular to the
rural areas with a view to reach all insurable persons in the country, providing
them adequate financial cover at a reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from
its corporate office in the year 1956. Since life insurance contracts are long
term contracts and during the currency of the policy it requires a variety of
services need was felt in the later years to expand the operations and place a
branch office at each district headquarter. re-organization of LIC took place and
large numbers of new branch offices were opened. As a result of re-organisation
servicing functions were transferred to the branches, and branches were made
accounting units. It worked wonders with the performance of the corporation. It
may be seen that from about 200.00 crores of New Business in 1957 the corporation
crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for
LIC to cross 2000.00 crore mark of new business. But with re-organisation
happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore
Sum Assured on new policies.
Today LIC functions with 2048 fully computerized branch offices, 100 divisional
offices, 7 zonal offices and the Corporate office. LIC’s Wide Area Network covers
100 divisional offices and connects all the branches through a Metro Area Network.
LIC has tied up with some Banks and Service providers to offer on-line premium
collection facility in selected cities. LIC’s ECS and ATM premium payment facility
is an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info
Centres have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai,
Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of
providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK
offices. The satellite offices are smaller, leaner and closer to the customer. The
digitalized records of the satellite offices will facilitate anywhere servicing
and many other conveniences in the future.
LIC continues to be the dominant life insurer even in the liberalized scenario of
Indian insurance and is moving fast on a new growth trajectory surpassing its own
past records. LIC has issued over one crore policies during the current year. It
has crossed the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005,
posting a healthy growth rate of 16.67% over the corresponding period of the
previous year.
From then to now, LIC has crossed many milestones and has set unprecedented
performance records in various aspects of life insurance business. The same
motives which inspired our forefathers to bring insurance into existence in this
country inspire us at LIC to take this message of protection to light the lamps of
security in as many homes as possible and to help the people in providing security
to their families.

2.2)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.
The General insurance business in India, on the other hand, can trace its roots to
the Triton Insurance Company Ltd., the first general insurance company established
in the year 1850 in Calcutta by the British.

2.3)Some of the important milestones in the general insurance business in India


are:
1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact
all classes of general insurance business.
1957: General Insurance Council, a wing of the Insurance Association of India,
frames a code of conduct for ensuring fair conduct and sound business practices.
1968: The Insurance Act amended to regulate investments and set minimum solvency
margins and the Tariff Advisory Committee set up.
1972: The General Insurance Business (Nationalisation) Act, 1972 nationalised the
general insurance business in India with effect from 1st January 1973.
107 insurers amalgamated and grouped into four companies viz.
the NationalInsurance Company Ltd., the New India Assurance Company Ltd.,
theOriental Insurance Company Ltd. and the United India Insurance Company
Ltd. GIC incorporated as a company.

2.4)OBJECTIVE OF LIC

• Spread Life Insurance widely and in particular to the rural areas and to the
socially and economically backward classes with a view to reaching all insurable
persons in the country and providing them adequate financial cover against death
at a reasonable cost.
• Maximize mobilization of people's savings by making insurance-linked savings
adequately attractive.
• Bear in mind, in the investment of funds, the primary obligation to its
policyholders, whose money it holds in trust, without losing sight of the interest
of the community as a whole; the funds to be deployed to the best advantage of the
investors as well as the community as a whole, keeping in view national priorities
and obligations of attractive return.
• Conduct business with utmost economy and with the full realization that the
moneys belong to the policyholders.
• Act as trustees of the insured public in their individual and collective
capacities.
• Meet the various life insurance needs of the community that would arise in
the changing social and economic environment.
• Involve all people working in the Corporation to the best of their
capability in furthering the interests of the insured public by providing
efficient service with courtesy.
• Promote amongst all agents and employees of the Corporation a sense of
participation, pride and job satisfaction through discharge of their duties with
dedication towards achievement of Corporate Objective.

2.5)MISSION/VISION
2.5.1)Mission
"Explore and enhance the quality of life of people through financial security by
providing products and services of aspired attributes with competitive returns,
and by rendering resources for economic development."
2.5.2)Vision
"A trans-nationally competitive financial conglomerate of significance to
societies and Pride of India."

2.6)BORD OF DIRECTORS

Members On The Board Of The Corporation


Shri. T.S. Vijayan (Chairman)

Shri. D.K. Mehrotra (Managing Director - LIC)

Shri. Thomas Mathew T. (Managing Director - LIC)

Shri. A.K. Dasgupta (Managing Director - LIC)


Shri. Ashok Chawla (Finance Secretary, Ministry of Finance, Govt. of India)
Shri. G.C. Chaturvedi (Additional Secretary, Department of Financial Services,
Ministry of Finance, Govt. of India.)
Shri. Yogesh Lohiya (Chairman cum Managing Director, GIC of India)

Dr. Sooranad Rajashekhran Shri. Monis R. Kidwai


2.7)We Operate All Over India

3.1)KNOW ABOUT YOUR LIFE INSURANCES


Life insurance in India made its debut well over 100 years ago.

In our country, which is one of the most populated in the world, the prominence of
insurance is not as widely understood, as it ought to be. What follows is an
attempt to acquaint readers with some of the concepts of life insurance, with
special reference to LIC.

It should, however, be clearly understood that the following content is by no


means an exhaustive description of the terms and conditions of an LIC policy or
its benefits or privileges.

For more details, please contact our branch or divisional office. Any LIC Agent
will be glad to help you choose the life insurance plan to meet your needs and
render policy servicing.

3.2)What Is Life Insurance?

Life insurance is a contract that pledges payment of an amount to the person


assured (or his nominee) on the happening of the event insured against.

The contract is valid for payment of the insured amount during:


• The date of maturity, or
• Specified dates at periodic intervals, or
• Unfortunate death, if it occurs earlier.
Among other things, the contract also provides for the payment of premium
periodically to the Corporation by the policyholder. Life insurance is universally
acknowledged to be an institution, which eliminates 'risk', substituting certainty
for uncertainty and comes to the timely aid of the family in the unfortunate event
of death of the breadwinner.
By and large, life insurance is civilisation's partial solution to the problems
caused by death. Life insurance, in short, is concerned with two hazards that
stand across the life-path of every person:
1. That of dying prematurely leaving a dependent family to fend for itself.
2. That of living till old age without visible means of support.

3.3)Life Insurance Vs. Other Savings


3.3.1)Contract Of Insurance:
A contract of insurance is a contract of utmost good faith technically known as
uberrima fides. The doctrine of disclosing all material facts is embodied in this
important principle, which applies to all forms of insurance.

At the time of taking a policy, policyholder should ensure that all questions in
the proposal form are correctly answered. Any misrepresentation, non-disclosure or
fraud in any document leading to the acceptance of the risk would render the
insurance contract null and void.
3.3.1)Protection:
Savings through life insurance guarantee full protection against risk of death of
the saver. Also, in case of demise, life insurance assures payment of the entire
amount assured (with bonuses wherever applicable) whereas in other savings
schemes, only the amount saved (with interest) is payable.

3.3.3)Aid To Thrift:
Life insurance encourages 'thrift'. It allows long-term savings since payments can
be made effortlessly because of the 'easy instalment' facility built into the
scheme. (Premium payment for insurance is either monthly, quarterly, half yearly
or yearly).
For example: The Salary Saving Scheme popularly known as SSS, provides a
convenient method of paying premium each month by deduction from one's salary.
In this case the employer directly pays the deducted premium to LIC. The Salary
Saving Scheme is ideal for any institution or establishment subject to specified
terms and conditions.

3.3.4)Liquidity:
In case of insurance, it is easy to acquire loans on the sole security of any
policy that has acquired loan value. Besides, a life insurance policy is also
generally accepted as security, even for a commercial loan.

3.3.5)Tax Relief:
Life Insurance is the best way to enjoy tax deductions on income tax and wealth
tax. This is available for amounts paid by way of premium for life insurance
subject to income tax rates in force.
Assessees can also avail of provisions in the law for tax relief. In such cases
the assured in effect pays a lower premium for insurance than otherwise.

3.3.6)Money When You Need It:


A policy that has a suitable insurance plan or a combination of different plans
can be effectively used to meet certain monetary needs that may arise from time-
to-time.
Children's education, start-in-life or marriage provision or even periodical needs
for cash over a stretch of time can be less stressful with the help of these
policies.
Alternatively, policy money can be made available at the time of one's retirement
from service and used for any specific purpose, such as, purchase of a house or
for other investments. Also, loans are granted to policyholders for house building
or for purchase of flats (subject to certain conditions).

3.3.7)Who Can Buy A Policy?

Any person who has attained majority and is eligible to enter into a valid
contract can insure himself/herself and those in whom he/she has insurable
interest.

Policies can also be taken, subject to certain conditions, on the life of one's
spouse or children. While underwriting proposals, certain factors such as the
policyholder’s state of health, the proponent's income and other relevant factors
are considered by the Corporation.

3.3.8)Insurance For Women

Prior to nationalisation (1956), many private insurance companies would offer


insurance to female lives with some extra premium or on restrictive conditions.
However, after nationalisation of life insurance, the terms under which life
insurance is granted to female lives have been reviewed from time-to-time.

At present, women who work and earn an income are treated at par with men. In
other cases, a restrictive clause is imposed, only if the age of the female is up
to 30 years and if she does not have an income attracting Income Tax.

3.3.9)Medical And Non-Medical Schemes

Life insurance is normally offered after a medical examination of the life to be


assured. However, to facilitate greater spread of insurance and also to avoid
inconvenience, LIC has been extending insurance cover without any medical
examination, subject to certain conditions.
3.3.10)With Profit And Without Profit Plans

An insurance policy can be 'with' or 'without' profit. In the former, bonuses


disclosed, if any, after periodical valuations are allotted to the policy and are
payable along with the contracted amount.

In 'without' profit plan the contracted amount is paid without any addition. The
premium rate charged for a 'with' profit policy is therefore higher than for a
'without' profit policy.

3.3.11)Keyman Insurance

Keyman insurance is taken by a business firm on the life of key employee(s) to


protect the firm against financial losses, which may occur due to the premature
demise of the Keyman.

INSURANCE PLANS
As individuals it is inherent to differ. Each individual?s insurance needs and
requirements are different from that of the others. LIC?s Insurance Plans are
policies that talk to you individually and give you the most suitable options that
can fit your requirement.

Jeevan Anurag

Komal Jeevan

CDA Endowment Vesting At 21

Marriage Endowment Or
Educational Annuity Plan

CDA Endowment Vesting At 18


Jeevan Kishore

Jeevan Chhaya

Child Career Plan

Child Future Plan

Child Fortune Plus

Jeevan Aadhar

Jeevan Vishwas

The Endowment Assurance Policy

The Endowment Assurance Policy-Limited Payment

Jeevan Mitra(Double Cover Endowment Plan)

Jeevan Mitra(Triple Cover Endowment Plan)

Jeevan Anand

New Janaraksha Plan

Jeevan Amrit
Jeevan Shree-I

Jeevan Pramukh

The Money Back Policy-20 Years

The Money Back Policy-25 Years

Jeevan Surabhi-15 Years

Jeevan Surabhi-20 Years

Jeevan Surabhi-25 Years

Bima Bachat

Jeevan Bharati - I

The Whole Life Policy

The Whole Life Policy- Limited Payment

The Whole Life Policy- Single Premium

Jeevan Anand

Jeevan Tarang
Two Year Temporary Assurance Policy

The Convertible Term Assurance Policy

Anmol Jeevan-I

Amulya Jeevan-I

Jeevan Saathi Plus

Jeevan Saathi

Jeevan Bharati - I

FEATURES:-
Introduction
LIC’s Jeevan Bharati-I – is a plan exclusively for women. It is a with profit plan
having special features considering the needs of women. The plan also provides for
Accident Benefit, Critical Illness Benefit and Congenital Disability Benefit as
optional Riders

1. SPECIAL FEATURES

1. Encashment of Survival Benefit 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 the rate
decided by the corporation from time to time will be payable.

2. Flexibility to pay premiums in advance:


The mode of premium payment is only yearly under this plan. However, policyholder
may pay the next yearly premium in advance in instalments (maximum upto 3
instalments) during the year. If premiums are paid in advance a premium rebate may
be allowed as may be decided by the Corporation from time to time

3. Option to receive maturity proceeds in the form of an annuity: :


The policyholder shall have the option to receive the maturity proceeds in the
form of annuity. The rate of annuity will be based on the annuity rates prevalent
at the time of stipulated Date of Maturity.

4. Auto Cover::
After two years premiums have been paid, whenever premium payment is discontinued,
the life cover for full sum assured will continue for 3 years from the due date of
first unpaid premium.

If death occurs during the Auto Cover period, then death benefit after deducting
unpaid premiums, with interest is payable along with the vested bonus, if any.

2. OPTIONAL RIDERS:
The following riders are available under this plan:

A. CRITICAL ILLNESS (CI) RIDER :


An amount equal to the Critical Illness Rider Sum Assured will be payable in case
of diagnosis of defined categories of critical illnesses. A person is eligible for
this benefit upto a maximum age of 60 years but subject to a maximum of the policy
term. This benefit can be availed for a minimum Sum of Rs 50000 and for a maximum
Sum equal to the Sum assured under the basic plan subject to the maximum of Rs 5
lakh overall limit taking all critical illness riders under all existing policies
of the Life Assured.
(For details refer the sales brochure of Critical Illness rider)

B. ACCIDENT BENEFIT RIDER:


An additional amount equal to the Accident Benefit Rider Sum Assured is payable
upon death or total and permanent disability due to accident during the policy
term.
This benefit can be availed for a minimum sum of Rs 50000 and for a maximum sum
equal to the Sum Assured under the Basic Plan subject to the maximum of Rs.50
lakhs.

C. CONGENITAL DISABILITIES BENEFIT (CDB) RIDER:


This rider can be opted for by a female between the ages of 18yrs and 35 years.
An amount equal to 50% of the CDB Sum Assured is payable if the Life Assured
gives birth to a child with specified congenital disabilities. This benefit is
available for a maximum of two such children and this benefit ceases at the age of
40 years.
This benefit can be availed for a minimum Sum of Rs 50000 and a maximum sum of Rs
500000.
(For details refer the sales brochure of Congenital Disability Benefit Rider)

3. ELIGIBILITY CONDITIONS (For Basic Plan):


Minimum age at entry : 18 years (completed)
Maximum age at entry : 55 years (nearest birthday)
Maximum age at maturity : 70 years (nearest birthday)
Policy term : 15 and 20 years
Minimum Sum Assured : Rs. 50,000/-
Maximum Sum Assured : Rs. 25,00,000/-
(Sum Assured shall be in multiples of Rs.5,000/-)
4. SAMPLE PREMIUM RATES FOR BASIC PLAN :
Tabular Annual Premium per 1000 SA
AGE/TERM 15 20
20 79.35 63.90
25 79.45 64.10
30 79.70 64.55
35 80.25 65.45
36 80.45 65.70
37 80.60 66.00
40 81.35 67.00
45 83.15 69.50
50 86.05 73.50
5. HIGH SUM ASSURED REBATES:
Sum Assured (in Rs) Rebate per thousand Sum Assured
1,00,000 to 4, 99,999 Rs 2.00
5, 00,000 and above Rs 4.00
6. LOAN:
Loan is available under the plan after the policy acquires paid-up value.
7. GRACE PERIOD:
A grace period of one-month but not less than 30 days will be allowed for payment
of premium .
8. REVIVAL:
A. REVIVAL DURING THE AUTO COVER PERIOD:
(i) If Critical Illness Rider is not opted for:
During the Auto Cover Period, the Life Assured can pay one or more instalments of
premiums with interest without submission of any evidence of health. On payment of
part or full arrears of premiums with interest, the Auto Cover Period of 3 years
from the due date of new FUP shall again be available during the term of the
Policy.

If any survival benefit falls due during the above 3-year auto cover period the
same will be paid after deduction of unpaid premiums with interest until the due
date of the survival benefit, provided it is more than the unpaid premiums with
interest. If the survival benefit is insufficient to cover the arrears of premiums
with interest up to the due date of such survival benefit, then the survival
benefit will be payable only on payment of such arrears of premiums with
interest , during the period of the aforesaid 3 years or on revival of the policy
thereafter.
(ii) If Critical Illness Rider is opted for:
During the auto cover period, the policy can be revived by payment of full arrears
of premium together with interest and subject to submission of proof of continued
insurability of the Life Assured to the satisfaction of the Corporation. The
Corporation reserves the right to accept at original terms, accept at revised
terms or decline the revival of the policy. The revival of the policy shall take
effect only after the same is approved by the Corporation and is specifically
communicated to the Life Assured.
If any survival benefit falls due during the above 3-year auto cover period the
same will be paid only after revival of the policy as stated above.

B. REVIVAL OTHER THAN DURING AUTO COVER PERIOD :


If the Policy has lapsed, and the policy is not under the period of auto cover,
the policy can be revived within a period of 5 years from the date of first unpaid
premium and before the date of maturity by payment of full arrears of premium
together with interest and subject to submission of proof of continued
insurability of the Life Assured to the satisfaction of the Corporation. The
Corporation reserves the right to accept at original terms, accept at revised
terms or decline the revival of a discontinued policy. The revival of discontinued
policy shall take effect only after the same is approved by the Corporation and is
specifically communicated to the Life Assured.
The Rider/s shall be revived along with the Basic plan and not in isolation.
9. PAID UP VALUE:
If after at least three full years’ premiums have been paid and any subsequent
premium not paid, this policy shall not be wholly void after the expiry of three
years Auto Cover Period ,but shall continue as a paid up policy. The Sum Assured
of the policy shall be reduced in the same proportion as the number of premiums
actually paid bears to the total number of premiums stipulated for in the policy ,
less any survival benefit paid. This reduced Sum is called the paid up value.

The policy thereafter shall be free from all liabilities for payment of the
premiums, but shall not be entitled to the future bonuses. The existing vested
reversionary bonuses, if any, will remain attached to the reduced paid-up Policy.
This paid up value shall be payable on the date of maturity or at Life Assured’s
prior death. No survival benefit shall be payable under paid up policies.
The rider benefits will cease to apply if the policy is in lapsed condition and
will not acquire any paid up value.
10. SURRENDER VALUE:
The Guaranteed Surrender value will be available after the expiry of 3 policy
years provided the premiums have been paid for at least three years. The
Guaranteed Surrender Value is equal to 30% of the total amount of premiums paid
excluding the premiums paid for the first year, any premiums paid towards riders,
all extra premiums that may have been paid less the amount of survival benefits
paid earlier. The cash value of any existing bonuses, if ,any will also be paid .
Corporation may, however, pay special surrender value as the discounted value of
Paid up sum assured and vested bonus, if any, as applicable on date of surrender,
provided the same is higher than guaranteed surrender value.
11. EXCLUSIONS:
Suicide: This policy shall be void if the Life Assured commits suicide (whether
sane or insane at that time) at any time on or after the date on which the risk
under the policy has commenced but before the expiry of one year from the date of
commencement of risk under the policy and the Corporation will not entertain any
claim by virtue of this policy except to the extent of a third party’s bonafide
beneficial interest acquired in the policy for valuable consideration of which
notice has been given in writing to the branch where the Policy is being presently
serviced (where the policy records are kept), at least one calendar month prior to
death.
12. COOLING OFF PERIOD:
If you are not satisfied with the “Terms and Conditions” of the policy, you may
return the policy to us within 15 days.

BENEFITS

A. Survival Benefits:
On Survival the following benefits are payable:

For 15 Years Term


20% of the Sum Assured payable at the end of 5 years.
20% of the Sum Assured payable at the end of 10 years.
60% of the Sum Assured payable together with vested bonus, and Final Additional
Bonus, if any, at the end of 15 years.

For 20 Years Term


20% of the Sum Assured payable at the end of 5 years.
20% of the Sum Assured payable at the end of 10 years.

20% of the Sum Assured payable at the end of 15 years.


40% of the Sum Assured payable together with vested bonus and Final Additional
Bonus, if any at the end of 20 years.
B. Death Benefit:
In case of death of the life assured during the policy term, the full sum assured
is payable irrespective of the survival benefits paid earlier. The vested bonuses
and Final Additional Bonus, if any are also payable.
BENEFIT ILLUSTRATION
Statutory warning:
“Some benefits are guaranteed and some benefits are variable with returns based on
the future performance of your Insurer carrying on life insurance business. If
your policy offers guaranteed returns then these will be clearly marked
“guaranteed” in the illustration table on this page. If your policy offers
variable returns then the illustrations on this page will show two different rates
of assumed future investment returns. These assumed rates of return are not
guaranteed and they are not the upper or lower limits of what you might get back,
as the value of your policy is dependent on a number of factors including future
investment performance.”
Benefit Illustration
Age of LA (Yrs.) 35
Term (Yrs.) 20
Sum Assured(Rs.) 100000
Annual Premium 6345

End
of
Year Total premiums paid till end of year Death Benefit during the year
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 6345 100000 2200 4500 102200 104500
2 12690 100000 4400 9000 104400 109000
3 19035 100000 6600 13500 106600 113500
4 25380 100000 8800 18000 108800 118000
5 31725 100000 11000 22500 111000 122500
6 38070 100000 13200 27000 113200 127000
7 44415 100000 15400 31500 115400 131500
8 50760 100000 17600 36000 117600 136000
9 57105 100000 19800 40500 119800 140500
10 63450 100000 22000 45000 122000 145000
15 95175 100000 36667 75000 136667 175000
20 126900 100000 48900 100000 148900 200000

End
of
Year Total premiums paid till end of year BENEFIT ON SURVIVAL / MATURITY AT
THE END OF YEAR
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 6345 0 0 0 0 0
2 12690 0 0 0 0 0
3 19035 0 0 0 0 0
4 25380 0 0 0 0 0
5 31725 20000 0 0 20000 20000
6 38070 0 0 0 0 0
7 44415 0 0 0 0 0
8 50760 0 0 0 0 0
9 57105 0 0 0 0 0
10 63450 20000 0 0 20000 20000
15 95175 20000 0 0 20000 20000
20 126900 40000 48900 100000 88900 140000
Note: i)his illustration is applicable to a standard (from medical, life style and
occupation point of view) life.
i) The non-guaranteed benefits (1) and (2) in above illustration are calculated so
that they are consistent with the Projected Investment Rate of Return assumption
of 6% p.a.(Scenario 1) and 10% p.a. (Scenario 2) respectively. In other words, in
preparing this benefit illustration, it is assumed that the Projected Investment
Rate of Return that LICI will be able to earn throughout the term of the policy
will be 6% p.a. or 10% p.a., as the case may be. The Projected Investment Rate of
Return is not guaranteed.
Section 45 of Insurance Act, 1938:
No policy of life insurance shall after the expiry of two years from the date on
which it was effected, be called in question by an insurer on the ground that a
statement made in the proposal for insurance or in any report of a medical
officer, or referee, or friend of the insured, or in any other document leading to
the issue of the policy, was inaccurate or false, unless the insurer shows that
such statement was on a material matter or suppressed facts which it was material
to disclose and that it was fraudulently made by the policyholder and that the
policyholder knew at the time of making it that the statement was false or that it
suppressed facts which it was material to disclose. Provided that nothing in this
section shall prevent the insurer from calling for proof of age at any time if he
is entitled to do so, and no policy shall be deemed to be called in question
merely because the terms of the policy are adjusted on subsequent proof that the
age of the life assured was incorrectly stated in the proposal.

Prohibition of Rebates (Section 41 of INSURANCE ACT ,1938) :


(1) No person shall allow or offer to allow, either directly or indirectly, as an
inducement to any person to take out or renew or continue an insurance in respect
of any kind of risk relating to lives or property in India, any rebate of the
whole or part of the commission payable or any rebate of the premium shown on the
policy nor shall any person taking out or renewing or continuing a policy accept
any rebate except such rebates as may be allowed in accordance with the published
prospectuses or tables of the insurer provided that acceptance by an insurance
agent of commission in connection with a policy of life insurance taking out by
himself on his own life shall not be deemed to be acceptance of a rebate of
premium within the meaning of this sub-section if at the time of such acceptance
the insurance agent satisfies the prescribed conditions establishing that he is a
bona fide insurance agent employed by the insurer.
(2) Any person making default in complying with the provision of this Section
shall be punishable with a fine, which may extend to 500 rupees

PENSION PLAN
Pension Plans are Individual Plans that gaze into your future and foresee
financial stability during your old age. These policies are most suited for senior
citizens and those planning a secure future, so that you never give up on the best
things in life.

Jeevan Nidhi

Jeevan Akshay-VI

New Jeevan Dhara-I


New Jeevan Suraksha-I

Jeevan Nidhi

FEATURE
LIC's JEEVAN NIDHI is a with profits Deferred Annuity (Pension) plan. On survival
of the policyholder beyond term of the policy the accumulated amount (i.e. Sum
Assured + Guaranteed Additions + Bonuses) is used to generate a pension (annuity)
for the policyholder. The plan also provides a risk cover during the deferment
period. The USP of the plan being the pension can commence at 40 years. The
premiums paid are exempt under Section 80CCC of Income Tax Act.
Salient Features:
a . Guaranteed Additions: Guaranteed Additions @ Rs.50/- per thousand Sum assured
for each completed year, for the first five years.

b. Participation in profits: The policy shall participate in profits of the


Corporation from the 6th year onwards and shall be entitled to receive bonuses
declared as per the experience of the Corporation.

c. Benefit On Vesting:
1. Option to commute up to 1/3rd of the amount available on vesting, which shall
include the Sum Assured under the Basic Plan together with accrued Guaranteed
Additions, simple Reversionary Bonuses and Terminal Bonus, if any.

2 . Annuity as per the option selected: Annuity on the balance amount if


commutation is exercised, otherwise annuity on the full amount.
d. Annuity Options:
On vesting, the annuity instalment, mode of annuity payment and type of annuity
which shall be made available to the Life Assured (Annuitant) / Nominee will
depend upon the then prevailing Immediate Annuity plan of the Life Insurance
Corporation of India and its terms and conditions.

Currently the following options are available under LIC’s immediate annuities:

1. Annuity for life: The annuity is paid to the life assured as long as he/she is
alive.

2. Annuity Guaranteed for certain periods: The annuity is paid to the life assured
for periods of 5 or 10 or 15 or 20 years as chosen by him/her, whether or not
he/she survives that period. After the chosen period, the annuity is paid to the
life assured as long as he/she is alive.

3. Annuity with return of purchase price on death: The annuity is paid to the life
assured as long as he/she is alive. On the death of the life assured, the purchase
price of the annuity is paid as death benefit. The purchase price includes the Sum
Assured under the Basic Plan, the accrued Guaranteed Additions and any accrued
bonuses, excluding the commuted value, if any.

4. Increasing annuity: The annuity is paid to the life assured as long as he/she
is alive. The amount of annuity increases every year at a simple rate of 3% per
annum.

5. Joint Life Last Survivor Annuity: The annuity is paid to the life assured as
long as he/she is alive. On death of the life assured, 50% of the annuity is
payable to the nominated spouse as long as the spouse is alive.

e. Death Benefit on death before annuity vests: On the death of the Life Assured
during the deferment period of the policy, i.e. before the annuity vests, an
amount equal to the Sum Assured under the Basic plan along with the accrued
Guaranteed Additions, simple Reversionary Bonuses and Terminal Bonus, if any, will
be paid in a lump sum to the appointed nominee, provided the policy is in force
for full Sum Assured. Nominee will also have the option to purchase an annuity
with this amount.
BENEFITS:-
Eligibility Conditions And Other Restrictions Under This Plan:

For Basic Benefit:


a) Minimum age at entry: 18 years (completed)
b) Maximum age at entry: 65 years
c) Minimum age at vesting: 40 years
d) Maximum age at vesting 75 years
e) Policy terms: 6 to 35 years under Single Premium policies and 5 to 35
years under Regular Premium policies
f) Modes of premium payment: Yearly, Half-yearly, Quarterly, SSS & Single
Premium
g) Sums Assured allowed: Rs.50,000/- and in multiples of Rs.5,000/-
thereafter, with no upper limit.
h) Minimum Annual Premium: Rs.3,000/-
i) Minimum Single premium: Rs.10,000/-

For Term Assurance Rider Option:


a) Minimum age at entry: 18 years (completed)
b) Maximum age at entry: 50 years
c) Maximum age at vesting 60 years
d) Policy terms: 6 to 35 years under Single Premium mode and 10 to 35 years
under regular premium mode
e) Minimum Sum Assured: Rs.1,00,000/-
f) Maximum Sum Assured: An amount equal to the Sum Assured under the Basic
plan subject to a limit of
Rs.25,00,000/- taking all Term Assurance Rider Sum Assured under all policies of a
life assured.
g) Multiples of Sum Assured: Rs.25,000/-

For Critical Illness Rider Option:


a) Minimum

age at entry: 20 years (completed)


b) Maximum age at entry: 50 years
c) Maximum age at vesting 60 years
d) Policy terms: 10 to 35 years
e) Minimum Sum Assured: Rs.50,000/-
f) Maximum Sum Assured: An amount equal to the Sum Assured under the Basic
plan subject to a limit of Rs.5,00,000/- taking all Critical Illness Rider Sum
Assured under all policies of a life assured
g) Multiples of Sum Assured: Rs.10,000/-

Rebates:

Rebate for Mode of Premium Payment:


Yearly 2% of tabular premium
Half-Yearly 1% of tabular premium
Quaterly Nil
Monthly 5% extra of tabular premium
Large Sum Assured Rebates:
For Regular Premium Policies
Sum Assured Rebate
50,000 to 1,00,000 Nil
1,05,000 to 3,00,000 1%o S.A.
3,05,000 and above 2%o S.A.

For Single Premium Policies


Sum Assured Rebate
50,000 to 1,00,000 Nil
1,05,000 to 3,00,000 5%o S.A.
3,05,000 and above 10%o S.A.

f. Grace Period:
A grace period of 30 days will be available for payment of yearly, half-yearly or
quarterly premiums and 15 days for monthly premiums.

g. 15 – days Cooling-off period:


If policyholder is not satisfied with the “Terms and Conditions” of the policy,
he/she may return the policy to us within 15 days.

h. Paid-up Value:
The policy will acquire paid-up value after at least 3 full year’s premiums have
been paid.

i. Guaranteed Surrender Value:


Before the annuity vests, the policy can be surrendered at any time after the
completion of 3 policy years. For a regular premium policy, the Guaranteed
Surrender value is available provided 3 years’ premiums are paid, and it is 30% of
the premiums paid excluding premiums paid in the first year. For a Single Premium
policy, the Guaranteed Surrender Value available after completion of 3 policy
years is 90% of the Single Premium. Any extra premiums and premiums for Term
Assurance Rider Option, Critical Illness Rider option and Accident Benefit, if any
will be excluded.

j. Revival: The policyholder can revive his lapsed policy by paying arrears of
premium together with interest within a period of five years from the date of
first unpaid premium subject to satisfactory evidence of health. The rate of
interest for this purpose will be decided by the Corporation from time to time.
The present rate of interest is 9% pa.

k. Options:
Accidental Death and Disability Benefit:

In case of death due to accident (within 180 days) an additional amount equal to
the Accident Benefit Sum assured will be payable. In case of Total and Permanent
disability arising due to accident an amount equal to accident benefit sum assured
will be payable over a period of 10 years in monthly instalments. However, the
payment of accident benefit will be subject to an overall limit of Rs.25 lakh
under all policies of the Life Assured with the Corporation taken together.

The disability due to accident should be total and such that the Life Assured is
unable to carry out any work to earn a living. Following disabilities due to
accident are also covered -

a) irrevocable loss of the entire sight of both eyes or


b) amputation of both hands at or above the wrists or
c) amputation of both feet at or above ankles, or
d) amputation of one hand at or above the wrist and one foot at or above the
ankle.

No benefit will be paid in case of accidental death or disability due to accident


in case of

a) intentional self-injury, attempted suicide, insanity or immorality or the Life


Assured is under the influence of intoxicating liquor, drug or narcotic,
b) engagement in aviation or aeronautics other than that of a passenger in any air
craft,
c) injuries resulting from riots, civil commotion, rebellion, war, invasion,
hunting, mountaineering, steeple chasing or racing of any kind,
d) accident resulted from committing any breach of law.
e) accident arising from employment in armed forces or military services or police
organisation.
Term Assurance Rider Option: Term Assurance as optional rider will be available
under this plan. Premiums for this option are payable during the premium paying
term and an amount equal to Term Assurance Sum Assured will be payable on death
during the policy term. The maximum cover for this rider will be Rs.25 lakh under
all policies of the Life Assured with the Corporation taken together.
Critical Illness Rider Option: An amount equal to the Critical Illness Rider Sum
Assured as optional rider will be payable in case of diagnosis of defined
categories of Critical Illness subject to certain terms and conditions. The
maximum cover for this rider will be Rs.5 lakh under all policies of the Life
Assured with the Corporation taken together.
If opted for Premium Waiver Benefit, then in case the Life Assured is diagnosed
with any of the Critical Illnesses covered under the policy, the total future
premiums in respect of the policy will be waived. Sum Assured under all such
policies with the Corporation taken together will not exceed Rs.5 lakh.

Loan / Assignment:
No Loan/Assignment will be available by the Corporation to the policyholders under
this plan.

EXCLUSIONS:

Suicide: This policy shall be void if the Life Assured commits suicide (whether
sane or insane at the time) at any time on or after the date on which the risk
under the policy has commenced but before the expiry of one year from the date of
commencement of risk under the policy and the Corporation will not entertain any
claim by virtue of this policy except to the extent of a third party’s bonafide
beneficial interest acquired in the policy for valuable consideration of which
notice has been given in writing to the office in which the policy is being
serviced, at least one calendar month prior to death.

Specimen Premium Rates per Rs.1000/- Sum Assured

Single Premium
Age at entry Policy Term
10 15 20 25 30 35
20 - - 616.40 523.40 446.50 384.35
25 - 727.30 617.30 525.35 450.30 390.70
30 856.45 728.05 619.25 529.40 457.45 401.85
35 857.10 730.10 623.70 537.50 470.35 420.80
40 858.40 733.85 631.60 550.95 490.95 450.35
45 860.70 740.35 644.15 571.80 522.35 -
50 864.55 750.40 663.30 603.10 - -
55 869.95 764.85 691.20 - - -
60 878.30 787.25 - - - -
65 892.25 - - - - -

Annual Premium
Age at entry Policy Term
5 10 15 20 25 30 35
20 - - - 52.45 40.30 32.35 26.90
25 - - 72.75 52.55 40.55 32.75 27.45
30 - 113.05 72.90 52.90 41.05 33.45 28.40
35 231.90 113.40 73.45 53.60 42.05 34.80 30.15
40 232.35 114.05 74.40 54.95 43.80 37.05 33.05
45 233.05 115.25 76.10 57.15 46.65 40.70 -
50 234.45 117.40 78.85 60.75 51.30 - -
55 236.55 120.45 83.05 66.40 - -
60 239.55 125.40 90.15 - - - -
65 245.00 134.55 - - - - -

BENEFIT ILLUSTRATION

Insurance Regulatory & Development Authority (IRDA) requires all life insurance
companies operating in India to provide official illustrations to their customers.
The illustrations are based on the investment rates of return set by the Life
Insurance Council (constituted under Section 64C(a) of the Insurance Act 1938) and
is not intended to reflect the actual investment returns achieved or may be
achieved in future by Life Insurance Corporation of India (LICI).

For the year 2004-05 the two rates of investment return declared by the Life
Insurance Council are 6% and 10% per annum.

Product summary:

This is a with-profits pension plan which provides for death cover during the
deferment period and on survival to the date of vesting, the maturity proceeds are
compulsorily to be used for purchase of annuity.

Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through Salary
deduction, as opted by you, throughout the term of the policy or till earlier
death. Alternatively, the premium may be paid in one lump sum (single premium).

Tax Benefits:
Tax relief under Section 80CCC(1) is available on premiums paid under this policy.

Guaranteed Additions during the first five years:


The policy provides for the Guaranteed Additions at the rate of Rs.50/- per
thousand Sum Assured during first five years of the policy. The Guaranteed
Additions are payable along with the basic Sum Assured on vesting or on earlier
death.
Bonuses after the first 5 years:
This is a with-profit plan and participates in the profits of the Corporation’s
life insurance business after 5 years. It gets a share of the profits in the form
of bonuses. Simple Reversionary Bonuses are declared per thousand Sum Assured
annually at the end of each financial year. Once declared, they form part of the
guaranteed benefits of the plan. A Final (Additional) Bonus may also be payable
provided a policy has run for certain minimum period.
Death Benefit:
The Sum Assured along with accrued guaranteed additions and vested simple
reversionary bonuses and Final (Additional) Bonus, if any, is payable in a lump
sum on death of the life assured during the deferment period of the policy.
Benefit on vesting:
On the date of vesting you can encash up to a maximum of 1/3rd of the amount
consisting of the Sum Assured along with accrued guaranteed additions, vested
simple reversionary bonuses and Final (Additional) Bonus, if any as a tax-free
lump sum. The balance amount shall be compulsorily converted into an annuity at
the option and the rates applicable at the time of vesting of the annuity.
Supplementary/Extra Benefits:
These are the optional benefits that can be added to your basic plan for extra
protection/option. An additional premium is required to be paid for these
benefits.

Surrender Value:
Buying a life insurance contract is a long-term commitment. However, surrender
value is available on the plan on earlier termination of the contract.
Guaranteed Surrender Value:
The policy may be surrendered for cash after the policy is kept in force by
payment of premiums for at least three years. The guaranteed surrender value
available under this plan for all modes, except the single premium mode, will be
equal to 30% of the total amount of premiums paid excluding the first year’s
premium and the extra premiums. In case of single premium mode, The guaranteed
surrender value will be 90% of the premium paid excluding all extra premiums.
Corporation’s policy on surrenders:
In practice, the Corporation will pay a Special Surrender Value – which is either
equal to or more than the Guaranteed Surrender Value. The benefit payable on
surrender reflects the discounted value of the reduced claim amount that would be
payable on death or at maturity. This value will depend on the duration for which
premiums have been paid and the policy duration at the date of surrender. In some
circumstances, especially in case of early termination of the policy, the
surrender value payable may be less than the total premium paid.
The Corporation reviews the surrender value payable under its plans from time to
time depending on the economic environment, experience and other factors.
Note: The above is the product summary giving the key features of the plan. This
is for illustrative purpose only. This does not represent a contract and for
details please refer to your policy document. Further, the tax benefits are as per
present Tax Laws.

Benefit Illustration:
Statutory Warning
“Some benefits are guaranteed and some benefits are variable with returns based on
the future performance of your insurer carrying on life insurance business. If
your policy offers guaranteed returns then these will be clearly marked
“guaranteed” in the illustration table on this page. If your policy offers
variable returns then the illustrations on this page will show two different rates
of assumed future investment returns. These assumed rates of return are not
guaranteed and they are not upper or lower limits of what you might get back as
the value of your policy is dependent on a number of factors including future
investment performance.”

Illustration 1:
Age at entry: 35 years
Policy Term: 25 years
Premium paying term: 25 years
Sum Assured (Rs.): 100000
Yearly Premium (Rs.): 4121
End of year Total premiums paid till end of year Benefit payable on death /
Amount available on survival up to the date of vesting for purchase of annuity
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 4,121 1,00,000 0 0 100000 100000
2 8,242 1,05,000 0 0 105000 105000
3 12,363 1,10,000 0 0 110000 110000
4 16,484 1,15,000 0 0 115000 115000
5 20,605 1,20,000 0 0 120000 120000
6 24,726 1,25,000 2300 7300 127300 132300
7 28,847 1,25,000 4600 14600 129600 139600
8 32,968 1,25,000 6900 21900 131900 146900
9 37,089 1,25,000 9200 29200 134200 154200
10 41,210 1,25,000 11500 36500 136500 136500
15 61,815 1,25,000 23000 73000 148000 198000
20 82,420 1,25,000 48500 157500 173500 282500
25 1,03,025 1,25,000 63500 206000 188500 331000
Illustration 2:
Age at entry: 35 years
Policy Term: 25 years
Sum Assured (Rs.): 100000
Single Premium (Rs.): 53750
End of year Total premiums paid till end of year Benefit payable on death /
Amount available on survival up to the date of vesting for purchase of annuity
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 53,750 1,00,000 0 0 100000 100000
2 53,750 1,05,000 0 0 105000 105000
3 53,750 1,10,000 0 0 110000 110000
4 53,750 1,15,000 0 0 115000 115000
5 53,750 1,20,000 0 0 120000 120000
6 53,750 1,25,000 2500 12400 127500 137400
7 53,750 1,25,000 5000 24800 130000 149800
8 53,750 1,25,000 7500 37200 132500 162200
9 53,750 1,25,000 10000 49600 135000 174600
10 53,750 1,25,000 12500 62000 137500 187000
15 53,750 1,25,000 25000 124000 150000 249000
20 53,750 1,25,000 53500 268000 178500 393000
25 53,750 1,25,000 70000 350500 195000 475500

i) This illustration is applicable to a non-smoker male/female standard (from


medical, life style and occupation point of view) life.

ii) The non-guaranteed benefits (1) and (2) in above illustration are calculated
so that they are consistent with the Projected Investment Rate of Return
assumption of 6% p.a.(Scenario 1) and 10% p.a. (Scenario 2) respectively. In
other words, in preparing this benefit illustration, it is assumed that the
Projected Investment Rate of Return that LICI will be able to earn throughout the
term of the policy will be 6% p.a. or 10% p.a., as the case may be. The Projected
Investment Rate of Return is not guaranteed.

iii) The main objective of the illustration is that the client is able to
appreciate the features of the product and the flow of benefits in different
circumstances with some level of quantification.

iv) Future bonus will depend on future profits and as such is not guaranteed.
However, once bonus is declared in any year and added to the policy, the bonus so
added is guaranteed.
v) The Maturity benefit is the amount shown at the end of the Policy term.

UNIT PLANS
Unit plans are investment plans for those who realise the worth of hard-earned
money. These plans help you see your savings yield rich benefits and help you save
tax even if you don't have consistent income.

Market Plus I

Profit Plus

Money Plus-I

Child Fortune Plus

Jeevan Saathi Plus

SPECIAL PLANS
LIC’s Special Plans are not plans but opportunities that knock on your door once
in a lifetime. These plans are a perfect blend of insurance, investment and a
lifetime of happiness!

Jeevan Nischay
New Bima Gold

Health Protection Plus

Bima Nivesh 2005

Jeevan Saral

Jeevan Madhur

Jeevan Mangal
4.1)INCOME-TAX AND TAX BENEFITS FROM LIFE INSURANCE

A] INCOME-TAX RATES FOR ASSESSMENT YEAR 2010-2011 (FINANCIAL YEAR 2009-2010)


Income Slabs Tax RatesNil
Individual & HUF below age of 65 years Woman below age of 65 years Individual
above age of 65 years
Income upto Rs.1,60,000 Income upto Rs.1,90,000 Income upto Rs.2,40,000 NIL
Rs.1,60,001 to Rs.3,00,000 Rs.1,90,001 to Rs.3,00,000 Rs.2,40,001 to
Rs.3,00,000 10%
Rs.3,00,001 to Rs.5,00,000 Rs.3,00,001 to Rs.5,00,000 Rs.3,00,001 to
Rs.5,00,000 20%
Above Rs.5,00,001 Above Rs.5,00,001 Above Rs.5,00,001 30%
Education Cess : An additional surcharge called as ‘Education Cess’ is levied at
the rate of 2% on the amount of Income tax and surcharge (if any) in all cases
shall be levied.
Secondary and Higher : An additional surcharge, called the “Secondary and Higher
Education Cess on income- tax” at the rate of 1% of income-tax and surcharge (not
including the “Education Cess on Income-tax”) in all cases shall be levied.
B] SOME IMPORTANT INCOME TAX BENEFITS AVAILABLE UNDER VARIOUS PLANS OF LIFE
INSURANCE ARE HIGHLIGHTED BELOW:
4.1.1) Deduction allowable from Income for payment of Life Insurance Premium
(Sec. 80C).
a) Life Insurance premia paid in order to effect or to keep in force an insurance
on the life of the assessee or on the life of the spouse or any child of assessee
& in the case of HUF, premium paid on the life of any member thereof, Provided
premium paid is not in excess of 20% of capital sum assured.
b) Contribution to deferred annuity Plans in order to effect or to keep in force a
contract for deferred annuity, on his own life or the life of his spouse or any
child of such individual, provided such contract does not contain a provision to
exercise an option by the insured to receive a cash payment in lieu of the payment
of annuity is eligible for deduction.
c) Contribution to Pension/Annuity Plans – New Jeevan Dhara-I.
4.1.2) Jeevan Nidhi Plan & New Jeevan Suraksha – I Plan (U/s. 80CCC)
A deduction to an individual for any amount paid or deposited by him from his
taxable income in the above annuity plans for receiving pension (from the fund set
up by the Corporation under the Pension Scheme) is allowed.
NOTE: The premium can be paid upto Rs.1,00,000/- to avail deduction u/s.80C, 80CCC
& 80CCD. However, there is no sectoral cap i.e. the limit of Rs.1,00,000/- can be
exhausted by paying premium under of the said sections.
4.1.3) Deduction under section 80D
1. Deduction allowable upto Rs.15,000/- if an amount is paid to keep in force
an insurance on health of assessee or his family (i.e. Spouse & children)
2. Additional deduction upto Rs.15,000/- if an amount is paid to keep in force
an insurance on health of parents
3. In case of HUF, deduction allowable upto Rs.15,000/- if an amount is paid
to keep in force an insurance on health of any member of that HUF
Note: If the sum specified in (a) or (b) or (c) is paid to effect or keep in
force an insurance on the health of any person specified therein who is a senior
citizen, then the deduction available will be upto Rs.20,000/-. provided that such
insurance is in accordance with the scheme framed by
a) the General Insurance Corporation of India as approved by the Central
Government in this behalf or;
b) Any other insurer and approved by the Insurance Regulatory and Development
Authority.
4.1.4)Jeevan Aadhar Plan (Sec.80DD):
Deduction from total income upto Rs.50000/- allowable on amount deposited with LIC
under Jeevan Aadhar Plan for maintenance of an handicapped dependent
(Rs.1,00,000/- where handicapped dependent is suffering from severe disability)
4.1.5)Exemption in respect of commutation of pension under Jeevan Suraksha &
Jeevan Nidhi Plans:
Under Section 10(10A) (iii) of the Income-tax Act, any payment received by way of
commutations of pension out of the Jeevan Suraksha & Jeevan Nidhi Annuity plans
is exempt from tax under clause (23AAB).
4.6)Income tax exemption on Maturity/Death Claims proceeds under Section 10(10D)
Under the provisions of section 10(10D) of the Income-tax Act, 1961,
Maturity/Death claims proceeds of life insurance policy, including the sum
allocated by way of bonus on such policy (other than amount to be refunded under
Jeevan Aadhar Insurance Plan in case of handicapped dependent predeceases the
individual or amount received under a Keyman Insurance Plan) is exempted from
income-tax. However any sum (not including the premium paid by the assessee)
received under an insurance policy issued on or after the 1st day of April, 2003
in respect of which the premium payable for any of the years during the term of
the policy exceeds 20% of the actual capital sum assured will no longer be
exempted under this section.

5.1)HELP US TO SERVE U BETTER


5.1.1)Admission Of Age:

Age is the main basis of calculation of premium under life insurance policies. The
following are accepted as evidence of age:
• Certified extract from Municipal or Local Body’s records made at the time of
birth.
• Certificate of Baptism or Certified Extract from Family Bible, if it
contains age or date of birth.
• Certified Extract from School or College records, if age or date of birth is
stated therein.
• Certified Extract from Service Register in the case of Govt. employees and
employees of Quasi-Govt. Institutions or
• Passport issued by the Passport Authorities in India.
5.1.2)Payment Of Premium:
• By cash, local cheque (subject to realization of cheque), Demand Draft at
Branch Office.
• The DD and cheques or Money Order may be sent by post.
• You can pay your premiums at any of our Branches as 99% of our Branches are
networked.
• Many Banks do accept standing instructions to remit the premiums. So by
providing a standing instruction to your Bank to debit your account for the
premium amount and send it vide a banker’s cheque to LIC, on the due dates and
months mentioned on your policy bond.
• Through Internet : Payment of premiums can be made through Internet through
Service Providers viz.HDFC Bank, ICICI Bank, Times of Money, Bill Junction, UTI
Bank, Bank of Punjab, Citibank, Corporation Bank, Federal Bank and BillDesk.
• Premium payment can also be made through ATMs of Corporation Bank and UTI
Bank.
• Premium payment can also be made through Electronic Clearing Service (ECS)
which has been launched at Mumbai, Hyderabad, Chennai, Kolkata, New Delhi, Kanpur,
Bangalore, Vijaywada, Patna, Jaipur, Chandigarh, Trivandrum, Ahmedabad, Pune, Goa
and Nagpur, Secunderabad & Visakhapatnam. A policyholder having an account in any
Bank which is a Member of the local Clearing House can opt for ECS debit to pay
premiums. The policyholders wishing to use this system would have to fill up a
Mandate Form available at our Branches/DO and get it certified by the Bank. The
certified Mandate Forms are to be submitted to our BO/DO.
Policy can be anywhere in India.
• Citibank Kiosks at Industrial Assurance Building, Churchgate, New India
Building, Santacruz, Jeevan Shikha Building, Borivili are dedicated for collection
of premiums through cheques.
5.1.3)Days Of Grace:
• Policyholder should pay the premiums on due dates. However, a grace period
of one month but not less than 30 days will be allowed for payment of yearly/half-
yearly/quarterly premiums and 15 days for monthly premiums.
• When the days of grace expire on a Sunday or a public holiday, the premium
may be paid on the following working day to keep the policy in force.
• If the premium is not paid before the expiry of the days of grace, the
policy lapses.
5.1.4)Revival Of Lapsed Policy:
• If the policy has lapsed, it can be revived during the life time of the life
assured, within a period of five years from the date of the first unpaid premium
but before the date of maturity subject to certain conditions.
• The Corporation offers three convenient schemes of revival viz., Ordinary
Revival, Special Revival and Installment Revival. Policies can also be revived
under Loan-cum-Revival and SB-cum-Revival schemes.
• Request for revival may be made to the Branch Office servicing the policy.
Change Of Address And Transfer Of Policy Records:
• The policyholder should immediately intimate the change of his/her address
to the Branch Office servicing the policy. The correct address facilitates better
service and quicker settlement of claims.
• Policy records can also be transferred from one Branch Office to another for
servicing, as requested by the policyholder.
5.1.5)Loss Of Policy Document:
• The Policy Document is an evidence of the contract between the Insurer and
the Insured. Hence the policyholder should preserve the Policy Bond till the
contracted amount under it is settled.
• Loss of the Policy Document should be immediately intimated to the Branch
Office where it is serviced.
5.1.6)Loans:
• Loans are granted on policies to the extent of 90% of Surrender Value of the
policies which are in force and 85% of the Surrender Value in case of policies
which are paid-up, inclusive of the cash value of bonus. The rate of interest
charged at present is 9% p.a. payable half-yearly.
• Loans are not granted for a period shorter than six months. The Conditions
and Privileges printed on the back of the Policy Bond states whether a particular
policy is with or without the loan facility.
5.1.7)Relief To Policyholders:
• The Corporation generally allows concessions on payment of premiums,
settlement of claims, issue of duplicate policies, etc when the policyholder are
affected by natural calamities such as droughts, cyclones, floods, earthquakes,
etc.
5.1.8)Nomination:
• Nomination is a right conferred on the holder of a Policy of Life Assurance
on his own life to appoint a person/s to receive policy moneys in the event of the
policy becoming a claim by the assured’s death. The Nominee does not get any other
benefit except to receive the policy moneys on the death of the Life Assured. A
nomination may be changed or cancelled by the life assured whenever he likes
without the consent of the Nominee.
Ensure nomination exists in the policy for easy settlement of claims.
5.1.9)Assignment:
• Assignment means transfer of rights, title and interest. When an assignment
is executed, all rights, title and interest in respect of the property assigned
are immediately transferred to the Assignee/s and the Assignee/s become the
owner/s of the policy subject to any lawful condition made in the assignment.
• Assignment can be either conditional or absolute. On assignment (other than
to LIC), Nomination automatically stands cancelled. Hence, when such a policy is
reassigned, the policyholder will have to make a fresh nomination to avoid delay
in settlement of claim.
5.1.10)Survival Benefit/Maturity Claims:
• LIC settles survival benefit/maturity claims on or before the due date.
• Policyholder are intimated well in advance by the Branch Office which
services the policy regarding the payment, and the necessary Discharge Voucher is
also sent for execution by the assured. In case the policyholder does not get any
intimation from the Branch Office concerned, he/she should contact them, quoting
the Policy Number.
• Survival Benefit payment up to Rs.60,000/- are settled without insisting for
Policy Bond and Discharge Voucher.
5.1.11)Death Claims:
• If the life assured dies during the term of the policy, death claim arises.
The death of the policyholder should be immediately intimated in writing to the
Branch Office where the policy is serviced along with the following particulars:
1. The No./s of the policy/ies
2. The name of the policyholder
3. Death Certificate issued by concerned Authority
4. The date of death
5. The cause of death and
6. Claimant’s relationship with the deceased
• On receipt of the intimation of death, necessary claim forms are sent by the
Branch Office for completion along with instructions regarding the procedure to be
followed by the claimant.
• The claims which have arisen after a period of three years are treated as
non-early claims and settled within 30 days from the date of receipt of all
requirements.
• The claims that have arisen within a period of two years from the date of
commencement of the policy, are treated as early claims and investigation is
compulsory in such cases.
• The claim is usually payable to the nominee/assignee or the legal heirs, as
the case may be. However, if the deceased policyholder has not nominated/assigned
the policy or if he/she has not made a suitable provision regarding the policy
moneys by way of a Will, the claim is payable to the holder of a Succession
Certificate or some such evidence of title from a Court of Law.
• The Corporation grants claims concessions under certain Plans whereby
payment of full sum assured is made, subject to the deduction of unpaid premiums
with interest till the date of death and unpaid premiums falling due before the
next anniversary of the policy, in the event of the death of the life assured
within a period of six months or one year from the date of the first unpaid
premium, provided premiums have been paid for at least three years and five years
respectively.
5.1.12)Claim Review Committee:
The Corporation settles a large number of Death Claims every year. Only in case of
fraudulent suppression of material information is the liability repudiated. This
is to ensure that claims are not paid to fraudulent persons at the cost of honest
policyholders. The number of Death Claims repudiated is, however, very small. Even
in these cases, an opportunity is given to the claimant to make a representation
for consideration by the Review Committees of the Zonal office and the Central
Office. As a result of such review, depending on the merits of each case,
appropriate decisions are taken. The Claims Review Committees of the Central and
Zonal Offices have among their Members, a retired High Court/District Court Judge.
This has helped providing transparency and confidence in our operations and has
resulted in greater satisfaction among claimants, policyholders and public.

5.1.13)Insurance Ombudsman:
• The Grievance Redressal Machinery has been further expanded with the
appointment of Insurance Ombudsman at different centers by the Government of
India. At present there are 12 centres operating all over the country.
• Following type of complaints fall within the purview of the Ombdusman
a) any partial or total repudiation of claims by an insurer;
b) any dispute in regard to premiums paid if payable in terms of the policy;
c) any dispute on the legal construction of the policies in so far as such
disputes relate to claims;
d) delay in settlement of claims;
e)non-issue of any insurance document to customers after receipt of premium.
• Policyholder can approach the Insurance Ombudsman for the redressal of their
complaints free of cost.
5.1.14)Initiatives In Policy Servicing Areas:
• All 2048 Branches of LIC are fully computerized covering all policy
servicing aspects to give prompt computerized services from new policy
introduction, acceptance of renewal premium, revivals, loans, etc to final claims
settlement.
• Green Channel facility has been introduced for the speedy completion of
proposals.
• Payment of premiums can be made through internet through service providers,
viz., HDFC Bank, ICICI Bank, Times of money, Bill Junction, UTI Bank, Bank of
Punjab,Citi Bank, Corporation Bank, Federal Bank and Billdesk.
5.1.15)Grievance Redressal Machinery:
• A machinery for redressal of policyholders? grievances exist in all the
offices of the Corporation. These are headed by designated Officers who are
available at their respective Offices every Monday between 2.30 pm and 4.30 pm.
except holidays. Policyholder can approach these officers to get their grievances
redressed.
• The Designated Officers at the various offices of the Corporation are :
At Branch Office --- Sr./Branch Manager
At Divisional Office --- Marketing Manager
At Zonal Office --- Regional Manager (Mktg)
At Central Office --- Executive Director (Mktg/IO/CRM)
5.1.17)Citizens’ Charter:
• Citizens' Charter was presented to the Nation in November, 1997. In the
Charter the bench marks were prescribed for 30 servicing areas.

6.1)INFORMATION TECHNOLOGY & LIC


LIC has been one of the pioneering organizations in India who introduced the
leverage of Information Technology in servicing and in their business. Data
pertaining to almost 10 crore policies is being held on computers in LIC. We have
gone in for relevant and appropriate technology over the years.

1964 saw the introduction of computers in LIC. Unit Record Machines introduced in
late 1950’s were phased out in 1980’s and replaced by Microprocessors based
computers in Branch and Divisional Offices for Back Office Computerization.
Standardization of Hardware and Software commenced in 1990’s. Standard Computer
Packages were developed and implemented for Ordinary and Salary Savings Scheme
(SSS) Policies.

6.2)FRONT END OPERATIONS


With a view to enhancing customer responsiveness and services , in July 1995, LIC
started a drive of On Line Service to Policyholders and Agents through Computer.
This on line service enabled policyholders to receive immediate policy status
report , prompt acceptance of their premium and get Revival Quotation, Loan
Quotation on demand. Incorporating change of address can be done on line. Quicker
completion of proposals and dispatch of policy documents have become a reality.
All our 2048 branches across the country have been covered under front-end
operations. Thus all our 100 divisional offices have achieved the distinction of
100% branch computerisation. New payment related Modules pertaining to both
ordinary & SSS policies have been added to the Front End Package catering to Loan,
Claims and Development Officers’ Appraisal. All these modules help to reduce time-
lag and ensure accuracy.

6.3)METRO AREA NETWORK


A Metropolitan Area Network, connecting 74 branches in Mumbai was commissioned in
November, 1997, enabling policyholders in Mumbai to pay their Premium or get their
Status Report, Surrender Value Quotation, Loan Quotation etc. from ANY Branch in
the city. The System has been working successfully. More than 10,000 transactions
are carried out over this Network on any given working day. Such Networks have
been implemented in other cities also.

6.5)WIDE AREA NETWORK


All 7 Zonal Offices and all the MAN centres are connected through a Wide Area
Network (WAN). This will enable a customer to view his policy data and pay premium
from any branch of any MAN city. As at November 2005, we have 91 centers in India
with more than 2035 branches networked under WAN.

6.6)INTERACTIVE VOICE RESPONSE SYSTEMS (IVRS)


IVRS has already been made functional in 59 centers all over the country. This
would enable customers to ring up LIC and receive information (e.g. next premium
due, Status, Loan Amount, Maturity payment due, Accumulated Bonus etc.) about
their policies on the telephone. This information could also be faxed on demand to
the customer.

6.7)LIC ON THE INTERNET


Our Internet site is an information bank. We have displayed information about LIC
& its offices . Efforts are on to upgrade our web site to make it dynamic and
interactive.The addresses/e-mail Ids of ur Zonal Offices, Zonal Training Centers,
Management Development Center, Overseas Branches, Divisional Offices and also all
Branch Offices with a view to speed up the communication process.

6.8)PAYMENT OF PREMIUM AND POLICY STATUS ON INTERNET


(You have to register for these services)
LIC has given its policyholders a unique facility to pay premiums through Internet
absolutely free and also view their policy details on Internet premium
payments.There are 11 service providers with whom L I C has signed the agreement
to provide this service.

6.9)INFORMATION KIOSKS
We have set up 150 Interactive Touch screen based Multimedia KIOSKS in prime
locations in metros and some major cities for dissemination information to general
public on our products and services. These KIOSKS are enable to provide policy
details and accept premium payments.

6.10)INFO CENTRES
We have also set up 8 call centres, manned by skilled employees to provide you
with information about our Products, Policy Services, Branch addresses and other
organizational information.
AWARDS

World Brand Congress Award OUTLOOK MONEY -- NDTV PROFIT AWARD 2009 in
" BEST LIFE INSURER CATEGORY "

NDTV PROFIT BUSSINESS LEADERSHIP, AWARDS 2009 CNBC AWAAZ CONSUMER AWARD 2009 for
" Most preferred insurance company "
ASIA PACIFIC HRM Congress, 2009 Award for INNOVATIVE HR PRACTICES Brand Equity
Most Trusted Brand 2009 Top in Insurance Category

Golden Peacock Innovative Product / Service Award - 2009 Loyalty Award - 2009

Reader's Digest Trusted Brand Award, 2009 ( Platinum category ) CNBC Awaaz
Consumer Awards 2008

NDTV Profit Business Leadership Award 2008 INDY's Silver Award for Best
Corporate Film

INDY's Silver Award for Best


" In-house Magazine " NASCOM IT USER Award 2008

Business Superbrand India 2009 ASIA BRAND CONGRESS BRAND LEADERSHIP AWARD,
2008
HONOURED BY YOU

Dr.Manmohan Singh
Prime Minister of India

Shri.P.Chidambaram
Union Finance Minister

“In the year 1956, 245 Indian and foreign companies were nationalized and today,
the three letters ‘LIC’, stands as a synonym for insurance, for services, for
excellence in strengthening the economic fibre of this country. I dare to say that
no other three letters taken together are more recognised to the length and
breadth of India than LIC.”

“The performance figures of LIC give an indication why LIC is dear to us, why LIC
is a Jewel in our crown and why we will continue to nurture LIC and grow it into a
great organization rendering service to the people of India.”

“LIC’s footprints are now to be found in many other countries in the world.
Wherever Indians go - and they go everywhere now, wherever Indians are welcome -
and they are welcome in every part of the world, wherever Indians settle down –
they have found many new homes, wherever Indians excel – and they excel in every
walk of life, they want LIC – they want LIC to protect them, to look after their
savings, and provide for protection as well as their retirement.”

P. Chidambaram
Union Finance Minister
Excerpts from speeches at the inaugural function of LIC’s Golden Jubilee
Celebrations.
Lucknow, September 1, 2005.

CONCLUSION

Insurance is an integral part of any personal financial plan. The type of


insurance and the amount of coverage you obtain all depends on your unique
financial and family circumstances, and must be evaluated carefully. When
considering purchasing coverage, you should review all the potential risks and the
financial impact of these risks on your financial health. This will help you
determine what options to look for and what questions to ask. What you need to
keep in mind is that you do not want to be underinsured or overinsured, which
means you have to do your homework before you buy. And as with any type of
financial product, you must read the fine print and consult with a competent
advisor.

Let's review what we've learned:


• Insurance is a form is risk management in which the insured transfers the
cost of potential loss to another entity in exchange for monetary compensation
known as the premium.

• Insurance works by pooling risks. Because the number of insured individuals


is so large, insurance companies can use statistical analysis to project what
their actual losses will be within the given class. This allows the insurance
companies to operate profitably and at the same time pay for claims that may
arise.

• Underwriting is the process of evaluating the risk to be insured. This is


done by the insurer when determining how likely it is that the loss will occur,
how much the loss could be and then using this information to determine how much
you should pay to insure against the risk. .

9.1)REFERENCE WEBSITE

WWW.LICINDIA.COM

WWW.HK-FD.COM

WWW.GOOGLE.CO.IN

http://realneo.us/system/files/Ag-show-hail-insurance
9.2)REPORTS:-

World Insurance Report 2009

1.1)INTRODUCTION

Insurance is a cover used for protecting oneself from the risk of a financial
loss. It is important to understand that risk is a part of any person’s life and
that it increases as a person increases in age, responsibility and wealth.
Insurance is risk coverage against financial losses and should not be taken as an
investment instrument.
There are mainly two parties involved in this – the insurer and the insured. The
insurer is the insurance company who will provide the cover to the insured against
any financial losses. The insured may be an individual person or a group of people
like an employer, members of a society, etc.
A policy is the contract between the insurer and the insured, which states the
risks covered, the exclusions, if any, and the benefits reimbursed on the
happening of an event like death, illness etc. The policy is paid through what is
called a premium, which is a set amount that must be paid by the insured on a
monthly, semi-annual or annual basis. On the happening of an event like death,
disability, fire, etc, for which the insured is covered, the benefit amount stated
in the policy contract can be claimed by the insured.
1.2)Classification of Insurance
There are mainly two broad classes of Insurance – Life and Non Life.
• Life insurance products include Term Life policies, which give a pure risk
coverage of only the death benefit, whereas endowment or money back policies have
a risk as well as savings component i.e. death as well as maturity benefit. Also
coming under the life insurance umbrella are the Unit – Linked Policies in which
there is a risk component and a savings component, which is invested in equity,
debt or gilt funds, depending on the insurance company.
• Non Life insurance products include property or casualty, health insurance
or house, fire, marine insurance etc. This insurance class deals with all the non-
life aspects of an insured like his/her house, health, land, office, cargo, etc
which might bring financial loss.

1.3)WHAT IS INSURANCE
Insurance is a form of risk management in which the insured transfers the cost of
potential loss to another entity in exchange for monetary compensation known as
the premium. (For background reading, see The History Of Insurance In America.)

Insurance allows individuals, businesses and other entities to protect themselves


against significant potential losses and financial hardship at a reasonably
affordable rate. We say "significant" because if the potential loss is small, then
it doesn't make sense to pay a premium to protect against the loss. After all, you
would not pay a monthly premium to protect against a $50 loss because this would
not be considered a financial hardship for most.

Insurance is appropriate when you want to protect against a significant monetary


loss. Take life insurance as an example. If you are the primary breadwinner in
your home, the loss of income that your family would experience as a result of our
premature death is considered a significant loss and hardship that you should
protect them against. It would be very difficult for your family to replace your
income, so the monthly premiums ensure that if you die, your income will be
replaced by the insured amount. The same principle applies to many other forms of
insurance. If the potential loss will have a detrimental effect on the person or
entity, insurance makes sense. (For more insight, see 15 Insurance Policies You
Don't Need.)

Everyone that wants to protect themselves or someone else against financial


hardship should consider insurance. This may include:
• Protecting family after one's death from loss of income
• Ensuring debt repayment after death
• Covering contingent liabilities
• Protecting against the death of a key employee or person in your business
• Buying out a partner or co-shareholder after his or her death
• Protecting your business from business interruption and loss of income
• Protecting yourself against unforeseeable health expenses
• Protecting your home against theft, fire, flood and other hazards
• Protecting yourself against lawsuits
• Protecting yourself in the event of disability
• Protecting your car against theft or losses incurred because of accidents

1.4)FUNDAMENTAL OF INSURANCE
1.4.1)How does insurance work?

Insurance works by pooling risk.What does this mean? It simply means that a large
group of people who want to insure against a particular loss pay their premiums
into what we will call the insurance bucket, or pool. Because the number of
insured individuals is so large, insurance companies can use statistical analysis
to project what their actual losses will be within the given class. They know that
not all insured individuals will suffer losses at the same time or at all. This
allows the insurance companies to operate profitably and at the same time pay for
claims that may arise. For instance, most people have auto insurance but only a
few actually get into an accident. You pay for the probability of the loss and for
the protection that you will be paid for losses in the event they occur.

1.4.2)Risks

Life is full of risks - some are preventable or can at least be minimized, some
are avoidable and some are completely unforeseeable. What's important to know
about risk when thinking about insurance is the type of risk, the effect of that
risk, the cost of the risk and what you can do to mitigate the risk. Let's take
the example of driving a car. (For more insight on the concept of risk, see
Determining Risk And The Risk Pyramid.)

1.4.3)Type of risk: Bodily injury, total loss of vehicle, having to fix your car

The effect: Spending time in the hospital, having to rent a car and having to make
car payments for a car that no longer exists

The costs: Can range from small to very large


Mitigating risk: Not driving at all (risk avoidance), becoming a safe driver (you
still have to contend with other drivers), or transferring the risk to someone
else (insurance)
Let's explore this concept of risk management (or mitigation) principles a little
deeper and look at how you may apply them. The basic risk management tools
indicate that risks that could bring financial losses and whose severity cannot be
reduced should be transferred. You should also consider the relationship between
the cost of risk transfer and the value of transferring that risk.

1.5)TYPES OF INSURANCE

2.1)Brief History Of LIC

The story of insurance is probably as old as the story of mankind. The same
instinct that prompts modern businessmen today to secure themselves against loss
and disaster existed in primitive men also. They too sought to avert the evil
consequences of fire and flood and loss of life and were willing to make some sort
of sacrifice in order to achieve security. Though the concept of insurance is
largely a development of the recent past, particularly after the industrial era –
past few centuries – yet its beginnings date back almost 6000 years.
Life Insurance in its modern form came to India from England in the year 1818.
Oriental Life Insurance Company started by Europeans in Calcutta was the first
life insurance company on Indian Soil. All the insurance companies established
during that period were brought up with the purpose of looking after the needs of
European community and Indian natives were not being insured by these companies.
However, later with the efforts of eminent people like Babu Muttylal Seal, the
foreign life insurance companies started insuring Indian lives. But Indian lives
were being treated as sub-standard lives and heavy extra premiums were being
charged on them. Bombay Mutual Life Assurance Society heralded the birth of first
Indian life insurance company in the year 1870, and covered Indian lives at normal
rates. Starting as Indian enterprise with highly patriotic motives, insurance
companies came into existence to carry the message of insurance and social
security through insurance to various sectors of society. Bharat Insurance Company
(1896) was also one of such companies inspired by nationalism. The Swadeshi
movement of 1905-1907 gave rise to more insurance companies. The United India in
Madras, National Indian and National Insurance in Calcutta and the Co-operative
Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative
Insurance Company took its birth in one of the rooms of the Jorasanko, house of
the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General
Assurance and Swadeshi Life (later Bombay Life) were some of the companies
established during the same period. Prior to 1912 India had no legislation to
regulate insurance business. In the year 1912, the Life Insurance Companies Act,
and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912
made it necessary that the premium rate tables and periodical valuations of
companies should be certified by an actuary. But the Act discriminated between
foreign and Indian companies on many accounts, putting the Indian companies at a
disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance
business. From 44 companies with total business-in-force as Rs.22.44 crore, it
rose to 176 companies with total business-in-force as Rs.298 crore in 1938. During
the mushrooming of insurance companies many financially unsound concerns were also
floated which failed miserably. The Insurance Act 1938 was the first legislation
governing not only life insurance but also non-life insurance to provide strict
state control over insurance business. The demand for nationalization of life
insurance industry was made repeatedly in the past but it gathered momentum in
1944 when a bill to amend the Life Insurance Act 1938 was introduced in the
Legislative Assembly. However, it was much later on the 19th of January, 1956,
that life insurance in India was nationalized. About 154 Indian insurance
companies, 16 non-Indian companies and 75 provident were operating in India at the
time of nationalization. Nationalization was accomplished in two stages; initially
the management of the companies was taken over by means of an Ordinance, and
later, the ownership too by means of a comprehensive bill. The Parliament of India
passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life
Insurance Corporation of India was created on 1st September, 1956, with the
objective of spreading life insurance much more widely and in particular to the
rural areas with a view to reach all insurable persons in the country, providing
them adequate financial cover at a reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from
its corporate office in the year 1956. Since life insurance contracts are long
term contracts and during the currency of the policy it requires a variety of
services need was felt in the later years to expand the operations and place a
branch office at each district headquarter. re-organization of LIC took place and
large numbers of new branch offices were opened. As a result of re-organisation
servicing functions were transferred to the branches, and branches were made
accounting units. It worked wonders with the performance of the corporation. It
may be seen that from about 200.00 crores of New Business in 1957 the corporation
crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for
LIC to cross 2000.00 crore mark of new business. But with re-organisation
happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore
Sum Assured on new policies.
Today LIC functions with 2048 fully computerized branch offices, 100 divisional
offices, 7 zonal offices and the Corporate office. LIC’s Wide Area Network covers
100 divisional offices and connects all the branches through a Metro Area Network.
LIC has tied up with some Banks and Service providers to offer on-line premium
collection facility in selected cities. LIC’s ECS and ATM premium payment facility
is an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info
Centres have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai,
Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of
providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK
offices. The satellite offices are smaller, leaner and closer to the customer. The
digitalized records of the satellite offices will facilitate anywhere servicing
and many other conveniences in the future.
LIC continues to be the dominant life insurer even in the liberalized scenario of
Indian insurance and is moving fast on a new growth trajectory surpassing its own
past records. LIC has issued over one crore policies during the current year. It
has crossed the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005,
posting a healthy growth rate of 16.67% over the corresponding period of the
previous year.
From then to now, LIC has crossed many milestones and has set unprecedented
performance records in various aspects of life insurance business. The same
motives which inspired our forefathers to bring insurance into existence in this
country inspire us at LIC to take this message of protection to light the lamps of
security in as many homes as possible and to help the people in providing security
to their families.

2.2)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.
The General insurance business in India, on the other hand, can trace its roots to
the Triton Insurance Company Ltd., the first general insurance company established
in the year 1850 in Calcutta by the British.

2.3)Some of the important milestones in the general insurance business in India


are:
1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact
all classes of general insurance business.
1957: General Insurance Council, a wing of the Insurance Association of India,
frames a code of conduct for ensuring fair conduct and sound business practices.
1968: The Insurance Act amended to regulate investments and set minimum solvency
margins and the Tariff Advisory Committee set up.
1972: The General Insurance Business (Nationalisation) Act, 1972 nationalised the
general insurance business in India with effect from 1st January 1973.
107 insurers amalgamated and grouped into four companies viz.
the NationalInsurance Company Ltd., the New India Assurance Company Ltd.,
theOriental Insurance Company Ltd. and the United India Insurance Company
Ltd. GIC incorporated as a company.
2.4)OBJECTIVE OF LIC

• Spread Life Insurance widely and in particular to the rural areas and to the
socially and economically backward classes with a view to reaching all insurable
persons in the country and providing them adequate financial cover against death
at a reasonable cost.
• Maximize mobilization of people's savings by making insurance-linked savings
adequately attractive.
• Bear in mind, in the investment of funds, the primary obligation to its
policyholders, whose money it holds in trust, without losing sight of the interest
of the community as a whole; the funds to be deployed to the best advantage of the
investors as well as the community as a whole, keeping in view national priorities
and obligations of attractive return.
• Conduct business with utmost economy and with the full realization that the
moneys belong to the policyholders.
• Act as trustees of the insured public in their individual and collective
capacities.
• Meet the various life insurance needs of the community that would arise in
the changing social and economic environment.
• Involve all people working in the Corporation to the best of their
capability in furthering the interests of the insured public by providing
efficient service with courtesy.
• Promote amongst all agents and employees of the Corporation a sense of
participation, pride and job satisfaction through discharge of their duties with
dedication towards achievement of Corporate Objective.

2.5)MISSION/VISION
2.5.1)Mission
"Explore and enhance the quality of life of people through financial security by
providing products and services of aspired attributes with competitive returns,
and by rendering resources for economic development."
2.5.2)Vision
"A trans-nationally competitive financial conglomerate of significance to
societies and Pride of India."

2.6)BORD OF DIRECTORS

Members On The Board Of The Corporation


Shri. T.S. Vijayan (Chairman)

Shri. D.K. Mehrotra (Managing Director - LIC)

Shri. Thomas Mathew T. (Managing Director - LIC)

Shri. A.K. Dasgupta (Managing Director - LIC)

Shri. Ashok Chawla (Finance Secretary, Ministry of Finance, Govt. of India)


Shri. G.C. Chaturvedi (Additional Secretary, Department of Financial Services,
Ministry of Finance, Govt. of India.)
Shri. Yogesh Lohiya (Chairman cum Managing Director, GIC of India)

Dr. Sooranad Rajashekhran Shri. Monis R. Kidwai


2.7)We Operate All Over India

3.1)KNOW ABOUT YOUR LIFE INSURANCES


Life insurance in India made its debut well over 100 years ago.

In our country, which is one of the most populated in the world, the prominence of
insurance is not as widely understood, as it ought to be. What follows is an
attempt to acquaint readers with some of the concepts of life insurance, with
special reference to LIC.

It should, however, be clearly understood that the following content is by no


means an exhaustive description of the terms and conditions of an LIC policy or
its benefits or privileges.

For more details, please contact our branch or divisional office. Any LIC Agent
will be glad to help you choose the life insurance plan to meet your needs and
render policy servicing.

3.2)What Is Life Insurance?

Life insurance is a contract that pledges payment of an amount to the person


assured (or his nominee) on the happening of the event insured against.

The contract is valid for payment of the insured amount during:


• The date of maturity, or
• Specified dates at periodic intervals, or
• Unfortunate death, if it occurs earlier.
Among other things, the contract also provides for the payment of premium
periodically to the Corporation by the policyholder. Life insurance is universally
acknowledged to be an institution, which eliminates 'risk', substituting certainty
for uncertainty and comes to the timely aid of the family in the unfortunate event
of death of the breadwinner.
By and large, life insurance is civilisation's partial solution to the problems
caused by death. Life insurance, in short, is concerned with two hazards that
stand across the life-path of every person:
1. That of dying prematurely leaving a dependent family to fend for itself.
2. That of living till old age without visible means of support.

3.3)Life Insurance Vs. Other Savings


3.3.1)Contract Of Insurance:
A contract of insurance is a contract of utmost good faith technically known as
uberrima fides. The doctrine of disclosing all material facts is embodied in this
important principle, which applies to all forms of insurance.

At the time of taking a policy, policyholder should ensure that all questions in
the proposal form are correctly answered. Any misrepresentation, non-disclosure or
fraud in any document leading to the acceptance of the risk would render the
insurance contract null and void.
3.3.1)Protection:
Savings through life insurance guarantee full protection against risk of death of
the saver. Also, in case of demise, life insurance assures payment of the entire
amount assured (with bonuses wherever applicable) whereas in other savings
schemes, only the amount saved (with interest) is payable.

3.3.3)Aid To Thrift:
Life insurance encourages 'thrift'. It allows long-term savings since payments can
be made effortlessly because of the 'easy instalment' facility built into the
scheme. (Premium payment for insurance is either monthly, quarterly, half yearly
or yearly).
For example: The Salary Saving Scheme popularly known as SSS, provides a
convenient method of paying premium each month by deduction from one's salary.
In this case the employer directly pays the deducted premium to LIC. The Salary
Saving Scheme is ideal for any institution or establishment subject to specified
terms and conditions.

3.3.4)Liquidity:
In case of insurance, it is easy to acquire loans on the sole security of any
policy that has acquired loan value. Besides, a life insurance policy is also
generally accepted as security, even for a commercial loan.

3.3.5)Tax Relief:
Life Insurance is the best way to enjoy tax deductions on income tax and wealth
tax. This is available for amounts paid by way of premium for life insurance
subject to income tax rates in force.
Assessees can also avail of provisions in the law for tax relief. In such cases
the assured in effect pays a lower premium for insurance than otherwise.

3.3.6)Money When You Need It:


A policy that has a suitable insurance plan or a combination of different plans
can be effectively used to meet certain monetary needs that may arise from time-
to-time.
Children's education, start-in-life or marriage provision or even periodical needs
for cash over a stretch of time can be less stressful with the help of these
policies.
Alternatively, policy money can be made available at the time of one's retirement
from service and used for any specific purpose, such as, purchase of a house or
for other investments. Also, loans are granted to policyholders for house building
or for purchase of flats (subject to certain conditions).

3.3.7)Who Can Buy A Policy?

Any person who has attained majority and is eligible to enter into a valid
contract can insure himself/herself and those in whom he/she has insurable
interest.

Policies can also be taken, subject to certain conditions, on the life of one's
spouse or children. While underwriting proposals, certain factors such as the
policyholder’s state of health, the proponent's income and other relevant factors
are considered by the Corporation.

3.3.8)Insurance For Women

Prior to nationalisation (1956), many private insurance companies would offer


insurance to female lives with some extra premium or on restrictive conditions.
However, after nationalisation of life insurance, the terms under which life
insurance is granted to female lives have been reviewed from time-to-time.

At present, women who work and earn an income are treated at par with men. In
other cases, a restrictive clause is imposed, only if the age of the female is up
to 30 years and if she does not have an income attracting Income Tax.

3.3.9)Medical And Non-Medical Schemes

Life insurance is normally offered after a medical examination of the life to be


assured. However, to facilitate greater spread of insurance and also to avoid
inconvenience, LIC has been extending insurance cover without any medical
examination, subject to certain conditions.
3.3.10)With Profit And Without Profit Plans

An insurance policy can be 'with' or 'without' profit. In the former, bonuses


disclosed, if any, after periodical valuations are allotted to the policy and are
payable along with the contracted amount.

In 'without' profit plan the contracted amount is paid without any addition. The
premium rate charged for a 'with' profit policy is therefore higher than for a
'without' profit policy.

3.3.11)Keyman Insurance

Keyman insurance is taken by a business firm on the life of key employee(s) to


protect the firm against financial losses, which may occur due to the premature
demise of the Keyman.

INSURANCE PLANS
As individuals it is inherent to differ. Each individual?s insurance needs and
requirements are different from that of the others. LIC?s Insurance Plans are
policies that talk to you individually and give you the most suitable options that
can fit your requirement.

Jeevan Anurag

Komal Jeevan

CDA Endowment Vesting At 21

Marriage Endowment Or
Educational Annuity Plan

CDA Endowment Vesting At 18

Jeevan Kishore

Jeevan Chhaya

Child Career Plan

Child Future Plan

Child Fortune Plus

Jeevan Aadhar

Jeevan Vishwas
The Endowment Assurance Policy

The Endowment Assurance Policy-Limited Payment

Jeevan Mitra(Double Cover Endowment Plan)

Jeevan Mitra(Triple Cover Endowment Plan)

Jeevan Anand

New Janaraksha Plan

Jeevan Amrit

Jeevan Shree-I

Jeevan Pramukh

The Money Back Policy-20 Years

The Money Back Policy-25 Years

Jeevan Surabhi-15 Years

Jeevan Surabhi-20 Years

Jeevan Surabhi-25 Years

Bima Bachat
Jeevan Bharati - I

The Whole Life Policy

The Whole Life Policy- Limited Payment

The Whole Life Policy- Single Premium

Jeevan Anand

Jeevan Tarang

Two Year Temporary Assurance Policy

The Convertible Term Assurance Policy

Anmol Jeevan-I

Amulya Jeevan-I

Jeevan Saathi Plus

Jeevan Saathi
Jeevan Bharati - I

FEATURES:-
Introduction
LIC’s Jeevan Bharati-I – is a plan exclusively for women. It is a with profit plan
having special features considering the needs of women. The plan also provides for
Accident Benefit, Critical Illness Benefit and Congenital Disability Benefit as
optional Riders

1. SPECIAL FEATURES

1. Encashment of Survival Benefit 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 the rate
decided by the corporation from time to time will be payable.

2. Flexibility to pay premiums in advance:


The mode of premium payment is only yearly under this plan. However, policyholder
may pay the next yearly premium in advance in instalments (maximum upto 3
instalments) during the year. If premiums are paid in advance a premium rebate may
be allowed as may be decided by the Corporation from time to time

3. Option to receive maturity proceeds in the form of an annuity: :


The policyholder shall have the option to receive the maturity proceeds in the
form of annuity. The rate of annuity will be based on the annuity rates prevalent
at the time of stipulated Date of Maturity.

4. Auto Cover::
After two years premiums have been paid, whenever premium payment is discontinued,
the life cover for full sum assured will continue for 3 years from the due date of
first unpaid premium.

If death occurs during the Auto Cover period, then death benefit after deducting
unpaid premiums, with interest is payable along with the vested bonus, if any.

2. OPTIONAL RIDERS:
The following riders are available under this plan:

A. CRITICAL ILLNESS (CI) RIDER :


An amount equal to the Critical Illness Rider Sum Assured will be payable in case
of diagnosis of defined categories of critical illnesses. A person is eligible for
this benefit upto a maximum age of 60 years but subject to a maximum of the policy
term. This benefit can be availed for a minimum Sum of Rs 50000 and for a maximum
Sum equal to the Sum assured under the basic plan subject to the maximum of Rs 5
lakh overall limit taking all critical illness riders under all existing policies
of the Life Assured.
(For details refer the sales brochure of Critical Illness rider)

B. ACCIDENT BENEFIT RIDER:


An additional amount equal to the Accident Benefit Rider Sum Assured is payable
upon death or total and permanent disability due to accident during the policy
term.
This benefit can be availed for a minimum sum of Rs 50000 and for a maximum sum
equal to the Sum Assured under the Basic Plan subject to the maximum of Rs.50
lakhs.

C. CONGENITAL DISABILITIES BENEFIT (CDB) RIDER:


This rider can be opted for by a female between the ages of 18yrs and 35 years.
An amount equal to 50% of the CDB Sum Assured is payable if the Life Assured
gives birth to a child with specified congenital disabilities. This benefit is
available for a maximum of two such children and this benefit ceases at the age of
40 years.
This benefit can be availed for a minimum Sum of Rs 50000 and a maximum sum of Rs
500000.
(For details refer the sales brochure of Congenital Disability Benefit Rider)

3. ELIGIBILITY CONDITIONS (For Basic Plan):


Minimum age at entry : 18 years (completed)
Maximum age at entry : 55 years (nearest birthday)
Maximum age at maturity : 70 years (nearest birthday)
Policy term : 15 and 20 years
Minimum Sum Assured : Rs. 50,000/-
Maximum Sum Assured : Rs. 25,00,000/-
(Sum Assured shall be in multiples of Rs.5,000/-)
4. SAMPLE PREMIUM RATES FOR BASIC PLAN :
Tabular Annual Premium per 1000 SA
AGE/TERM 15 20
20 79.35 63.90
25 79.45 64.10
30 79.70 64.55
35 80.25 65.45
36 80.45 65.70
37 80.60 66.00
40 81.35 67.00
45 83.15 69.50
50 86.05 73.50
5. HIGH SUM ASSURED REBATES:
Sum Assured (in Rs) Rebate per thousand Sum Assured
1,00,000 to 4, 99,999 Rs 2.00
5, 00,000 and above Rs 4.00
6. LOAN:
Loan is available under the plan after the policy acquires paid-up value.
7. GRACE PERIOD:
A grace period of one-month but not less than 30 days will be allowed for payment
of premium .
8. REVIVAL:
A. REVIVAL DURING THE AUTO COVER PERIOD:
(i) If Critical Illness Rider is not opted for:
During the Auto Cover Period, the Life Assured can pay one or more instalments of
premiums with interest without submission of any evidence of health. On payment of
part or full arrears of premiums with interest, the Auto Cover Period of 3 years
from the due date of new FUP shall again be available during the term of the
Policy.

If any survival benefit falls due during the above 3-year auto cover period the
same will be paid after deduction of unpaid premiums with interest until the due
date of the survival benefit, provided it is more than the unpaid premiums with
interest. If the survival benefit is insufficient to cover the arrears of premiums
with interest up to the due date of such survival benefit, then the survival
benefit will be payable only on payment of such arrears of premiums with
interest , during the period of the aforesaid 3 years or on revival of the policy
thereafter.
(ii) If Critical Illness Rider is opted for:
During the auto cover period, the policy can be revived by payment of full arrears
of premium together with interest and subject to submission of proof of continued
insurability of the Life Assured to the satisfaction of the Corporation. The
Corporation reserves the right to accept at original terms, accept at revised
terms or decline the revival of the policy. The revival of the policy shall take
effect only after the same is approved by the Corporation and is specifically
communicated to the Life Assured.
If any survival benefit falls due during the above 3-year auto cover period the
same will be paid only after revival of the policy as stated above.

B. REVIVAL OTHER THAN DURING AUTO COVER PERIOD :


If the Policy has lapsed, and the policy is not under the period of auto cover,
the policy can be revived within a period of 5 years from the date of first unpaid
premium and before the date of maturity by payment of full arrears of premium
together with interest and subject to submission of proof of continued
insurability of the Life Assured to the satisfaction of the Corporation. The
Corporation reserves the right to accept at original terms, accept at revised
terms or decline the revival of a discontinued policy. The revival of discontinued
policy shall take effect only after the same is approved by the Corporation and is
specifically communicated to the Life Assured.
The Rider/s shall be revived along with the Basic plan and not in isolation.
9. PAID UP VALUE:
If after at least three full years’ premiums have been paid and any subsequent
premium not paid, this policy shall not be wholly void after the expiry of three
years Auto Cover Period ,but shall continue as a paid up policy. The Sum Assured
of the policy shall be reduced in the same proportion as the number of premiums
actually paid bears to the total number of premiums stipulated for in the policy ,
less any survival benefit paid. This reduced Sum is called the paid up value.

The policy thereafter shall be free from all liabilities for payment of the
premiums, but shall not be entitled to the future bonuses. The existing vested
reversionary bonuses, if any, will remain attached to the reduced paid-up Policy.
This paid up value shall be payable on the date of maturity or at Life Assured’s
prior death. No survival benefit shall be payable under paid up policies.
The rider benefits will cease to apply if the policy is in lapsed condition and
will not acquire any paid up value.
10. SURRENDER VALUE:
The Guaranteed Surrender value will be available after the expiry of 3 policy
years provided the premiums have been paid for at least three years. The
Guaranteed Surrender Value is equal to 30% of the total amount of premiums paid
excluding the premiums paid for the first year, any premiums paid towards riders,
all extra premiums that may have been paid less the amount of survival benefits
paid earlier. The cash value of any existing bonuses, if ,any will also be paid .
Corporation may, however, pay special surrender value as the discounted value of
Paid up sum assured and vested bonus, if any, as applicable on date of surrender,
provided the same is higher than guaranteed surrender value.
11. EXCLUSIONS:
Suicide: This policy shall be void if the Life Assured commits suicide (whether
sane or insane at that time) at any time on or after the date on which the risk
under the policy has commenced but before the expiry of one year from the date of
commencement of risk under the policy and the Corporation will not entertain any
claim by virtue of this policy except to the extent of a third party’s bonafide
beneficial interest acquired in the policy for valuable consideration of which
notice has been given in writing to the branch where the Policy is being presently
serviced (where the policy records are kept), at least one calendar month prior to
death.
12. COOLING OFF PERIOD:
If you are not satisfied with the “Terms and Conditions” of the policy, you may
return the policy to us within 15 days.

BENEFITS

A. Survival Benefits:
On Survival the following benefits are payable:

For 15 Years Term


20% of the Sum Assured payable at the end of 5 years.
20% of the Sum Assured payable at the end of 10 years.
60% of the Sum Assured payable together with vested bonus, and Final Additional
Bonus, if any, at the end of 15 years.

For 20 Years Term


20% of the Sum Assured payable at the end of 5 years.
20% of the Sum Assured payable at the end of 10 years.

20% of the Sum Assured payable at the end of 15 years.


40% of the Sum Assured payable together with vested bonus and Final Additional
Bonus, if any at the end of 20 years.
B. Death Benefit:
In case of death of the life assured during the policy term, the full sum assured
is payable irrespective of the survival benefits paid earlier. The vested bonuses
and Final Additional Bonus, if any are also payable.
BENEFIT ILLUSTRATION
Statutory warning:
“Some benefits are guaranteed and some benefits are variable with returns based on
the future performance of your Insurer carrying on life insurance business. If
your policy offers guaranteed returns then these will be clearly marked
“guaranteed” in the illustration table on this page. If your policy offers
variable returns then the illustrations on this page will show two different rates
of assumed future investment returns. These assumed rates of return are not
guaranteed and they are not the upper or lower limits of what you might get back,
as the value of your policy is dependent on a number of factors including future
investment performance.”
Benefit Illustration
Age of LA (Yrs.) 35
Term (Yrs.) 20
Sum Assured(Rs.) 100000
Annual Premium 6345

End
of
Year Total premiums paid till end of year Death Benefit during the year
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 6345 100000 2200 4500 102200 104500
2 12690 100000 4400 9000 104400 109000
3 19035 100000 6600 13500 106600 113500
4 25380 100000 8800 18000 108800 118000
5 31725 100000 11000 22500 111000 122500
6 38070 100000 13200 27000 113200 127000
7 44415 100000 15400 31500 115400 131500
8 50760 100000 17600 36000 117600 136000
9 57105 100000 19800 40500 119800 140500
10 63450 100000 22000 45000 122000 145000
15 95175 100000 36667 75000 136667 175000
20 126900 100000 48900 100000 148900 200000

End
of
Year Total premiums paid till end of year BENEFIT ON SURVIVAL / MATURITY AT
THE END OF YEAR
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 6345 0 0 0 0 0
2 12690 0 0 0 0 0
3 19035 0 0 0 0 0
4 25380 0 0 0 0 0
5 31725 20000 0 0 20000 20000
6 38070 0 0 0 0 0
7 44415 0 0 0 0 0
8 50760 0 0 0 0 0
9 57105 0 0 0 0 0
10 63450 20000 0 0 20000 20000
15 95175 20000 0 0 20000 20000
20 126900 40000 48900 100000 88900 140000
Note: i)his illustration is applicable to a standard (from medical, life style and
occupation point of view) life.
i) The non-guaranteed benefits (1) and (2) in above illustration are calculated so
that they are consistent with the Projected Investment Rate of Return assumption
of 6% p.a.(Scenario 1) and 10% p.a. (Scenario 2) respectively. In other words, in
preparing this benefit illustration, it is assumed that the Projected Investment
Rate of Return that LICI will be able to earn throughout the term of the policy
will be 6% p.a. or 10% p.a., as the case may be. The Projected Investment Rate of
Return is not guaranteed.
Section 45 of Insurance Act, 1938:
No policy of life insurance shall after the expiry of two years from the date on
which it was effected, be called in question by an insurer on the ground that a
statement made in the proposal for insurance or in any report of a medical
officer, or referee, or friend of the insured, or in any other document leading to
the issue of the policy, was inaccurate or false, unless the insurer shows that
such statement was on a material matter or suppressed facts which it was material
to disclose and that it was fraudulently made by the policyholder and that the
policyholder knew at the time of making it that the statement was false or that it
suppressed facts which it was material to disclose. Provided that nothing in this
section shall prevent the insurer from calling for proof of age at any time if he
is entitled to do so, and no policy shall be deemed to be called in question
merely because the terms of the policy are adjusted on subsequent proof that the
age of the life assured was incorrectly stated in the proposal.

Prohibition of Rebates (Section 41 of INSURANCE ACT ,1938) :


(1) No person shall allow or offer to allow, either directly or indirectly, as an
inducement to any person to take out or renew or continue an insurance in respect
of any kind of risk relating to lives or property in India, any rebate of the
whole or part of the commission payable or any rebate of the premium shown on the
policy nor shall any person taking out or renewing or continuing a policy accept
any rebate except such rebates as may be allowed in accordance with the published
prospectuses or tables of the insurer provided that acceptance by an insurance
agent of commission in connection with a policy of life insurance taking out by
himself on his own life shall not be deemed to be acceptance of a rebate of
premium within the meaning of this sub-section if at the time of such acceptance
the insurance agent satisfies the prescribed conditions establishing that he is a
bona fide insurance agent employed by the insurer.
(2) Any person making default in complying with the provision of this Section
shall be punishable with a fine, which may extend to 500 rupees

PENSION PLAN
Pension Plans are Individual Plans that gaze into your future and foresee
financial stability during your old age. These policies are most suited for senior
citizens and those planning a secure future, so that you never give up on the best
things in life.

Jeevan Nidhi

Jeevan Akshay-VI

New Jeevan Dhara-I

New Jeevan Suraksha-I

Jeevan Nidhi

FEATURE
LIC's JEEVAN NIDHI is a with profits Deferred Annuity (Pension) plan. On survival
of the policyholder beyond term of the policy the accumulated amount (i.e. Sum
Assured + Guaranteed Additions + Bonuses) is used to generate a pension (annuity)
for the policyholder. The plan also provides a risk cover during the deferment
period. The USP of the plan being the pension can commence at 40 years. The
premiums paid are exempt under Section 80CCC of Income Tax Act.
Salient Features:
a . Guaranteed Additions: Guaranteed Additions @ Rs.50/- per thousand Sum assured
for each completed year, for the first five years.

b. Participation in profits: The policy shall participate in profits of the


Corporation from the 6th year onwards and shall be entitled to receive bonuses
declared as per the experience of the Corporation.
c. Benefit On Vesting:
1. Option to commute up to 1/3rd of the amount available on vesting, which shall
include the Sum Assured under the Basic Plan together with accrued Guaranteed
Additions, simple Reversionary Bonuses and Terminal Bonus, if any.

2 . Annuity as per the option selected: Annuity on the balance amount if


commutation is exercised, otherwise annuity on the full amount.
d. Annuity Options:
On vesting, the annuity instalment, mode of annuity payment and type of annuity
which shall be made available to the Life Assured (Annuitant) / Nominee will
depend upon the then prevailing Immediate Annuity plan of the Life Insurance
Corporation of India and its terms and conditions.

Currently the following options are available under LIC’s immediate annuities:

1. Annuity for life: The annuity is paid to the life assured as long as he/she is
alive.

2. Annuity Guaranteed for certain periods: The annuity is paid to the life assured
for periods of 5 or 10 or 15 or 20 years as chosen by him/her, whether or not
he/she survives that period. After the chosen period, the annuity is paid to the
life assured as long as he/she is alive.

3. Annuity with return of purchase price on death: The annuity is paid to the life
assured as long as he/she is alive. On the death of the life assured, the purchase
price of the annuity is paid as death benefit. The purchase price includes the Sum
Assured under the Basic Plan, the accrued Guaranteed Additions and any accrued
bonuses, excluding the commuted value, if any.

4. Increasing annuity: The annuity is paid to the life assured as long as he/she
is alive. The amount of annuity increases every year at a simple rate of 3% per
annum.

5. Joint Life Last Survivor Annuity: The annuity is paid to the life assured as
long as he/she is alive. On death of the life assured, 50% of the annuity is
payable to the nominated spouse as long as the spouse is alive.

e. Death Benefit on death before annuity vests: On the death of the Life Assured
during the deferment period of the policy, i.e. before the annuity vests, an
amount equal to the Sum Assured under the Basic plan along with the accrued
Guaranteed Additions, simple Reversionary Bonuses and Terminal Bonus, if any, will
be paid in a lump sum to the appointed nominee, provided the policy is in force
for full Sum Assured. Nominee will also have the option to purchase an annuity
with this amount.
BENEFITS:-
Eligibility Conditions And Other Restrictions Under This Plan:

For Basic Benefit:


a) Minimum age at entry: 18 years (completed)
b) Maximum age at entry: 65 years
c) Minimum age at vesting: 40 years
d) Maximum age at vesting 75 years
e) Policy terms: 6 to 35 years under Single Premium policies and 5 to 35
years under Regular Premium policies
f) Modes of premium payment: Yearly, Half-yearly, Quarterly, SSS & Single
Premium
g) Sums Assured allowed: Rs.50,000/- and in multiples of Rs.5,000/-
thereafter, with no upper limit.
h) Minimum Annual Premium: Rs.3,000/-
i) Minimum Single premium: Rs.10,000/-

For Term Assurance Rider Option:


a) Minimum age at entry: 18 years (completed)
b) Maximum age at entry: 50 years
c) Maximum age at vesting 60 years
d) Policy terms: 6 to 35 years under Single Premium mode and 10 to 35 years
under regular premium mode
e) Minimum Sum Assured: Rs.1,00,000/-
f) Maximum Sum Assured: An amount equal to the Sum Assured under the Basic
plan subject to a limit of
Rs.25,00,000/- taking all Term Assurance Rider Sum Assured under all policies of a
life assured.
g) Multiples of Sum Assured: Rs.25,000/-

For Critical Illness Rider Option:


a) Minimum

age at entry: 20 years (completed)


b) Maximum age at entry: 50 years
c) Maximum age at vesting 60 years
d) Policy terms: 10 to 35 years
e) Minimum Sum Assured: Rs.50,000/-
f) Maximum Sum Assured: An amount equal to the Sum Assured under the Basic
plan subject to a limit of Rs.5,00,000/- taking all Critical Illness Rider Sum
Assured under all policies of a life assured
g) Multiples of Sum Assured: Rs.10,000/-

Rebates:

Rebate for Mode of Premium Payment:


Yearly 2% of tabular premium
Half-Yearly 1% of tabular premium
Quaterly Nil
Monthly 5% extra of tabular premium
Large Sum Assured Rebates:
For Regular Premium Policies
Sum Assured Rebate
50,000 to 1,00,000 Nil
1,05,000 to 3,00,000 1%o S.A.
3,05,000 and above 2%o S.A.
For Single Premium Policies
Sum Assured Rebate
50,000 to 1,00,000 Nil
1,05,000 to 3,00,000 5%o S.A.
3,05,000 and above 10%o S.A.

f. Grace Period:
A grace period of 30 days will be available for payment of yearly, half-yearly or
quarterly premiums and 15 days for monthly premiums.

g. 15 – days Cooling-off period:


If policyholder is not satisfied with the “Terms and Conditions” of the policy,
he/she may return the policy to us within 15 days.

h. Paid-up Value:
The policy will acquire paid-up value after at least 3 full year’s premiums have
been paid.

i. Guaranteed Surrender Value:


Before the annuity vests, the policy can be surrendered at any time after the
completion of 3 policy years. For a regular premium policy, the Guaranteed
Surrender value is available provided 3 years’ premiums are paid, and it is 30% of
the premiums paid excluding premiums paid in the first year. For a Single Premium
policy, the Guaranteed Surrender Value available after completion of 3 policy
years is 90% of the Single Premium. Any extra premiums and premiums for Term
Assurance Rider Option, Critical Illness Rider option and Accident Benefit, if any
will be excluded.

j. Revival: The policyholder can revive his lapsed policy by paying arrears of
premium together with interest within a period of five years from the date of
first unpaid premium subject to satisfactory evidence of health. The rate of
interest for this purpose will be decided by the Corporation from time to time.
The present rate of interest is 9% pa.

k. Options:
Accidental Death and Disability Benefit:

In case of death due to accident (within 180 days) an additional amount equal to
the Accident Benefit Sum assured will be payable. In case of Total and Permanent
disability arising due to accident an amount equal to accident benefit sum assured
will be payable over a period of 10 years in monthly instalments. However, the
payment of accident benefit will be subject to an overall limit of Rs.25 lakh
under all policies of the Life Assured with the Corporation taken together.

The disability due to accident should be total and such that the Life Assured is
unable to carry out any work to earn a living. Following disabilities due to
accident are also covered -
a) irrevocable loss of the entire sight of both eyes or
b) amputation of both hands at or above the wrists or
c) amputation of both feet at or above ankles, or
d) amputation of one hand at or above the wrist and one foot at or above the
ankle.

No benefit will be paid in case of accidental death or disability due to accident


in case of

a) intentional self-injury, attempted suicide, insanity or immorality or the Life


Assured is under the influence of intoxicating liquor, drug or narcotic,
b) engagement in aviation or aeronautics other than that of a passenger in any air
craft,
c) injuries resulting from riots, civil commotion, rebellion, war, invasion,
hunting, mountaineering, steeple chasing or racing of any kind,
d) accident resulted from committing any breach of law.
e) accident arising from employment in armed forces or military services or police
organisation.
Term Assurance Rider Option: Term Assurance as optional rider will be available
under this plan. Premiums for this option are payable during the premium paying
term and an amount equal to Term Assurance Sum Assured will be payable on death
during the policy term. The maximum cover for this rider will be Rs.25 lakh under
all policies of the Life Assured with the Corporation taken together.
Critical Illness Rider Option: An amount equal to the Critical Illness Rider Sum
Assured as optional rider will be payable in case of diagnosis of defined
categories of Critical Illness subject to certain terms and conditions. The
maximum cover for this rider will be Rs.5 lakh under all policies of the Life
Assured with the Corporation taken together.
If opted for Premium Waiver Benefit, then in case the Life Assured is diagnosed
with any of the Critical Illnesses covered under the policy, the total future
premiums in respect of the policy will be waived. Sum Assured under all such
policies with the Corporation taken together will not exceed Rs.5 lakh.

Loan / Assignment:
No Loan/Assignment will be available by the Corporation to the policyholders under
this plan.

EXCLUSIONS:

Suicide: This policy shall be void if the Life Assured commits suicide (whether
sane or insane at the time) at any time on or after the date on which the risk
under the policy has commenced but before the expiry of one year from the date of
commencement of risk under the policy and the Corporation will not entertain any
claim by virtue of this policy except to the extent of a third party’s bonafide
beneficial interest acquired in the policy for valuable consideration of which
notice has been given in writing to the office in which the policy is being
serviced, at least one calendar month prior to death.

Specimen Premium Rates per Rs.1000/- Sum Assured

Single Premium
Age at entry Policy Term
10 15 20 25 30 35
20 - - 616.40 523.40 446.50 384.35
25 - 727.30 617.30 525.35 450.30 390.70
30 856.45 728.05 619.25 529.40 457.45 401.85
35 857.10 730.10 623.70 537.50 470.35 420.80
40 858.40 733.85 631.60 550.95 490.95 450.35
45 860.70 740.35 644.15 571.80 522.35 -
50 864.55 750.40 663.30 603.10 - -
55 869.95 764.85 691.20 - - -
60 878.30 787.25 - - - -
65 892.25 - - - - -

Annual Premium
Age at entry Policy Term
5 10 15 20 25 30 35
20 - - - 52.45 40.30 32.35 26.90
25 - - 72.75 52.55 40.55 32.75 27.45
30 - 113.05 72.90 52.90 41.05 33.45 28.40
35 231.90 113.40 73.45 53.60 42.05 34.80 30.15
40 232.35 114.05 74.40 54.95 43.80 37.05 33.05
45 233.05 115.25 76.10 57.15 46.65 40.70 -
50 234.45 117.40 78.85 60.75 51.30 - -
55 236.55 120.45 83.05 66.40 - -
60 239.55 125.40 90.15 - - - -
65 245.00 134.55 - - - - -

BENEFIT ILLUSTRATION

Insurance Regulatory & Development Authority (IRDA) requires all life insurance
companies operating in India to provide official illustrations to their customers.
The illustrations are based on the investment rates of return set by the Life
Insurance Council (constituted under Section 64C(a) of the Insurance Act 1938) and
is not intended to reflect the actual investment returns achieved or may be
achieved in future by Life Insurance Corporation of India (LICI).

For the year 2004-05 the two rates of investment return declared by the Life
Insurance Council are 6% and 10% per annum.

Product summary:

This is a with-profits pension plan which provides for death cover during the
deferment period and on survival to the date of vesting, the maturity proceeds are
compulsorily to be used for purchase of annuity.

Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through Salary
deduction, as opted by you, throughout the term of the policy or till earlier
death. Alternatively, the premium may be paid in one lump sum (single premium).

Tax Benefits:
Tax relief under Section 80CCC(1) is available on premiums paid under this policy.

Guaranteed Additions during the first five years:


The policy provides for the Guaranteed Additions at the rate of Rs.50/- per
thousand Sum Assured during first five years of the policy. The Guaranteed
Additions are payable along with the basic Sum Assured on vesting or on earlier
death.
Bonuses after the first 5 years:
This is a with-profit plan and participates in the profits of the Corporation’s
life insurance business after 5 years. It gets a share of the profits in the form
of bonuses. Simple Reversionary Bonuses are declared per thousand Sum Assured
annually at the end of each financial year. Once declared, they form part of the
guaranteed benefits of the plan. A Final (Additional) Bonus may also be payable
provided a policy has run for certain minimum period.
Death Benefit:
The Sum Assured along with accrued guaranteed additions and vested simple
reversionary bonuses and Final (Additional) Bonus, if any, is payable in a lump
sum on death of the life assured during the deferment period of the policy.
Benefit on vesting:
On the date of vesting you can encash up to a maximum of 1/3rd of the amount
consisting of the Sum Assured along with accrued guaranteed additions, vested
simple reversionary bonuses and Final (Additional) Bonus, if any as a tax-free
lump sum. The balance amount shall be compulsorily converted into an annuity at
the option and the rates applicable at the time of vesting of the annuity.
Supplementary/Extra Benefits:
These are the optional benefits that can be added to your basic plan for extra
protection/option. An additional premium is required to be paid for these
benefits.

Surrender Value:
Buying a life insurance contract is a long-term commitment. However, surrender
value is available on the plan on earlier termination of the contract.
Guaranteed Surrender Value:
The policy may be surrendered for cash after the policy is kept in force by
payment of premiums for at least three years. The guaranteed surrender value
available under this plan for all modes, except the single premium mode, will be
equal to 30% of the total amount of premiums paid excluding the first year’s
premium and the extra premiums. In case of single premium mode, The guaranteed
surrender value will be 90% of the premium paid excluding all extra premiums.
Corporation’s policy on surrenders:
In practice, the Corporation will pay a Special Surrender Value – which is either
equal to or more than the Guaranteed Surrender Value. The benefit payable on
surrender reflects the discounted value of the reduced claim amount that would be
payable on death or at maturity. This value will depend on the duration for which
premiums have been paid and the policy duration at the date of surrender. In some
circumstances, especially in case of early termination of the policy, the
surrender value payable may be less than the total premium paid.
The Corporation reviews the surrender value payable under its plans from time to
time depending on the economic environment, experience and other factors.
Note: The above is the product summary giving the key features of the plan. This
is for illustrative purpose only. This does not represent a contract and for
details please refer to your policy document. Further, the tax benefits are as per
present Tax Laws.

Benefit Illustration:
Statutory Warning
“Some benefits are guaranteed and some benefits are variable with returns based on
the future performance of your insurer carrying on life insurance business. If
your policy offers guaranteed returns then these will be clearly marked
“guaranteed” in the illustration table on this page. If your policy offers
variable returns then the illustrations on this page will show two different rates
of assumed future investment returns. These assumed rates of return are not
guaranteed and they are not upper or lower limits of what you might get back as
the value of your policy is dependent on a number of factors including future
investment performance.”

Illustration 1:
Age at entry: 35 years
Policy Term: 25 years
Premium paying term: 25 years
Sum Assured (Rs.): 100000
Yearly Premium (Rs.): 4121
End of year Total premiums paid till end of year Benefit payable on death /
Amount available on survival up to the date of vesting for purchase of annuity
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 4,121 1,00,000 0 0 100000 100000
2 8,242 1,05,000 0 0 105000 105000
3 12,363 1,10,000 0 0 110000 110000
4 16,484 1,15,000 0 0 115000 115000
5 20,605 1,20,000 0 0 120000 120000
6 24,726 1,25,000 2300 7300 127300 132300
7 28,847 1,25,000 4600 14600 129600 139600
8 32,968 1,25,000 6900 21900 131900 146900
9 37,089 1,25,000 9200 29200 134200 154200
10 41,210 1,25,000 11500 36500 136500 136500
15 61,815 1,25,000 23000 73000 148000 198000
20 82,420 1,25,000 48500 157500 173500 282500
25 1,03,025 1,25,000 63500 206000 188500 331000

Illustration 2:
Age at entry: 35 years
Policy Term: 25 years
Sum Assured (Rs.): 100000
Single Premium (Rs.): 53750
End of year Total premiums paid till end of year Benefit payable on death /
Amount available on survival up to the date of vesting for purchase of annuity
Guaranteed Variable Total
Scenario 1 Scenario 2 Scenario 1 Scenario 2
1 53,750 1,00,000 0 0 100000 100000
2 53,750 1,05,000 0 0 105000 105000
3 53,750 1,10,000 0 0 110000 110000
4 53,750 1,15,000 0 0 115000 115000
5 53,750 1,20,000 0 0 120000 120000
6 53,750 1,25,000 2500 12400 127500 137400
7 53,750 1,25,000 5000 24800 130000 149800
8 53,750 1,25,000 7500 37200 132500 162200
9 53,750 1,25,000 10000 49600 135000 174600
10 53,750 1,25,000 12500 62000 137500 187000
15 53,750 1,25,000 25000 124000 150000 249000
20 53,750 1,25,000 53500 268000 178500 393000
25 53,750 1,25,000 70000 350500 195000 475500

i) This illustration is applicable to a non-smoker male/female standard (from


medical, life style and occupation point of view) life.

ii) The non-guaranteed benefits (1) and (2) in above illustration are calculated
so that they are consistent with the Projected Investment Rate of Return
assumption of 6% p.a.(Scenario 1) and 10% p.a. (Scenario 2) respectively. In
other words, in preparing this benefit illustration, it is assumed that the
Projected Investment Rate of Return that LICI will be able to earn throughout the
term of the policy will be 6% p.a. or 10% p.a., as the case may be. The Projected
Investment Rate of Return is not guaranteed.

iii) The main objective of the illustration is that the client is able to
appreciate the features of the product and the flow of benefits in different
circumstances with some level of quantification.

iv) Future bonus will depend on future profits and as such is not guaranteed.
However, once bonus is declared in any year and added to the policy, the bonus so
added is guaranteed.

v) The Maturity benefit is the amount shown at the end of the Policy term.

UNIT PLANS
Unit plans are investment plans for those who realise the worth of hard-earned
money. These plans help you see your savings yield rich benefits and help you save
tax even if you don't have consistent income.

Market Plus I

Profit Plus
Money Plus-I

Child Fortune Plus

Jeevan Saathi Plus

SPECIAL PLANS
LIC’s Special Plans are not plans but opportunities that knock on your door once
in a lifetime. These plans are a perfect blend of insurance, investment and a
lifetime of happiness!

Jeevan Nischay

New Bima Gold

Health Protection Plus

Bima Nivesh 2005

Jeevan Saral

Jeevan Madhur
Jeevan Mangal

4.1)INCOME-TAX AND TAX BENEFITS FROM LIFE INSURANCE

A] INCOME-TAX RATES FOR ASSESSMENT YEAR 2010-2011 (FINANCIAL YEAR 2009-2010)


Income Slabs Tax RatesNil
Individual & HUF below age of 65 years Woman below age of 65 years Individual
above age of 65 years
Income upto Rs.1,60,000 Income upto Rs.1,90,000 Income upto Rs.2,40,000 NIL
Rs.1,60,001 to Rs.3,00,000 Rs.1,90,001 to Rs.3,00,000 Rs.2,40,001 to
Rs.3,00,000 10%
Rs.3,00,001 to Rs.5,00,000 Rs.3,00,001 to Rs.5,00,000 Rs.3,00,001 to
Rs.5,00,000 20%
Above Rs.5,00,001 Above Rs.5,00,001 Above Rs.5,00,001 30%
Education Cess : An additional surcharge called as ‘Education Cess’ is levied at
the rate of 2% on the amount of Income tax and surcharge (if any) in all cases
shall be levied.
Secondary and Higher : An additional surcharge, called the “Secondary and Higher
Education Cess on income- tax” at the rate of 1% of income-tax and surcharge (not
including the “Education Cess on Income-tax”) in all cases shall be levied.
B] SOME IMPORTANT INCOME TAX BENEFITS AVAILABLE UNDER VARIOUS PLANS OF LIFE
INSURANCE ARE HIGHLIGHTED BELOW:
4.1.1) Deduction allowable from Income for payment of Life Insurance Premium
(Sec. 80C).
a) Life Insurance premia paid in order to effect or to keep in force an insurance
on the life of the assessee or on the life of the spouse or any child of assessee
& in the case of HUF, premium paid on the life of any member thereof, Provided
premium paid is not in excess of 20% of capital sum assured.
b) Contribution to deferred annuity Plans in order to effect or to keep in force a
contract for deferred annuity, on his own life or the life of his spouse or any
child of such individual, provided such contract does not contain a provision to
exercise an option by the insured to receive a cash payment in lieu of the payment
of annuity is eligible for deduction.
c) Contribution to Pension/Annuity Plans – New Jeevan Dhara-I.
4.1.2) Jeevan Nidhi Plan & New Jeevan Suraksha – I Plan (U/s. 80CCC)
A deduction to an individual for any amount paid or deposited by him from his
taxable income in the above annuity plans for receiving pension (from the fund set
up by the Corporation under the Pension Scheme) is allowed.
NOTE: The premium can be paid upto Rs.1,00,000/- to avail deduction u/s.80C, 80CCC
& 80CCD. However, there is no sectoral cap i.e. the limit of Rs.1,00,000/- can be
exhausted by paying premium under of the said sections.
4.1.3) Deduction under section 80D
1. Deduction allowable upto Rs.15,000/- if an amount is paid to keep in force
an insurance on health of assessee or his family (i.e. Spouse & children)
2. Additional deduction upto Rs.15,000/- if an amount is paid to keep in force
an insurance on health of parents
3. In case of HUF, deduction allowable upto Rs.15,000/- if an amount is paid
to keep in force an insurance on health of any member of that HUF
Note: If the sum specified in (a) or (b) or (c) is paid to effect or keep in
force an insurance on the health of any person specified therein who is a senior
citizen, then the deduction available will be upto Rs.20,000/-. provided that such
insurance is in accordance with the scheme framed by
a) the General Insurance Corporation of India as approved by the Central
Government in this behalf or;
b) Any other insurer and approved by the Insurance Regulatory and Development
Authority.
4.1.4)Jeevan Aadhar Plan (Sec.80DD):
Deduction from total income upto Rs.50000/- allowable on amount deposited with LIC
under Jeevan Aadhar Plan for maintenance of an handicapped dependent
(Rs.1,00,000/- where handicapped dependent is suffering from severe disability)
4.1.5)Exemption in respect of commutation of pension under Jeevan Suraksha &
Jeevan Nidhi Plans:
Under Section 10(10A) (iii) of the Income-tax Act, any payment received by way of
commutations of pension out of the Jeevan Suraksha & Jeevan Nidhi Annuity plans
is exempt from tax under clause (23AAB).
4.6)Income tax exemption on Maturity/Death Claims proceeds under Section 10(10D)
Under the provisions of section 10(10D) of the Income-tax Act, 1961,
Maturity/Death claims proceeds of life insurance policy, including the sum
allocated by way of bonus on such policy (other than amount to be refunded under
Jeevan Aadhar Insurance Plan in case of handicapped dependent predeceases the
individual or amount received under a Keyman Insurance Plan) is exempted from
income-tax. However any sum (not including the premium paid by the assessee)
received under an insurance policy issued on or after the 1st day of April, 2003
in respect of which the premium payable for any of the years during the term of
the policy exceeds 20% of the actual capital sum assured will no longer be
exempted under this section.
5.1)HELP US TO SERVE U BETTER
5.1.1)Admission Of Age:

Age is the main basis of calculation of premium under life insurance policies. The
following are accepted as evidence of age:
• Certified extract from Municipal or Local Body’s records made at the time of
birth.
• Certificate of Baptism or Certified Extract from Family Bible, if it
contains age or date of birth.
• Certified Extract from School or College records, if age or date of birth is
stated therein.
• Certified Extract from Service Register in the case of Govt. employees and
employees of Quasi-Govt. Institutions or
• Passport issued by the Passport Authorities in India.
5.1.2)Payment Of Premium:
• By cash, local cheque (subject to realization of cheque), Demand Draft at
Branch Office.
• The DD and cheques or Money Order may be sent by post.
• You can pay your premiums at any of our Branches as 99% of our Branches are
networked.
• Many Banks do accept standing instructions to remit the premiums. So by
providing a standing instruction to your Bank to debit your account for the
premium amount and send it vide a banker’s cheque to LIC, on the due dates and
months mentioned on your policy bond.
• Through Internet : Payment of premiums can be made through Internet through
Service Providers viz.HDFC Bank, ICICI Bank, Times of Money, Bill Junction, UTI
Bank, Bank of Punjab, Citibank, Corporation Bank, Federal Bank and BillDesk.
• Premium payment can also be made through ATMs of Corporation Bank and UTI
Bank.
• Premium payment can also be made through Electronic Clearing Service (ECS)
which has been launched at Mumbai, Hyderabad, Chennai, Kolkata, New Delhi, Kanpur,
Bangalore, Vijaywada, Patna, Jaipur, Chandigarh, Trivandrum, Ahmedabad, Pune, Goa
and Nagpur, Secunderabad & Visakhapatnam. A policyholder having an account in any
Bank which is a Member of the local Clearing House can opt for ECS debit to pay
premiums. The policyholders wishing to use this system would have to fill up a
Mandate Form available at our Branches/DO and get it certified by the Bank. The
certified Mandate Forms are to be submitted to our BO/DO.
Policy can be anywhere in India.
• Citibank Kiosks at Industrial Assurance Building, Churchgate, New India
Building, Santacruz, Jeevan Shikha Building, Borivili are dedicated for collection
of premiums through cheques.
5.1.3)Days Of Grace:
• Policyholder should pay the premiums on due dates. However, a grace period
of one month but not less than 30 days will be allowed for payment of yearly/half-
yearly/quarterly premiums and 15 days for monthly premiums.
• When the days of grace expire on a Sunday or a public holiday, the premium
may be paid on the following working day to keep the policy in force.
• If the premium is not paid before the expiry of the days of grace, the
policy lapses.
5.1.4)Revival Of Lapsed Policy:
• If the policy has lapsed, it can be revived during the life time of the life
assured, within a period of five years from the date of the first unpaid premium
but before the date of maturity subject to certain conditions.
• The Corporation offers three convenient schemes of revival viz., Ordinary
Revival, Special Revival and Installment Revival. Policies can also be revived
under Loan-cum-Revival and SB-cum-Revival schemes.
• Request for revival may be made to the Branch Office servicing the policy.
Change Of Address And Transfer Of Policy Records:
• The policyholder should immediately intimate the change of his/her address
to the Branch Office servicing the policy. The correct address facilitates better
service and quicker settlement of claims.
• Policy records can also be transferred from one Branch Office to another for
servicing, as requested by the policyholder.
5.1.5)Loss Of Policy Document:
• The Policy Document is an evidence of the contract between the Insurer and
the Insured. Hence the policyholder should preserve the Policy Bond till the
contracted amount under it is settled.
• Loss of the Policy Document should be immediately intimated to the Branch
Office where it is serviced.
5.1.6)Loans:
• Loans are granted on policies to the extent of 90% of Surrender Value of the
policies which are in force and 85% of the Surrender Value in case of policies
which are paid-up, inclusive of the cash value of bonus. The rate of interest
charged at present is 9% p.a. payable half-yearly.
• Loans are not granted for a period shorter than six months. The Conditions
and Privileges printed on the back of the Policy Bond states whether a particular
policy is with or without the loan facility.
5.1.7)Relief To Policyholders:
• The Corporation generally allows concessions on payment of premiums,
settlement of claims, issue of duplicate policies, etc when the policyholder are
affected by natural calamities such as droughts, cyclones, floods, earthquakes,
etc.
5.1.8)Nomination:
• Nomination is a right conferred on the holder of a Policy of Life Assurance
on his own life to appoint a person/s to receive policy moneys in the event of the
policy becoming a claim by the assured’s death. The Nominee does not get any other
benefit except to receive the policy moneys on the death of the Life Assured. A
nomination may be changed or cancelled by the life assured whenever he likes
without the consent of the Nominee.
Ensure nomination exists in the policy for easy settlement of claims.
5.1.9)Assignment:
• Assignment means transfer of rights, title and interest. When an assignment
is executed, all rights, title and interest in respect of the property assigned
are immediately transferred to the Assignee/s and the Assignee/s become the
owner/s of the policy subject to any lawful condition made in the assignment.
• Assignment can be either conditional or absolute. On assignment (other than
to LIC), Nomination automatically stands cancelled. Hence, when such a policy is
reassigned, the policyholder will have to make a fresh nomination to avoid delay
in settlement of claim.
5.1.10)Survival Benefit/Maturity Claims:
• LIC settles survival benefit/maturity claims on or before the due date.
• Policyholder are intimated well in advance by the Branch Office which
services the policy regarding the payment, and the necessary Discharge Voucher is
also sent for execution by the assured. In case the policyholder does not get any
intimation from the Branch Office concerned, he/she should contact them, quoting
the Policy Number.
• Survival Benefit payment up to Rs.60,000/- are settled without insisting for
Policy Bond and Discharge Voucher.
5.1.11)Death Claims:
• If the life assured dies during the term of the policy, death claim arises.
The death of the policyholder should be immediately intimated in writing to the
Branch Office where the policy is serviced along with the following particulars:
1. The No./s of the policy/ies
2. The name of the policyholder
3. Death Certificate issued by concerned Authority
4. The date of death
5. The cause of death and
6. Claimant’s relationship with the deceased
• On receipt of the intimation of death, necessary claim forms are sent by the
Branch Office for completion along with instructions regarding the procedure to be
followed by the claimant.
• The claims which have arisen after a period of three years are treated as
non-early claims and settled within 30 days from the date of receipt of all
requirements.
• The claims that have arisen within a period of two years from the date of
commencement of the policy, are treated as early claims and investigation is
compulsory in such cases.
• The claim is usually payable to the nominee/assignee or the legal heirs, as
the case may be. However, if the deceased policyholder has not nominated/assigned
the policy or if he/she has not made a suitable provision regarding the policy
moneys by way of a Will, the claim is payable to the holder of a Succession
Certificate or some such evidence of title from a Court of Law.
• The Corporation grants claims concessions under certain Plans whereby
payment of full sum assured is made, subject to the deduction of unpaid premiums
with interest till the date of death and unpaid premiums falling due before the
next anniversary of the policy, in the event of the death of the life assured
within a period of six months or one year from the date of the first unpaid
premium, provided premiums have been paid for at least three years and five years
respectively.
5.1.12)Claim Review Committee:
The Corporation settles a large number of Death Claims every year. Only in case of
fraudulent suppression of material information is the liability repudiated. This
is to ensure that claims are not paid to fraudulent persons at the cost of honest
policyholders. The number of Death Claims repudiated is, however, very small. Even
in these cases, an opportunity is given to the claimant to make a representation
for consideration by the Review Committees of the Zonal office and the Central
Office. As a result of such review, depending on the merits of each case,
appropriate decisions are taken. The Claims Review Committees of the Central and
Zonal Offices have among their Members, a retired High Court/District Court Judge.
This has helped providing transparency and confidence in our operations and has
resulted in greater satisfaction among claimants, policyholders and public.

5.1.13)Insurance Ombudsman:
• The Grievance Redressal Machinery has been further expanded with the
appointment of Insurance Ombudsman at different centers by the Government of
India. At present there are 12 centres operating all over the country.
• Following type of complaints fall within the purview of the Ombdusman
a) any partial or total repudiation of claims by an insurer;
b) any dispute in regard to premiums paid if payable in terms of the policy;
c) any dispute on the legal construction of the policies in so far as such
disputes relate to claims;
d) delay in settlement of claims;
e)non-issue of any insurance document to customers after receipt of premium.
• Policyholder can approach the Insurance Ombudsman for the redressal of their
complaints free of cost.
5.1.14)Initiatives In Policy Servicing Areas:
• All 2048 Branches of LIC are fully computerized covering all policy
servicing aspects to give prompt computerized services from new policy
introduction, acceptance of renewal premium, revivals, loans, etc to final claims
settlement.
• Green Channel facility has been introduced for the speedy completion of
proposals.
• Payment of premiums can be made through internet through service providers,
viz., HDFC Bank, ICICI Bank, Times of money, Bill Junction, UTI Bank, Bank of
Punjab,Citi Bank, Corporation Bank, Federal Bank and Billdesk.
5.1.15)Grievance Redressal Machinery:
• A machinery for redressal of policyholders? grievances exist in all the
offices of the Corporation. These are headed by designated Officers who are
available at their respective Offices every Monday between 2.30 pm and 4.30 pm.
except holidays. Policyholder can approach these officers to get their grievances
redressed.
• The Designated Officers at the various offices of the Corporation are :
At Branch Office --- Sr./Branch Manager
At Divisional Office --- Marketing Manager
At Zonal Office --- Regional Manager (Mktg)
At Central Office --- Executive Director (Mktg/IO/CRM)
5.1.17)Citizens’ Charter:
• Citizens' Charter was presented to the Nation in November, 1997. In the
Charter the bench marks were prescribed for 30 servicing areas.
6.1)INFORMATION TECHNOLOGY & LIC
LIC has been one of the pioneering organizations in India who introduced the
leverage of Information Technology in servicing and in their business. Data
pertaining to almost 10 crore policies is being held on computers in LIC. We have
gone in for relevant and appropriate technology over the years.

1964 saw the introduction of computers in LIC. Unit Record Machines introduced in
late 1950’s were phased out in 1980’s and replaced by Microprocessors based
computers in Branch and Divisional Offices for Back Office Computerization.
Standardization of Hardware and Software commenced in 1990’s. Standard Computer
Packages were developed and implemented for Ordinary and Salary Savings Scheme
(SSS) Policies.

6.2)FRONT END OPERATIONS


With a view to enhancing customer responsiveness and services , in July 1995, LIC
started a drive of On Line Service to Policyholders and Agents through Computer.
This on line service enabled policyholders to receive immediate policy status
report , prompt acceptance of their premium and get Revival Quotation, Loan
Quotation on demand. Incorporating change of address can be done on line. Quicker
completion of proposals and dispatch of policy documents have become a reality.
All our 2048 branches across the country have been covered under front-end
operations. Thus all our 100 divisional offices have achieved the distinction of
100% branch computerisation. New payment related Modules pertaining to both
ordinary & SSS policies have been added to the Front End Package catering to Loan,
Claims and Development Officers’ Appraisal. All these modules help to reduce time-
lag and ensure accuracy.

6.3)METRO AREA NETWORK


A Metropolitan Area Network, connecting 74 branches in Mumbai was commissioned in
November, 1997, enabling policyholders in Mumbai to pay their Premium or get their
Status Report, Surrender Value Quotation, Loan Quotation etc. from ANY Branch in
the city. The System has been working successfully. More than 10,000 transactions
are carried out over this Network on any given working day. Such Networks have
been implemented in other cities also.

6.5)WIDE AREA NETWORK


All 7 Zonal Offices and all the MAN centres are connected through a Wide Area
Network (WAN). This will enable a customer to view his policy data and pay premium
from any branch of any MAN city. As at November 2005, we have 91 centers in India
with more than 2035 branches networked under WAN.

6.6)INTERACTIVE VOICE RESPONSE SYSTEMS (IVRS)


IVRS has already been made functional in 59 centers all over the country. This
would enable customers to ring up LIC and receive information (e.g. next premium
due, Status, Loan Amount, Maturity payment due, Accumulated Bonus etc.) about
their policies on the telephone. This information could also be faxed on demand to
the customer.

6.7)LIC ON THE INTERNET


Our Internet site is an information bank. We have displayed information about LIC
& its offices . Efforts are on to upgrade our web site to make it dynamic and
interactive.The addresses/e-mail Ids of ur Zonal Offices, Zonal Training Centers,
Management Development Center, Overseas Branches, Divisional Offices and also all
Branch Offices with a view to speed up the communication process.
6.8)PAYMENT OF PREMIUM AND POLICY STATUS ON INTERNET
(You have to register for these services)
LIC has given its policyholders a unique facility to pay premiums through Internet
absolutely free and also view their policy details on Internet premium
payments.There are 11 service providers with whom L I C has signed the agreement
to provide this service.

6.9)INFORMATION KIOSKS
We have set up 150 Interactive Touch screen based Multimedia KIOSKS in prime
locations in metros and some major cities for dissemination information to general
public on our products and services. These KIOSKS are enable to provide policy
details and accept premium payments.

6.10)INFO CENTRES
We have also set up 8 call centres, manned by skilled employees to provide you
with information about our Products, Policy Services, Branch addresses and other
organizational information.
AWARDS

World Brand Congress Award OUTLOOK MONEY -- NDTV PROFIT AWARD 2009 in
" BEST LIFE INSURER CATEGORY "

NDTV PROFIT BUSSINESS LEADERSHIP, AWARDS 2009 CNBC AWAAZ CONSUMER AWARD 2009 for
" Most preferred insurance company "

ASIA PACIFIC HRM Congress, 2009 Award for INNOVATIVE HR PRACTICES Brand Equity
Most Trusted Brand 2009 Top in Insurance Category

Golden Peacock Innovative Product / Service Award - 2009 Loyalty Award - 2009

Reader's Digest Trusted Brand Award, 2009 ( Platinum category ) CNBC Awaaz
Consumer Awards 2008

NDTV Profit Business Leadership Award 2008 INDY's Silver Award for Best
Corporate Film

INDY's Silver Award for Best


" In-house Magazine " NASCOM IT USER Award 2008
Business Superbrand India 2009 ASIA BRAND CONGRESS BRAND LEADERSHIP AWARD,
2008
HONOURED BY YOU

Dr.Manmohan Singh
Prime Minister of India

Shri.P.Chidambaram
Union Finance Minister

“In the year 1956, 245 Indian and foreign companies were nationalized and today,
the three letters ‘LIC’, stands as a synonym for insurance, for services, for
excellence in strengthening the economic fibre of this country. I dare to say that
no other three letters taken together are more recognised to the length and
breadth of India than LIC.”

“The performance figures of LIC give an indication why LIC is dear to us, why LIC
is a Jewel in our crown and why we will continue to nurture LIC and grow it into a
great organization rendering service to the people of India.”

“LIC’s footprints are now to be found in many other countries in the world.
Wherever Indians go - and they go everywhere now, wherever Indians are welcome -
and they are welcome in every part of the world, wherever Indians settle down –
they have found many new homes, wherever Indians excel – and they excel in every
walk of life, they want LIC – they want LIC to protect them, to look after their
savings, and provide for protection as well as their retirement.”

P. Chidambaram
Union Finance Minister
Excerpts from speeches at the inaugural function of LIC’s Golden Jubilee
Celebrations.
Lucknow, September 1, 2005.
CONCLUSION

Insurance is an integral part of any personal financial plan. The type of


insurance and the amount of coverage you obtain all depends on your unique
financial and family circumstances, and must be evaluated carefully. When
considering purchasing coverage, you should review all the potential risks and the
financial impact of these risks on your financial health. This will help you
determine what options to look for and what questions to ask. What you need to
keep in mind is that you do not want to be underinsured or overinsured, which
means you have to do your homework before you buy. And as with any type of
financial product, you must read the fine print and consult with a competent
advisor.

Let's review what we've learned:


• Insurance is a form is risk management in which the insured transfers the
cost of potential loss to another entity in exchange for monetary compensation
known as the premium.

• Insurance works by pooling risks. Because the number of insured individuals


is so large, insurance companies can use statistical analysis to project what
their actual losses will be within the given class. This allows the insurance
companies to operate profitably and at the same time pay for claims that may
arise.

• Underwriting is the process of evaluating the risk to be insured. This is


done by the insurer when determining how likely it is that the loss will occur,
how much the loss could be and then using this information to determine how much
you should pay to insure against the risk. .
9.1)REFERENCE WEBSITE

WWW.LICINDIA.COM

WWW.HK-FD.COM

WWW.GOOGLE.CO.IN

http://realneo.us/system/files/Ag-show-hail-insurance

9.2)REPORTS:-

World Insurance Report 2009