(AFFILIATED TO GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY, DELHI) CONTENTS CERTIFICATE OF COMPANY... CERTIFICATE OF INSTITUTE.. ii ACKNOWLEDGEMENT...

iii

1 2 3 4. 5. 6. 7. 8. 9. 10 11. 12. 13.

EXECUTIVE SUMMERY INTRODUCTION . RESEARCH OBJECTIVE & METHODOLOGY INTRODUCTION OF THE COMPANY PRODUCT OF LIC GROWTH OF PVT. LIFE INSURANCE COMPANIES IN THE LAST 5YEARS CURRENT STANDING OF PVT. LIFE INSURANCE COMPANIES INURBAN ROLE OF FOREIGN COMPANIES IN INDIA FINDINGS IMPORTANCE OF JOINT VENTURE CONCLUSION RECOMMENDATIONS BIBLIOGRAPHY

CERTIFICATE This is to certify that project entitled Comparative Study of Life Insurance Corporation of India submitted byMr.CHAVDA ANIRUDH has been done under my guidance and supervision in fulfillment of the requirement for the award of Bachelor of Business Administration

The work and analysis mentioned in this project report have been undertaken by the candidate himself and necessaryreferences have been recognized and acknowledged in the textof the report.

Mr. RUSHI KANADA (Project guide & faculty)

ACKNOWLEDGEMENT

Co-operation and building up of moral are the essence of success. These are two factors that go a long way in achieving it. It is a Herculean task,whichlacksthesetwodeterminants of success. Summer training was an e x p o s u r e t o c o r p o r a t e e n v i r o n m en t . I t w a s a n o p p o r t u n i t y a n d g r e a t pleasure for me to be in suchan environment and having interaction with concerned people. I am highly obliged to Mr. Rahul Dutt Mudgal (Development officer,LIC Karol Bagh branch) who provided me the opportunity for doing my summer training at LIC, and would like to thank him for their guidance and help which had made it possible for me to complete my project work successfully. F i n a l l y , I w o u l d l i k e t o t h a n k Dr. N.K.Kakkar(Director), MaharajaAgrasen Institute of Management Studies andM r s . A m i t G u p t a my p r o j e c t g u i d e a t the institute, f o r t h e i r e n l i g h t e n i n g a n d m e t i c u l o u s guidance for the consummation and evaluating of this project. I also wish to pay my sincere regards to all my respected teachers who helped me build a concrete platform before sending me for training so that I can land out firmly in all respects

ANIRUDH CHAVDA (T Y BBA)

EXECUTIVE SUMMARY Someone has g r e a t l y s a i d t h a t p r a c t i c a l k n o w l e d g e i s f a r b e t t e r t h a n classroom teaching. During this project I fully realized this and come to know about the present real world of Insurance sector It includes all the activities involved in providing insurance products to the final customers. I a m p l e a s e d t o k n o w a b o u t t h c o n s u m e r s w a n t s a n d c o m p e t i t o r s activities in the real world of Insurance. The subject of my study is to analyze the present insurance sector and products offered by LIC by applying various tools like cold calling and through direct interaction with customers. I have also done research on the growth of private life insurance companies in the last five years. The report contains first of all brief introduction about the company. Then it contains the current status of private insurance companies and foreign insurance companies in India. . I also put forward recommendations of the consumers and conclusions t h a t w i l l h e l p L I C t o p r o v i d e c o n s u m e r s a t i s f a c t o r y s e r v i c e s i n t h e insurance sector

INTRODUCTION

I n s u r a n c e i s a s o c i a l d e v i c e w h e r e u n c e r t a i n r i s k s o f i n d i v i d u a l s m a y b e c o m b i n e d i n a g r o u p a n d t h u s m a d e m o r e c e r t a i n s m a l l p e r i o d i c c o n t r i b u t i o n s b y t h e i n d i v i d u a l s p r o v i d e a f o u n d o u t o f w h i c h t h o s e w h o s u f f e r l o s s e s m a y b e r e i m b u r s e d . I n a d d i t i o n t o b e i n g a m e a n s t o p r o t e c t o n e s e l f , t h e i n s u r a n c e I n d u s t r y i s a n e f f i c i e n t c o n d u i t f o r t h e s a v i n g o f p e o p l e t o b e c h a n n e l e d t o w a r d s e c o n o m i c g r o w t h . I n I n d i a , t h e I n s u r a n c e I n d u s t r y 7 i s m o r e t h a n 1 5 0 y e a r s o l d . T o d a y , i t i s m o n o p o l i z e d b y t w o P S U ' s i n t h e i r r e s p e c t i v e f i e l d s o f l i f e a n d G e n e r a l I n s u r a n c e . H o w e v e r , w i t h t h e s u c c e s s f u l p a s s a g e I R D A B i l l t h r o u g h b o t h h o u s e s o f p a r l i a m e n t i n D e c e m b e r 1 9 9 9 t h e s e c t o r h a s b e e n o p e n e d u p t o p r i v a t e p l a y e r s . T h i s w i l l p r o v i d e d m u c h . N e e d e d i m p e t u s t o t h e I n d u s t r y a n d w i l l i m p r o v e t h e q u a l i t y o f s e r v i c e a n d p r o d u c t s a n d w i l l a l s o i n c r e a s e e m p l o y m e n t o p p o r t u n i t i e s . T h e r e a r e s t i l l s o m e i s s u e s t h e i r n e e d t o b e s o r t e d o u t , p a r t i c u l a r l y w i t h r e g a r d t o t h e s t a t u s o f i n t e r m e d i a r i e s a s e n v i s a g e d b y t h e I n s u r a n c e R e g u l a t o r y A u t h o r i t y .

RESEARCH OBJECVIV T b p c p l h r e p o r t a c k g r o u r o c e e d s o m i n g s l a y e r s . i b e r a l i z g i n d t o o f T h e d v e s t h e o f t h e h i g h l i g t h e e x i e b e n e f s e c t o r b r i e f s e c t o r a n d h t t h e s h o r t s t i n g s e t u p a n d i t s o f a r e e n u m e r a t e d .

T h e t h e p r o w e T h e k n o g e n

r e p o r t a l s o t r i e s m a r k e t p o t e n t i a l d u c t s a n d t h e s t r a t e m p l o y e d t o e x p l o s t r e s s i s a l s o g i v w i n g t h e a w a r e n e s e r a l p u b l i c . 7

t o i d e n t i f y f o r i n s u r a n c e e g y t h a t c a n i t t h e s a m e . e n o n s l e v e l o f

RESEARCH METHODOLOGY To conduct the market research first of all it is necessary to create a research design.A research design is basically a blue print of how a research is to be conducted, it mayinclude;1 . C h o o s i n g t h e a p p r o a c h 2.Determining the types of data needed.3 . L o c a t i n g t h e s o u r c e o f d a t a . 4 . C h o o s i n g a m e t h o d o f d a t a . 8

RESEARCH DESIGN Basically there are 3 types of approaches used during the any research:1 . E x p l o r a t o r y 2 . D e s c r i p t i v e 3 . E x p e r i m e n t a l . During this research Descriptive and Exploratory approach is taken intoconsideration because of the availability of relevant information to describe therelationships between the marketing problem and the available information.9

TYPES OF DATA USED: Both primary and secondary data is used in the research. Data Collection Methods To conduct the market research the data is collected by two sources. SECONDARY DATA Secondary data is one which already exists and is collected from the publishedsources.The sources from which secondary data was collected are: Newspapers and Magazines like Economic Times, Insurance Times, andInsurance Post. Internet PRIMARY DATA The primary sources of data refer to the first hand i nformation Primary data iscollected during the survey with the help of Questionnaires.10

INTRODUCTION OF THE COMPANY LIFE INSURANCE CORPORATION OF INDIA (LIC) Life Insurance Corporation of India (LIC) was formed in September, 1956, by an Actof Parliament, viz., Life Insurance Corporation Act, 1956, with capital contributionfrom the Government of India. The then Finance Minister, Shri C.D. Deshmukh,while piloting the bill, outlined the objectives of LIC thus to conduct the businesswith the utmost economy, and a spirit of trusteeship; to charge premium no higher than warranted by strict actuarial considerations; to invest the funds for obtainingmaximum yield for the' policy holders consistent with safety of the capital; to render prompt and efficient service to policy holders, thereby making insurance widely popular. Since nationalization, LIC has built up a vast network of 2,048 branches, 100divisions and 7 zonal offices spread over the country. The Life Insurance Corporationof India also' transacts business abroad and has offices in Fiji, Mauritius and UnitedKingdom. LIC is associated with joint ventures abroad in the field of insurance,namely, Ken-India ,Assurance Company Limited, Nairobi; United Oriental AssuranceCompany Limited, Kuala Lumpur and Life Insurance Corporation (International) E.C.Bahrain. The Corporation has registered a joint venture company in 26 th December,2000 in Katmandu, Nepal by the name of Life Insurance Corporation (Nepal) Limitedin collaboration with Vishal Group Limited, a local industrial Group. An offshorecompany L.I.C. (Mauritius) Off-shore Limited has also been set up in 2001 to tap the11

African insurance market. General Insurance: General insurance business in the country was nationalized with effect from 1stJanuary, 1973 by the General Insurance Business (Nationalization) Act, 1972. Morethan 100 nonlife insurance companies including branches of foreign companiesoperating within viz., the National Insurance Company Ltd., The New IndiaAssurance Company Ltd., The Oriental Insurance Company Ltd., and The UnitedIndia Insurance Company Ltd. with head offices at Calcutta, Bombay, New Delhi andMadras, respectively. General Insurance Corporation (GIC) which was the holdingcompany of the four public sector general insurance companies has since beendelinked from the later and has been approved as the "Indian Reinsurer" since 3 rd November 2000. The share capital of GIC and that of the four companies are held bythe Government of India. All the five entities are Government companies registeredunder the Companies Act, 1956. The general insurance business has grown in spreadand volume after nationalization. The four companies have 2699 branch offices, 1360divisional offices and 92 regional offices spread all over the country. GIC and itssubsidiaries have representation either directly through branches or agencies in 16countries and through associate locally incorporated subsidiary companies in 14 other countries. A wholly- owned subsidiary company of GIC, i.e. Indian International Pvt.Ltd. is operating in Singapore and there is a joint venture company, viz. Ken-IndiaAssurance Ltd. in Kenya. A new wholly owned subsidiary called New IndiaInternational Ltd., UK has also been registered.12

PRODUCTS OF LIC Whole Life with Profits Plan 002 Features: This plan is mainly devised to create an estate for the heirs of the policyholder as the plan basically provides for payment of sum assured plus bonuses on the death of the policyholder. However, considering the increased longevity of the Indian population,the Corporation has amended the above provision, thereby proving for payment of sum assured plus bonuses in the form of maturity claim on completion of age 80 yearsor on expiry of term of 40 years from date of commencement of the policy whichever is later.The premiums under the policy are payable up to age 80 years of the policyholder or for a term of 35 years whichever is later. If the payment of premium ceases after 3years, a paid-up policy for such reduced sum assured will be automatically secured provided the reduced sum assured exclusive of any attached bonus is not less thanRs.250/-. Such reduced paid-up policy is not entitled to participate in the bonusdeclared thereafter but the bonuses already declared on the policy will remain attach, provided the policy is converted in to a paid-up policy after the premiums are paid for 5 years. Suitable For: This policy is suitable for people of all ages who wish to protect their families fromfinancial crises that may occur owing to the policyholder's premature death.13

term under this plan is five years minimum and 55 years maximum. BENEFITSSurvival benefits If the Life Assured survives the premium paying period and the policy continues infull force, provided all premiums have been paid, but no further premiums arerequired to be paid.

Death Benefits: Sum Assured plus Bonuses accrued and vested in the policy.Plan Parameters:M i n i m u m M a x i m u m E n t r y a g e 1 2 ( n e a r e r b i r t h d a y ) 6 0 S u m a s s u r e d ( R s . ) 5 0 0 0 0 N O L I M I T T e r m ( y e a r s ) 5 5 5 ( M a x . P r e m o c e a s i n g age is 70)Mode of Payment Maximum premium paying period Policy loanavailableY e a r l y , h a l f y e a r l y 8 0 y r s . o f a g e o r 4 0 y r s . o f y e s ,quarterly, monthly premium paying term from the, s a l a r y s a v i n g d a t e o f c o m m e n c e m e n t w h i c h e v e r Scheme is later.15

ENDOWMENT WITH PROFIT PLAN - 014 FEATURES:

Moderate Premiums High bonus High liquidity Savings orientedThis policy not only makes provisions for the family of the Life Assured in event of his early death but also assures a lump sum at a desired age. The lump sum can bereinvested to provide an annuity during the remainder of his life or in any other wayconsidered suitable at that time.Premiums are usually payable for the selected term of years or until death if it occursduring the term period. Suitable For: Being an endowment assurance policy, this plan is apt for people of all ages andsocial groups who wish to protect their families from a financial setback that mayoccur owing to their demise.The amount assured if not paid by reason of his death earlier will payable at the endof the endowment term where it can be invested in an annuity provision for the rest of the policyholder's life or in any other way he may think most suitable at that time.16

BENEFITS Disability Benefit: In case policy holder becomes totally and permanently disabled due to an accident before reaching the age of 70 and the policy is in full force, he will not be required to pay further premiums, (the Disability Benefit is available in respect of the firstRs.20000 sum assured on anyone life) and the policy will continue to be in force.

Accident Benefit: By paying a small extra premium of Rs. l per Rs. 1000/- sum assured per year he or his family are entitled to the following benefits on death or permanent disabilitycaused by accident. Even students above the age of 18 years can avail of this benefit. Premium Stoppage: If payment of premiums ceases after at least THREE years' premiums have been paid , a free paid-up policy for a reduced sum assured will be automatically secured provided the reduced sum assured, exclusive of any attached bonus, is not less thanRs. 250/. The reduced sum assured will become payable on the event as stipulated inthe policy. Bonus: Is there anything extra payable besides the sum assured at the time of claimsettlement? Yes, but only if it is a 'with profits' policy. Every year the Life InsuranceCorporation distributes its surplus among policyholder to 'with profits' polices in theform of bonuses. Substantial bonuses have been declared in the past after eachvaluation of policy liabilities.17

BENEFITS Survival benefits: Payment of full Sum' Assured + Vested Bonus + Final Additional bonus, if any. Death Benefits: Payment of full sum assured + Vested Bonus. Plan Parameters: Minimum Maximum E n t r y A g e ( y e a r s ) 1 2 6 5 S

u m A s s u r ( R s . ) 0 n o l T e r ( y e s ) 5 M o d e O f P a y m e n t a x P o l i c y l o a n a v a i l a b l 2 Q u a r t e r l y , 7 5 y e Yearly, Salary Saving Scheme.18

e 5 i

d 0 m

0 i

0 t

m a r 5 5 M a t u r i t y A g e e M o n t h l y , a r s y e s Half Yearly,

ANMOL JEEVAN - I (WITHOUT PROFITS) BENEFITS On Death during the Term of the Policy: Sum AssuredO M a t u t y : N i l RESTRICTIONS ( A ) M i n i m u m a g e e n t r y : 1 8 y e a r s ( c o m p l e t e d )

n r i

( B ) e n t r (C)

M a x i y : 5 5

m y

m e a

a g r s

e (

a t n e a

birthday)

M a x i m u m a g e a t m a t u r i t y : 6 5 y e a r s ( D ) M i n i m u m T e r m : 5 y e a r s ( E ) M a x i m u m T e r m : 2 5 y e a r s ( F ) M i n i m u m S u m A s s u r e d : R s . F i v e L a k h ( G ) M a x i m u m S u m A s s u r e d : R s . T h r e e C r o r e ( I n c l u s i v e o f a l l term Assurance plans) Note: The policy would be issued in multiples of Rs. one lakh for Sum Assured above Rs. five lakh. (H)Mode of Premium Payment: Yearly, Half- Yearly and S i n g l e p r e m i u m . (G) Rebates: Sum Assured Rebate : NIL in case of regular premium policies and Re. lSum Assured for policies of Rs.25 lakh and above in case of single premium policies. Mode Rebate: 1% of Annual premium for yearly mode a n d n i l f o r Half-Yearly mode.

UNDERWRITING, AGE PROOF AND MEDICAL REQUIREMENTS: The plan is available to Standard and Sub-standard lives (upto Class VI EMR). This plan is also available to female lives (category I and II lives only) and to physicallyhandicapped persons subject to certain conditions. Standard age proof will have to besubmitted along with the Proposal Form. PAID-UP AND SURRENDER VALUE: The policy will not acquire any paid-up value. No Surrender Value will be available under this plan.

GRACE PERIOD FOR NON-FORFEITURE PROVISIONS: A grace period of 15 days will be allowed for payment of yearly or half-yearly premiums. If death occurs within this period and before the payment of the premiumthen due, the policy will still be valid and the Sum Assured paid after deduction of thesaid premium as also unpaid premiums falling due before the next policy anniversaryof the Policy. If the premium is not paid before the expiry of the days of grace, thePolicy gets lapsed.20

REVIVAL If the Policy has lapsed, it may be revived during the life time of the Life Assured, but before the date of expiry of policy term, on submission of proof of continuedinsurability to the satisfaction of the Corporation and the payment of all the arrears of premium together with interest at such rate as may be prevailing at the time of the payment. The corporation reserves the right to accept or decline the revival of discontinued policy. The revival of the discontinued policy shall take effect only after the same is approved by the Corporation and is specifically communicated to the

LifeAssured. The cost of the Medical reports, including Special Reports, if any, requiredfor the purposes of revival of the policy, should be borne by the Life Assured. PAYMENT OF CLAIMS No Claims concession will be applicable to this Policy. BACK-DATING INTEREST The policy can be back dated within the financial year. No dating back interest shall be charged. BENEFITSSurvival benefits: If one or both the lives survive to the maturity date, the sum assured, along with theaccumulated bonus, is payable.21

Death Benefits: In case either of the couple dies during the policy's term, two things happen. One, LIC pays to the surviving spouse the full sum assured. And, two, the policy continues onthe life of the surviving partner without him/her having to pay any further premiums,i.e. the life cover on the survivor continues free of cost.The sum assured is again be payable on the death of the other partner in case both thehusband and wife were to die during the term of the policy. Vested bonus would also be paid along with the sum assured on the second death. NEW INSURANCE SCHEMESUniversal Health Insurance Scheme

The Universal Health Insurance policy is available to groups of 100 or more families.The policy provides for reimbursement of medical expenses upto Rs.30000/towardshospitalization floated amongst the members of the family, death cover due to anaccident for Rs.25000 to the earning head of the family and compensation due to lossof earning head of the family @ Rs.50/- per day upto a maximum of 15 days, after awaiting period of three days, when the earning head of the family is hospitalized. The premium under the policy is Rs.1! - Per day (Le. Rs.365/-per annum) for anindividual, Rs. 1.50 per day for a family of five limited to spouse and children (i.e.Rs.548 per annum), and Rs.2/per day (i.e. Rs. 730 per annum) for coveringdependent parents within the overall family size of seven. A subsidy of Rs. 100 per year towards annual premium for "Below Poverty Life" families is also provided22

under the Scheme.For purpose of this policy HOSPITAL means: Any Hospital/Nursing home registered with the local authorities and under thesupervision of a registered and qualified Medical practitioner.

Hospital, Nursing Home runs by Government. Enlisted hospitals run by NGOs/ Trusts/ selected private hospitals with fixedschedule of charges. Hospitalization should be for a minimum period of 24 hours.However, this time limit is not applied to some specific treatments and also where dueto technological advancement hospitalization for 24 hours may not be required. Main Exclusions: All pre-existing diseases. Corrective, cosmetic or aesthetic dental surgery or treatment. Cost of spectacles, contact lens and hearing aid. Primarily diagnostic expenses not related to sickness/injury. Treatment for Pregnancy, Childbirth, Miscarriage, abortions etc. Age Limitations: This policy covers people between the age of 3 months to 65 years. Floater Basis: The benefit of family' will operate on floater basis i.e. the total reimbursement of Rs.30,000/- can be availed of individually or collectively by members of the family.23

A.

Unit plans:
Unit plans are investment plans for those who realize the worth of hard-earnedmoney. These plans help you see your savings yield rich benefits and help you savetax even if you dont have consistent income. Jeevan plus Future plus25

Bima plus
Market plus Money plus Profit plus Fortune plus Fortune plus: It is a unit linked assurance plan where premium payment term (PPT) is 5 years andthe premium payable in the first year will be 50% of total premium payable under the policy. The level of cover will depend on the level of premium you agree to pay.Four types of investment funds are offered. Premiums paid after allocation charge will purchase units of the Fund type chosen. The Unit Fund is subject to various chargesand value of the units may increase or decrease, depending on the Net Asset Value(NAV). The plan therefore serves the purpose of insurance-cum-investment. 1. Payment of Premiums: You may pay premiums regularly at yearly, half-yearly,quarterly or monthly (ECS) intervals for 5 years. The minimum First year premiumwill be Rs.20,000/- and you may pay any amount exceeding it. From second year onwards each years premium will be 25% of the first year premium. Other Features:i) Partial Withdrawals: You may encash the units partially after the third policyanniversary subject to the following:i) In case of minors, partial withdrawals shall be allowed from the policy anniversarycoinciding with or next following the date on which the life assured attains majority(i.e. on or after18th birthday).ii) Partial withdrawals may be in the form of fixed amount or in the form of fixednumber of units.iii) For 2 years period from the date of withdrawal, the Sum Assured under the Basic plan shall be reduced to the extent of the amount of partial withdrawals made.iv) Under policies where less than 3 years premiums have been paid and further premiums are not paid, the partial withdrawals shall not be allowed.v) Under policies where atleast 3 years premiums have been paid, partial withdrawalwill be allowed subject to Policyholders Fund Value being atleast Rs. 10,000/-. ii) Switching: You can switch between any fund types for the entire Fund Value26

during the policy term subject to switching charges, if any. iii) Discontinuance of premiums: If premiums are payable either yearly, half-yearly,quarterly or monthly (ECS) and the same have not been duly paid within the days of grace under the Policy, the Policy will lapse. A lapsed policy can be revived duringthe period of two years from the due date of first unpaid premium.I) Where atleast 3 years premiums have been paid, the Life Cover and AccidentBenefit rider, if any, shall continue during the revival period.During this period, the charges for Mortality and Accident Benefit cover, if any, shall be taken, in addition to other charges, by canceling an appropriate number of units outof the Policyholders Fund Value every month. This will continue to provide relevantrisk covers for:i. two years from the due date of first unpaid premium, or ii. Till the date of maturity, or iii. Till such period that the Policyholders Fund Value reduces to Rs. 5,000/-,whichever is earlier.The benefits payable under the policy in different contingencies during this periodshall be as under: A. In case of Death: Higher of Sum assured under the Basic Plan or the PolicyholdersFund Value. The Sum Assured shall be subject to provisions of Partial Withdrawalsmade, if any. B. In case of Death due to accident: Accident Benefit Sum Assured in addition to theamount under A above, if Accident Benefit is opted for. C. On Maturity: The Policyholders Fund Value. D. In case of Surrender (including Compulsory Surrender): The Policyholders FundValue. The Surrender value, however, shall be paid only after the completion of 3 policy years. E. In case of Partial Withdrawals: For 2 years period from the date of withdrawal, thesum assured under the basic plan shall be reduced to the extent of the amount of partial withdrawals made. II) Where the policy lapses without payment of at least 3 years premiums, the LifeCover and Accident Benefit rider cover, if any, shall cease and no charges for these benefits shall be deducted. However, deduction of all the other charges shall continue.The benefits under such a lapsed policy shall be payable as under:27

F. In case of Death: The Policyholders Fund Value. G. In case of death due to accident: Only, the amount as under F above. H. In case of Surrender (including Compulsory Surrender): Policyholders FundValue / monetary value as the case may be, shall be payable after the completion of the third policy anniversary. No amount shall be payable within 3 years from the dateof commencement of policy. I. In case of Partial withdrawal: Partial Withdrawals shall not be allowed under such a policy even after completion of 3 years period. iv) Revival: If due premium is not paid within the days of grace, the policy lapses. Alapsed policy can be revived during the period of two years from the due date of firstunpaid premium or before maturity, whichever is earlier. The period during which the policy can be revived will be called Period of revival or revival period.If premiums have not been paid for at least 3 full years, the policy may be revivedwithin two years from the due date of first unpaid premium. The revival shall be madeon submission of proof of continued insurability to the satisfaction of the Corporationand the payment of all the arrears of premium without interest.If at least 3 full years premiums have been paid and subsequent premiums are not paid, the policy may be revived within two years from the due date of first unpaid premium but before the date of maturity. No proof of continued insurability shall berequired but all arrears of premium without interest shall be required to be paid.The Corporation reserves the right to accept the revival at its own terms or decline therevival of a lapsed policy. The revival of a lapsed policy shall take effect only after the same is approved by the Corporation and is specifically communicated in writingto the Proposer / Life Assured.Irrespective of what is stated above, if less than 3 years premiums have been paid andthe Policyholders Fund Value is not sufficient to recover the charges, the policy shall be terminated and thereafter revival will not be entertained. If 3 years or more than 3years premiums have been paid and the Policyholders Fund Value reduces to Rs.5000/-, the policy shall terminate and Policyholders Fund Value as on such date shall be refunded to the Life Assured and thereafter revival will not be allowed. v) Settlement Option: When the policy comes for maturity, you may exerciseSettlement Option and may receive the policy money in instalments spread over a period of not more than five years from the date of maturity. There shall not be anylife cover during this period. The value of installment payable on the date specifiedshall be subject to investment risk i.e. the NAV may go up or down depending uponthe performance of the fund. Reinstatement: A policy once surrendered will not be reinstated.28

Risks borne by the Policyholder: i) LICs Fortune Plus is a Unit Linked Life Insurance product which is different fromthe traditional insurance products and are subject to the risk factors.ii) The premium paid in Unit Linked Life Insurance policies are subject to investmentrisks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and theinsured is responsible for his/her decisions.iii) Life Insurance Corporation of India is only the name of the Insurance Companyand LICs Fortune Plus is only the name of the unit linked life insurance contract anddoes not in any way indicate the quality of the contract, its future prospects or returns.iv) Please know the associated risks and the applicable charges, from your Insuranceagent or the Intermediary or policy document of the insurer.v) The various funds offered under this contract are the names of the funds and do notin any way indicate the quality of these plans, their future prospects and returns.vi) All benefits under the policy are also subject to the Tax Laws and other financialenactments as they exist from time to time. Cooling off period: If you are not satisfied with the Terms and Conditions of the policy, you may returnthe policy to us within 15 days. Loan: No loan will be available under this plan. Assignment: Assignment will be allowed under this plan. Exclusions: any amount exceeding it. From second year onwards each years premium will be 25% of the first year premium.In case the Life Assured commits suicide at any time within one year, the Corporationwill not entertain any claim by virtue of the policy except to the extent of thePolicyholders Fund Value on death.29

MARKET PLUS
IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO ISBORNE BY THE POLICYHOLDER" LICs MARKET PLUS: This is a unit linked deferred pension plan. You can take the plan with or without risk cover. You can also choose the level of cover within the limits, which will depend onwhether the policy is a Single premium or Regular premium contract and on the levelof premium you agree to pay.The allocated premiums will be applied to purchase units as per the Fund type chosen.Your Unit Account will be subject to deduction of charges as specified in the PolicyConditions. The value of the units in the Unit Fund may increase or decrease,depending on the investment return of the assets representing the chosen Fund.i. Payment of Premiums: You may pay premiums regularly at yearly, half-yearly or quarterly intervals over the term of the policy. The minimum annual premium will be Rs.5, 000/- increasing thereafter in multiples of Rs.1, 000/-.Alternatively, a Single premium can be paid subject to a minimum of Rs.10,000 and thereafter in multiples of Rs.1, 000.ii. Benefits: A) Death Benefit: If the Life cover is opted for, the Sum Assured under the Basic Plan together with the Fund Value of units either as a lump sum or as pension. In case the policy is taken without life cover, then the Fund Value of the units held in thePolicyholders Unit Account shall be payable either as a lump sum or as a pension.The amount of pension will depend on the then prevailing immediate annuityrates under the annuity option chosen. B) Benefit on Vesting:

On your surviving to the date of vesting, the Fund Value of the units held inyour Unit Account will compulsorily be utilized to provide a pension based onthe then prevailing immediate annuity rates under the relevant annuity option.However, you may opt to commute up to one-third of the Benefit to be paid asa lump sum. Further, you may choose to purchase pension from LIC or other life insurance company. Accident Benefit Option: If you have opted for life cover, you may opt for Accident Benefit equal to life cover subject to minimum Rs. 25,000 andmaximum Rs. 50 lakh (taken all policies with LIC of India and other insurers).In case of death by Accident, an additional sum equal to Accident benefit will be payable. Eligibility Conditions And Other Restrictions: Basic Plan M i n i m u m A g e a t e n t r y : 1 8 y e a r s c o m p l e t e d Maximum Age at entry:70 years ( a g e n e a r e r b i r t h d a y ) . H o w e v e r i f life cover is opted for, then 65 yearsM i n i m u m A g e a t v e s t i n g : 4 0 y e a r s ( a g e last birthday)M a x i m u m V e s t i n g A g e : 7 5 y e a r s ( a g e l a s t b i r t h d a y ) Minimum Deferment Term:5 yearsM i n i m u m S u m A s s u r e d : R s . 2 5 , 0 0 0 f o r S i n g l e p r e m i u m Rs. 50,000 for Regular premiumM a x i m u m S u m Assured:Single Premium - Equal to single p r e m i u m Regular Premium - 20 times of the annualized premiumi. Investment of Funds: The premiums allocated to purchase units will bestrictly invested according to the investment pattern committed in various fundtypes. Various types of fund and their investment pattern will be as under: F u n d T y p e I S h o r t t e r m i n v e s t m e n t s such as moneymarket instruments(including Govt.Securities & CorporateDebt)Investment inListed EquitySharesBond Fund N o t l e s s t h a n 8 0 % 1 0 0 % N i l Secured Fund N o t l e s s t h a n 6 5 % N o t m o r e t h a n 8 5 % N o t l e s s t h a n 15% & not morethan 35%31

Balanced Fund N o t l e s s t h a n 5 0 % N o t m o r e t h a n 7 0 % N o t l e s s t h a n 30% & not morethan 50% Growth Fund N o t l e s s t h a n 2 0 % N o t m o r e t h a n 4 0 % N o t l e s s t h a n 60% & not morethan 80%i i . T h e P o l i c y h o l d e r h a s t h e o p t i o n t o c h o o s e a n y O N E o f t h e a b o v e 4 f u n d s . I n case no fund has been opted for, the allocated premiums shall, by default, beinvested in the SECURED FUND.iii. Method of Calculation of Unit price: Units will be allotted based on the NetAsset Value (NAV) of the respective fund as on the date of allotment. There isno Bid-Offer spread (the Bid price and Offer price of units will both be equalto the NAV). The NAV will be computed on daily basis and will be based oninvestment in Government / Government Guaranteed Securities /Corporate Debtnt performance, Fund Management Charge and whether fundis expanding or contracting under each fund type.iv. Charges under the Plan: Units will be allotted based on the Net Asset Value(NAV) of the respective fund as on the date of allotment. There is no Bid-Offer spread (the Bid price and Offer price of units will both be equal to the NAV). The NAV will be computed on daily basis and will be based oninvestment performance, Fund Management Charge and whether fund isexpanding or contracting under each fund type. (A) Premium Allocation Charge : This is the percentage of the premiumappropriated towards charges from the premium received. The balance knownas allocation rate constitutes that part of the premium which is utilized to purchase (Investment) units for the policy. The allocation charges are as below: For Single premium policies: 3.3%For Regular premium policies : Premium Band (per annum)Allocation charge F i r s t Y e a r T h e r e a f t e r 5 , 0 0 0 t o 7 5 , 0 0 0 1 6 . 5 0 % 2 . 5 0 % 7 5 , t o 1 , 5 0 , 0 0 . 7 5 % 2 . 5 , 5 0 , 0 0 1 3 , 0 0 , 0 0 0 0 0 % 2 . 5 0 % 14.25% 2.50%5,00,001 and above 13.50% 2.50%32

0 0 0 t 1

1 5 % 1 o 5 . 3,00,001 to 5,00,000

v. Allocation charge for Top-up: 1.25% (B) Charges for Risk Covers:Mortality Charge: This is the cost of insurance cover. These are age specificand will be taken every month. Accident Benefit charge: This is the cost of Accident Benefit rider and will be levied every month at the rate of Rs. 0.50 per thousand Accident BenefitSum Assured per policy year.vi. (C) Other Charges:Policy Administration charge: Rs. 60/- per month during the first policyyear and Rs. 20/- per month thereafter, throughout the term of the policy. Fund Management Charge: This is the charge levied as a percentage of thevalue of units and shall be appropriated by adjusting NAV at following rates:0.75% p.a. of Unit Fund for Bond Fund 1.00% p.a. of Unit Fund for ?Secured?Fund 1.25% p.a. of Unit Fund for Balanced Fund 1.50% p.a. of Unit Fund for Growth Fund. Switching Charge: This is the charge levied on switching of monies from onefund to another. Within a given policy year 4 switches will be allowed free of charge. Subsequent switches in that year shall be subject to a switching chargeof Rs. 100 per switch. Bid/Offer Spread: Nil. Surrender Charge: Nil Service Tax Charge: A service tax charge shall be levied on the Mortalityand Accident Benefit rider charge, if any, on a monthly basis. The level of thischarge will be as per the rate of service tax as applicable from time to time.Presently, the rate of Service Tax is 12% with an educational cess at the rate of 2% thereon and hence effective rate is 12.24%. Miscellaneous Charge: This is a charge levied for an alteration within thecontract, such as reduction in policy term, change in premium mode, etc. Analteration may be allowed subject to a charge of Rs. 50/-. (D) Right to revise charges: The Corporation reserves the right to revise allor any of the above charges except the premium allocation charge and chargesfor risk covers, with the prior approval of IRDA.v i i . A l t h o u g h t h e c h a r g e s a r e r e v i e w a b l e , t h e y w i l l b e s u b j e c t t o a c a p f o r w h i c h please refer to the policy document.33

viii. Surrender: The surrender value, if any, is payable only after the completionof the third policy anniversary both under Single and Regular premiumContract. No partial withdrawal of units will be allowed under this plan.ix. Other Features:i) Top-up (Additional Premium): The policyholder can pay additional premium in multiples of Rs.1, 000 without any limit at anytime during theterm of the policy. In case of yearly, half-yearly or quarterly mode of premium payment such Top-up can be paid only if all premiums have been paid under the policy . ii)Switching: You can switch between any fund types during the policy termsubject to switching charges, if any. iii) Discontinuance of premiums and revival: If premiums are payableyearly, half-yearly or quarterly and the same have not been duly paid withinthe days of grace under the Policy, the Policy will lapse. A lapsed policy can be revived during the period of two years from the due date of first unpaid premium.If you have opted for life cover, under Regular premium policies where atleast 3 years premiums have been paid, and the subsequent premiums are not paid, the life cover and accident benefit cover, if any, will be compulsorilyavailable under the policy and the charges for the same if any, shall be taken,in addition to other charges, by canceling an appropriate number of units outof the Policyholders Unit Account every month subject to the following :two years from the due date of first unpaid premium, or two years from the due date of first unpaid premium, or till such period that the Policyholders Unit Account reduces to one annualized premium, whichever is earlier. iv) Increase / decrease of benefits: No increase (except to the extent of Top-up stated above) or decrease of benefits will be allowed under the plan. iiv) Conversion to annuity at vesting date: The rate at which the amount atvesting date will be converted to an annuity is not guaranteed and will be based on the prevailing immediate annuity rates under the relevant annuityoption at the vesting date.x. Reinstatement: A policy once surrendered cannot be reinstated.xi. Risks borne by the Policyholder: 34

i) Unit Linked Life Insurance products are different from the traditionalinsurance products and are subject to the risk factors.ii) The premium paid in Unit Linked Life Insurance policies are subject toinvestment risks associated with capital markets and the NAVs of the unitsmay go up or down based on the performance of fund and factors influencingthe capital market and the insured is responsible for his/her decisions.iii) Life Insurance Corporation of India is only the name of the InsuranceCompany and LICs Market Plus is only the name of the unit linked lifeinsurance contract and does not in any way indicate the quality of the contract,its future prospects or returns.iv) Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document of the insurer.v) The various funds offered under this contract are the names of the funds and donot in any way indicate the quality of these plans, their future prospects andreturns.vi) All benefits under the policy are also subject to the Tax Laws and other financial enactments as they exist from time to time.xii. 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.xiii. Loan: No loan will be available under this plan.xiv. Assignment: Assignment will not be allowed under this plan.xv. Exclusions: In case the Life Assured commits suicide at any time, theCorporation will not entertain any claim by virtue of the policy except to theextent of the Fund Value of the units held in the Policyholders Unit Accounton death.35

Benefit IllustrationStatutory warningsome benefits are guaranteed and some benefits are variable with returns basedon the future performance of your life insurance company. If your policy offersguaranteed returns then these will be clearly marked guaranteed in theillustration table on this page. If your policy offers variable returns then theillustrations on this page will show two different rates of assumed investmentreturns. These assumed rates of return are not guaranteed and they are notupper or lower limits of what you might get back as the value of your policy isdependant on a number of factors including future investment performance