Contain: Comparative Study Ofs Customer Preference For Life Insurance Scheme of LIC & Birla Sun Life

Comparative study ofs customer preference for life insurance scheme of LIC
& BIRLA SUN LIFE.
CONTAIN
1. THE INSURANCE INDUSTRY IN INDIA (AN OVERVIEW)
2. PRESENT SCENARIO - LIFE INSURANCE INDUSTRY IN INDIA.
3. COMPANY PROFILE
i. BIRLA SUN LIFE INSURANCE COMPANY LIMITED
ii. LIFE INSURANCE CORPORATIONOF INDIA (LIC)
4. COMPARATIVE ANALYSIS
5. RESEARCH METHDOLOGY
6. FACTS &FINDINGS
7. ANALYSIS & INTERPRETATION
8. SWOT ANALYSIS:
9. CONCLUSION
10. RECOMMENDATION
11. APPENDIX
12. BIBLIOGRAPHY
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THE INSURANCE INDUSTRY IN INDIAs
AN OVERVIEW
HISTORY OF INSURANCE
In India, insurance has a deep-rooted history. It finds mention in the writings of Manu (
Manusmrithi ), Yagnavalkya ( Dharmasastra ) and Kautilya ( Arthasastra ). The writings
talk in terms of pooling of resources that could be re-distributed in times of calamities
such as fire, floods, epidemics and famine. This was probably a pre-cursor to modern day
insurance. Ancient Indian history has preserved the earliest traces of insurance in the
form of marine trade loans and carriers’ contracts. Insurance in India has evolved over
time heavily drawing from other countries, England in particular.
1818 saw the advent of life insurance business in India with the establishment of the
Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In
1829, the Madras Equitable had begun transacting life insurance business in the Madras
Presidency. 1870 saw the enactment of the British Insurance Act and in the last three
decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and
Empire of India (1897) were started in the Bombay Residency. This era, however, was
dominated by foreign insurance offices which did good business in India, namely Albert
Life Assurance, Royal Insurance, Liverpool and London Globe Insurance and the Indian
offices were up for hard competition from the foreign companies.
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In 1914, the Government of India started publishing returns of Insurance Companies
in India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure
to regulate life business. In 1928, the Indian Insurance Companies Act was enacted to
enable the Government to collect statistical information about both life and non-life
business transacted in India by Indian and foreign insurers including provident insurance
societies. In 1938, with a view to protecting the interest of the Insurance public, the
earlier legislation was consolidated and amended by the Insurance Act, 1938 with
comprehensive provisions for effective control over the activities of insurers.
The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there
were a large number of insurance companies and the level of competition was high.
There were also allegations of unfair trade practices. The Government of India, therefore,
decided to nationalize insurance business.
An Ordinance was issued on 19th January, 1956 nationalizing the Life Insurance
sector and Life Insurance Corporation came into existence in the same year. The LIC
absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies—245 Indian
and foreign insurers in all. The LIC had monopoly till the late 90s when the Insurance
sector was reopened to the private sector.
The history of general insurance dates back to the Industrial Revolution in the west
and the consequent growth of sea-faring trade and commerce in the 17 th century. It came
to India as a legacy of British occupation. General Insurance in India has its roots in the
establishment of Triton Insurance Company Ltd., in the year 1850 in Calcutta by the
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British. In 1907, the Indian Mercantile Insurance Ltd, was set up. This was the first
company to transact all classes of general insurance business.
Following the recommendations of the Malhotra Committee report, in 1999, the
Insurance Regulatory and Development Authority (IRDA) was constituted as an
autonomous body to regulate and develop the insurance industry. The IRDA was
incorporated as a statutory body in April, 2000. The key objectives of the IRDA include
promotion of competition so as to enhance customer satisfaction through increased
consumer choice and lower premiums, while ensuring the financial security of the
insurance market.
The IRDA opened up the market in August 2000 with the invitation for application for
registrations. Foreign companies were allowed ownership of up to 26%. The Authority
has the power to frame regulations under Section 114A of the Insurance Act, 1938 and
has from 2000 onwards framed various regulations ranging from registration of
companies for carrying on insurance business to protection of policyholders’ interests.
In December, 2000, the subsidiaries of the General Insurance Corporation of India were
restructured as independent companies and at the same time GIC was converted into a
national re-insurer. Parliament passed a bill de-linking the four subsidiaries from GIC in
July, 2002.
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.
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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 nationalized. LIC formed by an Act of Parliament, viz. LIC Act,
1956, with a capital contribution of Rs. 5 crore from the Government of India.
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LIBERALIZATION OF INSURANCE SECTOR:
Liberalization commitment of the country to help in disciplining future economic
policies will include the insurance reforms. When world over insurance market has been
open up, Indian market cannot remain in isolation. History has shown that it is very
difficult for a country to remain in isolation.
Globalization is the new economic reality, which is here to stay, heralding a new era of
insurance in India.
With the opening of the insurance industry, India stands to gain with the following major
advantages:
 Globalization will provide opportunities to the customers.
 Better production with more reasonable and affordable prices.
 The customer will get better services.
 It will enhance the saving rate.
 Long term funds for infrastructure development will be available to the country.
 It will secure for India larger inflow of foreign capital need to sustain our GDP
growth.
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WHY INSURANCE IN INDIA:
We live in the information age. People are becoming more aware of the importance of
insurance in their life. However, there is a paradox in the form of a growing need to
educate people to buy insurance.
Today,natural disasters on a large scale occur regularly and even terrorism is increasing
day by day. Specialized software is used in actuarial science to accurately predict life
expectancy and mortality. But natural disasters are difficult to predict.
This has highlighted to the world that insurance is a basic and fundamental need for the
safety and security of the family. Only a larger insurance cover can guarantee a better
future.
However insurance claims for natural disasters are very low. This is because insurance
coverage was too low, and those who really needed insurance had not taken it. There is
the need to push insurance as a social responsibility for those who really need it.
Business and Social Objectives
When LIC was formed in 1956 through the amalgamation of 225 private companies, its
business objectives complemented its social objectives. The main objective is to spread
life insurance to every nook and corner of the country especially rural areas, to socially
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and economically backward classes and provide them reasonably-priced financial cover
against death.
Other objectives include encouraging people to save for the future by making insurance
linked savings more attractive and secure. The funds created are then utilized and
invested for nation building. The insurance business is conducted with the full realization
that LIC is only a trustee of the insured public and priority is given to meet the needs that
arise due to change in the social and economic environments.
Even today after 50 years, the core value of social commitment has not changed. What
have changed in recent times are customers’ expectations and the environment in which
the life insurance sector operates. This is due to globalization which has opened up the
insurance sector to private players.
Insurance Business in India:

Insurance is a federal subject in India and has a history dating back to 1818. Life and
general insurance in India is still a nascent sector with huge potential for various global
players with the life insurance premiums accounting to 2.5% of the country's GDP while
general insurance premiums to 0.65% of India's GDP.. The Insurance sector in India has
gone through a number of phases and changes, particularly in the recent years when the
Govt. of India in 1999 opened up the insurance sector by allowing private companies to
solicit insurance and also allowing FDI up to 26%. Ever since, the Indian insurance
sector is considered as a booming market with every other global insurance company
wanting to have a lion's share. Currently, the largest life insurance company in India is
still owned by the government.
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A well-developed and evolved insurance sector is needed for economic development
as it provides long term funds for infrastructure development and at the same time
strengthens the risk taking ability.
Insurance Sector Reforms
In 1993, Malhotra Committee- headed by former Finance Secretary and RBI Governor
R.N. Malhotra- was formed to evaluate the Indian insurance industry and recommend its
future direction. The Malhotra committee was set up with the objective of
complementing the reforms initiated in the financial sector. The reforms were aimed at
creating a more efficient and competitive financial system suitable for the requirements
of the economy keeping in mind the structural changes currently underway and
recognizing that insurance is an important part of the overall financial system where it
was necessary to address the need for similar reforms.
The Government of India liberalized the insurance sector in March 2000 with the passage
of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry
restrictions for private players and allowing foreign players to enter the market with
some limits on direct foreign ownership. Under the current guidelines, there is a 26
percent equity cap for foreign partners in an insurance company. The opening up of the
sector is likely to lead to greater spread and deepening of insurance in India and this may
also include restructuring and revitalizing of the public sector companies. In the private
sector 15 life insurance and 11 general insurance companies have been registered. A host
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of private Insurance companies operating in both life and non-life segments have started
selling their insurance policies since 2001.
Insurance companies in India:
IRDA has so far granted registration to 12 private life insurance companies and 9 general
insurance companies. If the existing public sector insurance companies are included,
there are currently 13 insurance companies in the life side and 13 companies operating in
general insurance business.Particulars of the life insurance companies and general
insurance companies including their web address is given below:
LIFE INSURERS Websites

Public Sector
Life Insurance Corporation of India www.licindia.com
Private Sector
Allianz Bajaj Life Insurance Company Limited www.allianzbajaj.co.in
Birla Sun-Life Insurance Company Limited www.birlasunlife.com
HDFC Standard Life Insurance Co. Limited www.hdfcinsurance.com
ICICI Prudential Life Insurance Co. Limited www.iciciprulife.com
ING Vysya Life Insurance Company Limited www.ingvysayalife.com
Max New York Life Insurance Co. Limited www.maxnewyorklife.com
MetLife Insurance Company Limited www.metlife.com
Om Kotak Mahindra Life Insurance Co. Ltd. www.omkotakmahnidra.com
SBI Life Insurance Company Limited www.sbilife.co.in
TATA AIG Life Insurance Company Limited www.tata-aig.com
AMP Sanmar Assurance Company Limited www.ampsanmar.com
Dabur CGU Life Insurance Co. Pvt. Limited www.avivaindia.com
GENERAL INSURERS
Public Sector
National Insurance Company Limited www.nationalinsuranceindia.com
New India Assurance Company Limited www.niacl.com
Oriental Insurance Company Limited www.orientalinsurance.nic.in
United India Insurance Company Limited www.uiic.co.in
Private Sector
Bajaj Allianz General Insurance Co. Limited www.bajajallianz.co.in
ICICI Lombard General Insurance Co. Ltd. www.icicilombard.com
IFFCO-Tokio General Insurance Co. Ltd. www.itgi.co.in
Reliance General Insurance Co. Limited www.ril.com
Royal Sundaram Alliance Insurance Co. Ltd. www.royalsun.com
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TATA AIG General Insurance Co. Limited www.tata-aig.com
Cholamandalam General Insurance Co. Ltd. www.cholainsurance.com
Export Credit Guarantee Corporation www.ecgcindia.com
HDFC Chubb General Insurance Co. Ltd.
REINSURER
General Insurance Corporation of India www.gicindia.com
Indian Insurance Industry: New Avenues for Growth 2012
Annual growth rate of 15-20% and the largest number of life insurance policies in force,
the potential of the Indian insurance industry is huge. Total value of the Indian insurance
market (2004-05) is estimated at Rs. 450 billion (US$10 billion). According to
government sources, the insurance and banking services’ contribution to the country's
gross domestic product (GDP) is 7% out of which the gross premium collection forms a
significant part.
Till date, only 20% of the total insurable population of India is covered under various
life insurance schemes, the penetration rates of health and other non-life insurances in
India is also well below the international level. These facts indicate the of immense
growth potential of the insurance sector.
Though, the existing rule says that a foreign partner can hold 26% equity in an insurance
company, a proposal to increase this limit to 49% is pending with the government. Since
opening up of the insurance sector in 1999, foreign investments of Rs. 8.7 billion have
poured into the Indian market and 21 private companies have been granted licenses.
Innovative products, smart marketing, and aggressive distribution have enabled fledgling
private insurance companies to sign up Indian customers faster than anyone expected.
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Indians, who had always seen life insurance as a tax saving device, are now suddenly
turning to the private sector and snapping up the new innovative products on offer.
The life insurance industry in India grew by an impressive 36%, with premium income
from new business at Rs. 253.43 billion during the fiscal year 2004-2005, braving stiff
competition from private insurers. This report, “Indian Insurance Industry: New Avenues
for Growth 2012”, finds that the market share of the state behemoth, LIC, has clocked
21.87% growth in business at Rs.197.86 billion by selling 2.4 billion new policies in
2004-05. But this was still not enough to arrest the fall in its market share, as private
players grew by 129% to mop up Rs. 55.57 billion in 2004-05 from Rs. 24.29 billion in
2003-04.
Though the total volume of LIC's business increased in the last fiscal year (2004-2005)
compared to the previous one, its market share came down from 87.04 to 78.07%. The 14
private insurers increased their market share from about 13% to about 22% in a year's
time. The figures for the first two months of the fiscal year 2005-06 also speak of the
growing share of the private insurers. The share of LIC for this period has further come
down to 75 percent, while the private players have grabbed over 24 percent.
There are presently 12 general insurance companies with four public sector companies
and eight private insurers. According to estimates, private insurance companies
collectively have a 10% share of the non-life insurance market.
Though the focus of this market research report is on the potential growth on the Indian
Insurance Sector, it also talks about the market size, market segmentation, and key
developments in the market after 1999. The report gives an instant overview of the
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Indian non-life insurance market, and covers fire, marine, and other non-life insurance.
The data is supplied in both graphical and tabular format for ease of interpretation and
analysis. This report also provides company profiles of the major private insurance
companies.
As per a recent report “INDIAN INSURANCE INDUSRTY FORECAST” ( 2007-09)
published by RNCOS, it has been found that “ life insurance market in India will likely
reach around Rs. 1683 billion by the year 2009. Changing consumer demography and
natural calamities occurring from time to time will remain the key contributors in this
growth.
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PRESENT SCENARIO - LIFE INSURANCE INDUSTRY IN
INDIA:
The life insurance industry in India grew by an impressive 47.38%, with premium
income at Rs. 1560.41 billion during the fiscal year 2006-2007. Though the total volume
of LIC's business increased in the last fiscal year (2006-2007) compared to the previous
one, its market share came down from 85.75% to 81.91%.
The 17 private insurers increased their market share from about 15% to about 19% in a
year's time. The figures for the first two months of the fiscal year 2007-08 also speak of
the growing share of the private insurers. The share of LIC for this period has further
come down to 75 percent, while the private players have grabbed over 24 percent.
With the opening up of the insurance industry in India many foreign players have entered
the market. The restriction on these companies is that they are not allowed to have more
than a 26% stake in a company’s ownership.
Since the opening up of the insurance sector in 1999, foreign investments of Rs. 8.7
billion have poured into the Indian market and 19 private life insurance companies have
been granted licenses.
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Innovative products, smart marketing, and aggressive distribution have enabled fledgling
private insurance companies to sign up Indian customers faster than anyone expected.
Indians, who had always seen life insurance as a tax saving device, are now suddenly
turning to the private sector and snapping up the new innovative products on offer. Some
of these products include investment plans with insurance and good returns (unit linked
plans), multi – purpose insurance plans, pension plans, child plans and money back
plans.
KEY PLAYERS IN INDIAN LIFE INSURANCE INDUSTRY:
LIFE INSURANCE CORPORATION OF INDIA:
The Life Insurance Corporation of India was formed after the merger of 229 life
insurance companies operating in India in 1956 after the life insurance nationalization
bill was passed and all private life insurance companies taken over. The company was
initially capitalized at Rs. 5 crores and is fully owned by the govenrnment of India. The
company has been a role player in the field for around 45 years.
ING. VYSYA LIFE INSDURANCE:
The Company is a joint venture between ING group, the largest life insurance group in
the world, the VYSYA bank limited, a south India based bank with 70 years of
experience in banking and GMR group reputed name in the field of manufacturing,
power generation and infrastructure.
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OM KOTAK MAHINDRA LIFE INSURANCE:
Kotak Mahindra is one of India’s premier financial services group, with a range of over
2 dozen highly specialized products and services spread over a number of companies and
with the client list that spans more then 500 Indian and international firms. Old Mutual
plc. is a leading financial services Provider in the world, providing a broad range of
financial services in the area of insurance, asset management and banking. It is a leading
life insurance in South Africa with more than 30% market share .The partnership with
Old Mutual plc.
HDFC STANDARD LIFE:
The Company is a joint venture between HDFC, India’s largest housing finance
company and Standard Life of U.K. HDFC is a majority stake holder with around 81%
share holding with Standard Life
BIRLA SUN LIFE:
Aditya Birla Group Is India’s second largest business house, with a turnover of over
$4.75bn and an asset base of 43.8bn. The group is a well diversified conglomerate with
72,000 strong workforce spanning 40 companies across 17 countries. Sun life is the
largest insurer of Canada with asset under management of over $200bn.
AVIVA:
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Aviva plc is the largest life and general insurance group of UK and worlds seventh
largest insurer with world wide premium income and retail investment sales of $28bn
and more than $200bn in asset under management. Its partner DABUR is one of India’s
oldest and largest groups of companies with interests in aurvedic specialist,
pharmaceuticals, and personal care and health care products.
TATA-AIG:
The Company is a joint venture between TATA’s of India, the most respected industrial
group of India and AIG of US with asset under management of over $300bn and
operating in 130 countries across the world.
MET LIFE:
It is a joint venture between Met Life International Holding inc., The Jammu & Kashmir
bank and M.Pallonji co. pvt. Ltd. the resultant entity has developed and distributes a
range of life insurance products in India.
Reliance Life Insurance:
It offers you products that fulfill your savings and protection needs. Our aim is to emerge
as a transnational Life Insurer of global scale and standard.
Reliance Life Insurance is an associate company of Reliance Capital Ltd., a part of
Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of India’s leading
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private sector financial services companies, and ranks among the top 3 private sector
financial services and banking companies.
Life insurance industry
Life insurance may be defined as a plan under which large groups of individuals can
equalize the burden of loss from death by distributing funds to the beneficiaries of those
who die. From the individual standpoint life insurance is a means by which an estate
may be created immediately for one's heirs and dependents. It has achieved its greatest
acceptance in Canada, the United States, Belgium, South Korea, Australia, Ireland, New
Zealand, The Netherlands, and Japan, countries in which the face value of life insurance
policies in force generally exceeds the national income.
In the United States in 1990 nearly $9.4 trillion of life insurance was in force. The assets
of the more than 2,200 U.S. life insurance companies totaled nearly $1.4 trillion, making
life insurance one of the largest savings institutions in the United States. Much the same
is true of other wealthy countries, in which life insurance has become a major channel of
saving and investment, with important consequences for the national economy.
Life insurance is relatively little used in poor countries, although its acceptance has been
increasing.
Additional benefits of Life Insurance:
• Disability benefits:
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Death is not the only hazard that is insured; many policies also include disability
benefits. Typically, these provide for waiver of future premiums and payments of
monthly installments spread over certain time period.
Accidental death benefits: -
Many policies can also provide for an extra sum to be paid (typically equal to the sum
assured) if death occurs as a result of accident.
Tax relief: -
Under the Indian income, tax act, the following tax relief is available
a)Under section 88: - 20% of the premium paid can be deducted from your total income
tax liabilities
b)Under section 80(ccc): - 100%of the premium paid is deductible from your total
taxable income
Types of life insurance:
The following types of plans are available, in general: -
 Term life
 Whole life insurance
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 Endowment type plans
 Combination of whole life and endowment type plans
 Children assurance plans
 Annuity and pension plans
• Term life insurance:
In the case of term life insurance contract, the sum assured is payable only in the event of
death during the term. In the case of survival. The contract comes to an end at the end of
this case of term life insurance contract, the sum assured is payable only in the event of
death during the term. In the case of survival. The contract comes to an end at the end of
The term. There is no refund of the premium. These policies are non-participating. Since
only death risk is covered, the premium is low and the contract is simple.
Whole life insurance:
The risk is covered for the entire life of the policyholder. That is why, they are known as
whole life policies. The policies money and bonus are payable only to the nominee or the
beneficiary upon the death of the policyholder.
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Endowment types of plans:
Endowment policies cover the risk for a specified period at the end of which, the sum
assured paid back to policyholder, along with the entire bonus accumulated during the
term of the policy.
Children’s assurance plans:
Children deferred assurance plans provide risk cover on life of the child after it had
attained an age of 18 years.
Annuities and pension plans:-
contract. An annuity is just reverse of the life insurance principle. When a person
purchases a life insurance contract, he agrees to make a series of payments (premium) to
the insurer and, in return, the insurer agrees to pay a specified sum to the beneficiaries
Benefits of General Insurance:
Non-life insurance or general insurance is also lucrative, as its scope of operations is
wide by definition. In practice, however, general insurance premium has been lower than
life insurance. In 1993, total life premium income in India was US $ 3.2 billion while
general insurance premium US $ 1.5 billion. General Insurance premium as a percentage
of GDP was a mere 0.5% in 1994. Clearly, there is ample scope for development of
general insurance in India. However, its market is smaller in comparison with the huge
market for life insurance in this country.
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The history of general Insurance would appear to date back to the Industrial Revolution
in the west and the consequent growth of sea-faring trade and commerce in the 17th
century. It came to India as a legacy of British occupation. British and other foreign
Insurance companies through their agencies in India transacted this business.
Management of Non-Life insurers was taken over by the Central government in 1971 as
a prelude to nationalization. General Insurance business was nationalized with effect
from 1.1.1973 by the General Insurance Business (Nationalization) Act, 1972.
Prior to 1973, general insurance was urban-centric, catering mainly to the needs of
organized trade and Industry. One hundred and seven insurers including branches of
foreign companies operating the country were amalgamated. These were grouped into
four companies, viz. the National Insurance Company Ltd., the Oriental Insurance
Company Ltd., the New India Assurance Company Ltd., and the United India Insurance
Company Ltd. with head offices at Calcutta, New Delhi, Bombay and Madras
respectively. GIC was incorporated as a company in 1972 and it commenced business on
January 1st 1973. The Government of India subscribed to the capital of GIC. GIC, in turn,
subscribed to the capital of the four companies. All the four companies are government
companies registered under the Companies Act.
GIC and its subsidiaries have representation either directly or through branches in 18
countries and through associate/ locally incorporated subsidiaries in 14 other countries. A
subsidiary company of GIC India International Pvt. Ltd. is operating in Singapore and
their joint venture company, Kenindia Assurance Company Ltd. in Kenya. On the whole,
the foreign operations of the general insurance industry have been profitable.
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GIC was designated as the Indian reinsurer under the Insurance Act, to which all the
domestic insurers were obliged to cede 20% of gross direct premium in India. In order to
ensure maximum retention in the country and to secure the best terms from foreign
reinsurers, GIC and its subsidiaries have a common program for reinsurance cessions.
Over the years the Indian Insurance market has done well in achieving the objective of
increasing market retention consistent with safety
PURPOSE, NEED OF THE LIFE INSURANCE:

Life insurance as "Investment"
Insurance is an attractive option for investment. While most people recognize the risk
hedging and tax saving potential of insurance, many are not aware of its advantages as an
investment option as well. Insurance products yield more compared to regular investment
options, and this is besides the added incentives (read bonuses) offered by insurers.
You cannot compare an insurance product with other investment schemes for the simple
reason that it offers financial protection from risks, something that is missing in non-
insurance products. In fact, the premium you pay for an insurance policy is an investment
against risk. Thus, before comparing with other schemes, you must accept that a part of
the total amount invested in life insurance goes towards providing for the risk cover,
while the rest is used for savings. In life insurance, unlike Non-life products, you get
maturity benefits on survival at the end of the term. In other words, if you take a life
insurance policy for 20 years and survive the term, the amount invested as premium in
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the policy will come back to you with added returns. In the unfortunate event of death
within the tenure of the policy, the family of the deceased will receive the sum assured.
Now, let us compare insurance as an investment options. If you invest Rs 10,000 in PPF,
your money grows to Rs 10,950 at 9.5 per cent interest over a year. But in this case, the
access to your funds will be limited. One can withdraw 50 per cent of the initial deposit
only after 4 years.
The same amount of Rs 10,000 can give you an insurance cover of up to approximately
Rs 5-12 lakh (depending upon the plan, age and medical condition of the life insured,
etc) and this amount can become immediately available to the nominee of the
policyholder on death. Thus insurance is a unique investment avenue that delivers sound
returns in addition to protection.
Life insurance as "Risk cover"
First and foremost, insurance is about risk cover and protection - financial protection, to
be more precise - to help outlast life's unpredictable losses. Designed to safeguard against
losses suffered on account of any unforeseen event, insurance provides you with that
unique sense of security that no other form of investment provides. By buying life
insurance, you buy peace of mind and are prepared to face any financial demand that
would hit the family in case of an untimely demise.
Insurance also provides a safeguard in the case of accidents or a drop in income after
retirement. An accident or disability- can be devastating, and an insurance policy can
lend timely support to the family in such times. It also comes as a great help when you
retire, in case no untoward incident happens during the term of the policy.
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With the entry of private sector players in insurance, you have a wide range of products
and services to choose from. Further, many of these can be further customized to fit
individual/group specific needs. Considering the amount you have to pay now, it's worth
buying some extra sleep.
Life insurance as "Tax planning"
Insurance serves as an excellent tax saving mechanism too. The Government of India has
offered tax incentives to life insurance products in order to facilitate the flow of funds
into productive assets. Under Section 88 of Income Tax Act 196 I, an individual is
entitled to a rebate of 20 per cent on the annual premium payable on his/her life and life
of his/her children or adult children. The rebate is deductible from tax payable by the
individual or a Hindu Undivided Family. This rebate is can be availed up to a maximum
of Rs 12,000 on payment of yearly premium of Rs 60,000. By paying Rs 60,000 a year,
you can buy anything upwards of Rs 10 lakhs of sum assured. (Depending upon the age
of the insured and term of the policy).
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COMPANY PROFILE
LIFE INSURANCE CORPORATIONOF INDIA (LIC):
Introduction
LIC has an excellent money back policy which provides for periodic payments of partial
survival benefits as long as the policy holder is alive. 20% of the sum assured is payable
after 5, 10, 15 and 20 years and the balance 40% is payable at the 20th year along with
accrued bonus. (www.lic.com)
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For a 25 years term , 15% of the sum assured becomes payable after 5,10,15 and 20
years and the balance 40% plus the accrued bonus becomes payable at the 25th year.
An important feature of these types of policies is that in the event of the death of the
policy holder at any time within the policy term the death claim comprises of full sum
assured without deducting any of the survival benefit amounts which have already been
paid. The bonus is also calculated on the full sum assured. HDFC SLIC does not have a
money back policy. It could offer a money back plan and capture some portion of this
market. While marketing insurance products I found that many customers wanted to
purchase these plans.
LIC offers 66 different plans; plans are formulated for specific occasions – whole life
plans, term assurance plans, money back plan for women, child plans, plans for the
handicapped individuals, endowment assurance plans, plans for high worth individuals,
pension plans, unit linked plans, special plans, social security schemes – diversified
portfolio of products. HDFC SLIC could diversify its product portfolio. It could add more
plans for high worth individuals and women.
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.
27
• 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
Mission/vision:
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."
28
Vision
"A trans-nationally competitive financial conglomerate of significance to societies and
Pride of India."
Board of director:
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. Arun Ramanathan (Finance Secretary & Secretary (Financial Services),
Department of Financial Services, Ministry of Finance, Govt. of India)
Smt. Sindhushree Khullar (Secretary, Sport and Youth Affairs , Ministry of Sports
and Youth Affairs , Govt. of India)
Shri. Yogesh Lohiya (Chairman cum Managing Director, GIC of India)
Shri. T.C. Venkat Subramanian (Chairman & Managing Director. Export Import
Bank of India)
Information technology and lic:
29
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 year 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 .
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 computerization. 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.
METRO AREA NETWORK
A Metropolitan Area Network, connecting 74 branches in Mumbai was commissioned in
30
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.
WIDE AREA NETWORK
All 7 Zonal Offices and all the MAN centers 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
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.
LIC ON THE INTERNET
31
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
PAYMENT OF PREMIUM AND POLICY STATUS ON INTERNET
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.
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.
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 .
32
Awards:
Golden Peacock Innovative Product / Loyalty Awards - 2009

Service Award - 2009
CNBC Awaaz Consumer Awards 2008

Readers Digest Trusted Brand Award
2008 in the Platinum category.
33
NDTV Profit Business Leadership INDY's Silver Award for Best Corporate Film
Award 2008
INDY's Silver Award for Best in IT USER 2008 NASCOM

House Magazine
Business Superbrand India 2008 ASIA BRAND CONGRESS BRAND LEADERSHIP

AWARD 2008
34
Pitch Award -" Rank 1 " India's Top SKOCH Challengers Award 2008 for Jeevan Madhur
50 service Brands
Products Offered by LIC

1. Children policy:
What is children policy?
Children's insurance includes policies through which parents or legal guardians can
provide for life insurance for their child from birth. The risk cover commences from the
child attaining the age of 12 / 17 / 18 / 21 (known as the Date of Risk), and will vest itself
on the child upon his or her attaining majority on completion of age 21, if the case
demands so.
How is it beneficial to me?
Children’s policies are designed to enable a parent or a legal guardian of the child to
provide insurance cover for the child. With such policies, you as a parent will need to
pay the premium for your child’s policy depending on the plan and the term till your child
attains majority. The risk cover on your child could start from 7 yrs, 12, 18 or 21 years of
age depending on the plan taken.
35
Who should buy this plan?
Those, who plan to provide their child with life insurance cover for a future date when he
turns a major, can take children’s policies. The policy envisages two stages, one covering
the period from the date of commencement of policy to the deferred date that is the
commencement of the risk. No loans are granted against this policy during the deferment
period and no risk of death is covered until the child attains the prescribed age as per the
policy document.
Types of children policy:
• Komal Jeevan - Plan No. 159
• Children Deferred - Plan No.41
• Jeevan Kishore - Plan No.102
• Jeevan Chhaya - Plan No.103
• Marriage Endowment/Educational Annuity - Plan No. 90
• Jeevan Anurag - Plan No.168
• Komal jevan - plan no. 159
Features:
Under this children’s plan, the payment of premium ceases on policy anniversary
immediately after the child attains 18 years of age. The plan, besides offering risk cover,
also offers payment of Sum Assured in installments at age 18, 20, 22, 24 and
Guaranteed and Loyalty additions, if any, at 26 years of age.
Benefits:
36
The Sum Assured under this plan will be paid in installments at periodic intervals
provided the policy is in force for full sum assured as under:
20 percent of the Sum Assured on the policy anniversary immediately after the Life
Assured attains the age of 18 years.
Death Benefits:
In the event of unfortunate death during the term, after the commencement of risk but
before policy matures, the Sum Assured together with Guaranteed Additions is payable
without any deduction or adjustment for the amount that may have been paid earlier by
way of installment benefits.
37
Min Max
Entry Age 0 10
Sum Assured 100000 25,00,000
Term Not Applicable 50
Mode of Payment Max Maturity Age Policy loan available
Single, Yrly, Half-yly, 26 Years No

Qtly, Salary Savings
Scheme.
• Children deferred - plan no. 14:
Features:
This plan of assurance is designed to enable a parent or a legal guardian or any near
relative of the child to provide for the child, by payment of a very low rate of premium,
the risk under which will commence at a selected age.
Benefits-:
The policy will participate in profits from the date of commencement of risk at rates
applicable to Endowment Assurance. The life to be assured for which policy will have to
undergo full medical examination. The policy shall automatically vest in the life assured
as soon as he/ she attains majority. At the request of the proposer, the premium waiver
benefit is available under this plan. Additional premium required for this benefit will be as
per the table applicable to C.D.A plan except that the deferment period should be taken
as the period equal to 18 minus age at entry.
38
Death Benefits:
If the life assured dies the policy shall stand cancelled before the deferred date, and in
such event provided the policy is then in full force or in force for a reduced cash option,
a sum of money equal to all the premiums paid without any deduction whatsoever will
become payable to the person entitled to the policy moneys. It should be noted that
payment of premium does not cease on the death of the proposer during the deferment
period but must be continued during the currency of the policy.
Min
Max
Entry Age 0 17
Sum Assured 50000 No limit
Term 25 50
Mnthly, Qtly, Hlf Yly,Yly, SSS 65 years No
• Jeevan kishore - plan no. 102:
Features:
• High bonus from day one.
39
• Child becomes owner of the policy automatically at the age of 18 years.
• Risk commences after 2 years of policy or on completion of 7 years of age,
whichever is later.
• No medical examination of the child if age is less than 10 years.
• Jeevan chhaya- plan no .103:
Features:
• Ideal for parents having less than a year old child.
• Makes provision for education/ marriage of the child.
• Extra benefit of waiver of premium in case of death of the policy holder.
Benefits-
Short term needs like family provision in case of premature death of the policyholder
and long term needs like education and marriage of dependents are simultaneously
fulfilled by this policy. This Policy is the right choice if a person wants to provide for the
marriage of his daughter. The term can be fixed so as to receive the maturity benefit at
the marriageable age of the daughter. Example, If the policy is for 20 years then At the
end of 17th year - 25% of Sum assured is payable provided the policy is force. At the
end of 18th year - 25% of Sum assured is payable provided the policy is force. At the
end of 19th year - 25% of Sum assured is payable provided the policy is force.
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Death Benefits
Natural:
Besides the fixed benefits, an additional amount equal to the Sum assured will be paid
on the death of the policy holder. Future premiums, falling due from the policy
anniversary following the date of death will stand waived.
Accidental:
Payment of double the Sum assured + Fixed Benefit. Future premiums falling due from
the policy anniversary following the date of death will stand waived.
Min Max
Entry Age 18 40 (Nearer Birthday)
Term 18 25
Yly, Hlf-Yly, Qtly, Mthly, 65 (Nearer Birthday) No

SSS
• Marriage/ Endowment annuity- plan no. 90:

Feature:
41
The Marriage Endowment/ Educational annuity plan provides a sum assured to be kept
aside for the expenses of marriage or higher education of the policyholder's children.
Premiums payable for selected term or till death of the life Assured. Benefits will be
given only after the selected term.
Benefits:
(Sum Assured + Bonus) payable in lump sum. Or (Sum Assured + Bonus) payable in
10 half-yearly installments at the option of the life assured.
Death Benefits:
(Sum Assured + Bonus) payable in lump sum or in 10 half-yearly installments at the
option of beneficiary.
Accident:
Accident benefit equivalent to basic sum assured would be available by paying
appropriate additional premiums in that behalf. An amount equivalent to Sum Assured
become payable immediately.
Min Max
Entry Age 18 (last birthday) 60
Term 5 25
42
Mnthly, Qtly, Hlf Yly,Yly, 70 years Yes

SSS
• Jeevan anurag- plan no. 168:
Features:
LIC’s Jeevan Anurag Plan is a with profits plan under which benefits are payable at pre
specified durations irrespective of whether the Life Assured survives to the end of the
policyterm or dies during the term of the policy. In addition, the plan provides for an
immediate payment of Sum Assured under the Basic Plan on death of the Life Assured
during the term of the policy. This plan is therefore suitable to take care of the
educational and other needs of children.
Benefits:
Assured Benefits
Provided policy is in full force, an amount equal to 20% of the Sum Assured under the
Basic Plan at the start of every year during last 3 policy years before maturity shall be
payable. At maturity, 40% of the Sum Assured under the Basic Plan along with
Reversionary Bonuses declared from time to time for the full term and the Terminal
Bonus, if any, shall be payable.
Death Benefits
An amount equal to the Sum Assured under the Basic plan shall be payable immediately
on the death of the life assured during the term of the policy, provided the policy is in full
force.
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Min Max
Entry Age 20 60
5 yrs for Single Premium

Term 25
10 yrs for Regular Premium.
2. Endowment Policy:
What Is Endowment Policy?
Endowment policies cover the risk for a specified period at the end of which the sum
assured is paid back to the policyholder along with the entire bonus accumulated during
the term of the policy. It is this feature - the payment of the endowment to the
policyholder upon the completion of the policy’s term - which rightly accounts for the
popularity of endowment policies.
As compared to whole life policies, the premium rates for endowment policies are higher
and the bonus rates lower. The cost of an endowment policy is, typically, double that of
a whole life one. On the plus side, these polices offer you an endowment - representing
a return on your premium payments payable to you in your own lifetime when the policy
comes to an end.
44
Who should buy this Plan?
Overall, endowment policies are the most suitable of all insurance plans for covering the
risks to a family breadwinner’s life. Not only do these policies provide financial risk cover
for the family, were the policy holder to die prematurely but the insurance amount is also
repaid once this risk is over. The endowment amount can then be used for meeting
major expenditures such as children’s education and marriage, etc.
Types of endowment policy:
• Endowment with Profits - Plan no.14
• Limited Payment Endowment with Profits - Plan no.48
• Jeevan Mitra - Plan no.88
• New JanaRaksha Policy - Plan no.91
• Jeevan Anand Plan no. 149
• Jeevan Mitra Triple Cover - Plan no.133
• Endowment with profits - plan no. 14:
Features
• Moderate Premiums
• High bonus
• High liquidity
• Savings oriented
45
This 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 be
reinvested to provide an annuity during the remainder of his life or in any other way
considered suitable at that time.
Benefits:
Survival Benefits: Payment of full Sum Assured + Vested Bonus + Final Additional
bonus.
Death Benefits: Payment of full sum assured + Vested bonus.
Min Max
Entry Age 12 65
Term 5 55
• Limited payment endowment with profits plan no. 48:
Features:
Just as in the case of limited payment whole life polices, here, too, the payment of
premium can be limited either to a single payment or to a term shorter than the policy.
The endowment is, however, payable only at the end of the policy term, or upon death of
the policy holder if it takes place earlier.
46
Benefits:
Death Benefits
This is the most popular form of life assurance since it not only makes provision for the
family of the Life Assured in the event of his early death, but also assures a lump sum at
any desired age. The amount assured, if not paid by reason of his earlier death,
becomes payable at the end of the endowment term when it may be invested to provide
an annuity during the remainder of his life or in any other way he may think most
suitable at the time.
Min Max
Entry Age 12 65
Term 5 50
• Jeevan mitra - plan no 88:

Features:
The benefits of this policy are considered normally for standard and substandard lives
Class I and II. It cannot be allowed for people engaged in hazardous occupations.
Female lives under Category I & II allowed. Non-medical special is allowed only if the
Sum Assured does not exceed Rs.1, 00,000/-
Benefits:
Survival Benefits
Sum Assured + vested Bonus on the basic Sum Assured
47
Death Benefits
Double the Sum Assured + vested Bonuses on the basic Sum Assured O Double
Accident benefits, if taken and paid for will treble the amount of Sum Assured
Min Max
Entry Age 18 50
Term 15 30
Yly, Hlf Yly, Qtly, Mnthly,

70 Years Yes
SSS
• New janaraksha policies - plan no. 91:
Features:
Ideal for Farmers and Workers, since farmers have to depend on the vagaries of the
climate while workers are subject to changes in trade cycles, depressions, strikes, labor
disputes, etc Provides full life insurance cover for 3 years even when the premiums are
not paid. (This benefit is available after at least 2 years premiums are paid). Non-
medical General up to Rs.100, 000/- with declaration of age up to 40 without any extra
48
premium. On-medical Special is allowed up to a limit of Rs.2,00,000/- Accident benefit
available without payment of any extra premium.
Benefits:
Policy loan: Available.
Maturity Benefit
Payment of Sum Assured + Accrued bonus.
Death Benefits
Natural
Payment of Sum assured + Accrued bonus.
Accident/Permanent Disability
Payment of double the Sum Assured + Accrued bonuses on the Sum Assured as
defined on the policy document.
Income-tax rebate
Under section 88 on premiums paid.
100% income-tax free
Permanent disability, Maturity and Death Claims.
49
Min Max
Entry Age 18 50
Sum Assured (Medical Scheme) 30000 10,00,000
Sum Assured (Non-medical 30000 Rs 1,00,000

(General)
Sum Assured (Non-Medical 30000 Rs 2,00,000

(Special) )
Term 12 30
Yly, Hlf Yly, Qtly, Mnthly, SSS 70 Yes
• Jeevan Andan plan no 149:
Features:
Jeevan Anand is a With Profit Assurance Plan. It is a combination of the Whole Life Plan
and the most popular Endowment Assurance Plan. The plan provides the pre-decided
Sum Assured and Bonuses at the end of the stipulated premium paying term, but the
risk cover on the life continues till death.
Benefits:
Accident Benefit
50
The double Accident Benefit is available during the premium paying term and thereafter
up to age 70. The premium for this has been built into the tabular premium rates.
Maximum Accident Cover available under this plan will be Rs 5 lakh (this limit excludes
accident benefit taken under other plans).
Death Benefits
Sum Assured along with vested bonuses are payable on death during the premium
paying term and policy ceases. An amount equal to the Sum Assured is payable if death
occurs after the premium paying term. Simple Reversionary Bonus accrues during the
premium paying term and is payable at the end of the premium paying term or on earlier
death along with Final Additional Bonus, if any. No Bonus is paid on death after the
premium paying term.
Min Max
Entry Age 18 65
Sum Assured 1,00,000 No limit
Term 5 57
Yly, Hlf Yly, Qtly, Mnthly, 75 Yes

SSS
51
• Jeevan mitra triple cover plan - no. 133:
Features:
The benefits of this policy can be considered only for standard and substandard lives
Class I and II. It cannot be allowed for people engaged in hazardous occupations.
Individuals engaged in dangerous pursuits will be rated against the revised tabular
occupational extra rates.
Benefits:
Death Benefit
Three times the basic sum assured together with vested bonuses if any, will be payable
on death of the life assured during the term of assurance.
Accident Benefit
Accident Benefit equivalent to the basic sum assured would also be available as pre
existing rules. This would however, be subject to overall limit of Rs.5,00,000 in the
aggregate including existing policies and also the payment of appropriate additional
premiums in that behalf at the existing rate.
Min Max
Entry Age 18 50
Term 15 30
52
3. Group Insurance Policy:
What Are Group Insurance Plans?
Group Insurance offers life insurance protection under group policies to various groups
such as employer-employee, professionals, co-operatives, weaker sections of society
etc. It also provides insurance coverage to people under certain approved occupations
at the lowest possible premium cost. Besides providing insurance coverage, it also
offers group schemes to employers, which provide funding of gratuity and pension
liabilities of the employers.
How are they beneficial to me?
Group insurance plans have low premiums. Such plans are particularly beneficial to
those for whom other regular policies are a costlier proposition. Group insurance plans
extend cover to large segments of the population including those who cannot afford
individual insurance. As such the premier you need to pay is comparatively lower and at
the same time you can avail of insurance benefits.
Group insurance plans have low premiums. Such plans are particularly beneficial to
those for whom other regular policies are a costlier proposition. Group insurance plans
extend cover to large segments of the population including those who cannot afford
individual insurance. As such the premier you need to pay is comparatively lower and at
the same time you can avail of insurance benefits.
Types of group insurance policy:
• Janashree Bima Yojana
53
• Group Insurance Scheme in lieu of EDLI
• Group (Term) Insurance Scheme
• Group Savings Linked Insurance Scheme
• Group Mortgage Redemption Assurance Scheme
• Shiksha Sahayog Yojana
• Janashree bima yojana:
Features:
The scheme provides life insurance protection to the rural and urban poor persons
below poverty line and marginally above the poverty line. The premium under the
scheme is Rs.200/-per annum per member. 50% of the premium i.e. Rs.100/- will be
contributed by the member and/or Nodal Agency/State Government and the balance
50% will be borne by the Social Security Fund.
Benefits:
In the event of Death (other than by accident) of the member, an amount of Rs.20,
000/- is payable. In case of death/total permanent disability, due to accident, an amount
of Rs.50, 000/-is payable. In case of Permanent partial disability, due to accident, an
amount of Rs.25, 000/- is payable.
• Person should be below or marginally above poverty line
• Person should be a member of any of the approved vocation/occupation groups
54
Min Max
Entry age 18 59
Sum Assured Rs.20,000 Rs 50,000
Membership 25 -
• Group insurance scheme in lieu of EDLI:
Features:
All employees to whom the Employee's Provident Fund and Miscellaneous Provision
Act, 1952 applies, have a Statutory liability to subscribe to Employee's Deposit Linked
Insurance Scheme, 1976 to provide for the benefit of Life insurance to all their
employees.
Benefits
To The Employer:
• The premium payable by the employer is usually less than the total contribution
being paid by the employer to R.P.F.C; particularly when the salary level is high
and average age of the group is low.
• Settlement of claim is quicker; LIC requires only the death certificate and the
Claim Form from the employer.
• Premium paid by the employer is treated as normal business expenses for
Income-Tax purpose. The contribution @ 0.50% of each employee's salary is
payable by the Employer to the Provident Fund Authorities.
To The Employee:
55
Each employee is covered for a sum assured ranging between 5,000 to 62,000
depending upon the current salary and service put in from day one irrespective of the
actual balance in the Provident Fund. Alternatively every employee/ worker can be
covered for a uniform sum assured of Rs.62, 000.
Minimum Membership Max.Sum Assured Graded
20 Flat-62,000 **(5,000 - 62,000)
Group ( term) insurance scheme :
Features:
Group (Term) Insurance Scheme provides life insurance protection to groups of people.
Administration of the scheme is on group basis and cost is very low. Under Group
(Term) Insurance Scheme, life insurance cover is allowed to all the members of a group
subject to some simple insurability conditions without insisting upon any medical
evidence
Benefits:
Tax Benefits
The premiums paid by the employer are allowed as business expenses and the
amounts are not treated as perquisites in the hands of the employees. The
premiums paid by the members are eligible for income-tax rebate under Section
88. The benefits paid under the scheme are tax-free.
Death Benefits:
56
Double Accident Benefit:
Double Accident Benefit, i.e. payment of double the sum assured on death due to
accident (without permanent disability benefit), may be allowed under Group Insurance
Schemes for an extra premium Rs. 0.75 per Thousand Sum Assured per annum.
Double accident cover under all Group Schemes taken together should not exceed Rs.
4.5 lakhs.
• Group saving linked insurance scheme:
Features:
The Group Savings Linked Insurance Scheme (GSLI) offers insurance cover together
with a savings element. The contribution under this scheme is deducted from the
monthly salary of the member. The scheme is govt. bodies, Public Sector Corporations
and reputed companies in public and private sectors who keep accurate records of their
employees. Under the scheme, out of the contribution received in respect of each
employee, a portion is utilized for the insurance cover and the balance, known as
contribution for savings, is accumulated till exit at an attractive rate of interest, For
policies where policy-anniversary falls after 1.1.2000 the current rate is 10% p.a. The
amount apportioned from the monthly contributions towards insurance premium will be
determined on the basis of the nature of the group, occupation, age composition of
members etc. The savings contribution is returned with interest at the time of retirement,
or exit by any other mode. In case of death during service the amount for which the
member was covered at the time of death is also paid along with accumulated saving
Benefits
Accident Benefit:
57
Double accident benefit can be allowed to the extent of the Sum Assured for an extra
Premium @ Rs. 0.75 per thousand Sum Assured per annum. Double accident cover
under all groups Scheme taken together should not exceed Rs. 4.5 lacks.
Tax benefits:
Employees' total contribution, savings as well as risk premium is entitled for income-tax
rebate under Sec. 88 of the Income Tax Act. The entire claim amount including interest
earned payable on retirement or leaving service or on death is free from income tax. The
premium paid by the employer towards insurance cover is treated as business
expenses.
No of eligible employees on date of Minimum participation required

commencement of Scheme
Upto 500 75% of eligible employees
501 - 2500 70% but not less than 375
2501-10000 65% but not less than 1750
10000 & above 60% but not less than 6500
The insurance cover available to them is as below:
Category of Maximim limit of Cover available

employees
Group Size
25-99 100-499 500-1999 2000&above
Sr. Management 200000 280000 400000 450000
58
Middle Management 140000 225000 280000 315000
Clerical Staff 90000 140000 200000 225000
Sub-staff & workers 45000 70000 90000 100000
• Group Superannuation Scheme:
Features:
Under such a scheme the employer contributes a certain fixed percentage of salary,
which is, accumulated by LIC and the accumulated amount is utilized to provide various
benefits as mentioned below. The maximum annual contribution that an employer can
make to the Pension Fund and Provident Fund is restricted by the Income Tax
Provisions to 27% of the annual salary (basic plus D.A.) The annual contributions are
treated as deductible business expenses.
• Group mortgage redemption assurance scheme:
Features:
Group Mortgage Redemption Assurance Scheme is a Group Insurance Scheme for the
borrowers of Housing/Vehicle Loans from Financial Institutions where Loan is recovered
under EMI.
Benefits:
Insurance cover every year will be equal to the loan outstanding at the anniversary date
of each borrower.
59
• Existing Borrowers can join the scheme within 6 months of the commencement
of scheme.
• No accident Benefit is available under the scheme.
Min Max
Entry Age 18 60
Sum Assured - 50 lakh
Term 3 -
Maturity - 65 yrs
• Shiksha sahayog yojana:
Features:
This is a scholarship scheme launched on 31.12.2001 for the benefit of children of
members of Janashree Bima Yojana.
Benefits:
Scholarship of Rs 300/- per quarter per child will be paid for maximum period of 4 years.
The benefit is restricted to two children per member (family) only.
60
Students studying in ix to xii standards, whose parents are covered under Janashree
Bima Yojana are eligible. If a student fails and is detained in the same standard, he will
not be eligible for scholarship for the next year in the same standard.
4. Joint Life Policy:
What is Joint Life Policy?
Joint life policies are similar to endowment policies in as much as these policies also
offer maturity benefits to the policyholders, apart from covering the risks as all life
insurance policies.
Under a joint life policy the sum assured is payable on the first death and again on the
death of the survivor during the term of the policy. Vested bonuses would also be paid
besides the sum assured after the death of the survivor. If one or both the lives survive
to the maturity date, the sum assured as well as the vested bonuses are payable on the
maturity date.
Particularly for couples - Joint life policies provide dual-purpose income and risk
protection for both belonging to every income group and class of society. Under a joint
life plan though the premium payment stops after the first life's death, bonuses continue
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to accrue on the basic Sum Assured till Maturity Date or till the death of the second life,
if earlier.
Types of joint life policy:
• Jeevan Saathi - Plan no.89:
Features:
This policy is issued on the lives of the husband and wife provided the female's life
belongs to Category I or is actively engaged in her spouse's business.
Benefits:
Survival Benefits:
If one or both the lives survive to the maturity date, the sum assured, along with the
accumulated bonus, is payable.
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 on the
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 the
husband 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.
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Min Max
Entry Age 20 50
Term 15 30
5. Money Back Policy:
What is Money Back Policy?
Unlike ordinary endowment insurance plans where the survival benefits are payable only
at the end of the endowment period, money back policies provide for periodic payments
of partial survival benefits during the term of the policy, of course so long as the policy
holder is alive.
Under money back policies premiums can be paid as per the insurance company’s
policy. These could be quarterly, half yearly or annually. The premiums for these policies
are payable for the selected term of years, or till death if it occurs earlier. By buying such
policies one can receive income at regular intervals other than the risk cover it provides.
Also a good amount of bonus on the full sum assured is quite a good bargain.
Such plans are particular popular with individuals for whom income at regular intervals is
a necessity in addition to an insurance cover. The minimum age is 12 years to be
eligible for a Money-Back Policy.
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Types of money back policy:
• Money Back with Profit - Plan no.75
• New Money Back - Plan no.93
• Jeevan Surabhi 15 yrs - Plan no.106
• Jeevan Surabhi 20 yrs - Plan no.107
• Jeevan Surabhi 25 Yrs – Plan no.108
• Jeevan Bharti – Plan no. 160
• Jeevan Samriddhi - Plan No. 154, 155, 156 157
• Bima Bachat- Plan no.175
• Money back with profits - plan no. 75:
Features:
holder is alive Unlike ordinary endowment insurance plans where the survival benefits
are payable only at the end of the endowment period, this scheme provides for periodic
payments of partial survival benefits as follows during the term of the policy, of course
so long as the policy.
Benefits:
Survival Benefits:
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Period Sum Assured for 20 years' Sum Assured for 25 years'
term term
5 Years 20 percent 15 percent
20 Years 40 percent + Bonus 15 percent
25 Years - 40 percent + Bonus
• New money back - plan no. 93:
Features:
Fixed percentage of sum assured paid periodically. This policy enables you
to satisfy important financial needs like children’s education or marriage,
long awaited holiday, purchase of car, scooter, TV etc.
Benefits:
Death Benefits:
Full sum assured + bonus irrespective of survival benefits take
• Jeevan surabhi plan - no. 106:
Features:
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This plan was introduced in Oct 92 by LIC and is a modified version of other money
back plans offered by LIC. The difference between the other money back plans and
Jeevan Surabhi plans are that
• Maturity term is more than premium paying term.
• Early and higher rate of survival benefit payment.
• Risk cover increases every five years.
Benefits:
Death Benefits:
If death occurs at anytime during the term of a policy (provided the policy has been kept
in force by payment of all premiums that had fallen due), the basic sum assured along
with the vested bonus will be paid. The survival benefits already paid, if any, will not be
deducted from this claim amount. An additional amount (depending on the duration of
the policy) will also be paid on death under such a policy.
• Jeevan surabhi plan - no. 107:
Features:
back plans offered by LIC. The difference between the other money back plans and this
plan is as follows
• sEarly and higher rate of survival benefit payment.
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Benefits:
Death Benefits
with the vested bonus will be paid. The survival benefits already paid, if any, will not be
deducted from this claim amount. An additional amount (depending on the duration of
the policy) will also be paid on death under such a policy.
• Jeevan surabhi - plan no. 108:
Features:
back plans offered by LIC. The difference between the other money back plans and this
plan is as follows
• Early and higher rate of survival benefit payment.
Benefits:
Death Benefits
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with the vested bonus will be paid. deducted from this claim amount.
• Jeevan bharati - plan no. 160:
Features:
This is an exclusive money back plan for women. This plan offers free insurance cover
for three years if first two years premium has been paid.
Benefits:
Survival benefits:
20 % of the Sum Assured at the end of 5/10 /15 years for 20 year term (balance payable
on maturity plus Guaranteed Additions plus bonus, if any) Guaranteed Additions @ 50/-
thousand Sum Assured for first five years. 20 % of the Sum Assured at the end of 5/10
years for 15 year term (balance payable on maturity plus Guaranteed Additions plus
bonus, if any)
Death Benefits:
Full Sum Assured irrespective of all earlier survival benefits paid plus Guaranteed
Additions plus bonus, if any)
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Min Max
Entry Age 18 50
Sum Assured 50,000 25,00,000
Term 15 20
• Jeevan samriddhi - plan no. 154 155 156 157:
Features:
Jeevan Samriddhi, a money back plan gives Guaranteed Addition as well as loyalty
addition (if any).
Death Benefits:
On death of the life assured during the term of the policy, the basic Sum assured is
payable irrespective of survival benefits already paid. In addition to the basic Sum
Assured, Guaranteed and Loyalty additions if any, as per provisions herein below are
also payable. On death due to accident during the term of the contract and provided the
policy is in full force on the date of death an additional sum equal to the basic Sum
assured will be payable.
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Min Max
Entry Age 14 Plan 154 58
Plan 155 55
Plan 156 50
Plan 157 45
Term 12
6. Pension Plan and Annuities:
What is Annuity?
An annuity is an investment that you make, either in a single lump sum or through
installments paid over a certain number of years, in return for which you receive back a
specific sum every year, every half-year or every month, either for life or for a fixed
number of years.
By buying an annuity or a pension plan the annuitant receives guaranteed income
throughout his life. He also receives lump sum benefits for the annuitant’s estate in
addition to the payments during the annuitant’s life time.
An individual, who after retiring from service has received a large sum from his
Provident Funds, should invest the proceeds in a pension plan or annuity fund available
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in the market since it is the most satisfactory method of providing a safe and secured
income for the rest of his life.
How do I pay for an annuity?
Annuities are paid for:
• Either through a single premium OR
• Through installment payments that are annual in most cases
How do I receive payments from an annuity?
Life annuity
The first is a life annuity, which guarantees you a specified amount of income for your
life. On death, the annuity payments cease but your investment is refunded to your
estate.
How do I evaluate an annuity?
Since annuities are not life insurance policies, we cannot evaluate them as we evaluate
other policies. Unlike life insurance policies which cover the risk of the premature death
of a family’s breadwinner, annuities should be evaluated just like any other investment
option, i.e. on the four-fold criteria of safety, profitability, liquidity and ready availability of
your invested capital in case of need, and capital appreciation.
Types of pension plan:
• New Jeevan Dhara - Plan no.148
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• New Jeevan Suraksha - Plan no. 147
• Jeevan Akshay II - Plan no. 163
• Jeevan Nidhi - Plan no. 169
• Jeevan Akshay V - Plan no. 183
• New Jeevan Dhara - Plan No. 148:
Features:
This pension plan is a vehicle for planning a lifelong pension and is also tax deferred.
Not only can you plan a pension for life with the help of these annuities but these
schemes also help you reduce your tax liability.
Benefits:
On vesting:
The Notional Cash Option together with Reversionary Bonuses and Final additional
Bonuses ( if any ) with or without 25% commutation will be compulsorily converted into
annuity having following options.
Annuity for life:
Annuity for life with guaranteed period of 5, 10, 15, 20 years. Joint life and last survivor
annuity to the annuitant and his/her spouse under which annuity payable to the spouse
on death of the purchaser will be 50% of that payable to the annuitant.
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Min Max
Entry Age 18 65
Vesting Age 50 79
Deferment Period 2 years 35 years.
Notional cash Single premium Annual premium

option
Minimum Rs. 50,000 for regular Rs. 10,000/- Rs. 2500

premium policies
• New Jeevan Suraksha - Plan No. 147:
Features:
This pension plan is a vehicle for planning a lifelong pension and is also tax deferred.
Not only can you plan a pension for life with the help of these annuities but these
schemes also help you reduce your tax liability.
Benefits:
The Notional Cash Option together with Reversionary Bonuses and Final additional
Bonuses (if any) with or without 25% commutation will be compulsorily converted into
annuity having following options.
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Min Max
Entry Age 18 70
vesting age 50 79
deferment period 2 years 35 years.
Notional cash Single premium Annual premium

option
Minimum Rs. 50,000 for regular Rs. 10,000/- Rs. 2500

premium policies
• Jeevan Nidhi - Plan no. 169:
Features:
LIC of India has decided to withdraw the immediate annuity Plan, New Jeevan Akshay-
III (Plan No.170) with effect from 17th March, 2006 and instead replace it with a its new
plan - Jeevan Akshay – IV.
Benefits:
Survival Benefits
the first installment of annuity shall be paid one year, six months, three months or one
month after the date of purchase of the annuity depending on whether the mode of
annuity payment is yearly, half-yearly, quarterly or monthly respectively.
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Minimum Age at
40 years last Birthday
entry
Maximum Age at
79 years last Birthday
entry
Minimum Rs.50,000/- or such amount which may secure a minimum annuity

Purchase Price of Rs.3,000/- p.a.
Minimum Annuity Installment: Rs.250/-per month, Rs.750/- per quarter, Rs.1,500/- per
half-year, Rs.3,000/-per year.
• Jeevan Akshay V - Plan no. 183:
Features:
It has been decided to withdraw the Immediate annuity Plan, LIC’s Jeevan Akshay- IV
(Plan No.176) with effect from 20th September, 2006 and introduce a New Plan - LIC’s
Jeevan Akshay – V in its place.
Benefits:
Survival Benefits
The first installment of annuity shall be paid one year, six months, three months or one
month after the date of purchase of the annuity depending on whether the mode of
annuity payment is yearly, half-yearly, quarterly or monthly respectively.
7. Special plans:
What are Special Plans?
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Special plans are insurance policy plans available from the national insurance providers
to serve the needs of citizens that cannot be commonly classified or segregated.
Since special plans are designed for people with diverse and specific needs, the
average citizen may not necessarily need or use them.
Who should buy these plans?
Special plans should be bought by people after carefully scrutinizing their lifestyles and
circumstances.
Types of special plans:
• Term Assurance - Plan no.43
• Mortgage Redemption - Plan no.52
• Jeevan Aadhar - Plan no.114
• Market Plus - Plan No. 181
• Jeevan Vishwas Plan No. 136
• Jeevan Saral Plan no. 165
• Jeevan Pramukh Plan No. 167
• Bima Nivesh 2005 - Plan No. 171
• Money Plus-Plan - No. 180
• Term Assurance - plan no. 43:
Features:
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The Two Year Temporary Assurance policy is designed for the insuring public who
requires risk cover for only two years.
Benefits:
Survival Benefits:
Not applicable
Death Benefits:
Total sum assured
• Mortgage Redemption - plan no. 52
Features:
The Mortgage Redemption Assurance policy (without profits) plan is designed to meet
the requirements of the policy holding individual who seeks to ensure that all his
outstanding loans and debts are automatically paid up in the event of his demise.
Benefits:
Survival benefits: Nil
Death benefits:
All outstanding loans declared at the beginning of the financial year would be payable as
per the prepared schedule.
• Jeevan adhar - plan no. 114:
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Features:
This Plan has been specially designed to make provision for maintenance of
handicapped dependants. Under the Jeevan Aadhar plan, an individual or member of a
Hindu undivided Family can take an assurance on his/her own life to provide for
payment of a lump sum and an annuity to the handicapped dependant.
The payment will be made to the nominee under the policy, who will be either the
handicapped dependant or any other person or a trust, all for the benefit of the
handicapped dependant.
Benefits:
Survival benefits:
Sum Assured + 10 percent guaranteed addition of the sum assured on an annual basis.
Death benefits:
In the event of handicapped dependant predeceasing the life assured during the term of
the policy the contract ceases and the life assured will have the option of keeping the
policy for a reduced paid-up sum assured or receive a refund of premiums paid
(excluding extra premiums and accident benefit premium if any). The reduced paid up
sum assured including any guaranteed and terminal addition as applicable will be paid
as lump sum to the estate of the life assured on the death of the life assured.
• Jeevan vishwas - plan no. 136:
Features:
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This plan is Endowment with guaranteed and loyalty additions. Guaranteed Additions at
the rate of Rs.60 % of basic sum assured will accrue at the end of each completed
policy year while the policy is in force for full sum assured and will be payable on the
date of maturity or on earlier death of the life assured.
Benefits:
Accident Benefit:
This benefit can be allowed only under annual premium policies, subject to underwriting
restrictions. The accident and disability benefits will be paid as per the usual LIC
practice.
Survival benefits:
Basic sum assured together with accrued guaranteed additions and loyalty additions, if
any will be payable on the life assured (proposer) surviving the date of maturity of the
policy.
Death Benefits:
On death of the life assured during the term of the policy, Basic sum assured together
with accrued guaranteed additions and loyalty addition, if any will be payable.
• Jeevan saral - plan no. 165:
Plan Details: This plan is appropriate for employees seeking life cover through Salary
Savings Schemes.
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Eligibility:
Minimum Maximum
Age 12 Yrs (completed) 60 Nearest Birthday
Term 10 35
Age at maturity Maximum 70 years
In case of term rider, minimum and maximum age of entry will be 18 and 50 years
respectively. Further minimum sum assured will be Rs.1 lakh.
Death Benefit
On death of the Life Assured during the term of the policy an amount equal to the Sum
Assured along with accrued Guaranteed Additions and vested Simple Reversionary
Bonuses and Terminal Bonus, if any, shall be payable provided the policy is in full force.
• Bima Nivesh - Plan no.171
Features:
Bima Nivesh 2005 plan (Plan No.171) will replace Bima Nivesh 2004. This
plan is available for terms 5 and 10 years only. The Single Premium per
thousand Sum Assured is Rs.995/- for term 5 years and Rs.976/- for term 10
years.
8. Term Policy:
What is Term Policy?
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Term policies; cover only the risk during the selected term period. If the policyholder
survives the term, the risk cover comes to an end.
Term policies are an ideal option if you are unable to pay the larger premium required
for a Whole Life or Endowment policy, but hope to be able to pay for such a policy in the
near future.
A Term plan is particularly beneficial for people who are initially unable to pay the larger
premium required for a whole life or an endowment assurance policy.
Types of Term Policy:
• Convertible Term Assurance - Plan no.58
• New Bima Kiran
• Term Assurance
• Anmol Jeevan I - Plan No . 164
• Amulya Jeevan-Plan No.177
• Convertible Term Assurance - Plan no.58:
Features:
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This plan of assurance is designed to meet the needs of those who are initially unable to
pay the larger premium required for a Whole Life or Endowment Assurance Policy, but
hope to be able to pay for such a policy in the near future. This plan would be found
useful also in cases where it is desired to leave the final decision as to the plan to a later
date when, perhaps a better choice could be made.
Benefits:
Survival benefits: Nil
Death Benefits:
The sum assured is payable only in the event of death of the Life Assured before the
expiry of the specified term.
• New Bima Kiran:
Features:
• Maximum risk covers with minimum premium (up to 10 lakhs).
• Free insurance cover after maturity for a period of 10 years.
Benefits:
Survival benefits:
Return of total premium + Loyalty Addition + 10 years free insurance cover (both
according to duration of the policy)
Death Benefits:
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If death occurs, full sum assured + Loyalty Addition if policy has completed at least 4 yrs
and kept in force.
• Term Assurance:
Features:
This two year temporary Assurance policy is designed for those who need a risk cover
for a maximum of two years.
A single premium is required to be paid at the outset of the policy to cover the entire
period of term.
Benefits:
Survival benefits: Not applicable
Death Benefits: Total sum assured.
• Anmol Jeevan I - Plan No. 164:
Features:
This pure Term Assurance plan provides risk cover at a low-cost to the policyholder.This
without profits term plan is also available to female lives (category I and II lives only) and
to physically handicapped persons subject to certain conditions.
Benefits:
Survival benefits on Maturity: Nil
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On Death during the Term of the Policy: Sum Assured 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 continued insurability 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.
• Amulya Jeevan-Plan No.177
Features:
LIC’s ‘Amulya Jeevan’ Plan (Plan No. 177) is a pure term assurance plan. It
provides financial security to the policyholder's family (nominee) if he fails to
survive the term of the policy.
9. Whole life policy:
What is Whole Life Policy?
A typical whole life policy runs as long as the policyholder is alive. In other words, the
risk is covered for the entire life of the policyholder, which is why they are known as
whole life policies.
The policy monies and the bonus are payable only to the nominee of the beneficiary
upon the death of the policyholder. The policyholder is not entitled to any money during
his or her own lifetime, i.e. there is no survival benefit.
Whole Life Policy can be a good initial policy to buy since its cost is very low. That is an
important consideration when one is just starting a career.
84
Whole Life Policy can be a good initial policy to buy since its cost is very low. That is an
important consideration when one is just starting a career.
Types of Whole life policy:
• Whole Life With Profits – Plan no.2
• Limited Payment Whole Life with Profits - Plan no.5
• Single Premium Whole Life– Plan no. 8
• Jeevan Tarang- Plan no.178
• Whole life with profits:
Features:
This policy covers the risk as long as the policyholder is alive. The premium is also
payable throughout your lifetime. If the payment of premiums ceases after three years, a
free paid-up policy for such reduced sum will be automatically secured provided the
reduced sum assured, exclusive of any attached bonus is not less than Rs.250/- Such a
reduced paid-up policy is not entitled to participate in the profits declared thereafter but
the bonuses already declared on the policy will remain attached, provided the policy is
converted into a paid-up after premiums are paid up for 5 years.
Benefits:
Survival Benefits
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Sum assured plus accrued bonuses and the terminal bonuses, if any; on the
policyholder attaining age 80 years or on expiry of term of 40 years from the date of
commencement of the policy whichever is later.
Death Benefits
Sum assured plus accrued bonuses and the terminal bonuses, if any, on the death of
the policyholder are paid to his/her nominees/heirs.
• Ltd Payment whole life - Plan no. 5:
Features:
This is the best form of life assurance for family provision since it enables the Life
Assured to pay all the premiums during the ordinarily vigorous and most productive
years of life. He need not pay any premium in the later stages of life if and when his
conditions might become adverse.
Benefits:
Survival Benefits:
If the Life Assured survives the premium paying period and the policy continues in full
force, provided all premiums have been paid, but no further premiums are required to be
paid.
Death Benefits:
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Sum Assured plus Bonuses accrued and vested in the policy
• Single premium whole life - plan no. 8:
Features:
This is the best form of life assurance for family provision since it enables the Life
Assured to pay all the premiums during the ordinarily vigorous and most productive
years of life, relieving him from the necessity of making payments later in life when they
might become a burden.
Benefits –
Death Benefits
Premiums are payable one time only. If the Life Assured survives the stipulated term of
the policy, the Policy continues in full force, and full sum assured (with or without bonus)
will be paid on death.
• Jeevan trang - plan no. 178:
Features –
This With-Profit plan is a combination of Whole life and Money back plan. The policy
provides for annual survival benefit at a rate of 5.5% of the Sum Assured for lifetime
after the chosen Accumulation Period. Under this policy, Life cover is available up to age
100.
Benefits:
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Death Benefit:
The Sum Assured, along with bonuses is payable in case of death of the Life Assured
during the Accumulation Period.
COMPANY PROFILE
88
Birla Sun Life – A Coming Together Of Values
Birla Sun Life is a joint venture between The Aditya Birla Group, one of the largest
business house in India and Sun Life Financial Inc., a leading International Financial
Services Organization. The local knowledge of the Aditya Birla Group combined with the
expertise of Sun Life Financial Inc. offers a formidable protection for our future.
The Aditya Birla Group is led by its chairman- Mr. Kumar Manglam Birla. The Group has
over 88000 employees across all its units worldwide. Some of the key organizations with
the group are Hindalco, Grasim, Aditya Birla Nuvo, etc.
The group is India's leading business house with a number of key organizations. These
are as follows:
1. Grasim
2. UltraTech Cement Ltd
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3. Hindalco
4. Indian Aluminium Company Ltd
5. Aditya Birla Nuvo
6. Idea Cellular Ltd.
7. Birla Sun Life Insurance Co.Ltd
8. Birla Sun Life Asset Mgmt. Co.Ltd
9. Birla Sun Life Distribution Co. Ltd
10. PSI Data Systems
11. Indo Gulf Fertilizers Ltd.
12. Birla Global Finance Ltd
Sun Life Financial Inc. and its partners today have operations in key markets worldwide,
including Canada, the United States, the United Kingdom, Hong Kong, the Philippines,
Japan, Indonesia, India, China and Bermuda. Sun Life Financial Inc. is a leading player
in the life insurance market in Canada.
Share Holding Pattern:
In Birla-Sun Life, the two companies are having shareholding pattern as follows:
74 %--> Aditya Birla Group
26 %--> Sun Life Financial Inc.
The group has 3 businesses:
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1. Mutual Funds
2. Wealth Management
3. Life Insurance
Birla Sun Life Insurance co ltd. is the Life-Insurance arm of Birla-Sun Life
Birla Sun Life Insurance in its 7 successful years of operations has contributed
significantly to the growth and development of life insurance industry in India. It
pioneered the launch of Unit Linked Life Insurance plans amongst the private players in
India. It was the first player in the industry to sell its policies through the Bancassurance
route and through the Internet. It was the first private sector player to introduce a Pure
Term plan in the Indian market. This was supported by sales practices, which brought a
degree of transparency that was entirely new to the market. The process of getting sales
illustrations signed by customers, offering a free look period on all policies, which are
now industry standards were introduced by BSLI. Being a customer centric company,
BSLI has covered more than a million lives since inception and its customer base is
spread across more than 1000 towns and cities in India. All this has assisted the
company
in cementing its place amongst the leaders in the industry in terms of new business
premium income. The company has a capital base of more than Rs.672 crores.
Many ONEs with Birla Sun Life Insurance:
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BSLI is a company that has a very unique contribution in the history of Insurance sector.
The company not only has varying plans and funds, rather also is a pioneer in many
aspects. These pioneering features of BSLI are as follows:
1. Free Look Period: BSLI offers its policyholders with a free look period of 15
days. Client gets freedom to have an in-depth look over all the terms and
conditions regarding his/her life-insurance policy. If he finds policy not worth
opting for, he can also return the policy, but at BSLI, co. people ensures this not
to happen.
2. Bancassurance: BSLI pioneered Bancassurance in India. Bancassurance
means to include Banks as one of the distribution channels with the company.
BSLI is the first company, which realized that banks, with their huge customer
base and strong customer loyalty, are a readymade platform to acquire new
business on a more cost effective and sustainable basis.
3. Unit Linked Life Insurance Plans: BSLI was the first in India to introduce Unit
Linked Plans. A ULIP is an auspicious coming together of security from life
4. insurance and earnings from investment. Which means, apart from securing the
future they offer efficient returns. These plans provide the customer with a
certain number of units, in the same way as a mutual-fund holder gets units.
ULIPs offer market-linked returns to policyholders.
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5. Sales Illustrations: BSLI is the first company to introduce Sales Illustrations in
the Insurance Industry. Sales people of BSLI give demonstrations of fund
6. Performance on two points of projections i.e. on 6% and 10%. Now IRDA has
also made it mandatory to have sales illustrations.
BSLI’s has launched Century SIP, a unique systematic investment plan offering an
opportunity to create wealth with as little as Rs 1000 per month plus a life insurance
cover of up to 100 times the monthly installment.
This plan comes along with free term insurance for an individual up to 55 years of age.
The life insurance cover comes at no extra cost to the investor. The cover is hassle
free. The investor need not go thru any medial test to avail of the life cover. All an
investor needs to do is enroll for CSIP & sign a “Declaration of Good Health”. In case of
unfortunate demise of investor the insurance claim will be directly paid to the nominee
by the insurance company (Birla Sun Life Insurance Company).
Announcing the launch of Century SIP, Anil Kumar, CEO, and Birla Sun Life MF said,
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“This offering touches all aspects of an investor’s financial planning needs. We wish to
encourage the investment habit among investors by providing them life insurance
cover.”
Insurance cover to the investor would continue even after the SIP’s minimum maturity
tenor of 3 years. Any individual between 18 to 46 years of age may invest in this plan.
Investment in this plan may be made through Electronic clearing system (ECS), direct
debits or post dated cheques.
7. Others: Some other ONEs with BSLI are:
 1st to issue daily NAVs of funds for better transparency.
 1st to have a distinct CRISIL benchmark.
 1st to disclose portfolio on a monthly basis.
 Policyholders can view their policy details online; they can be accessed
from BSLI website using your unique password.
 Out of every 100 claims intimated to BSLI 98.28 stands cleared.
 Also the average Turn Around Time (TAT) :
(i) From the receipt of the last requirement till dispatch of
cheque is 5 days and
(ii) From intimation of claim till its decision & dispatch of cheque
is 36 days.
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VISION
To be a world class provider of financial security to individuals and corporates and to be
amongst the top three private sectors life insurance companies in India.
MISSION
To be the first preference of our customers by providing innovative, need based life
insurance and retirement solutions to individuals as well as corporates. These solutions
will be made available by well-trained professionals through a multi channel distribution
network and Superior technology.
Our endeavor will be to provide constant value addition to customers throughout their
relationship with us, within the regulatory framework.
We will provide career development opportunities to our employees and The highest
possible returns to our shareholders.
VALUES
 Integrity: Honesty in every action.
 Commitment: Deliver on the promise
 Passion: Energized action
 Seamlessness: Boundary less in letter & spirit
 Speed: One step ahead alway
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Sales Procedure of Insurance in BSLI:
BSLI ensures that its policyholders get the best out of the policy offered to them by their
Advisors. For this, BSLI follows a set procedure of selling Insurance to the clients. The
sales procedure can be diagrammatically presented as follows:
SUSPECTING
PROSPECTING
APPOINTMENT
FIRST SALES
CALL
FOLLOW UPS
SALES CLOSED
OFFICE WORK
96
This procedure can be stepped down as follows:
1. Pitching the customer: The first and foremost thing is that, client should be ready to
purchase the Insurance plan. Insurance is not a very preferable product yet in India.
And,
thus, co. has to be very vigilant. Advisors, at BSLI, maintain relationships and make the
most of their Goodwill. Insurance is a Relationship oriented business. Keeping this in
mind BSLI also initiated Bancassurance, where Banks’ image of being loyal to the
customers, plays a major role in pitching the customer to buy Insurance. BSLI uses
following routes for distributing their Product to general public:
a. Direct Personal Contacts (through Advisors)
b. Bancassurance (through Banks)
c. Personal Relations (through co. employees)
d. Existing Policyholders.
2. Sales Illustration: BSLI is the first company to give demonstration of the fund
performance i.e. how a certain policy will perform or will give returns. BSLI Advisors
give sales illustration. Fund performance is shown on 6% and 10% projections. If
client find these projected returns suitable to his/her risk profile, he go for purchasing
the policy.
3. Proposal Form: Now as client is ready to get insured, advisor gives him the
proposal form and asks for all the documents required. Proposal form is a 4 page
document that contains all the necessary information related to the Insured and the
Owner of the policy. Documents required along with the proposal form are:
 Date-Of-Birth Proof
97
 Address & ID Proof
 Income Certificate
 Medical Certificates (only if Insurer is a senior citizen)
4. After Sales Service: Now after the Insurance is sold, follow-ups are required.
Advisor needs to maintain good relations with the policyholder. Insurance co. can
Generate further business, only if, existing policyholders are satisfied with the
services being provided by the advisor of the co. Thus, BSLI keeps this in mind and
Business Development Executives continuously track the needs of the policyholders.
BSLI provides the policyholders with monthly updates of the fund performance and
also discloses the asset portfolio of the fund. This assists the policyholders to
manage their policy according to their risk profile. They can, thus, change their fund
allocation as well as the asset allocation in any fund, chosen by them.
COMPANY PRODUCTS / PLANS
1- Flexi Plans
Flexi Plans have three variants. These variants are:
1. Flexi Save Plus (Endowment Plan)
2. Flexi Cash Flow (Money Back Plan)
3. Flexi Lifeline (Whole of Life Plan)
Features:
• This is a Unit Linked Plan with guaranteed returns.
98
• Provides flexibility with Top-Up Facility.
• For Quarterly modal premium less than Rs.5000, payment can be made
through ECS.
• Policyholder can attach riders to the plan according to his/her needs.
• Liquidity in the form of Partial withdrawals.
• Three Investment Fund options are available with the policy and
policyholder is free to switch between funds anytime during the tenure of the
policy.
• The Sum Assured may be increased once in every 5 policy years,
starting from the 6th policy year.
• Premium can be paid annually, semi-annually, quarterly and monthly
Premium Invested: Collected Premium is invested in three Investment Fund Options.
These funds are:
1. Protector
2. Builder
3. Enhancer
Benefits:
1. Maturity Benefits: At maturity, Policyholder gets the higher of the guaranteed
fund value (min. 3% on premium) or the Total Fund value.
2. Survival Benefits:
(i) At the end of every 5th Coverage Benefit Period and the remainder on
maturity, an amount equals to the minimum of (a) or (b) mentioned below will
be reduced from the guaranteed fund value and transferred to the holding
account for the purpose of partial withdrawals, where-
99
(a) Guaranteed Fund Value
(b) Sum Assured % as stated below:
• 30% if the Coverage Benefit Period is 10 years.
If survival benefits are not withdrawn, they will continue to be a part of the
Fund Value.
(ii) If the life insured is a minor, policyholder can withdraw the survival
benefit payout within one month from the scheduled payout date from
the fund value.
Death Benefits:
Age at time
Death Benefits
of Death
30 days to 1
Fund Value Only
year
Higher of Sum Assured less all partial withdrawals made

Age 1 Year
in 24 months preceeding the death of life insured or the
to 60 Year
fund value or the guaranteed fund value.
On or After Higher of Sum Assured less all partial withdrawals made
attainment since the life insured attained the age 58 or the fund
of 60 Years value or the guaranteed fund value.
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Charges:
1. Mortality Charges: These charges are deducted by canceling units on a monthly
basis at the prevailing NAV. The annual mortality charges per 1000 sum assured
for sample ages are as follows:
Age 20 30 40 50 60
Male 1.016 1.171 2.150 5.532 13.732
Female 0.896 1.163 1.657 4.030 10.660
2. Partial Withdrawal Charges: 2 withdrawals in a policy year are free of charge.
Rs100 for every additional partial withdrawal are charged.
2- Classic Life Premier
This is the plan that not only helps to save for the future but also helps to get rich
benefits from the investments, especially at a time when the need for family protection
reduces significantly.
Features:
• The plan is a unit linked, non-participating plan.
• This plan has the option of seven-investment fund with the flexibility to allocate
the premiums in varying proportions into the different Fund Option.
• Top up facility is there. The minimum amount of top ups is 10000.
• The plan offers further benefits in the form of additional units, which will be
added to the Fund value at the end of the 10th policy year.
• There is high liquidity in the form of Partial Withdrawals and Surrender Benefits.
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• Death Benefits, which will be higher of the Fund value or Sum Assured, reduced
by the applicable partial withdrawals.
Eligibility:
• Entry Age:
Minimum: 30 days for 20 & 30 term
8 years for 10 terms
30 years for whole life
Maximum: For 10 years term- 60 years
For 20 years term- 50 years
For 30 years term- 40 years
For Whole Life- 60 years
• Duration:
Minimum: 10 years
Maximum: 70 years (assuming whole life to be 100 years)
• Maturity Age: 70 years for the term- 10,20,30 years
100 years for whole life
• Premium Payment Term: For 10 years term- 3, 5yrs or regular coverage paying
period.
For 20 yrs, 30yrs term and Whole Life- 5yrs, 10 yrs or
regular coverage paying period.
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Premium Investment: Premium collected is invested in Seven Investment Fund
Options:
1. Assure
2. Protector
3. Builder
4. Enhancer
5. Creator
6. Magnifier
7. Maximiser
Benefits:
1. Guaranteed Addition: It is in the form of additional units, which is added to the
fund value on the 10th policy anniversary and on every 5th policy anniversary
thereafter, while policy is in effect.
2. Partial Withdrawal Options: Partial Withdrawals can be made after 3 policy years
or when the life insured attains maturity, whichever is later. The minimum partial
withdrawal amount is Rs.10000
3. Surrender Benefits: Policy offers the flexibility of surrendering the policy, if the
need arises. There is no surrender charge after 6 completed policy years.
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However, if the policy is surrendered within 3 years from inception, the surrender
value is paid after the completion of the third policy anniversary.
4. Death Benefits:
• Below 5 years: If the death of the life insured take place before 5 years,
only the fund value shall be payable to the policy owner.
• Between 5 to 60 years: Higher of the fund value or the sum assured less
all applicable partial withdrawals made in the last 24 months preceding
the death of the life insured.
• 60 years and Above: Higher of the fund value or the sum assured less all
applicable partial withdrawals made since the life insured attained the
age of 58.
5. Maturity Benefits: On maturity of the policy, the fund value is payable. Under the
whole life option, on maturity of the policy, when the life insured attains the age
of 100, then fund value is payable and the policy will be terminated.
6. Tax Benefits: Tax benefits on premium payment are governed by section 80C of
the Income Tax Act 1961. Tax Exemptions on the amount received on maturity in
the unfortunate event of death and the withdrawals are governed by section
10(10D).
7. Addition of Riders: Policy holder can customize the plan by adding any of the
following 6 riders:
1. Accidental Death & Dismemberment Rider
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2. Term Rider
3. Critical Illness Rider
4. Critical Illness Plus Rider
5. Critical Illness Women Rider
6. Waiver of Premium Rider
Charges:
1. Premium Allocation Charges: These charges during the premium paying term
are as under:
1 2 or 3 Thereafter
Policy Year
Charge 13% 4% 2%
This charge on Top-up and underwriting extra is 2%.
2. Mortality Charge: This charge will be deducted by cancellation of units on a
monthly basis at the prevailing NAV. The Annual Mortality charge per 1000 of the
Sum at risk for sample ages are as follows:
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Age 25 35 45 55 65
Female 1.023 1.162 2.385 6.441 15.92
Male 1.083 1.363 3.110 8.571 21.06
3. Fund Management Charge: This is charged by adjustment of the daily NAVs.
The charge is:
• 1% p.a. for Assure, Protector, Builder and Enhancer Fund.
• 1.25% p.a. for Creator, Magnifier and Maximiser Fund.
4. Policy administration Charge: The charge is deducted by canceling units on a
monthly basis at the prevailing NAV. The annual charge differs according to the
Life Insurance Coverage Sum Assured and Life Insurance Coverage Paying
Period. The maximum charge is 6.10 and the minimum charge is 0.00
5. Surrender Charge: These charges are levied as the percentage of the annual life
insurance coverage Premium payable. Charges are as follows:
Policy Year 1 2 3 4 5 6 7+
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Surrender Charge
30% 20% 15% 10% 8% 6% NIL
6. Rider Premium Charge: If the riders are attached, this charge will be realized by
cancellation of units on a monthly basis based on the equivalent monthly rider
coverage premium payable, when rider coverage payment period equals the
rider coverage benefit period.
3- Gold Plus II Plan
The plan gives much more than a good insurance cover, an opportunity to grow
investment for the medium term. It is worth more than Gold.
Features:
• It is a Unit Linked, Non-Participating, Insurance plan.
• Duration of plan is 8 years.
• Premium paying term of 3 years with the flexibility to reduce premium up to Rs.
10000 from the second policy year.
• Plan also has Top-up facility.
• Liquidity in the form of Partial Withdrawals and Surrender Benefits.
• Plan has 7 fund options.
• Free unlimited fund switching and premium redirection
Eligibility:
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• Entry Age: 18 to 70 years.
• Minimum Premium: Rs.50000
• Minimum sum Assured: 5 x Annual Premium
Premium Investment: Premium collected is allocated in varying proportions in seven
investment fund options. Policyholder can switch between the fund options anytime
during the tenure of the policy. The seven Investment Funds available are:
1. Assure
2. Protector
3. Builder
4. Enhancer
5. Creator
6. Magnifier
7. Maximiser
Benefits:
1. Maturity Benefits:
On maturity fund value will be paid to the policyholder.
2. Death Benefits:
In the Unfortunate event of the Death of the Life Insured prior to the maturity date
of the policy, the nominee gets the greater of
(a) Fund Value
(b) Sum Assured reduced for partial withdrawal as follows:
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• Before the life insured attains the age of 60, the sum assured
payable on death is reduced by partial withdrawals made in the
preceeding years.
• Once the Life Insured attains the age of 60, the Sum Assured
payable on death is reduced by all partial withdrawals made
from age 58 onwards.
3. Tax Benefits:
Policyholder is eligible for tax benefits U/S 80C and U/S 10(10D) of the Income
Tax Act 1961.
• U/S 80C- Premium up to Rs.100000 is allowed as deduction from taxable
income each year.
• U/S 10(10D) - The Benefits received under plan are exempted from tax.
Charges:
1. Premium Allocation Charges:
It is deducted from premium when received and before allocation of units.
Policy Policy Years
Charges 1 2 3 4+
On Policy
Premium 8% 4% 4%
On top-up
Premium 2% 2% 2% 2%
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2. Fund Management Charges:
Fund Management charge not exceeding 1.5% per annum of the fund value will
be charged by adjustments of the daily unit price. The charge is
• 1% p.a.- Assure, Protector, Builder and Enhancer
• 1.25% p.a. – Creator, Magnifier and Maximiser
3. Policy Administration Charges:
These charges are recovered by canceling units on a monthly basis
proportionately from each investment fund. The annual Rate per 1000 of Sum
Assured is:
Policy Policy Years
Charges 1 2 3 4+
Policy
Administration 19.4 19.4 19.4 14.4
Charge *
* An additional 5 per 1000 will be charged in the first 3 policy years only on any
excess Sum Assured over Rs. 50000
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4. Mortality Charges: These charges are deducted on a monthly basis. These
charges are taken by canceling units proportionately from each of the investment
funds at that time. The annual rate per 1000 of Sum Assured less fund value for
sample ages are:
Age 25 35 45 55 65
Female 1.023 1.162 2.385 6.441 15.92
Male 1.083 1.363 3.110 8.571 21.06
5 Surrender Charges:
These charges are applied when the policyholder surrender their policy in the
first 3 policy years. The surrender charge as a percentage of the annual policy
premium chosen at issue is
Policy Years
Policy
Charges 1 2 3 4+
Surrender 15% 12.5% 10% nil
Charges
4- Supreme Life Plan
Features:
• The plan is a Unit Linked Insurance Plan.
111
• It provides the nominee with an increased sum assured and builds savings
faster.
• The plan offers more protection of money at supremely low cost.
• Provides with Supreme Accidental TPD (Total Permanent Disability).
• Policyholder gets freedom to choose premium amount as low as Rs.25000
• The plan provides with 6 Investment Fund Options.
• The plan is flexible as it provides the policyholder with Top-Up Premium facility to
ensure faster growth in the Fund Value.
• Partial Withdrawals, are allowed, after 3 years to meet liquidity needs of the
policyholder
Duration:
• Policy Term: 10, 15, 20, 25, 30, 35, 40 Years.
• Premium Payment Term: Policyholder can choose to pay premium at short or
regular intervals.
Premium Investment: Premium Collected is investment in six investment fund options.
These funds are:
1. Assure
2. Protector
3. Builder
4. Enhancer
5. Creator
6. Magnifier
Benefits:
1. Death Benefits:
112
• Double Death Benefits i.e. Death Benefits= Sum Assured + Savings
• Increasing Death benefits i.e. Death Benefit= Sum Assured + 25% every
5th year
2. Accidental TPD Benefit:
• Policyholder immediately gets the original sum assured up to Rs.50 lac
• Co. pays the future premiums up to age 60.
3. Switches & Redirection:
• Policyholder gets flexibility to switch between the fund options. Two switches
are free per annum.
Charges:
1. Mortality Charges: Charges are deducted monthly by
canceling units from the associated fund option. The charge is 95%
2. Policy Administration Charges: These charges are
deducted monthly by canceling units from the investment fund. The annual
charge is Rs. 720 on the first 1000 Sum Assured in all years i.e. Rs.3.60 per
1000 Sum Assured p.a. The additional charges for years 1-5 are as follows:
Term Band 1 Band 2 Band 3
10/15 4.75 4.25 4.00
20+ 3.75 3.25 3.00
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3. Premium Allocation Charges: These charges are 5% for
the 1st policy year and 2% for subsequent policy years.
4. Fund Management Charges: These charges are 1 –
1.25% p.a. for all associated funds.
5- Platinum Plus Plan
Features:
• This plan is a Unit Linked, Non-Participating, Insurance plan.
• A policy term of 10 years.
• A premium paying term of 3 years.
• One Innovative Investment fund, namely Platinum Plus Fund I.
• Full Liquidity after three policy years to meet any cash needs.
• Unique Guaranteed Maturity Unit Price representing the highest unit plus price of
Platinum Plus Fund I recorded on 88 reset dates starting on March 17, 2008 and
ending on June 15, 2015.
Eligibility:
• Entry Age of Life Insured: 18 to 70 Years.
• Minimum Annual Premium: Rs. 1,00,000
• Minimum Sum Assured: 5xAnnual Premium.
Premium Collected is invested in the Equity & Debt Market according to the preset Asset
Allocation of the Platinum Plus Fund I.
Benefits:
1. Guaranteed Maturity Unit Price
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• Minimum of Rs. 10 on the first Reset Date
• At maturity, is the highest Unit Price recorded on 88 Reset Dates
2. Maturity Benefits
• Number of units multiplied by higher of Guaranteed Maturity Unit Price or
prevailing Unit Price at maturity
3. Surrender Benefits
• Full liquidity after 3 policy years –100% Fund Value*
4. Death Benefits
• Higher of Fund Value (as per the then prevailing unit price) or Sum Assured (less
applicable partial withdrawals)
5. Tax Benefits
• U/S 80C- Premium up to Rs.100000 is allowed as deduction from taxable
income each year.
• U/S 10(10D) - Benefits from the plan are exempted from tax.
Charges:
1. Premium Allocation Charges: 10% of premium in the first year and 4% of
premium in subsequent years.
2. Fund Management Charges: 1.00%-1.50% p.a. for Assure & 1.50%-2.00% p.a.
for Platinum Plus Fund I.
115
3. Policy Administration Charges: These charges are deducted monthly by
canceling units from the investment fund Assure first and then, from Platinum
Plus I, if required. The annual charge is Rs. 720 on the first 1000 Sum Assured
in all years plus Rs.6 per 1000 Sum Assured in years 1 to 3 only.
4. Mortality Charges: Charges are deducted monthly by canceling units from the
associated investment funds. The Annual Charges for sample ages are as
follows:
Attained Age 25 35 45 55 65
Female 1.023 1.162 2.385 6.441 15.920
Male 1.083 1.363 3.110 8.571 21.060
5. Surrender Charges: This charge, as a percentage of the annual premium at
issue, is 16%, 13% and 10% for policy year 1, 2 and 3 respectively.
6. Revival Charge: The charge for policy revival is Rs. 100-1000 per revival
FUNDS BY BSLI
116
irla Sun Life Insurance, a leading Life Insurance company, offers its clients with a long
range of Funds. These funds are designed to cater to a variety of needs of people who
are from different life stages. BSLI offers a broad range of 12 funds, each having
differing asset allocations.
12 funds offered are:
1. Individual Protector
2. Individual Assure
3. Individual Balancer
4. Individual Builder
5. Individual Creator
6. Individual Enhancer
7. Individual Life Maximiser
8. Individual Magnifier
9. Individual Multiplier
10. Pension Nourish
11. Pension Enrich
12. Pension Growth
A new fund named Platinum Plus Fund I is also added in this list of funds.
117
Asset Allocation is decided by the Fund Managers of the company. These fund
managers continuously tracks the movements of volatile market and combine this
volatility with the fund requirements of the policyholders. Accordingly he decides
allocation of assets in 5 major investment options:
 Government Securities
 Corporate Debt
 Securitized Debt
 Equity
 Money Market Instruments
Proportion of allocating the fund in these options, vary according to the needs and fund
requirements of policyholders. The most important thing to be noticed here is that this
portfolio is decided, based on the regulations of IRDA. Performances of these funds are
rated by the rating agency-CRISIL.
All the 12 funds by BSLI are described below along with their respective Asset
Allocations.
Individual Assure
Objective: The primary objective of this fund is to provide Capital Protection, at a high
level of safety and liquidity through judicious investments in high quality short-term debt.
Strategy: Generate better return with low level of risk through investment into fixed
interest securities having short-term maturity profile.
Asset Allocation:
118
SECURITIES HOLDING
Corporate Debt 59.57%
Money Market Instruments 17.97%
TOTAL 100.00%
Individual Balancer
Objective: The objective of this fund is to achieve value
creation of the policyholder at an average risk level over
medium to long-term period.
Strategy: The strategy is to invest predominantly in debt
securities with an additional exposure to equity, maintaining
medium term duration profile of the portfolio.
Asset Allocation:
SECURITIES HOLDINGS
Government Securities 10.67%
Equity 23.44%
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TOTAL 100.00%
Pension Growth
Objective: This fund option is designed to build the capital
and to generate better returns at moderate level of risk, over
a medium or long-term period through a balance of
investment in equity and debt.
Strategy: Generate better return with moderate level of risk
through active management of fixed income portfolio and
focus on creating long term equity portfolio which will
enhance yield of composite portfolio with low level of risk
appetite.
Asset Allocation
SECURITIES HOLDINGS
Equity 18.63%
TOTAL 100.00%
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Pension Enrich
Objective: Helps to grow the capital through enhanced
returns over a medium to long-term period through
investments in equity and debt instruments, thereby
providing a good balance between risk and return.
Strategy: To earn capital appreciation by maintaining
diversified equity portfolio and seek to earn regular return on
fixed income portfolio by active management resulting in
wealth creation for policyholders.
Asset Allocation:
SECURITIES HOLDINGS
Equity 32.69%
TOTAL 100.00%
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COMPARATIVE ANALYSIS
BIRLA SUN LIFE UNIT LINKED ENDOWMENT PLUS II v/s LIC

LIFE TIME GOLD:
BIRLA SUN LIFE Unit Linked Endowment Plus II LIC Time Gold
Impact of charges on returns:
ROLLING RETURN – BIRLA SUN LIFE v/s LIC Pru Maximis
BIRLA SUN LIFE lic Pru Maximiser II

BIRLA SUN LIFE UNIT LINKED ENDOWMENT WINNER v/s LIC
SARAL JEEVAN PAN:
Table 1:
FEATURES BIRLA SUN LIFE LIC saral jeevan

simplifies plan
Free switches 24 per policy year Unlimited
Policy Adminstration Rs. 60 per month Rs per Min max

month
Charges^
1-3 yrs 214 2940
4 yrs 64 440
Free Partial 6 per policy year unlimited

Withdrawals^
Premium Allocation Yearly Frequency
Charge
Year1 20% 0%
Year2 20% 0%
Year3 0% 0%
Fund management 1.25% across all funds magnifier 1.25%

charge
Multiplier 1.50%
Impact of charges of returns:

Assumed rate 10% 6% 10% 6%
of retuen
15 yeras 6.8% 2.9% 6.2% 2.2%
BIRLA SUN LIFE UNIT LINKED ENDOWMENT WINNER v/s LIC

SARAL JEEVAN PAN:
Table 2:
FEATURES BIRLA SUN LIFE LIC Saral Jeevan Plan

Unit Linked Endowment
Winner
Minimum Annual Rs. 20,000* derived from age, policy

term & sum assured.
Premium
Additional Allocation of Bumper Addition on NA

maturity - 70% of Original
Units^ annualised premium
Top-Ups Allowed Not allowed
Administration Charges 60 per month Rs per Min max

month
Year 1- 214 2940

3
Year 64 440
4+
Premium Allocation Yearly frequency
Charge
Year1 40% NIL
Year2 30% NIL
Yaer3 2% NIL
Fund Management 1.25 across all fumds magnifier 1.25%

Charge (p.a.)
multiplier 1.50%
Impact of charges of returns:
Assumed rate 10% 6% 10% 6%

of retuen
15 yeras 7.2% 3.5% 6.4% 2.4%
TERM ASSURANCE PLANS:

FEATURES BIRLA SUN LIFE Term LIC Anmol
Assurance Plan Jeevan I *
Minimum Rs. 2,000
Annual
Premium
Minimum Sum Rs. 8 Lakhs 5 Lakhs
Assured
Policy 10 - 30 5 - 25
Term(yrs)
Age at 18 - 55 18 - 55
Entry(yrs
Max.Age at 65 65
Maturity(yrs)
High Sum 35% on the excess of NA
Assured premium over the
Discount premium corresponding
to a Sum Assured of
Rs. 25 Lac
RESEARCH METHDOLOGY
TITTLE OF THE STUDY:Comparative study of customer preference for life insurance
scheme of LIC & BIRLA SUN LIFE.
INTRODUCTION:
Research in Common parlance refers to search for Knowledge. It’s a scientific and
systematic search for pertinent information on specific topic. Research is an art of
Scientific investigation its mean Systematized effort to gain new Knowledge.
According to Clifford woody “Research Comprises defining and redefining
problem formulating hypothesis or suggested solution Collecting, Organizing and
evaluating data making deductions and reaching Conclusion at Carefully testing the
Conclusion to determine whether they fit the formulating hypothesis.
Life insurance schemes, including pensions and life annuity policies, provide payments
depending on the life or the death of a particular person or persons.Life insurance
policies are issued in two basic types: term life and permanent life. This Project Study
intends to competitively analyze the customer preferences for life insurance schemes of
LIC and BIRLA SUN LIFE.
Types of the Research:
THERE ARE TWO TYPE OF RESEARCH DESIGN ARE FOLLOWING:-
 DESCRIPTIVE RESEARCH DESIGN

 QUANTITATIVE RESEARCH DESIGN
DESCRIPTIVE RESEARCH DESIGN:
Descriptive research includes survey and fact finding enquiries of different Kinds. The
major Purpose of descriptive research is description of State affairs as it exists in
present. In social and business research we quite often use. We have done Survey
found fact by personal interview so it is descriptive.
QUANTITATIVE RESEARCH DESIGN:
Quantitative research is based on the measurement of quantity or amount. It is
applicable to phenomena that can be expressed in term of quantity. We have also found
requirement in quantity so it’s the quantitative research.
OBJECTIVE OF THE STUDY:
The Purpose of research is to discover answer to question through the Application of
scientific procedure. The main aim of research is to find out the truth which is hidden and
which has not been discovered as yet.
 To know and apply different market research techniques in our study as follows:
o Sampling Design
o Research
o Questionnaire Design
 To highlight the satisfaction level regarding products.
 To know the perception regarding BIRLA SUN LIFE and LIC products and services.
 To identify the basic function of life insurance of the both company.
 To analysis the needs of the life insurance.

 To understand the comparative analysis of product of LIC & BIRLA SUN LIFE.
Sample Size and method of Selecting Sample:
SAMPLE DESIGN:
Sample design refers to the technique or the procedure the researcher would adopt in
selecting item for the Sample. Sample design may be well lay down the number of items
to be included in the sample that is the size of the sample design is determined before
data are collected. There are many Sample designs from which a researcher can
choose some designs are relatively more precise and easier to apply than other
researcher must select a sample design which should be reliable and appropriate for his
research study.
Here we have used random sampling and the sample size was 50. We have made a
questionnaire through personal interview filled the questionnaire.
SAMPLING:
To serve the objective and study the scope banks we have designed two set of
questionnaires.
1. The first questionnaire was developed to study the product offering and facilities of
different Insurance companies as to check the level of competition in the market for
Private and public insurance companies.
2. The second quest was developed to check the level of satisfaction the people after
getting policies from their favorable organizations and the factors they consider
important while selecting a insurance companies to getting the policies And what
facilities they require from their insurer or their grievances arising due to non
fulfillment of their needs and what is their opinion regarding different categories of
the insurance companies.
DATA COLLECTION:
Basically there are two main method of data Collection primary data and Secondary
data. Primary data are those which are Collected freshly and the first time and thus
happen to be original in character. Other hand Secondary data are those which have
already been collected by someone else and which have already been passed through
the Statistical granting.
PRIMARY DATA:
 QUESTIONNAIRE METHOD
This method of data collection is quite popular, particularly in case of big enquiries. It is
being adopted by private individuals, research workers private and public organization
and even by governments in this method a questionnaire Consists of a number of
question printed or typed in definite order on a form or set of form I have made a
Questionnaire for Survey. The inquiry was done of the respondents through
questionnaire in which the same set of questions were asked to the very respondents
falling within out sample. The advantage is that it is simple to administer easy to tabulate
and analyse.
 PERSONAL INTERVIEWS
The interview method of collecting data involves presentation of oral verbal stimuli and
reply in term of oral verbal responses. We have used this method through personal
interview.
SECONDARY DATA:
Secondary data means data that are already available they refer to the data which have
already been collected and analyzed by someone else. We have used for it following
method Internet and journals of company. The search was done on internet and related
magazines, company’s websites to extract relevant information. The other necessary
information regarding HDFC & LIC products and offerings were obtained through printed
sources such as Handouts, Pamphlets, Advertisements and circulars etc.
LIMITATIONS:
 Due to the financial & time constraints the study was limited to our place thus the
conclusion arrived in the end rely in short term experience.
 Being an opinion survey the personal bases of the respondents might have entered
into their responses.
 Time constraints resource constraints were some of the limitations.
 The selected sample might have affected the results of the study therefore the
findings & conclusions of the study are only suggestive & not conclusive.
 Sample was chosen according to convenience & judgment sampling & not according
to random sampling.
 The sampling error that appeared due to the kind of sampling technique adopted.
 Indifference and lack of interest disposed by a few respondents leading to
unauthentic responses.
 Time proved to be a major constraint as far as collection and analysis of data was
concerned.
FACTS &FINDINGS
As part of the project we had make a survey with the help of questionnaire that has to
taken to different people to get perception towards HDFC and LIC product the
questionnaire is passed on the general public and requested to give their opinion toward
HDFC and LIC product the questionnaire Consists of both open and close ended
question the main motto behind the Study is to find out how people react against the
HDFC and LIC products and aware about the benefits of these products.
In research methodology we have used random sampling and sample size was 50.
Simple random sampling method is followed where every member of population have
equal chance of been selected. The questionnaire is administrated on sample to find out
their perception towards HDFC and LIC insurance product and benefits of product. After
analysis of questionnaire Conclusions were made based on finding from pie charts.
BIRLA SUN LIFE
SWOT ANALYSIS:
STRENGTHS:
.
 Strong and well spread network of qualified intermediaries and sales person.
 Strong capital and reserve base.
 The company provides customer service of the highest order.
 Huge basket of product range which are suitable to all age and income groups.
 Large pool of technically skilled manpower with in depth knowledge and
understanding of the market.
 The company also provides innovative products to cater to different needs of
different customers.
WEAKNESS:
 Heavy management expenses and administrative costs.
 Low customer confidence on the private players.
 Vertical hierarchical reporting structure with many designations and cadres
leading to power politics at all levels without any exception.

 Poor retention percentage of tied up agents.
OPPORTUNITIES:
 Insurable population –According to ING only 10% of the population is insure
which represents around 30% of the insurable population. This suggests more
than 300m people, with the potential to buy insurance, remain uninsured.
 There will be inflow of managerial and financial expertise from the world’s leading
insurance markets. Further the burden of educating consumers will also be
shared among many players.
 International companies will help in building world class expertise in local market
by introducing the best global practices.
THREATS:
• Reorganization of PSU’s. The all PSU’s have started to redefine their services to
attract customer’s attention.
• A few foreign Insurance companies have been permitted to increase their
number branches and its entry has taken away some business of the existing
companies.
• Stringent norms by RBI in any time in future can be a threat to private insurance
companies as their activities can be adversely affected.

LIC of INDIA
SWOT ANALYSIS:
STRENGTHS:
• India’s top insurance company and best among Public sector company.
• Provide better infrastructure than any other Public company.
• LIC of India provides various types of insurance policies to the customer.
• LIC make good relationship with customers and provide extra unique features for
the customer who wants to take policy from bank
• Provide all types of insurance advisories
• The transparency is also much better from other insurance companies with least
employee turnover.
WEAKNESSES:
• Average waiting time for the customer is 15 to 20 minutes.
• No separate customer care unit.
• Rude attitude of the employees.

• There is no separate marketing cell in jaipur branches.
• No other facility such as, multiplicity and free financial advice of the company .
OPPORTUNITIES:
• Setup a marketing cell at the local branch.
• Ensure that policies are diversified across several customer segments
• Introduce robust risk scoring techniques to ensure better quality of policies , as well
as to enable better risk-adjusted returns at the portfolio level.
• Raise the share of non-fund income by increasing product offering wherever
necessary by better use of technology
• Reduce the impact of operational risks by putting in place appropriate frameworks to
measure risks, mitigate them or insuring them.
THEREATS:
• Growth of private players has led to shifting emphasis from public sector companies.
Increase in foreign insurance companies resulted in taking away business from PSU’s
CONCLUSION
The products of BIRLA SUN LIFE & LIC are no doubt very good and it provides the
customized solution to its customer the products offerings are made so very flexible and
adaptable in order to get with the customer requirements. All the products and the
special offering at LIC loaded with lot of benefits for the customer. LIC is always there to
serve its customers with great speed. LIC has a wide network of branches amongst the
private sector insurance companies or BIRLA SUN LIFE to services its customer
efficiently.
Today LIC hold largest market shares in Public sector Insurance companies in India.
This is possible all because of its products and services. In the survey the most of the
customer are prefer the LIC products because of it provide the high return etc.
The LIC faces a large amount of competition. To sustain itself it must promote its
products through advertising and improve its selling techniques. Consumers must be
aware of the new plans available at LIC. The medium of advertising used could be
television since most of its competitors use this tool to promote their products. The
company must be promoted as an Indian company since consumers seem to have more
trust in investing in Indian firms.
LIC could tap the rural markets with cheaper products and smaller policy terms. There
are individuals who are willing to pay small amounts as premium but the plans do not
accept premiums below a certain amount. It was usually found that a large number of
males were insured compared to females. Individuals below the age of 30 (mostly male)
were interested in investment plans. This was a general conclusion drawn during
prospecting client.
RECOMMENDATION
 Banks should have extensive advertising to attract potential

Customers.
 Adequate training improves the skill of employee.
 Company should put stress on market Capture.
 Adequate transparency in product plan and policies
 Maintain proper Customer relationship
 Company should publish its weekly review of internal or external

Competitive business.
 There must be proper management information system in Banks

 Monthly NAV statement to provide to the customer.
 Time to time banks launched new loan products for the customers with
extra unique features.
Questionnaire:
Dear Sir/Madam,
I am the student of Poornima College of engineering (DMS) and I am conducting a

survey on Comparative study of customer preference for Life Insurance scheme of LIC &
BIRLA SUN LIFE. The following questionnaire has been drafted to make me understand
the needs and expectations of the customers. Therefore I request you to kindly spare
some time and give me the following information. I assure you that the results of the
study will be kept confidential.
Q1. Age group
{A} < 29 {B} 29-39
{C} 40-49 {D} > 50
Q2. Annual Salary / Income
{A} 80,000 -100,000 {B} 100000 - 500000
{C} 500000 -1000000 {D} > 10000000

Q3. Do you have a life insurance policy/investment plan in your name?
{A} Yes {B} No
Q4. If yes which company’s insurance policies do you hold?
{A} HDFC Standard Life Insurance {B} LIC
{C} Max new York {D} Others

(specify name)________
Q5. Reasons behind the selection of particular

company:-
__________________________________________
__________________________________________
__________________________________________
__________________________________________
_______________________________________
Q6. Do you compare the insurance products of one

company with another before purchasing them:-
{A}Yes {B} No
Q7. What kind of life insurances would suit you best in

your current stage of life?
{A} Term life policy {B} {E}

Whole life policy others
{C} endowment policy {D} child plan
Q8. What motivates you to purchase life insurance

plans?
{A} Advertisements {B} High
Returns
{C} Advice from friends {D} Family

responsibilities
{E} other specify
Q9. From where do you get the knowledge of insurance

products:-
{A} Print media {B}

electronic media
{C} both {D} others
Q10. No. of life Insurance(s) you already have:-
{A} One {B} Two
{C} Three {D} More
Q11. In which kind of company would you prefer to make

a purchase of insurance?
{A} Government owned company {B} Private

Company
{C} Foreign based company

{D} Public Company
Q12. From how long times have you got this plan?
{A} < 3 years {B} 3 − 5

years
{C} 5− 7 years {D} > 7

years
Q13. What % of your savings goes into investment?

{A} < 25% {B} 25 - 50%
{C} 51-75% {D} > 75 %
Q14. How much amount do you willing to pay as premium?
{A} 5,000−25,000
{B} 25,000−50,000
{C} 50,000−100,000
{D}100,000−500,000
Q15. How do you want to pay your premium?
{A} Annually {B} Semi

annually
{C} Quarterly {D} Monthly
Q16 How much would you be willing to spend per annum if

you were to go for an investment/insurance plan?
{A} Less than Rs.10,000 {B}

Rs.11,001 – Rs.50000
{C} Rs.50,001 – Rs.100,000 {D}

Rs.100,000 & more
Q17 Typically what kind of returns would you look at

from your investments? (Please note: Higher returns
involve greater risk)
{A} Less than 10% {B} 11% -

20 %
{C} 21% - 30 % {D} 30%

& more
Q18 Which according to you is an ideal policy term?

(Number of years you would be willing to pay premium)
{A} 3 to 10 years {B} 11 to
20 years
{C} 21 to 30 years {D} 30

years
Personal Details:
Name:
Address:
Age:
ContactNo. :
Profile of respondent:
• Student
• Housewife
• Working Professional
• Business
• Self – Employed
• Government
• Service Employee
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Comparative study ofs customer preference for life insurance scheme of LIC

& BIRLA SUN LIFE.

1. THE INSURANCE INDUSTRY IN INDIA (AN OVERVIEW)

2. PRESENT SCENARIO - LIFE INSURANCE INDUSTRY IN INDIA.

i. BIRLA SUN LIFE INSURANCE COMPANY LIMITED

ii. LIFE INSURANCE CORPORATIONOF INDIA (LIC)

7. ANALYSIS & INTERPRETATION

Manusmrithi ), Yagnavalkya ( Dharmasastra ) and Kautilya ( Arthasastra ). The writings

talk in terms of pooling of resources that could be re-distributed in times of calamities

time heavily drawing from other countries, England in particular.

offices were up for hard competition from the foreign companies.

comprehensive provisions for effective control over the activities of insurers.

decided to nationalize insurance business.

absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies—245 Indian

sector was reopened to the private sector.

company to transact all classes of general insurance business.

Following the recommendations of the Malhotra Committee report, in 1999, the

Insurance Regulatory and Development Authority (IRDA) was constituted as an

promotion of competition so as to enhance customer satisfaction through increased

registrations. Foreign companies were allowed ownership of up to 26%. The Authority

companies for carrying on insurance business to protection of policyholders’ interests.

Some of the important milestones in the life insurance business in India

started its business.

the life insurance business.

statistical information about both life and non-life insurance businesses.

objective of protecting the interests of the insuring public.

Liberalization commitment of the country to help in disciplining future economic

difficult for a country to remain in isolation.

 Globalization will provide opportunities to the customers.

 Better production with more reasonable and affordable prices.

 The customer will get better services.

 It will enhance the saving rate.

educate people to buy insurance.

expectancy and mortality. But natural disasters are difficult to predict.

Business and Social Objectives

arise due to change in the social and economic environments.

insurance sector to private players.

Insurance Business in India:

still owned by the government.

strengthens the risk taking ability.

Insurance Sector Reforms

was necessary to address the need for similar reforms.

selling their insurance policies since 2001.

Insurance companies in India:

general insurance business.Particulars of the life insurance companies and general

insurance companies including their web address is given below:

LIFE INSURERS Websites

Indian Insurance Industry: New Avenues for Growth 2012

market (2004-05) is estimated at Rs. 450 billion (US$10 billion). According to

growth potential of the insurance sector.

and eight private insurers. According to estimates, private insurance companies

collectively have a 10% share of the non-life insurance market.

As per a recent report “INDIAN INSURANCE INDUSRTY FORECAST” ( 2007-09)

one, its market share came down from 85.75% to 81.91%.

than a 26% stake in a company’s ownership.

been granted licenses.

KEY PLAYERS IN INDIAN LIFE INSURANCE INDUSTRY:

LIFE INSURANCE CORPORATION OF INDIA: