PROJECT REPORT ON

A STUDY ON ROLE OF LIC IN INSURANCE

INDUSTRY

SUBMITTED BY
ASHWINI THEVAR

Roll no.39
TYBBI SEMESTER – VI 2023 – 24

UNDER THE GUIDANCE OF PROF. RAJIV MISHRA

SUBMITTED TO UNIVERSITY OF MUMBAI

N.E.S.RATNAM OF ARTS, SCIENCE AND COMMERCE
 INDEX:-
• Introduction to topic
• Introduction.
• Major players in the insurance industry in India.
• History of Life Insurance.
• Objective of Life Insurance.
• Features of Life Insurance.
• Benefits of LIC Insurance Plan.
• Types of LIC Life Insurance Plan.
• Important documents for purchasing LIC Life
Insurance Policy.
• Advantages of Life Insurance.
• Disadvantages of Life Insurance.
• Data Analysis
• Conclusion.
• Bibliography.
• Annexture .
 • INTRODUCTION TO TOPIC
Life is one of India’s leading private life insurance company, among the 24
players in India and the first private insurance player to be licensed in year
2000. It offers a range of individual and group insurance solutions and is a
joint venture between Housing Development Finance Corporation Limited ,
and Standard Life PLC, the leading provider of financial services in the United
Kingdom. As on 2016, Life has employee strength of 15,000 which caters to
its 64 lac customer base through a network of 414 branches and spoke
locations. Life distributes its products through specialized channels which
increase its reach to the customers. The channels are Agency, Bancassurance,
Group Sales, Direct Sales, Worksite, Loyalty, Online, and Telemarketing.

Individual business comprises of business sourced through our Bancassurance

partners, brokers, financial consultants aligned to Agency channel and Direct
Sales team.

Group Sales offers the most comprehensive products for EmployerEmployee

Benefit schemes. Products offered by Standard Life helps progressive
employers who wish to provide the best and most innovative employee benefit
solutions to their employees.

Insurance is a contract between 2 parties whereby one party called insurer undertakes
in exchange for a fixed sum called premium to pay the other party happening of a
certain event. There are good reasons to expect that the growth momentum can be
sustained. In particular, there is huge untapped potential in various segments of the
market. While the nation is heavily exposed to natural catastrophes, insurance to
mitigate the negative financial consequences of these adverse events is
underdeveloped. The same is true for both pension and health insurance, where
insurers can play a critical role in bridging demand and supply

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 Insurance or assurance, device for indemnifying or guaranteeing an individual
against loss. Reimbursement is made from a fund to which many individuals
exposed to the same risk have contributed certain specified amounts, called
premiums. Payment for an individual loss, divided among many, does not fall
heavily upon the actual loser. The essence of the contract of insurance,
called a policy, is mutuality. The major operations of an insurance company
are underwriting, the determination of which risks theinsurer can take on; and
rate making, the decisions regarding necessary prices for such risks. The
underwriter is responsible for guarding against adverse selection, wherein there
is excessive coverage of high risk candidates in proportion to the coverage of
low risk candidates. In preventing adverse selection, the underwriter must
consider physical, psychological, and moral hazards in relation to applicants.
Physical hazards include those dangers which surround the individual or
property, jeopardizing the well-being of the insured. The amount of the
premium is determined by the operation of the law of averages as calculated by
actuaries. By investing premium payments in a wide range of revenue-
producing projects, insurance companies have become major suppliers of
capital, and they rank among the nation's largest institutionalinvestors.
Depending on the policy you have chosen, and the layout option, the right life
insurance policy can be crucial in helping your loved ones take care of their short
term, and long term needs. Short term needs may include immediate expenses
such as loans, or liabilities, which need to be repaid quickly. Over the longer term,
the family would require funds to take care of the children's education, to invest,
or save for the future, to take care of recurring household expenses, etc. Certain
insurance policies also come with built-in investment components which allow
for investments in a variety of funds, as chosen by the policyholder.

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There are mainly two parties involved in this- the insurer and the insured. The
insurer is the insurance company who will provide the cover to the insured
against any financial losses. The insured may be an individual person or a
group of people like an employer, members of a society, etc.

Its aim is to reduce financial uncertainty and make accidental lossmanageable.

It does this substituting payment of a small, known fee—an insurance
premium—to a professional insurer in exchange for the assumption of the risk
a large loss, and a promise to pay in the event of such a loss.
Life insurance is universally acknowledged to be an investment which
eliminates risk and substituting certainty for uncertainty and comes to the timely
aid of the family in unfortunate event of death. In this type of insurance the
policy holder gets the compensation only when the loss is caused to him, due to
the reasons indicated in the policy. It is also called as non-life insurance. The
Life Insurance Corporation of India, the premier life insurer and one of the most
stable financial institutions in the country, during the forty-six years of its
existence has been through several trials and tribulations, but has managed to
grow and metamorphose into the giant it is today.

It has done especially well in the decade and half starting from 1985 and its
performance in the new millennium, which is also the beginning of the
liberalized era in the Indian insurance sector, has been the best during its
lifetime. The Game is old but the rules are new and still developing. Ensconced
in a monopoly run from the nationalization days beginning in 1956, the
insurance industry has indeed awaked to a deregulated environment in which
several private players have partnered with multinational insurance giants.

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However, despite its teeming one billion populations, India still has a Low
Insurance penetration of 1.95%, 51st in the world. This is in spite of the fact
that India boasts a saving rate of around 25per cent, although less Indian
Industry’s (CII) Expert Group on Insurance has put the aggregate insurance
market at a conservative figure of Rs.1,88,700crores by 2009-2010. While life
premiums are set to touch Rs.1,45,000 crores by that year from Rs.21,500crores
in 1998-1999, non life premiums are set to touchRs.38,600crores from
Rs.8,400crores. Personal line premium are expected to rise to Rs.5,100 crores
from Rs.400crores. With the advent of competition, the rules of the game are
set to change.

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• The market is already beginning to witness a wide array of products
from players whose number is set to grow. In such a scenario this
study is undertaken to know the level and pattern domestic savings and
the perception towards the Insurance Products.

• New Business is the core value chain in any insurance company and it
can be quite a complex structure with the increase in products and
distribution channels getting added every year. Life is a growing
organisation with multiple partner tie ups and increasing customer base.
Typically any organisation faces challenges when there are multiple
hand offs in a process running across departments and geographies.

• Life Insurance Corporation of India (also known as LIC) is a state-held

insurance provider. Life Insurance Corporation started operating in
September 1956. Life Insurance Operations is the oldest and one of the
largest life insurance providers in India. Life Insurance Corporation of

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 India provides a wide range of insurance plans such as Term Insurance,
Whole Life, Endowment and Money Back Plans.

• LIC has won several awards, here are some of the awards presented to LIC.
Life Insurance Corporation of India was rated as ‘Most Trusted Service Brand
Of India’ by The Economic Times Brand Equity Service in 2012. The company
has continuously been receiving the ‘Reader’s Digest Trusted Brand’ award since
2006. Life Insurance Corporation has been voted ‘India’s Most Trusted Brand’
for four continuous years from 2011-2014.

• Insurance plays an important role in an economy and a strong pillar of

¸financial market. A well-developed insurance sector promotes economic growth
by encouraging more industrial activities through risk-taking. For economic
development investments are necessary. Investments are made out of savings.
Life Insurance Company is a major instrument for the mobilization of savings of
people, particularly from the middle and lower group. All good life insurance
companies have huge funds accumulated through the payments of small
amounts of premium of individuals.

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• LIC has won several awards, here are some of the awards presented to
LIC. Life Insurance Corporation of India was rated as ‘Most Trusted
Service Brand Of India’ by The Economic Times Brand Equity Service
in 2012. The company has continuously been receiving the ‘Reader’s
Digest Trusted Brand’ award since 2006. Life Insurance Corporation
has been voted ‘India’s Most Trusted Brand’ for four continuous years
from 2011-2014.

• Insurance plays an important role in an economy and a strong pillar of

¸financial market. A well-developed insurance sector promotes economic
growth by encouraging more industrial activities throughrisk-taking. For
economic development investments are necessary. Investments are made
out of savings. Life Insurance Company is a major instrument for the
mobilization of savings of people, particularly from the middle and lower
group. All good life insurance companies have huge funds accumulated
through the payments of small amounts of premium of individuals.
These funds are invested in ways that contribute substantially for the
economic development of the countries in which they do business The
system of insurance provides numerous direct and indirect benefits to
the individuals and his family as well asto industry and commerce and
to the community and the nation as a whole. Present day organization of
industry, commerce and trade depend entirely on insurance for their
operation, banks, and financial institutions lend money to industrial and
commercial undertakings only on the basis of the collateral security of
insurance.

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• MAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIA

• LIFE INSURANCE CORPORATION OF INDIA (LIC)

• Life Insurance Corporation of India (LIC) was established on 1

September 1956 to spread the message of life insurance in the country
and mobilize people’s savings for nation building activities. LIC with its
central office in Mumbai and seven zonal offices at Mumbai, Calcutta,
Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100
divisional offices in important cities and 2,048 branch offices. LIC
has5.59 lakh active agents spread over the country. The Corporationalso
transacts business abroad and has offices in Fiji, Mauritius and United
Kingdom. LIC is associated with joint ventures abroad in the field of
insurance, namely, Ken-India Assurance Company Limited, Nairobi;
United Oriental Assurance Company Limited, Kuala Lumpur; and Life
Insurance Corporation (International), E.C. Bahrain. It has also entered
into an agreement with the Sun Life (UK) for marketing unit linked life
insurance and pension policies in U.K. In 1995-96, LIC had a total
income from premium and investments of $ 5 Billion while GIC
recordeda net premium of $ 1.3 Billion. During the last 15 years, LIC's
income grew at a healthy average of 10 per cent as against the industry's
6.7 per cent growth in the rest of Asia (3.4 per cent in Europe, 1.4 per
cent in the US). LIC has even provided insurance cover to five million
people living below the poverty line, with 50per cent subsidy in the
premium rates. LIC's claims settlement ratio at 95 per cent and GIC's at
74 per cent are higher than that of global average of 40 per cent.
Compounded annual growth rate for Life insurance business has been
19.22 per cent per annum.

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• HISTORY OF LIFE INSURANCE:-

• The story of insurance is probably as old as the story of the mankind. The
same instinct that prompts modern businessman today to secure
themselves against loss and disaster existed in primitive men also. They
too sought to avert the evil consequences of fire and flood andloss of
life and were willing to make some sort of sacrifice in order to achieve
security. Though the concept of insurance is largely a development of the
recent past, particularly after the industrial era-past few centuries-yet its
beginnings date back almost 6000 years.

• Life Insurance in its modern form came to India from England in the year
1818.Oriental Life Insurance Company started by Europeans in Calcutta
was the first Life Insurance Company on Indian soil. All the insurance
companies established during that period were brought up with the
purpose of looking after the needs of European community and Indian
natives were not being insured by these companies. However, later with
the efforts of eminent people like Babu Muttylal Seal, the foreign life
insurance companies started insuring Indian lives. But Indian lives were
being treated as sub-standard lives and heavy extra premiums were being
charged on them. Bombay Mutual Life Assurance Society heralded the
birth of first Indian life insurance companies in the year 1870, and
covered Indian lives at normal rates. Starting as Indian Enterprise with
highly patriotic motives, insurance companies came into existence to
carry the message of insurance and social security through insurance to
various sectors of society.

• Bharat Insurance Capital Company (1896) was also one of such

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 companies inspired by nationalism. The Swadeshi Movement of 1905-
1907 gave rise to more insurance companies. The United India in
Madras, National Indian and National Insurance in Calcutta and the Co-
Operative Insurance Company took its birth in one of the rooms of the
Jorasanko, house of the great poet Rabindra Nath Tagore, in Calcutta.
The Indian Mercantile, General Assurance and Swadeshi Life (later
Bombay Life) were some of the companies established during the same
period. Prior to 1912; India had no legislation to regulate insurance
business. In the year 1912, the Life Insurance Companies Act 1912 made
it necessary that the premium rate tables and periodical valuations of
companies should be certified by an actuary. But the Actdiscriminate
between foreign and Indian companies on many accounts, putting the
Indian Companies at a disadvantage.

• The first two decades of the 20th Century saw lot of growth in insurance
in business. From 44 companies with total business-in-force as Rs.22.44
crores it rose to 176 companies with total business-in-force as Rs. 298
crores in 1938. During the mushrooming of insurance companies many
financially unsound corner were also floated which failed miserably. The
insurance Act 1938 was the first legislation governing not only life
insurance but also non-life insurance to provide strict state
control over insurance business

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 o OBJECTIVE OF LIFE INSURANCE
• Being one of the oldest and largest government-owned life insurance

companies, LIC of India continues to be the dominant life insurer even in the
liberalized scenario of the Indian insurance sector. For over years now, the
company is surpassing its own past records. Here are few objectives of the
Life Insurance Corporation of India:

• The primary objective of LIC of India is to spread the importance of life

insurance widely in the rural areas and people belonging to socially and
economically backward classes. The company functions with a view of
providing such individuals with financial cover against death at a reasonable
cost.

• The company strives hard to meet various life insurance needs of the
community depending on the changing social and economic environment.

• The main focus of the Life Insurance Corporation of India is to safeguard the
interests of the life insureds and act as a trustee in their individual and collective
capacities.

• Maximize the ability of savings by providing a diverse range of life

insurance products to choose from.

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 o FEATURES OF LIC LIFE INSURANCE PLANS
• LIC is one of the financial institutions to be established in India after
independence. The full form of LIC is life insurance corporation and it
was established in 1956. The main aim behind the establishment was to
spread the message of life insurance in the country. Also, it was required
to mobilize people’s savings. This was done particularly for various nation-
building activities.

• Provide Financial Security: When you choose to purchase life

insurance policy from LIC, you can ensure financial security of your
loved ones in your absence. LIC life insurance policy provides financial
security to the family of the life assured in case of an unforeseendemise
of the life assured during the policy tenure.

• Tax Benefits: One can avail tax benefits by investing in a LIC life
insurance policy. Premiums paid for LIC life insurance policy qualify
for tax exemptions under Section 80C and 10(10D) of the Income Tax
Act.

• Hassle-free Claim Settlement: As LIC is a state run insurance

company, settling claims on time without any hassles is the one major
thing that the insurance company focuses on. One does not need to worry
about the claim not being settled on time. This is the one major
advantage of purchasing a LIC life insurance policy.
• Variety of Life Insurance Plans: LIC offers a variety of life insurance
plans to choose from. You can choose to purchase a Whole Life, Term,
Money Back, Endowment, ULIP. You can choose a life insurance plan
according to your requirements and budget.

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• Issued in the name of the policyholder: One of the primary features of
life insurance plans is that it is issued only in the name of the
policyholder. A policyholder is basically the individual who purchases
a life insurance policy and pays the requisite premiums. Generally, for
a typical life insurance plan, there tends to be just one policyholder. That
said, that’s not always the case. Some plans, like a joint life insurance
plan, allow you to have more than one policyholder.

• Flexible premium payments: As you’ve already seen above, to be able

to enjoy a life cover, you’re required to pay premiums to the insurance
service provider. You can also choose the frequency of premium
payments that you wish to make. For instance, you can choose to pay
the premiums for your life insurance policy as a lump sum amount. Or
alternatively, you could choose to pay them at periodic intervals such
as monthly, quarterly, half-yearly, or annually.

• Customizable tenure: When you purchase a life insurance policy,

you’re required to choose the tenure of the plan. The policy offers
protection only until the end of the selected tenure, which is known as
the policy term. The life cover is only valid during this tenure. This
tenure can be customized according to your needs and requirements. For
instance, you can simply choose a tenure of 20 years if you require life
insurance coverage for the next 20 years. There are also some life
insurance plans that offer you whole life coverage, meaning that they are
valid till you attain 99 or 100 years of age. This varies from one plan to
another.

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• Pay-out on death or on maturity: Another one of the important features of
life insurance is that the insurance service provider pays out the sum assured
only under one of two incidents - upon the death of the policyholder or upon the
maturity of the life insurance plan. For pure term insurance plans, pay-outs are
only made on death. When the insurer pays out the sum assured to the nominee
in the event of the policyholder’s death, the pay-out is termed as death benefit.
Similarly, when the pay-out is made to the policyholder themselves on maturity
of the policy, it is termed as maturity benefit.

• Customizable sum assured: The sum assured component of a life insurance plan is
the pay-out that your nominee gets from the insurance service provider in the event
of your demise. Just like the tenure of a life insurance plan, you can also customize
the sum assured when purchasing the policy. That said, here’s something that you
need to know. The premium that you’re required to pay for a life insurance policy
depends on the sum assured amount that you choose. So, for example, the premium
for a life insurance plan with Rs. 1 crore as the sum assured is likely tocarry a
higher premium than a similar plan with just Rs. 50 lakhs as the sum assured.

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BENEFITS OF LIC INSURANCE PLANS

• This study provides criteria for investment in life insurance sectors. With
the help of this study a person can able to choose the sector in which he
wants to insure his life and invest money. With the help of thisstudy an
industry can improve itself in life insurance
• i.e. growth pattern, market strategies, offices, products & policies etc.

• Life Insurance Corporation of India (also known as LIC) is a state-help

insurance company. Since 1956 LIC has been providing robust life
insurance services. Life Insurance Corporation is one of the largest life
insurance providers in India that provides a wide range of insurance plans
such as Term Insurance, Whole Life, Endowment, and Money Back. LIC
anticipates your insurance needs and provides you with a plan that fulfils
your requirements.

• Life insurance is something that we all need at some point in our life. In
fact, it is one of the most important financial planning tools for
individuals and families. Even if you don’t think about it frequently,
you will need it to ensure your financial security.

• All life insurance policies come with several advantages, including the
fact that you can get a guaranteed amount of money after the plan
matures. Life insurance also offers protection against financial loss in the
event of the death of the insured person.

• You can also take advantage of a tax deduction for the cost of the policy.
The premium of a life insurance plan can be tax-deductible under Section
80C up to Rs.
o 1.5 Lakh, which means that you’ll get to reduce your taxable
income by the amount you pay for the policy.

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 o If a family member is the beneficiary of a life insurance policy,
then the proceeds can be used to pay off the family’s debt and meet
future goals. This is a great way to make sure that your family is
taken care of in the event of your death.
Furthermore, life insurance can be used to meet various long-term goals, like
building a retirement corpus. can invest in life insurance to accumulate savings
to live a stress-free life after retirement.

• Many people in India ignore buying an insurance policy because they

think it is an unnecessary investment until a sudden mishap or accident
brings them to realize the importance of it. Life can be quite
unpredictable, and although you cannot predict uncertainties, you can
be well prepared to deal with it. One of the best ways to cope with the
uncertainties of life and ensure that your loved ones are protected
financially in the face of adversity is to invest in a good life insurance
policy.

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 ∆ Life Insurance Corporation offers the following benefits to its customers:

• Variety of Products: Life Insurance Corporation provides a wide range of

Term Insurance, Endowment, Money Back and Whole Life Plans. The plans
offered by Life Insurance Corporation can be chosen according to your
requirements and budget. LIC is the most trusted insurance provider and it
strives to fulfil every insurance need of a person at an affordable amount.

• High Claim Settlement Ratio: Life Insurance Corporation has featured a

claim settlement ratio of 96.69% in the FY 2019-20. High Claim Settlement
Ratio reflects the credibility of insurance companies. The Claim Settlement
Ratio depicts the number of claims that were paid successfully in a year.
When you choose an insurance provider with a high claim settlement ratio,
you can rely on the insurance provider to approve the claim fairly in desperate
times.

• Award-Winning Services: Life Insurance Corporation has received many

awards. LIC has been rated as ‘Most Trusted Service Brand Of India’ by The
Economic Times Brand Equity Service in 2012. LIC has continuously been
receiving the ‘Reader’s Digest Trusted Brand’ award since 2006. Life Insurance
Corporation has been voted ‘India’s Most Trusted Brand’ for four continuous
years from 2011-2014. LIC is a trusted life insurance provider in India.

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• Excellent Customer Support: Life Insurance Corporation is one of the
largest and oldest life insurance providers of affordable policies and plans The
company values its customers and provides excellent customer services. Their
customer care toll-free number is accessible 24x7. This helps the customer to
stay connected with the insurance provider at all times.

• Simplified Purchasing Process: Purchasing and applying for a LIC life

insurance plan is very easy. You can visit the LIC branch office for a
consultation or purchasing a life insurance plan. You can also get information
about the life insurance plan you want to purchase via SMS. Online customer
services are simplified to make it easier for existing and potential customers.

• Whole Life Police: A whole life policy is a life insurance plan that covers an
insured till the time they turn 99/100 years. In case the insured passes away
during the tenure, the family behind receives a death benefit. Because they have
long-term/whole life cover, these are known as whole life cover.

• Death benefit: This refers to the lump sum payment received by the family
of the insured person. The death benefit is typically the sum assured amount
chosen by the policyholder at the time of signing up for the policy

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• VALUABLE RETURN ON YOUR INVESTMENT: Several financial
advisors in India suggest that everyone must invest in a life insurance policy
not only to provide your family with the financial protection when you are not
around but also from the perspective of gaining valuable returns from the
investment. Many life insurance schemes in India offer a decent recent in the
form of bonus that no other investment tools offer. Also, life insurance is a
safe investment tool as compared to other investment option. The money you
invest in your policy is returned to you in full as the sum assured at the end of
the term or after the demise of the insured.

Takes care of your liabilities: The various loans and liabilities that you take
to make your life comfortable may become burdensome for your family in your
absence. The sum assured would be beneficial in repaying them. Thus, most high
value loans, such as home loans, are usually coupled with loan protection
insurance plans.

• Retirement Plans: A retirement plan, as the name suggests, is an ideal one for
individuals planning their retirement provides. It offers a life insurance cover and
pays a lump sum death benefit to the nominee in case the insured passes away. Apart
from this, one part of the premium is also used to provide a regular source ofincome
as an annuity that may be immediate or deferred.

• Maturity benefit: This refers to the payment received by the policyholder if

he/she outlives the chosen policy term. There are no maturity benefits in term
covers. However, other covers like endowment plans, ULIPs, retirement plans,
etc., offer maturity benefits for policyholders. Maturity benefits typically have
bonus payments provided by the company.

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 • Protect the children’s future: You work hard to provide the best of
everything for your children. A life insurance plan allows you to secure the dreams
and aspirations of your child even if you are no longer around. Most child insurance
plans come with a premium waiver benefit. So, if you happen to die within the
policy tenure, i.e. before your child completes his/her education, the insurer would
pay for the remaining premiums and the policy would continue as per original
schedule and the maturity benefits would be provided to the child as defined. This
would help to fund the child’s education without any financial woes.
•

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 ∆ TYPES OF LIC LIFE INSURANCE PLANS
Life Insurance Corporation a wide range of comprehensive life
insurance plans. Following are the types of life insurance plans offered
by the insurance company:

• Term Insurance Plans: Term life insurance is the most popular type of
life insurance. It is widely considered to be the simplest and purest form
of life insurance. It offers a death benefit to the beneficiaries of the
policy if the policyholder passes away during the policy term. Term
insurance is the most affordable types of life insurance. The most
distinctive feature of this plan is the high amount of coverage offered at
extremely nominal premium rates. It is thus cheaper than other types of
life insurance policies. In general, term life insurance does not offer
maturity benefits. But certain types of term plans also offer maturity
benefits, i.e., term plan with return of premiums (TROP) if the

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 policyholder outlives the policy term. One can also increase the amount
of coverage offered by a term plan by opting for additional riders, such
as Accidental Death Benefit or Child Support riders. Life Insurance
Corporation offers two-term insurance plans. LIC’s Tech Term is pure
protection and an online term plan that provides financial protection to
the family of the policyholder on the unforeseen demise of the
policyholder. LIC’s Jeevan Amar offers life cover and flexibility to
choose from two death benefits offered are Level Sum Assured and
Increasing Sum Assured.

• Endowment Plans : Endowment Policy is a type of life insurance policy

which acts as, both, an instrument for insurance and saving. These plans aim
to provide maturity benefits to the life insured, in the form of a lump sum
payment at the end of the policy tenure, even if a claim hasn’t been made. It is
the most suitable types of life insurance for people looking to get maximum
coverage alongside having a sizable savings component. They help the
policyholder inculcate the habit of savings, even while providing financial
security to their family. Endowment plans can broadly be classified into two
types: with profit and without profit. Policyholders can choose from these two
types based on their risk appetite.

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• Money Back Plans: Being one of the best types of life insurance policies, a
money-back policy offers policyholders a percentage of the total sum assured
at periodic intervals in the form of Survival Benefits. Once the policy reaches
maturity, the remaining amount of the Sum Assured is handed over to the
policyholder. However, if the policyholder dies while the term is ongoing,
their dependents are given the entire Sum Assured without any deductions. Life
Insurance Corporation offers several money back plans namely LIC’s New
Money Back Plan-20 Years, LIC’s New Money Back Plan-25 Years, LIC’s
Jeevan Umang, LIC’s New Children’s Money Back Plan, LIC’s Jeevan Tarun,
LIC’s Jeevan Shiromani and LIC’s Bima Shree.

• Child Insurance: A child insurance plan is a savings cum investment plan

that provides financial protection for the child’s future upon the unfortunate
demise of the policyholder. It is ideal for ensuring the future needs of the child
are well taken care of, even in the absence of the life insured. Parents can invest
in the best child insurance plans, in order to meet the financial requirements for
their child’s education, marriage or to fulfil a multitude of other financial goals
their child might have.

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• Retirement Plan: A retirement plan is a type of life insurance that focuses
on providing you financial stability and security post your retirement. After
you retire, you lose your regular income from employment. Investing in
retirement plans can help you create a stable regular income stream. If you
continue to invest until retirement, the plan will help you take care of your
expenses after retirement. It requires you to invest a certain part of your
income regularly during your working life. At the time you retire, the amount
that you create over the years will be converted into a regular income stream.
Retirement plans also involve death benefits. Thus, if the policyholder passes
away during the course of the policy, their beneficiaries will be provided with
an assured sum.

• Group Insurance Plan: A group life insurance policy is a type of life

insurance that covers a group of people inside a single insurance policy. Unlike
individual life insurance policies, which cover one person for a period, group
insurance covers a minimum of 10 members. Employers, banks, corporates, and
other homogeneous
groups of persons can buy group Life Insurance policies for their employees
and customers. While employers would want to offer financial protection to
their employees' families banks and lending institutions aim to keep the debt
off the borrowers’ family after their death.

• Savings and Investment Plan: Savings and investment plans from life
insurance are the plans which channel your regular savings into long-term
investment goals. iSelect Guaranteed Future is a life insurance cum savings plan
that offers a life cover along with guaranteed maturity benefits. With this, you
can plan your investments so that you can achieve your life goals smoothly.
You can also protect your financial goal with a premium protection.

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• Unit Linked Insurance Plan (ULIP): Unit Linked Insurance Plan or ULIP
is a type of life insurance product that offers dual benefits of investment and
life insurance. Among the different types of life insurance policies available,
ULIPs enjoy a high amount of popularity owing to their versatile nature. A
portion of the premiums paid is directed towards ensuring insurance
coverage, while the rest of the premium is invested into a bouquet of
investment instruments, which can include market-backed equity funds, debt
funds and other securities. ULIPs are extremely flexible instruments since
investors can easily switch or redirect their premiums between the different
funds available. They are also touted as having an edge over other market
instruments in terms of tax-saving benefits, since their proceeds are exempted
from LTCG (Long Term Capital Gains).

27
• How to Choose the Right Type of Life Insurance Policy?

• The idea of the right policy differs from person to person. What will be
a good option for someone else, may not be as attractive for you. Thus, it
becomes important to choose the policy that suits you the best.

• Here is how you can choose the right type of life insurance policy:

• Choose According to the Goal

▪ Different life insurance policies can help fulfil different

goals. You should be clear about the goal that you want to
achieve with your life insurance policy.

• Consider the Sum Assured

▪ Ascertain the needs and wants of your family members as

well as the daily expenses and choose a cover that can fulfil
all these. The general rule that goes is that you should select
a sum assured which is at least 10 times your annual income.

• Policy Term

▪ While some policies are made to achieve long-term goals

and have a longer time frame, some policies have shorter
terms as well. Select a policy that has multiple time frames.

• Riders

▪ Riders can enhance your sum assured and can cover those
occurrences which the basic policy doesn’t. Choose a policy
with maximum riders.

28
∆ There are some Basic Policies of the Life Insurance Corporation of
India?
• The basic policies in Life Insurance Corporation of India (LIC) are term
insurance, cash value insurance, straight life insurance, and limited
payment life insurance. The details of each of these policies are given
below:

• Term insurance: This insurance is like an insurance protection contract,

similar to auto insurance, home insurance, or health insurance. Therefore,
it ensures the individual against any risk of financial loss in case of death
and does not include any savings plan. In this insurance policy, the owner
buys a fixed amount of coverage and pays an annual premium based on
their age. These policies are available for five years, ten years or fifteen
years where the amount of premium to be paid remains constant. The life
insurance can also be purchased with a condition of 65 years of age, that
is, the insured does not become 65 years of age and in this case, the
amount of premium to be paid increases annually. There is decreasing
term life insurance also available wherein the coverage of the insurance
decreases with time so that the annual premium to be paid remains
constant. Term insurances provide maximum coverage to the premium
spent.

• Cash value insurance: In this kind of policy, the amount of actual

insurance decreases over time and the savings component of the policy
increases over time. This type of insurance is funded by the premium
payments done by the insured along with the earnings of the saving
element in the policy. These insurance policies are of two types: straight
life policy and a limited payment policy that provides coverage to the
insured throughout life.

29
 • Straight life insurance: the insurance is throughout life. In this type of
insurance, the amount of protection decreases as the savings amount
increases, though the total coverage of the policy that includes the
protection and savings elements remains the same. The premium for this
policy remains constant. The face value of insurance refers to the amount
which is paid when the insured person dies.

• Limited payment life insurance: in this type of policy the insured person
pays the total amount of policy in a limited number of years, that is, usually
20 to 30 years or by the age of 65. After the completion of the term, the policy
remains active for the whole life of the Insured if he or she has not withdrawn
the amount at any point in time. The amount of premium to be paid every year
in this policy is obviously higher than the straight life policy.

30
• IMPORTANT DOCUMENTS FOR PURCHASING LIC LIFE
INSURANCE POLICY
• Mentioned below is the lost of important documents required in order to
purchase a LIC life insurance policy:

• Identity Proof

o Aadhaar Card
o Passport
o Voter ID Card
o PAN Card

• Age Proof

o Driving License
o Voter ID Card
o Marriage Certificate
o Birth Certificate

• Address Proof

o Passport
o Ration Card
o Aadhar Card
o Latest 3 electricity, water or any other utility bills

• Income Proof

o Latest 6 salary slips

o Income Tax Returns of last 2 years
o Bank statements of last 6 months stating 3 months of salary
credited continuously
o Form 16

• Other Documents

o Policy Declarations in case the application form has not been

filled by the policyholder itself
o Final Declaration stating that information provided is true and correct.

31
 • IMPORTANCE OF LIFE INSURANCE

o To pay off debts

• Most people, during their early professional life, end up taking loans to fulfil
various needs like purchasing a house, or a car. Some end up taking a personal
loan to finance their child's wedding, or even repay multiple debts. However, in
case you happen to pass away suddenly, the burden of all these loans and debts
falls directly on your dependent family members. Even if your spouse is
employed, the financial burden of paying off these loans falls directly onthem.
With a life insurance policy, this is one worry less to be worried aboutas the
sum assured from the life insurance policy can help the family take care of such
liabilities, without compromising their needs.

o To take care of your family's needs

• The primary purpose of life insurance is helping your loved ones take care of
their needs, especially at a time when you may no longer be around to provide
for them. A dependent spouse, children, or aged parents will continue to be
dependent on your income, and leftover savings even after your demise.
However, with the loss of regular income, it can be difficult to take care of all
expenses, and families often have to compromise on their lifestyle to ensure that
essential needs can be taken care of. That's where life insurance steps in, to help
the family take care of their needs like children's education, as income
replacement, to create further savings or investments, and to provide much
needed financial stability to the family members.

o Insurance for your business

• The purpose of life insurance is not just to safeguard the financial future of
your loved ones, but also your business concerns. There are life insurance
policies specially designed for business owners where the surviving business
partner to acquire their deceased partner's share of the enterprise, while the
benefit sum assured pay-out is provided to the deceased's nominee.

32
 o To take care of short & long-term future requirements
• Depending on the policy you have chosen, and the pay-out option, the right
life insurance policy can be crucial in helping your loved ones take care of their
short term, and long-term needs. Short term needs may include immediate
expenses such as loans, or liabilities, which need to be repaid quickly. Over the
longer term, the family would require funds to take care of the children's
education, to invest, or save for the future, to take care of recurring household
expenses, etc. Certain insurance policies also come with built-in investment
components which allow for investments in a variety of funds, as chosen by the
policyholder. Some policies also have combination pay-outs where a part of the
sum assured is provided immediately after death, as lump sum. The remainder
is provided over a specified future period in fixed instalments and acts as
income replacement.

o For mental peace

• Having mental peace is very important to leading a worry free life. With life
insurance, that is exactly what you get. You no longer have to worry about what
happens to your family's financial well-being if you are not around. Given that
tragedy can strike at any time, having a life insurance policy will at least give
you peace of mind that your loved ones are provided for.

o To save on tax
• Besides providing protection, the other major reason people buy insurance is
to save on tax. As per the current provisions of Section 80C of the Income Tax
Act, 1961, policyholders can avail tax benefits of up to Rs.1.5 lakh on life
insurance premiums. Also, the proceeds received under the death/maturity
benefit are also tax free under Section 10 (D) of the Income Tax Act, 1961.

• These are just some of the many reasons that make life insurance an absolute
necessity, especially for someone who is the sole earning member in their
household.

33
 ∆ MODES OF PAYMENT OPTIONS OFFERED BY LIC

As the world of banking and insurance has shifted online, more and more people
are now opting for the convenience of making payments online. With time and
innovation, these channels of making payments have become more and more
sophisticated. For the convenience of its customers, LIC offers several channels
via which customers can make payments for their LIC policies. Payments for
LIC policies can be done online in variety of ways such as from the LIC website,
at authorised bank branches, at franchisees, or evenat merchants. Here, we have
prepared an exhaustive list of all the options via which customers can make
payments for their insurance policies.

• LIC policyholders have an option to pay premiums online or offline.

Below mentioned are different modes of payment options offered by
LIC:
• Online Payment Options:

• Following is the list of online payment options offered by LIC:

o LIC’s Official Website

o E-Wallets (Paytm, BHIM etc.)
o UPI

34
 o Debit/Credit Cards
o Net Banking

• Offline Payment Options:

• Following is the list of offline payment options offered by LIC:

o Direct Payment at
o NACH
o Bill Pay
o ATM - Axis and Corporation Bank

35
 LIC Online Services
• Following are the online services provided by LIC of India-

• Digitalization is no more a luxury; it has become a necessity. Having

realized the wide potential of the digital platform to connect companies
with their customers, a rapidly increasing number of businesses are
integrating it into their processes. LIC too has digitalized its processes,
creating an extensive online database for their customers. This has made
LIC's products and services more accessible right at the fingertips of
existing and prospective customers.

o Online forms for the products and services from LIC of India
o Registration for e-Services from LIC of India
o Policy schedule
o Status of policy
o Status of claim
o Status of loan
o Status of accrued bonus
o Revival quotation
o Certificate of premium payment
o Premium due calendar
o Policy bond/Proposal form image
o Claim history
o Registration of grievances.

36
 • THE ROLE OF INSURANCE SECTOR IN INDIA:
At the crossroads of development, the industry is on its way to
development and a number of factors govern that growth. Some of them are:

• Recent regulatory developments that govern the current market state:

The development of the insurance industry in India is likely to be critically
dependent on the nature and quality of regulation. Overall, the regulatory
environment is favourable and takes care that players maintain prudent
underwriting standards, and reserve valuation and investment practices. There
are certain factors that need to be considered by the Indian insurance industry
to ensure a seamless growth in business. Our report analyses these factors in
detail. Some of these include.

• Distribution channels: The effectiveness and cost of diverse distribution

strategies of different players is crucial in ensuring the success of players in
the insurance business, particularly in the retail lines of business.

• Focus on financial inclusion: The approach to insurance must be in sync

with the evolving times. The mission of the insurance sector in India should be
to extend the insurance coverage over a larger section of the population and a
wider segment of activities.

• Consumer needs and preferences: The growth in insurance industry has

been spurred by product innovation, vibrant distribution channels, coupled with
targeted publicity and promotional campaigns by the insurers. Innovation has
come not only in the form of benefits attached to the products, but also in the
delivery mechanism through various marketing tie-ups. All these efforts have
brought insurance closer to the customer as well as made it more relevant.

37
• Role of Insurance Provide safety and security: Insurance provide
financial support and reduce uncertainties in business and human life. It
provides safety and security against particular event. There is always a
fear of sudden loss. Insurance provides a cover against any sudden loss.
For example, in case of life insurance financial assistance is provided to
the family of the insured on his death. Insurance provides the investment
opportunities also. In case of other insurance security is provided against
the loss due to fire, marine, accidents etc.

• Generates financial resources: These funds are gainfully employed in

industrial development of a country for generating more funds and
utilized for the economic development of the country. Insurance helps
in providing Employment opportunities leading to capital formation.
Insurance generates funds by collecting premium. These funds are
invested in government securities and stock.

• Employment generation: Insurance industry provides employment

opportunities. The number of individual agents has increased. As on 31st
March, 2015, there were 503 Corporate Agents working for Life
insurance industry new business premium at`1.38 lakh crore in FY16,
as against `1.13 lakh crore in the previous financial year. Private insurers
saw new business premium at `40,983 crore in the last fiscal, as against
`34,840 crore in the previous financial year. The Union Budget 2016-17
has proposed several reforms for the insurance and pensions sector
including a proposal to allow foreign investment in insurance sector
through automatic route up to 49%. The number of new individual
policies issued in 2014- 15 stood at 2.59 Crore. Brokers, corporate agents,
training establishments provide extra employment opportunities.

38
 • Promotes economic growth: Insurance generates significant impact on
the economy by mobilizing domestic savings. Insurance sector provides
capital into productive investments. Insurance enables to mitigate loss,
financial stability and promotes trade and commerce activities those
results into economic growth and development. Thus, insurance plays a
crucial role in sustainable growth of an economy.
• • Spread of financial services in rural a socially less privileged: IRDA
Regulations provide certain minimum business to be done in rural areas,
in the socially weaker sections. Life Insurance offices are spread over
nearly 1400 centres. Presence of representative in every tensile deeper
penetration in rural areas.

• Spreading of risk: Insurance facilitates spreading of risk from the

insured to the insurer. The basic principle of insurance is to spread risk
among a large number of people. A large number of persons get
insurance policies and pay premium to the insurer. Whenever a loss
occurs, it is compensated out of funds of the insurer.

• Source of collecting funds: Large funds are collected by the way of

premium. These funds are utilized in the industrial development of a country,
which accelerates the economic growth. Employment opportunities are
increased by such big investments. Thus, insurance has become an important
source of capital formation.

39
 o ADVANTAGES OF LIFE INSRANCE
• The following are the main life insurance advantages:

• Return on Investment: Advantages of life insurance as an investment.

Whenever you visit a financial advisor for financial planning you can see that
most of them suggest you go for life insurance. They encourage you to invest
in life insurance so that you and your loved ones are not only protected but also
a considerable amount of returns can be obtained from the policy. Many life
insurance schemes in India provide decent returns as well as bonuses that no
other investment tools offer. Life insurance is considered one of the safest tools
for investment as the money invested is returned to you or your family at the
time of maturity or as a death benefit.

• Death Benefit: In case of any unexpected event to you,

which results in the loss of income to the family, the insurance
company provides compensation in the form of the death
benefit to the family. The nominee of the insured receives the
death benefit as well as the accrued bonus if any, depending on
the type of the policy. The death benefit can be claimed asa
lump sum or monthly benefit, in which the monthly benefit
option can be a boon for the family having old age people or
disabled people.

• Financial Security: This is the main advantage of life insurance. The main
purpose of life insurance is financial protection. If the sudden demise of the
insured can put the family in jeopardy. With no regular income, the family may
soon face a financial crisis. Having a life insurance policy helps your family
come out from any financial crisis after your sudden demise.

• Income tax exemption: The premiums paid under the life

insurance policy are eligible for income tax exemption under section 80C. At
present under this section of income tax, you can avail of a maximum tax
40
deduction of Rs.1.5Lakh.

• Additional Coverage: Additional coverage is also called riders. The riders

allow you to increase the coverage and get comprehensive coverage. Riders
may include coverage against personal accident, waiver of premium payments,
critical illness, loss of income due to a disability, etc.

• Loan availability: In the event of any emergency such as a college fee or property
purchase, the loan can be availed against your life insurance policy. These days almost
all insurance companies are providing this option. When you apply for a loana certain
amount of your sum assured is provided as the loan amount.

• Retirement Income: Life insurance policies can also be taken for the purpose of
regular income after retirement. These policies are called annuity policies and are
available with every life insurance company. If you take an annuity policy and pay a
premium till your retirement age, then after your retirement monthly income is paid
to you by the insurance company.
41
 o DISADVANTAGES OF LIFE INSRANCE
∆ The following are the main life insurance disadvantages:

• High premium for aged people: This is the major disadvantage of life
insurance policy. The higher the age the higher would the premium to be paid
in the life insurance. This is due to the simple fact that the risk increases with
the age so is the premium. So, it is advisable to take life insurance at a very
early age to prevent yourself from paying high premiums. There is a chance
where the insurance companies have rejected or denied providing policy to
old age people having ailments.

• Difficult to calculate the returns: The returns on the life insurance policies
are quite complicated and it is highly difficult to predict the returns. The returns
from life insurance are purely based on market conditions and performance.

42
Complex Policies: In India, many insurance companies offer different types of
life insurance plans. You can choose the best life insurance plan as per your
requirement. But it can also create confusion in the minds of the customer
because different insurance policies have different features. Some policies are
simple, and some are not so simple. It can be daunting to choose the right life
insurance policy.

• Insurance Companies May Not Pay the Benefits: The insurance

companies use various tricks to avoid paying the benefits even after thematurity
of the policy and also they have denied paying the sum assured or the death
benefit to the policyholder or the nominee. They would mention many hidden
charges or clauses to reduce the pay-out. So, it is important to carefully
understand the details of the policy and choose a company that has a positive
pay-out rate. Things to know about the merits and demerits of life insurance and
the importance of having life insurance it is advisable to talk to our agents before
entering a contract.

• Awareness of Exclusions, Hidden clauses: Any financial product available

in the market certainly has some exclusions and hidden clauses incorporated
into it. It is your responsibility to find out those clauses and choose the right life
insurance policy. For example, most of the policies don’t pay for suicidein the
first year and almost all the policies exclude loss of life due to drugs overdose
or involvement in criminal activities.

43
• Insurance Operations: Marketing, Underwriting, and
Administration

• MARKETING

• We begin with marketing despite the fact that it is not the first step
in starting a business. From a consumer’s point of view, it is the
first glimpse into the operations of an insurer. Insurance may be
bought through agents, brokers, or (in some cases) directly from the
insurer (via personal contact or on the Internet). An agent legally
represents the company, whereas a broker represents the buyer and,
in half of the states, also represents the insurer because of state
regulations. Etti
• G. Baranoff, Dalit Baranoff, and Tom Sager, “Nonuniform Regulatory
Treatment of Broker Distribution Systems: An Impact Analysis for
Life Insurers,” Journal of Insurance Regulations, Regulations 19,
no. 1 (Fall 2000): 94. Both agents and brokers are compensated by
the insurer. The compensation issue was brought to the limelight in
2004 when New York State Attorney General Eliot Spitzer opened an
investigation of contingent commissions that brokers received from
insurers; these contingent commissions were regarded as bid
rigging. Contingent commissions are paid to brokers for bringing in
better business and can be regarded as profit sharing. As a result of
this investigation, regulators look for more transparency in the
compensation disclosure of agents and brokers, and major
brokerage houses stopped the practice of accepting contingency
commission in the belief that clients view the practice negatively.

44
• UNDERWRITING

• Underwriting is the process of classifying the potential insureds into the

appropriate risk classification in order to charge the appropriate rate. An
underwriter decides whether or not to insure exposures on which
applications for insurance are submitted. There are separate procedures
for group underwriting and individual underwriting. For group
underwriting, the group characteristics, demographics, and past losses are
judged. Because individual insurability is not examined, even very sick
people such as AIDS patients can obtain life insurance through a group
policy. For individual underwriting, the insured has to provide evidence
of insurability in areas of life and
• Once the underwriter determines that insurance can be issued, the next
decision is to apply the proper premium rate. Premium rates are determined
for classes of insureds by the actuarial department. An underwriter’s role is
to decide which class is appropriate for each insured. The business of
insurance inherently involves discrimination; otherwise, adverse selection
would make insurance unavailable.
45
ADMINISTRATION

• After insurance is sold and approved by the underwriter, records must

be established, premiums collected, customer inquiries answered, and
many other administrative jobs performed. Administration is defined
broadly here to include accounting, information systems, office
administration, customer service, and personnel management.

• Service is the ultimate indicator on which the quality of the product

provided by insurance depends. An agent’s or broker’s advice and an
insurer’s claim practices are the primary services that the typical
individual or business needs. In addition, prompt, courteous responses
to inquiries concerning changes in the policy, the availability of other
types of insurance, changes of address, and other routine matters are
necessary.

46
• Some Crucial Reasons Why Life Insurance Is Important

• Among the many things we know about life, its unpredictability is

decidedly one of the most important quality one must never forget. While
one moment you may be the happiest you can every dream to be,the very
next moment can bring unimaginable sadness as well. One can never
know or predict what happens next. And this unpredictability is the very
reason why life insurance has even been invented.

• While it may seem like a rather depressing thing to do, but seldom do
people give a thought about when they may no longer be around. What
happens to their family? Who will support the family's expenses? Who
will pay for the children's education or upbringing? Who will take care
of household expenses? This is only the tip of the iceberg when it comes
to securing your family's future, and especially important for individuals
who are the sole income earners in their immediate household and
support dependents like a spouse, children, or aged parents. In the
unfortunate event of death of a family's income earner, not only is there
intense emotional grief to deal with, due to the loss ofa loved one, but
also impending financial turmoil, following the loss of income.

• While it may not drive away the emotional grief, but life insurance can,
to a large extent, help the aggrieved family take care of their financial
needs at such a testing time. With a life insurance policy, you can
secure not only your family's future, but also help safeguard your
business during difficult times. Here are some reasons which highlight
the importance of life insurance.

47
• SWOT ANALYSIS LIFE INSURANCE CORPORATION
• Life Insurance Corporation of India (LIC), SWOT analysis can help the
brand focus on building upon its strengths and opportunities while
addressing its weaknesses as well as threats to improve its market
position.

• STRENGHTS:
• The strengths of Life Insurance Corporation of India (LIC) looks at the
key aspects of its business which gives it competitive advantage in the
market. Some important factors in a brand's strengths include its financial
position, experienced workforce, product uniqueness & intangible assets
like brand value. Below are the Strengths in the SWOTAnalysis of Life
Insurance Corporation of India (LIC) :

• Largest state-owned life insurance company in India, and also the

country's largest investor
• Has over 2000 branches across all parts of India and more than 10,00,000
agents.
• With Largest fund base it is the biggest investor in India.

• According to The Brand Trust Report, LIC is the 8th most trusted brand of
India
• LIC has subsidiaries like LIC Housing Finance Limited, LIC
Cards Services Limited, LIC Nomura Mutual Fund,
LIC(Nepal)Ltd, LIC(Lanka)Ltd, LIC(International)BSC(C).

o WEAKNESS:
• The weaknesses of a brand are certain aspects of its business which are
it can improve to increase its position further. Certain weaknesses can

48
 be defined as attributes which the company is lacking or in which the
competitors are better. Here are the weaknesses in the Life Insurance
Corporation of India (LIC) SWOT Analysis:

• It has an image of a Government agency and hence lacks

innovation
• Being a Government agency, red tape and bureaucracy causes
problems
• Managing a huge workforce during economic crisis meant
overburdened due to salaries.

49
 o OPPORTUNITIES:
• The opportunities for any brand can include areas of improvement to
increase its business. A brand's opportunities can lie in geographic
expansion, product improvements, better communication etc. Following
are the opportunities in Life Insurance Corporation of India (LIC) SWOT
Analysis:

• Use of Technology to provide effective services to cater to urban

population.
• Government Schemes implementation.

o THREATS:
• The threats for any business can be factors which can negatively impact
its business. Some factors like increased competitor activity, changing
government policies, alternate products or services etc. can be threats.
The threats in the SWOT Analysis of Life Insurance Corporation of India
(LIC) are as mentioned:

• Economic crisis
• Entry of new NBFCs in the sector
• Varying Govt policies.

50
 o RESEARCH METHODOLOGY

• Nature of study- Descriptive & Analytical

• The study tries to focus on role of LIC in insurance industry. The main
focus is to find out about the impact on health insurance, to create
awareness among people, designation offered by insurance web sites and
articles to challenges faced by people faced in pandemic. A primary
survey was conducted by the researchers for this study.

• life insurance is a contract between an insurance company and a person,

known as the life insured. The contract offers the guarantee of financial
compensation to the policyholder's beneficiaries for loss of a
policyholder's life.

RESEARCH DESIGN

• Research design is heart of the research study. A research study is the

course of action of the condition for gathering and examination of
information in such way that aim to consolidate significance to the
study purpose. The design incorporated a frame work of what a
researcher intend to do in study. Considering the nature of the research,
descriptive as well as causal approaches have been employed. The key
intent of this study is to assess the various methods used by working
employees to allocate their income and various strategies for tax
deduction. Limited research have been conducted to identify how
financial planning is done by salaried employees in any firm or
organization and how they invest their money to increase it as well as
avail the tax benefit provided by the government via income tax act.
Thus, this study aims to investigate on the financial planning and tax
savings pattern of the working employees.

51
• REVIEW OF LITERATURE
• Alok Mittal and Akash Kumar (2003)
• In their study “An Exploratory Study of Factors Affecting Selection of Life
Insurance Products” have attempted to identify the factors which are affecting
the consumers in taking into consideration before selecting a life insurance
product and determining the extent to which these factors are taken into
consideration for choosing life insurance products. The study highlighted that
consumers take into consideration factors like product attributes, customer
delight, payment mode, product flexibility, risk coverage, grace period,
professional advisor, and maturity period as important before making a decision
on selection of a life insurance product but most important factors which are of
vital importance was product attributes, and the least important was maturity
period.

• William H. Greene, and Dan Segal (2004)

• In their research “Profitability and Efficiency in the U.S. Life Insurance
Industry” have discussed the relationship between cost inefficiency and
profitability in the U.S. life insurance industry. The life insurance industry is
mature and highly competitive, and cost efficiency may be the main driver of
profitability. The authors derive cost efficiency using the stochastic frontier
(SF) method allowing the mean inefficiency to vary with organizational form
and the outputs. In addition, the estimation of the cost efficiency measure takes
into account the underlying accounting concepts. This study suggests that cost
inefficiency in the life insurance industry is substantial relative to earnings, and
that inefficiency is negatively associated with profitability measures such as the
return on equity.

• T. Venkateshwara Rao (2004),

• Presented a paper titled “Alternative Distribution Channels in India” in Global

52
Conference of Actuaries. This research points out that a distribution channel
means a set of interdependent organizations involved in the process of making
a product or service available for use or consumption by the consumer by
creating place utility & the value of having the products where the customer
wants them, when they want them. The research said that in Distribution in Life
Insurance requires the intermediaries. The current insurance market depends
heavily on Individual Agency channel but it concluded that Alternative
distribution channels can give competitive edge for the Insurers, a statistics of
Alternative Distribution channels of LIC suggest that corporate agencies
including banks are garnering 82% and the rest 18% is coming from Brokers &
Over time bancassurance may get at least 20% distribution share in life
insurance market.

53
• CONCLUSION

• The paper discusses the growth of Indian Insurance sector in terms of selected
financial and marketing variables from 2004-05 to 2018-19. Along with this,
year-on-year growth, trend analysis and compounded annual growth rate are also
presented in this paper. After the reforms in insurance sector, life insurance
industries have seen a remarkable growth moreover; the policies measures
provided a favorable environment for insurance companies to flourish in the
country. Till 2013 there were 52 insurance companies operating in India of which
24 are in life insurance business. The share of the life insurance business in total
insurance business was very high is ranked 10th among 88 countries.LIC has
been successfully able to create value for its customers or policy holders. By
analysing the pre- and post-performances, it is showing a respectable growth in
its business. There is enormous potential for life insurance and no doubt that LIC
still enjoys immense goodwill in our country. But private players are giving cut
throat competition, So LIC has to made more efforts to enhance its business in
terms of technology distribution network, technological innovations, client
relationship and quality.

• Our exhaustive research in the field of Life Insurance threw up some interesting
trends which can be seen in the above analysis. A general impression that we
gathered during Data collection was the immense awareness and knowledge
among people about various companies and their insurance products

• The many features and benefits of life insurance at your disposal, investing in a
life insurance plan is one of the initiatives you can take to financially secure
your life goals. Before you purchase a life insurance plan, make sure you check
out the features offered, so you can customize the plan to the best of your
needs.

• Insurance Sector has not only played an unparalleled role by spreading the
message of life insurance throughout the country, but also a significant role in
the economic development of the nation. Insurance helps the society by
creating both direct and indirect employment opportunities for the economic
development of the nation.
54
• But a country like India with its vast resources is still lacking in the
development of both general insurance and life Insurance development.

• Insurance reduces the capital firms need to operate. It fosters investment and
innovation by creating an environment of greater certainty. Insurers are solid
partners for the development of a workable supplementary system of social
protection, in particular in the field of retirement and health provision.
Insurance promotes sensible risk- management measures through the price
mechanism and other methods and contributes to responsible and sustainable
economic development.

• Our exhaustive research in the field of Life Insurance threw up some interesting
trends which can be seen in the above analysis. A general impression that we
gathered during Data collection was the immense awareness and knowledge
among people about various companies and their insurance products.

• Insurance reduces the capital firms need to operate. It fosters investment and
innovation by creating an environment of greater certainty. Insurers are solid
partners for the development of a workable supplementary system of social
protection, in particular in the field of retirement and health provision.
Insurance promotes sensible risk- management measures through the price
mechanism and other methods and contributes to responsible and sustainable
economic development.

• Our exhaustive research in the field of Life Insurance threw up some interesting
trends which can be seen in the above analysis. A general impression that we
gathered during Data collection was the immense awareness and knowledge
among people about various companies and their insurance products.

55
• BIBLIOGRAPHY

• WEBSITE REFFERED
• www.indiainsuranceresearch.com www.irda.com

• www.licindia.com

• www.irdaindia.org

• www.licindia.in

• http://indianexpress.com

• https://irdai.gov.in.

• https://www.ibef.org/industry/insurance-sector-india.aspx

56
 ANNEXURE
(1). Gender:
a. Female
b. Male
c. Others

(2). Age:
a. 15 – 20
b. 20 - 25
c. 25 – 30
d. 30 & above

(3). Qualification:
a. HSC
b. Undergraduate
c. Graduate
d. post Graduate

(4). Occupation:
a. Student
b. Private Sector
c. Public Sector
d. Business

(5). Annual Income:

a. 50000 – 1Lakhs
b. 1 Lakhs – 2 Lakhs
c. 2 Lakhs – 3 Lakhs
d. 3 Lakhs & above

(6). Do you have life insurance policy ?

a. Yes
b. No

(7). If yes, then in which company ?

a. LIC
b. HDFC
c. ICICI
d. Others

(8). How many life insurance company do you know ?

a. 10 – 15
b. 15 – 20
c. 20 – 25
d. 20 & above
(9). Are you currently covered under any LIC investment policy ?
a. Yes
b. No

(10). How regularly do you pay your premiums ?

a. Monthly
b. Quarterly
c. Half yearly
d. Yearly
(11). Which of these insurance products have you buyed ?
a. Car insurance
b. Home insurance
c. Health insurance
d. Life insurance
e. Others

(12). Are you satisfied with services provided by your insurance company?
a. Yes
b. No

o DATA ANALYSIS & INTERPRETATION

1.Gender
Options No. of respondents Responses %
Female 41 54%
Male 35 46%
Other 0 0%

Interpretation:
Out of 76 responses, 41 respondents i.e., 54% are Male while
rest 35 respondents i.e. 46% are Female.
2:- Age
Options No. of respondents Responses %
15 - 20 22 29%
20 – 25 21 28%
25 - 30 17 22%
30 & Above 16 21%

Interpretation:
Out of 76 responses, 22 respondents are aged between age group of 15
- 20 i.e. 29%. About 21 respondents are aged between 20 - 25 age
group i.e. 28%. About
17 respondents are aged between 25 – 30 i.e. 10%. Only 21% of
respondents are aged between 30 and above.

3:- Qualification
Options No. of respondents Responses %
HSC 3 3%
Under Gradate 15 19%
Gradate 29 39%
Post Gradate 29 39%
Interpretation:
Out of 76 responses, 3 respondents i.e. 3% are HSC. 15 respondents
i.e. 19% are under gradate. 29 respondents i.e. 39% are gradate and
Post gradate.

4:- Occupation
Options No. of respondents Responses %
Student 18 23%
Private Sector 24 32%
Public Sector 19 25%
Business 15 20%
Interpretation:
Out of 76 responses, 18 respondents i.e. 23% are students. 24 respondents i.e. 32%
are private sector. 19 respondents i.e. 25% are public sector. 15 respondents
i.e. 20% are business.

5:- Annual Income

Options No. of respondents Responses %
50000 – 1Lakh 18 23%
1Lakh – 2 Lakh 16 22%
2 Lakh – 3Lakh 22 29%
3 Lakh & above 20 26%

Interpretation:
Out of 76 responses, 18 respondents i.e. 23% have income between
50,000 – 1 Lakh.
16 respondents i.e. 22% have income between 1Lakh – 2 Lakh. 22
respondents
i.e. 29% have income between 2 Lakh – 3 Lakh. 20 respondents i.e.
26% have income between 3 Lakh & above.

6:- Do you have life insurance policy ?

Options No. of respondents Responses %

Yes 47 63%
 No 29 37%

Interpretation:
Out 0f 76 responses, 47 respondents i.e. 63% have life insurance policy. 29
respondents
i.e. 37% not have life insurance policy.

7:- If yes, then in which company ?

Options No. of respondents Responses %
LIC 34 44%
HDFC 15 20%
ICICI 10 13%
OTHERS 17 23%
Interpretation:
Out 0f 76 responses, 34 respondents i.e. 44% are have life insurance policy
in LIC company. 15 respondents i.e. 20% are have life insurance policy in
HDFC company.
10 respondents i.e. 13% are have life insurance policy in ICICI company. 17
respondents i.e. 23% are have life insurance policy in other company.

8:- How many life insurance company do you know ?

Options No. of respondents Responses %
5 – 10 25 33%
10 – 15 35 47%
15 – 20 12 16%
20 & Above 4 4%

Interpretation:
Out of 76 responses, 25 responses i.e. 33% are know life insurance company 5 – 10.
35
responses i.e. 47% are know life insurance company 10 - 15. 12 responses
i.e. 16% are know life insurance company 15 – 20. 45 responses are know
above 20 company.

9:- Are you currently covered under any LIC investment policy ?
Options No. of respondents Responses %
Yes 37 49%
No 39 51%
 Interpretation:
Out of 76 responses, 37 respondents i.e. 49% are covered under LIC policy. 39
respondents i.e. 51% a are not covered under LIC policy.

10. How regularly do you pay your premiums ?

Options No. of respondents Responses %
Monthly 24 31%
Quarterly 11 14%
Half yearly 31 42%
Yearly 10 13%
Interpretation:
Out of 76 responses, 24 respondents i.e. 31% are prefer for monthly premium.
11 respondents i.e. 14% are prefer for quarterly premium. 11 respondents i.e.
14% are prefer for quarterly premium. 11 respondents i.e. 14% are prefer for
quarterly premium.