1
Your College Name
INDUSTRY REVIEW
ON
LIFE INSURANCE CORPORATION
In partial fulfillment for the Awarded
of Degree of
Master of Business Administration
(M.B.A.)
UNDER THE SUPERVISION OF
SUBMITTED BY
MBA
Roll No.:
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MBA PROJECT ON INDUSTRY REVIEW LIFE INSURANCE CORPORATION, Study Guides, Projects, Research of Project Management
This is a MBA project. You can use it to submit as summer project or research project. MBA PROJECT ON INDUSTRY REVIEW LIFE INSURANCE CORPORATION
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Your College Name
INDUSTRY REVIEW
ON
LIFE INSURANCE CORPORATION
In partial fulfillment for the Awarded
of Degree of
Master of Business Administration
(M.B.A.)
UNDER THE SUPERVISION OF
SUBMITTED BY
MBA
Roll No.:
DECLARATION
I hereby declare that this project report entitled “ Market Research on LIFE
INSURANCE CORPORATION” for India Life Insurance (LIC) is a bonafied record of
work done by me during the project work and that it has not previously formed the basis
for the award to us for any degree/diploma associate ship, fellowship or other similar title,
of any other Institute/ Society.
S.NO PARTICULARS PAGE NO
1. INTRODUCTION OF A COMPANY: -
➢ HISTORY
➢ BRANCHES
➢ HOLDINGS
➢ STRUCTURE
➢ OPERATION
➢ IPO
2. PLANS AND POLICY 9 - 14
3. OBJECTIVE OF THE ANALYSIS 15
4. BENEFITS TO THE INSURANCE POLICY HOLDER 16 - 18
5. MARKETING STRATEGY 19 - 23
6. WHY TO OPT FOR LIC PLANS 23 - 33
7. AWARDS AND ACHEIVEMENTS 34
8. CONCLUSION 35
9. REFRENCE 40
INTRODUCTION: -
LIFE INSURANCE CORPORATION; -
- LIFE INSURATION CORPORATION OF INDIA (abbreviated as LIC) is an Indian
government owned insurance and investment corporation. It is under the owned
insurance and investment corporation.
- It is under the ownership of Ministry of Finance, Government of India.
- The Life insurance Corporation of India was established on September 1, 1956, when
the Parliament of India passed the Life Insurance of India Act that nationalized the
insurance industry in India. Over 245 insurance companies and provident societies were
merged to create the state-owned Life Insurance Corporation of India.
- As of 2019, Life Insurance Corporation of India had total life fund of ₹28.3 trillion. The
total value of sold policies in the year 2018 – 19 is ₹21.4 million. Life Insurance
companies established during the same period. Prior to 1912 India had no legislation to
regulate insurance business. In the year 1912, the Life Insurance Companies Act, and the
Provident Fund Act were passed. The Life Insurance Companies Act, 1912 made it
necessary that the premium rate tables and periodical valuations of companies should be
certified by an actuary. But the Act discriminated between foreign and Indian companies on
many accounts, putting the Indian companies at a disadvantage.
The first two decades of the twentieth century saw lot of growth in insurance business. From
44 companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with
total business-in-force as Rs.298 crore in 1938. During the mushrooming of insurance
companies many financially unsound concerns were also floated which failed miserably.
The Insurance Act 1938 was the first legislation governing not only life insurance but also
non-life insurance to provide strict state control over insurance business. The demand for
nationalization of life insurance industry was made repeatedly in the past but it gathered
momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the
Legislative Assembly. However, it was much later on the 19th of January, 1956, that life
insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian
companies and 75 provident were operating in India at the time of nationalization.
Nationalization was accomplished in two stages; initially the management of the companies
was taken over by means of an Ordinance, and later, the ownership too by means of a
comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on
the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st
September, 1956, with the objective of spreading life insurance much more widely and in
particular to the rural areas with a view to reach all insurable persons in the country,
providing them adequate financial cover at a reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate
office in the year 1956. Since life insurance contracts are long term contracts and during the
currency of the policy it requires a variety of services need was felt in the later years to
expand the operations and place a branch office at each district headquarter. Re-organization
of LIC took place and large numbers of new branch offices were opened. As a result of re-
organisation servicing functions were transferred to the branches, and branches were made
accounting units. It worked wonders with the performance of the corporation. It may be seen
that from about 200.00 crores of New Business in 1957 the corporation crossed 1000.
crores only in the year 1969-70, and it took another 10 years for LIC to cross 2000.00 crore
mark of new business. But with re-organisation happening in the early eighties, by 1985- 86
LIC had already crossed 7000.00 crore Sum Assured on new policies.
Today LIC functions with 2048 fully computerized branch offices, 113 divisional offices, 8
zonal offices, 1381 satellite offices and the corporate office. LIC’s Wide Area Network
covers 113divisional offices and connects all the branches through a Metro Area Network.
LIC has tied up with some Banks and Service providers to offer on-line premium collection
facility in selected cities. LIC’s ECS and ATM premium payment facility is an addition to
customer convenience. Apart from on-line Kiosks and IVRS, Info Centres have been
commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New
Delhi, Pune and many other cities. With a vision of providing easy access to its
policyholders, LIC has launched its SATELLITE SAMPARK offices. The satellite offices
are smaller, leaner and closer to the customer. The digitalized records of the satellite offices
will facilitate anywhere servicing and many other conveniences in the future.
LIC continues to be the dominant life insurer even in the liberalized scenario of Indian
insurance and is moving fast on a new growth trajectory surpassing its own past records.
LIC has issued over one crore policies during the current year. It has crossed the milestone
of issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy growth rate of
16.67% over the corresponding period of the previous year.
From then to now, LIC has crossed many milestones and has set unprecedented performance
records in various aspects of life insurance business. The same motives which inspired our
forefathers to bring insurance into existence in this country inspire us at LIC to take this
message of protection to light the lamps of security in as many homes as possible and to
help the people in providing security to their families.
OPERATIONS: -
Today LIC functions with 2048 fully computerized branch offices, 8 zonal offices, around 113
divisional offices, 2,048 branches and 1408 satellite offices and the Central Office; it also has
73 customer zones and 25 metro-area service hubs located in different cities and towns of India.
It also has a network of 1,537,064 individual agents, 342 Corporate Agents, 109 Referral
Agents, 114 Brokers and 42 Banks for soliciting life insurance business from the public.
The LIC has 22 departments each headed by an Executive Director namely Marketing, Bank
assurance (B&AC), Corporate Communication, Personnel, CRM, Direct Marketing, E&OS,
F&A, IT/BPR, Inspection, Investment, SBU/Estates, Investment Operations, P&GS, Actuarial,
Chairman Sect, F&A, Micro Insurance, RTI, HRD, Engineering, and Vigilance.
The LIC follows a horizontal line of command & vertical line of command, while each
department is headed by an Executive Director, the Zonal offices are headed by a Zonal
Manager who oversees all the departments & divisions of the Zone – making him de facto CEO
of the Zone. The zonal departmental heads are Regional Managers. Divisions are headed by
Sr. Divisional Manager(I/C) who oversees all the departments & branches of the division.
There are 3 layers of Horizontal Management namely Senior Divisional Manager(I/C), Zonal
Manager(I/C) & the Chairman/MD. There are also 3 layers of vertical management namely
Managers of Divisions, Regional Managers of Zonal Office & the Executive Directors of
Central office. Horizontal Management is considered key managers of the corporation.
HOLDINGS: -
LIC invests in sectors such as banks, cement, chemicals and fertilizers, electricity and
transmission, electrical and electronics, engineering, construction and infrastructure, fast-
moving consumer goods, finance and investments, healthcare, hotels, information technology,
metals and mining, motor vehicles, and ancillaries, oil and natural resources, retail, textiles,
transportation, and logistics.
Among the Nifty companies, LIC's holding in terms of value in 2012 was estimated to be the
highest in ITC (₹27,326 crores), followed by RIL (₹21,659 crores), ONGC (₹17,764 crores),
SBI (₹17,058 crores), L&T (₹16,800 crores), and ICICI Bank (₹10,006 crores). The share price
drop in ITC on 18 July 2017 had caused LIC a major loss of around 7000 crores during the
financial year.
LIC also holds a 51% stake in IDBI Bank, making it the only insurer in India to own a bank,
since regulations prohibit insurers from holding more than 15% stake in any company, LIC
will have to decide a timeline for paring its stake in IDBI bank; also LIC may have to pare its
stake in LIC Housing Finance Ltd as a company cannot be the promoter of two finance
companies carrying out same housing finance business in India.
PRICE AND VOLUME
- LIC Pension Fund Ltd
- Industrial Development
Bank of India
LIC also holds a 51% stake in IDBI Bank, making it the only insurer in India to own a bank,
since regulations prohibit insurers from holding more than 15% stake in any company, LIC
will have to decide a timeline for paring its stake in IDBI bank; also LIC may have to pare its
stake in LIC Housing Finance Ltd as a company cannot be the promoter of two finance
companies carrying out same housing finance business in India.
The Securities and Exchange Board of India (Sebi) Wednesday extended the deadline for Life
Insurance Corporation (LIC) to achieve a 10% public shareholding by three years, pushing it to
- This extension provides LIC with much-needed flexibility on regulatory requirements as
its current public shareholding is just 3.5%.
Earlier, LIC had got a one-time exemption to meet a 25% minimum public shareholding within
10 years by May 2032 of its listing in May 2022. The government divested the ..
Following its listing, LIC's shares faced a turbulent path, initially trading at a discount of over
8% on its issue price. However, the company's shares have seen a recent positive uptick with
the stock trading above its issue price of ₹949.
After the announcement of the extended deadline, shares of LIC rose 6.31% to ₹989 on BSE
when Sensex fell 0.16%.
- Entry Age- This policy is available for individuals from 12 years to 45 years.
- Term Period- The term period is from 12 years to 20 years.
- Death Benefits- In the case of the death of the policyholder, the nominee gets the sum
assured with the bonus, and is either ten times the total annual premium or is calculated
as per the terms of the policy.
- Maturity Benefits- The sum assured is paid with the bonus and the reversionary bonus
for the full term of the policy. Minimum sum assured is Rs.1, 50,000/-. Maximum age at
maturity is 65years. Maturity amount is tax-free under section 10 (10D).
- Tax Benefit - The amount of premium paid is exempted under section 80C.
- Loan Facility- It is available after you have paid a premium for three years.
Riders Available: The optional riders are for accidental death and disability.
➢ LIC’s Jeevan Labh
This policy is limited premium paying and is not linked to share markets. It is an endowment
plan with profits and hence the holder gets the sum assured with bonus and other benefits.
- Premium- Premium paying period is lesser than the policy term.
- Entry Age – The age of the policyholder should be between 8 years and 59 years.
- Term Period- The Policy has a term period of 16 years to 25 years.
- Grace Period- There is a grace period of 30days for paying yearly, half yearly and
quarterly premium, and a grace period of 15days in case of monthly premium.
- Loan Facility- Once you have paid the premium for three years, you can avail the loan.
- Tax Benefits- The amount of premium paid is exempted under section 80C and the
maturity amount is tax-free.
➢ LIC’s Single Premium Endowment Plan
This plan asks the policyholder to pay the lump sum of the premium as a single payment at the
start of the plan. This is an endowment plan with bonus, in addition to other benefits.
- Entry Age- The plan is available for individuals between the age of 90days and 65years.
- Sum Assured- The sum assured is paid in both the cases – once the policy tenure is
complete and in the case of sudden demise of the policyholder. The sum assured is paid
with a bonus in both the cases.
- Loan Facility- Loan facility is available after the first year of the policy.
- Guaranteed Surrender Value- The holder gets 70% of the single premium paid if the
policy is surrendered within 12months of the commencement of the policy; and receives
90% of the premium paid from the second year onwards.
- Tax Benefits- The premium paid is exempted under the section 80C and the maturity
amount is tax-free under the section 10(10D).
- Term Period– The policy has a term period of 10years to 25 years.
- Maturity Age - The age of the insured should be between 18 years and 75years.
➢ LIC’s New Jeevan Anand
The plan is a combination of whole life plan and an endowment plan. The plan continues to
provide coverage in case of the sudden death of the insured and even after the maturity of the
plan.
- Maturity- A traditional endowment plan with the added feature that even after the
maturity, the plan continues to be in force.
- Tax Benefits- Premium paid and the maturity amount is exempted under section 80C and
10(10D).
- Entry Age- It is available for individuals between the age of 18 years and 50years.
- Grace Period- A grace period of 30days is applicable.
Rider Available: LIC’s Accidental death and disability benefit rider are applicable.
➢ LIC’s Jeevan Lakshya
This is a conventional endowment plan with profits. The policy is useful for minors and offers
a lump-sum amount irrespective of the survival of the insured at the time of policy maturity
- Sum Assured- Minimum sum assured is Rs.1,00,000/-.
- Entry Age – The insured should be between 18 years and 50years of age and the maturity
age is 65years.
➢ Death Benefits- The nominee receives the sum playout plus the bonus and the FAB. It is
ten times the total sum of the annual premium or 125% of the basic sum assured.
➢ Maturity Benefits- The balance 40% of the sum is paid with Bonus plus FAB to the
policyholder.
➢ LIC's New BimaBachat
It is a traditional single premium endowment plan. However, the survival benefits are paid just
like in a money back plan.
- Survival Benefits- After every three years, if the insured is alive, 15% of the basic sum
assured is paid as survival benefit.
- Maturity Benefits- The complete single premium along with Loyalty Addition is paid.
- Death Benefits- In the case of death of the policy tenure the complete, sum assured along
with the Loyalty addition are paid to the nominee.
➢ LIC’s New Children’s Money Back plan
A traditional money back policy specially designed for the benefit of children, even in the case
of the absence of parents. The child’s life is also covered.
- Life Cover of Child- If the age of the life assured is less than 8 years, the risk cover starts
one day before the commencement date of two years.
- Survival Benefits- The survival benefits are disbursed once the life assured has attained
the age of 18years and is paid @20% of the sum assured. It is paid every policy
anniversary year.
- Death Benefits- If the life assured dies before the commencement of the risk, the paid
premiums are returned. The benefits of sum assured plus bonus and FAB is paid in case
the death is after the commencement of risk.
- Tax Benefits- The premium paid and the sum assured are exempted under the section
80C and 10(10D).
- Entry Age- 0 years to 12 years.
- Policy Term- 25years.
➢ LIC’s Jeevan Tarun
This is a participating endowment plan for children up to the age of twelve years. There are
four options to receive the maturity and survival benefits. It is best suited for a child’s
education.
- Premium Period- 20 years but the policy continues till 25 years.
- Risk Cover- Either at the age of 8years or two years after the commencement of the
policy.
- Survival Benefits- The last five years, when the policyholder is not paying the premium,
he has the option of receiving the survival benefits in four different forms- 0%, 5%, 10%
and 15% of the sum assured.
- Maturity Benefits- The balance sum assured and the bonus are paid as the maturity
benefits after the completion of tenure of the policy.
- Death Benefits- In the case of the death of policyholder, the nominee gets the sum assured
at the time of death and the acquired bonus. This is irrespective of the amount paid as the
“survival benefit”.
- Tax Benefits- The premium paid and sum assured are exempted under section of 80C and
10(10D).
Riders Available:
- LIC’s Premium Waiver Benefit Rider is offered.
➢ LIC's Amulya Jeevan 2
This is purely a term plan whereby in case the insured dies within the policy tenure, the nominee
gets the sum assured or the death benefits.
- Sum Assured - Minimum Sum Assured is Rs.25Lacs. However, it can be as high as 1
crore.
- Tenure - The tenure can be as long as 35years.
- Tax Benefits - The Premium paid and the sum assured are exempted under the section
80C and 10(10D).
- Entry Age - Entry Age is 18 years to 60years.
- Grace Period - Grace Period of 30days is available to pay the premium.
➢ LIC Bhagya Lakshmi Plan
This micro insurance policy is specially designed for lower- income groups and has features of
investment, savings, and insurance. Unlike any term plan, it also offers Maturity Benefits to
the surviving policyholder.
- Death Benefit- In case of sudden death of the policyholder within the policy tenure, the
nominee gets the assured sum.