Lic Document Atul

8/2/2019 Lic Document Atul

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INTRODUCTION

What is Insurance?Life insurance is a type of insurance where the insured transfers a risk to the insurer. Theinsured pays a premium and receives a policy in exchange. The risk assumed by the insureris the risk of death of the insured.

There are three parties in a life insurance transaction; the insurer, the insured, and theowner of the policy (policyholder), although the owner and the insured are often the sameperson. For example, if John Smith buys a policy on his own life, he is both the owner andthe insured. But if Mary Smith, his wife, buys a policy on John's life, she is the owner and heis the insured. The owner of the policy is called the grantee (he or she will be the person

who will pay for the policy).

Another important person involved is the beneficiary. The beneficiary is the person orpersons who will receive the policy proceeds upon the death of the insured. Thebeneficiary is not a party to the policy, but is designated by the owner, who may change thebeneficiary unless the policy has an irrevocable beneficiary designation. With anirrevocable beneficiary, that beneficiary must agree to changes in beneficiary, policyassignment, or borrowing of cash value.

The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again.

Insurance is a social device where uncertain risks of individuals may be combined in agroup and thus made more certain small periodic contributions by the individualsprovide a found out of which those who suffer losses may be reimbursed.

In addition to being a means to protect oneself, the insurance Industry is anefficient conduit for the saving of people to be channeled towards economic growth. InIndia, the Insurance Industry7 is more than 150 years old. Today, it is monopolized bytwo PSU's in their respective fields of life and General Insurance. However, with thesuccessful passage IRDA Bill through both houses of parliament in December 1999 thesector has been opened up to private players.


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RESEARCH OBJECTIVES

The report gives the brief background of the sector and proceeds to highlight the short comings of the existing setup and players. The benefits of liberalizedsector are enumerated. The report also tries to identify the market potentialfor insurance products and the strategy that can we employed to exploit the

same. The stress is also given on knowing the awareness level of generalpublic .

RESEARCH METHODOLOGY

To conduct the market research first of all it is necessary to create a researchdesign. A research design is basically a blue print of how a research design isto be conducted.It may include:

1. Choosing the approach

2. Determining the types of data needed.

3. Locating the source of data.

4. Choosing a method of data.

RESEARCH DESIGN

Basically, there are 3 types of approaches which are used during the research:

1. Exploratory2. Descriptive

3. Experimental.


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During this research the explanatory and descriptive approaches are takeninto consideration because of the availability of relevant information todescribe the relationships between the marketing problem and available

information.

TYPES OF DATA USEDBoth primary and secondary data is used in the research.

Data Collection Methods :

To conduct the market research the data is collected by two sources.

SECONDARY DATASecondary data is one which already exists and is collected from the publishedsources.

The sources from which secondary data was collected are:

I. INTERNAL SOURCES: Newspapers and corporate Magazines like Economic Times,

Insurance Times, and Insurance Post. Annual reports Company prospectus Company database

II. EXTERNAL SOURCES: Internet services

PRIMARY DATA

The primary sources of data refer to the first hand information. Primary datais collected during the survey with the help of Questionnaires .


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INTRODUCTION OF THE COMPANY

LIFE INSURANCE CORPORATION OF INDIA (LIC)


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HISTORY OF LIC

LIFE INSURANCE BUSINESS

The Parliament of India passed the Life Insurance Corporation Act on the 19th of June1956, 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 therural areas with a view to reach all insurable persons in the country, providing themadequate financial cover at a reasonable cost.

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

1818: Oriental Life Insurance Company, the first life insurance company on Indian soilstarted functioning.

1870: Bombay Mutual Life Assurance Society, the first Indian life insurance companystarted its business.

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate thelife insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the Insurance Act with theobjective of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies are taken over by the centralgovernment and nationalised. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with acapital contribution of Rs. 5 crore from the Government of India.

The General insurance business in India, on the other hand, can trace its roots to the TritonInsurance Company Ltd., the first general insurance company established in the year 1850

in Calcutta by the British.107 insurers amalgamated and grouped into four companies viz. the NationalInsurance Company Ltd., the New India Assurance Company Ltd., theOriental Insurance Company Ltd. and the United India Insurance CompanyLtd. GIC incorporated as a company.


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LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from itscorporate 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 lateryears 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-organization servicing functions were transferred to the branches, andbranches were made accounting units. It worked wonders with the performance of thecorporation. It may be seen that from about 200.00 crores of New Business in 1957 thecorporation crossed 1000.00 crores only in the year 1969-70, and it took another 10 yearsfor LIC to cross 2000.00 crore mark of new business. But with re-organization happening inthe early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on newpolicies.

Today LIC functions with 2048 fully computerized branch offices, 109 divisional offices, 8zonal offices, 992 satellite offices and the corporate office. LICs Wide Area Network covers109 divisional offices and connects all the branches through a Metro Area Network. LIC hastied up with some Banks and Service providers to offer on-line premium collection facilityin selected cities.

LICs ECS and ATM premium payment facility is an addition to customer convenience.Apart from on-line Kiosks and IVRS, Info Centers have been commissioned at Mumbai,Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many othercities. With a vision of providing easy access to its policyholders.

LIC has launched its SATELLITE SAMPARK offices. The satellite offices are smaller, leanerand closer to the customer. The digitalized records of the satellite offices will facilitateanywhere servicing and many other conveniences in the future.

LIC is associated with joint ventures abroad in the field of insurance, namely, Ken-India,Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited, KualaLumpur and Life Insurance Corporation (International) E.C. Bahrain. The Corporation hasregistered a joint venture company in 26th December, 2000 in Katmandu, Nepal by thename of Life Insurance Corporation (Nepal) Limited in collaboration with Vishal Group

Limited, a local industrial Group. An off-shore company L.I.C. (Mauritius) Off-shore Limitedhas also been set up in 2001 to tap the African insurance market.


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GENERAL INSURANCE

General insurance business in the country was nationalized with effect from 1st January, 1973 by the General Insurance Business (Nationalization) Act, 1972. More than100 non-life insurance companies including branches of foreign companies operatingwithin viz., the National Insurance Company Ltd., The New India Assurance Company Ltd.,The Oriental Insurance Company Ltd., and The United India Insurance Company Ltd. withhead offices at Calcutta, Bombay, New Delhi and Madras, respectively.

General Insurance Corporation (GIC) which was the holding company of the four publicsector general insurance companies has since been delinked from the later and has beenapproved as the "Indian Reinsurer" since 3 rd November 2000. The share capital of GIC andthat of the four companies are held by the Government of India. All the five entities areGovernment companies registered under the Companies Act, 1956. The general insurancebusiness has grown in spread and volume after nationalization. The four companies have2699 branch offices, 1360 divisional offices and 92 regional offices spread all over thecountry.

GIC and its subsidiaries have representation either directly through branches or agencies in16 countries and through associate locally incorporated subsidiary companies in 14 othercountries. A wholly- owned subsidiary company of GIC, i.e. Indian International Pvt. Ltd. isoperating in Singapore and there is a joint venture company, viz. Ken-India Assurance Ltd.in Kenya. A new wholly owned subsidiary called New India International Ltd., UK has alsobeen registered.

Some of the important milestones in the general insurance business in India are:

1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classesof general insurance business.

1957: General Insurance Council, a wing of the Insurance Association of India, frames acode of conduct for ensuring fair conduct and sound business practices.

1968: The Insurance Act amended to regulate investments and set minimum solvency

margins and the Tariff Advisory Committee set up.1972: The General Insurance Business (Nationalisation) Act, 1972 nationalised thegeneral insurance business in India with effect from 1st January 1973.


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OBJECTIVES OF LIC

Spread Life Insurance widely and in particular to the rural areas and to the sociallyand economically backward classes with a view to reaching all insurable persons inthe country and providing them adequate financial cover against death at areasonable cost.

Maximize mobilization of people's savings by making insurance-linked savingsadequately attractive.

Bear in mind, in the investment of funds, the primary obligation to its policyholders,whose money it holds in trust, without losing sight of the interest of the communityas a whole; the funds to be deployed to the best advantage of the investors as well as

the community as a whole, keeping in view national priorities and obligations of attractive return. Conduct business with utmost economy and with the full realization that the

moneys belong to the policyholders.

Act as trustees of the insured public in their individual and collective capacities.

Meet the various life insurance needs of the community that would arise in thechanging social and economic environment.

Involve all people working in the Corporation to the best of their capability infurthering the interests of the insured public by providing efficient service withcourtesy.

Promote amongst all agents and employees of the Corporation a sense of participation, pride and job satisfaction through discharge of their duties withdedication towards achievement of Corporate Objective.


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VISION AND MISSION

Mission

"Explore and enhance the quality of life of people through financial security by providing products and services of aspired attributes with competitive returns,and by rendering resources for economic development."

Vision

"A trans-nationally competitive financial conglomerate of significance tosocieties and Pride of India."


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ACHIEVMENTS AND AWARDS

CNBC Awaaz Consumer awards 2010 Reader Digest Trusted Brand Insurancecategory 2010

OUTLOOK MONEY -- NDTV PROFIT AWARD2009 in" BEST LIFE INSURER CATEGORY "

World Brand Congress Award


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Golden Peacock Innovative Product / ServiceAward - 2009

ASIA PACIFIC HRM Congress, 2009 Awardfor INNOVATIVE HR PRACTICES

Loyalty Award - 2009 NDTV Profit Business Leadership Award

2008

INDY's Silver Award for Best Corporate Film NASCOM IT USER Award 2008

Business Superbrand India 2009 ASIA BRAND CONGRESS BRANDLEADERSHIP AWARD, 2008


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PRODUCTS OF LIC

INSURANCE PLANSAs individuals it is inherent to differ. Each individual insurance needs and requirements aredifferent from that of the others. LICs Insurance Plans are policies that talk to youindividually and give you the most suitable options that can fit your requirement.

CHILDREN PLANS Jeevan Anurag Komal Jeevan Jeevan Chaaya Child Future Plan Child Fortune Plus Child Career Plan Jeevan Fortune Plus

PLAN FOR HANDICAPPED DEPENDENTS Jeevan Adhar Jeevan Vishwas

ENDOWMENT ASSURANCE PLANS Jeevan Anand Jeevan Amrit

The Endowment Assurance Policy The Endowment Assurance Policy-limited payment Jeevan Mitra(double cover endowment plan) Jeevan Mitra(triple cover endowment plan)

PLANS FOR HIGH WORTH INDIVIDUALS Jeevan Shree-I Jeevan Pramukh

MONEY BACK PLANS The Money Back Policy- 20 years The Money Back Policy- 25 years Jeevan Surabhi-15 years Jeevan Surabhi-20years Jeevan Surabhi-25 years Bima Bachat


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WHOLE LIFE PLANS The Whole life policy The Whole life policy-limited payment The Whole life policy-single premium Jeevan Anand

TERMS ASSURANCE PLANS Two Year Temporary Assurance Policy The Convertible Term Assurance Policy Anmol Jeevan-I Amulya Jeevan-I

PENSION PLANS

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

PENSION PLANS Market Plus-I Jeevan Nidhi Jeevan Akshay-VI New Jeevan Dhara-I New Jeevan Suraksha-I

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

UNIT PLANS Market Plus-I Profit Plus Money Plus-I Child Fortune Plus Jeevan Saathi Plus

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


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I. GOLDEN JUBLIEE PLAN New Bima Gold

II. HEALTH PLAN Health Protection Plus

III. SPECIAL PLAN Bima Niresh Jeevan Saral

MARKET PLUS-I

FEATURES

IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER

This is a unit linked deferred pension plan. You can take the plan with or without life cover.You can also choose the level of cover within the limits, which will depend on whether thepolicy is a Single premium or Regular premium contract and on the level of premium youagree to pay.

Four types of investment Funds are offered. Premiums paid after allocation charge willpurchase units of the Fund type chosen. The Unit Fund is subject to various charges andvalue of units may increase or decrease, depending on the Net Asset Value (NAV).

1 . Payment of Premiums :You may pay premiums regularly at yearly, half-yearly or quarterly or monthly (throughECS mode only) intervals over the term of the policy. Alternatively, a Single premium canbe paid.

2. Eligibility Conditions And Other Restrictions:

For Basic Plan without Life Cover a) Minimum Entry Age - 18 years (last birthday)b) Maximum Entry Age - Regular premium: 75 years (nearest birthday)

- Single premium: 80 years (nearest birthday)


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c) Minimum Vesting Age - 40 years (completed)d) Maximum Vesting Age - 85 years (nearest birthday)e) Minimum Deferment Term - Regular premium: 10 years

- Single premium: 5 years

f) Sum Assured - NILg) Minimum Premium - Regular premium (other than monthly (ECS) mode):

Rs. [5,000] p.a. for deferment term 20 years and aboveRs. [10,000] p.a. for deferment term 15 to 19 yearsRs. [15,000] p.a. for deferment term 10 to 14 years

Regular premium (for monthly (ECS) mode):Rs. [1,000] p.m. for deferment term 15 years andaboveRs. [1,500] p.m. for deferment term 10 to 14 years

Single premium: Rs. [30,000] for deferment term 5years and above

Annualized Premiums shall be payable in multiple of Rs. 1,000 for other than ECS monthly.For monthly (ECS), the premium shall in multiples of Rs. 250/-.

For Basic Plan with Life Cover

a) Minimum Age at entry -18 years (last birthday)b) Maximum Age at entry - 65 years (nearer birthdayc) Minimum Age at vesting - 40 years (completed)d) Maximum Vesting Age - 75 years (nearest birthday)e) Minimum Deferment Term - Regular premium: 10 yearsSingle premium: 5 yearsf) Minimum Premium - Regular premium:

Rs. [5,000] p.a. for deferment term 20 years andaboveRs. [10,000] p.a. for deferment term 15 to 19 yearsRs. [15,000] p.a. for deferment term 10 to 14 years

Regular premium (for monthly (ECS) mode):Rs. [1,000] p.m. for deferment term 15 years and aboveRs. [1,500] p.m. for deferment term 10 to 14 years

Single premium: Rs. [30,000] for deferment term 5years and above

g) Minimum Sum Assured - Rs. 30,000h) Maximum Sum Assured -


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Single Premium : Equal to single premiumRegular Premium :

If Critical Illness Benefit Rider is opted for:10 times of the annualized premium if age at entry is upto 40 years.5 times of the annualized premium if age at entry is 41 years and above.

If Critical Illness Benefit Rider is not opted for:20 times of the annualized premium if age at entry is upto 40 years.10 times of the annualized premium if age at entry is 41 years and above.

Where the minimum Sum Assured is not in the multiples of Rs. 5,000, it will be rounded off to the next multiple of Rs. 5,000. Annualized Premiums shall be payable in multiple of Rs.1,000 for other than ECS monthly. For monthly (ECS), the premium shall in multiples of Rs.250/-.

3. Other Features:

i) Top-up (Additional Premium) :You can pay additional premium in multiples of Rs.1,000 without any limit at anytimeduring the term of policy. In case of yearly, half-yearly, quarterly or monthly (ECS) mode of premium payment such Top-up can be paid only if all premiums have been paid under thepolicy .

ii) Switching: You can switch between any fund types during the policy term subject to switchingcharges, if any.

iii) Increase / Decrease of risk covers : Noincrease of covers will be allowed under the plan. You can, however, decrease any or all of the risk covers within the specified limit once in a year during the Policy term, provided alldue premiums under the Policy have been paid. The reduced levels of cover will beavailable within the limits specified in para 4 above. Further, once reduction in risk cover isallowed, the same cannot be subsequently increased/ restored.

iv) Partial Withdrawal: No partial withdrawal of units will be allowed under this plan.

v) Discontinuance of premiums and revival :If premiums are payable either yearly, half-yearly, quarterly or monthly (through ECS) andthe same have not been paid within the days of grace, the Policy will lapse. A lapsed policycan be revived during the period of two years from the due date of first unpaid premium.

I. Where atleast 3 years premiums have been paid, the Life cover, Accident Benefit andCritical Illness Benefit riders, if any, shall continue during the revival period.


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During this period, the charges for Mortality, Accident Benefit and / or Critical IllnessBenefit riders, if any, shall be taken, in addition to other charges, by cancelling anappropriate number of u nits out of the Policyholders Fund Value every month. This will

continue to provide relevant risk covers:

1. for two years from the due date of first unpaid premium, or2. till the date of vesting, or3. till such period that the Policyholders Fund Value reduces to one annualized

premium,

whichever is earlier.

The benefits payable under the policy in different contingencies during this period shall beas under:

A. In case of Death: Life cover Sum Assured plus the Policyholders Fund Value, if lifecover is opted for . If life cover is not opted for, then only the Policyholders Fund Value ispayable.

B. In case of Death due to accident: Accident Benefit Sum Assured in addition to theamount under A above, if Accident Benefit is opted for.

C. In case of Critical Illness claim: Critical Illness Rider Sum Assured, if opted for.

D. On vesting: The Policyholders Fund Value.

E. In case of Surrender (including Compulsory Surrender): The PolicyholdersFund Value. The Surrender value, however, shall be paid only after the completionof 3 policy years.

II. Where the policy lapses without payment of at least 3 years premiums, the Life Cover,Accident Benefit and Critical Illness Benefit rider covers, if any, shall cease and no chargesfor these benefits shall be deducted. However deduction of all the other charges shallcontinue. The benefits under such a lapsed policy shall be payable as under:

A. In case of Death: The Policyholders Fund Value.

B. In case of death due to accident: Only, the amount as under F above.

C. In case of Critical Illness claim: Nil

D. In case of Surrender (including Compulsory Surrender): Policyholders FundValue / monetary value as the case may be, shall be payable after the completion of


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the third policy anniversary. No amount shall be payable within 3 years from thedate of commencement of policy.

vi) Revival :If due premium is not paid within the days of grace, the policy lapses. A lapsed policy can berevived during the period of two years from the due date of first unpaid premium or beforevesting, whichever is earlier. The period during which the policy can be revived will becalled Period of revival or revival period.

If premiums have not been paid for at least 3 years, the policy may be revived within twoyears from the due date of first unpaid premium. If the life cover is opted for, the revivalshall be made on submission of proof of continued insurability to the satisfaction of theCorporation and the payment of all the arrears of premium without interest.If life cover is not opted for, the revival shall be made on the payment of all the arrears of

If at least 3 years premiums have been paid and subsequent pr emiums are not duly paid,the policy may be revived within two years from the due date of first unpaid premium but before the date of vesting, if earlier. No proof of continued insurability is required and allarrears of premium without interest shall be required to be paid, irrespective of whetherlife cover is opted for or not.

The Corporation reserves the right to accept the revival at its own terms or decline therevival of a lapsed policy. The revival of a lapsed policy shall take effect only after the sameis approved by the Corporation and is specifically communicated in writing to thePolicyholder.

Irrespective of what is stated above, if less than 3 years premiums have been paid and thePolicyholders Fund Value is not sufficient to recover the ch arges, the policy shall terminateand thereafter revival will not be entertained. If 3 years or more than 3 years premiumshave been paid and the Policyholders Fund Value reduces to one annualized premium, thepolicy shall terminate and Policyholders Fun d Value as on such date shall be refunded tothe Life Assured and thereafter revival will not be allowed.

vii) Conversion to annuity at Vesting date:

On surviving to the date of vesting, the Policyholders Fund Value will compulsorily be

utilised to provide an annuity based on the then prevailing immediate annuity rates underthe relevant annuity option. An option will also be there to commute up to one-third of thePolicyholders Fund Value at the time of vesting of the annuity, which shall be paid as alump sum. In case commutation is opted for, the amount of annuity/pension available willbe reduced proportionately. There will also be an option to purchase pension from anyother life insurance company registered with IRDA subject to Regulatory provisions. If youopt to purchase pension from any other life insurance Company, you will have to inform it


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to the Corporation six months prior to the vesting date. In such case, LIC will transfer thePolicyholders Fund Value directly to the chosen Company.

Notwithstanding the above mentioned, in case the amount at the vesting date is insufficient

to purchase the minimum amount of annuity allowed by LIC, then the balance in thePolicyholders Fund Value at the vesting date shall be refunded to the Policyholder.

4. Reinstatement: A policy once surrendered cannot be reinstated.

5 . Risks borne by the Policyholder:

1. LICs Market Plus I is a Unit Linked Life Insurance product which is different fromthe traditional insurance products and is subject to the risk factors.

2. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or downbased on the performance of fund and factors influencing the capital market and theinsured is responsible for his/her decisions.

3. Life Insurance Corporation of India is only the name of the Insurance Company andLICs Market Plus - I is only the name of the unit linked life insurance contract anddoes not in any way indicate the quality of the contract, its future prospects orreturns.

4. Please know the associated risks and the applicable charges, from your Insuranceagent or the Intermediary or policy document of the insurer.

5. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.

6. All benefits under the policy are also subject to the Tax Laws and other financialenactments as they exist from time to time.

6. Cooling off period :

If you are not satisfied with the Terms and Conditions of the policy, you may return thepolicy to us within 15 days. The amount to be refunded in case the policy is returned withinthe cooling-off period shall be determined as under:Value of units in t he Policyholders Fund

Plus unallocated premium.Plus Policy Administration charge deductedless charges @ Rs.0.20per thousand Life Cover Sum Assured if life cover is opted for or @Rs. 0.20per thousand of Total Premiums payable during entire term of policy, if life cover isnot opted for.

Less Actual cost of medical examination and special reports, if any.

7. Loan : No loan will be available under this plan.


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8 . Assignment: Assignment is allowed under this plan during the deferment period.

9. Exclusions: In case the Life Assured commits suicide at any time within one year, the Corporation willnot entertain any claim by virtue of the policy except to the extent of the Fund Value of theunits held in the Policyho lders Unit Account on death.

BENEFITS

A) Death BenefitsIf the Life cover is opted for, the Sum Assured under the Basic Plan together with thePolicyholders Fund Value shall be payable either in a lump sum or as pension. In case thepolicy is taken without life cover, then the Policyholders Fund Value shall b e payable eitherin a lump sum or as pension.

The amount of pension will depend on the payable lump sum and the then prevailingimmediate annuity rates under the annuity option chosen.

B) Benefit on Vesting :On your surviving to the date of vesting, the Policyholders Fund Value will compulsorily beutilised to provide a pension based on the then prevailing immediate annuity rates underthe relevant annuity option. However, you may opt to commute up to one-third of theBenefit to be paid as a lump sum. Further, you may choose to purchase pension from LIC orother life insurance company.

1. Options : A) Life Cover Option:

This plan may be opted for with or without life insurance cover. If life insurance cover isopted for, he/ she can choose the level of cover within the limits. This benefit will beavailable only till the policy anniversary on which the age nearer birthday of the Life

Assured is 75 years.

B) Accident Benefit Option:

If you have opted for life cover, you may opt for Accident Benefit equal to life cover subject to minimum Rs. 25,000 and maximum Rs. 50 lakh (taken all policies with LIC of India andother insurers). This benefit will be available only till the policy anniversary on which the


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age nearer birthday of the Life Assured is 70 years. In case of death by Accident, anadditional sum equal to Accident benefit will be payable.

C) Critical Illness Benefit Rider:

If you have opted for life cover, you may opt for Critical Illness Benefit equal to the lifecover subject to a minimum of Rs. 50,000 and maximum of Rs. 10 lakh (including otherpolicies with LIC of India) provided the policy term is 10 years and above. This benefit willbe available only till the policy anniversary on which the age nearer birthday of the LifeAssured is 60 years or for a maximum policy term of 35 years whichever is earlier. In caseof diagnosis of defined categories of Critical Illness subject to certain terms and conditions,a sum equal to the Critical.

2. Investment of Funds : The plan offers following four funds detailed below:

Fund Type Investment inGovernment /Government GuaranteedSecurities /CorporateDebt

Short-terminvestmentssuch as moneymarket instruments

Investment inListed EquityShares

Details and objectiveof the fund for risk /return

Bond Fund Not less than60%

Not more than40%

Nil Low risk

SecuredFund

Not less than45%

Not more than40%

Not less than15% &Not more than55%

Steady Income Lowerto Medium risk

BalancedFund

Not less than30%

Not more than40%


Balanced Income andgrowth Medium risk

GrowthFund

Not less than20%

Not more than40%


Long term Capitalgrowth High risk

The Policyholder has the option to choose any ONE out of the above 4 funds.

3. Method of Calculation of Unit price: Units will be allotted based on the Net Asset Value (NAV) of the respective fund as on the date of allotment. There is no Bid-Offerspread (the Bid price and Offer price of units will both be equal to the NAV). The NAV will


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be computed on daily basis and will be based on investment performance, FundManagement Charge and whether fund is expanding or contracting under each fund typeand shall be calculated as under:

Appropriation price is applied (when fund is expanding): Market value of investments held by the fund plus the expenses incurred in the purchase of the assets plus the value of any current assets plus any accrued income net of fundmanagement charges less the value of any current liabilities less provisions, if any dividedby the number of units existing at the valuation date (before any new units are allocated).

Expropriation price is applied (when fund is contracting): Market value of investments held by the fund less the expenses incurred in the sale of assets plus the value of any current assets plus any accrued income net of fundmanagement charges less the value of any current liabilities less provisions, if any dividedby the number of units existing at the valuation date (before any units redeemed).

Applicability of Net Asset Value (NAV): The premiums received up to a particular time (presently 3 p.m.) by the servicing branch of the corporation through ECS or by way of a local cheque or a demand draft payable at parat the place where the premium is received, the closing NAV of the day on which premiumis received shall be applicable. The premiums received after such time by the servicingbranch of the corporation through ECS or by way of a local cheque or a demand draft payable at par at the place where the premium is received, the closing NAV of the next business day shall be applicable.

Similarly, in respect of the valid applications received for surrender, death claim, switchesetc up to such time by the servicing branch of the Corporation closing NAV of that day shallbe applicable. For the valid applications received in respect of surrender, death claim,switches etc after such time by the servicing branch of the Corporation the closing NAV of the next business day shall be applicable

In respect of the policies vesting, NAV of the date of vesting shall be applicable.

The timing given is as per the existing guidelines and changes in this regard shall be as perthe instruction from IRDA.

4. Charges under the Plan:

A. Premium Allocation Charge : This is the percentage of the premium deducted towards charges from the premiumreceived. The balance constitutes that part of the premium which is utilized topurchase (Investment) units for the policy. The allocation charges are as below:For Single premium policies: 3.3% For Regular premium policies:


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Premium Band (per annum) Allocation charge

First Year Thereafter

5,000 to 75,000 16.50% 2.50%75,001 to 1,50,000 15.75% 2.50%

1,50,001 to 3,00,000 15.00% 2.50%

3,00,001 to 5,00,000 14.25% 2.50%

5,00,001 and above 13.50% 2.50%

Allocation charge for Top-up : 1.25%

B) Charges for Risk Covers :

i) Mortality Charge -This is the cost of life insurance cover which is age specific and will be taken every month.The charges per Rs. 1000/- life insurance cover for some of the ages in respect of a healthylife are as under:

Age 25 35 45 55

Rs. 1.42 1.73 3.89 10.76

ii Critical illness Benefit rider charge - This is the cost of Critical Illness Benefit rider (if opted for). These are age specific and willbe taken every month.

The charges per Rs. 1000/- Critical Illness Rider Sum Assured per annum for some of theages in respect of a healthy life are as under:

Age 25 35 45 55

Rs. 0.91 1.80 5.31 14.44

iii Accident Benefit charge - This is the cost of Accident Benefit rider (if opted for) andwill be levied every month at the rate of Rs. 0.50 per thousand Accident Benefit SumAssured per policy year.


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C) Other Charges:

1) Policy Administration charge: Rs. 60/- per month during the first policy year andRs. 20/- per month thereafter, throughout the term of the policy.

2) Fund Management Charge It is a charge levied as a percentage of the value of unitsat following rates:

0.50% p.a. of Unit Fund for Bond Fund 0.60% p.a. of Unit Fund for Secured Fund 0.70% p.a. of Unit Fund for Balanced Fund 0.80% p.a. of Unit Fund for Growth Fund

Fund Management Charge shall be appropriated while computing NAV.

3) Switching Charge This is the charge levied on switching of monies from one fund toanother. Within a given policy year 4 switches will be allowed free of charge. Subsequent switches in that year shall be subject to a switching charge of Rs. 100 per switch.

4) Bid/Offer Spread Nil.

5) Surrender Charge Nil

6) Service Tax Charge A service tax charge, if any, shall be levied on the followingcharges

a)Policy Administration, Mortality, Accident Benefit and Critical Illness Benefit rider, if any by canceling appropriate numb er of units out of the Policyholders Fund Value on amonthly basis as and when the corresponding Policy Administration, Mortality, Accident Benefit and Critical Illness Benefit rider charges are deducted.

b) Premium allocation - at the time of allocation.

c) Fund Management at the time of deduction of Fund Management Charge.

d) Switching - at the time of effecting switch and

e) Alteration ( as provided under Miscellaneous charge) - on the date of alteration inthe policy.

The level of this charge will be as per the rate of service tax as applicable from time to time.Presently, the rate of Service Tax is 12% with an educational cess at the rate of 3% thereonand hence effective rate is 12.36%.


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7) Miscellaneous Charge This is a charge levied for an alteration within the contract, suchas reduction in policy term, change in premium mode, etc. An alteration may be allowedsubject to a charge of Rs. 50/-.

D) Right to revise charges :The Corporation reserves the right to revise all or any of the above charges except thepremium allocation charge and Mortality charge, with the prior approval of IRDA .Although the charges are reviewable, they will be subject to the following maximum limit:

- Policy Administration Charge: Rs. 150/- per month during the first policy year and Rs.50/- per month thereafter, throughout the term of the policy.

- Fund Management Charge: The Maximum for each Fund will be as follows:

1. Bond Fund: 1.00% p.a. of Unit Fund2. Secured Fund: 1.10% p.a. of Unit Fund3. Balanced Fund: 1.20% p.a. of Unit Fund4. Growth Fund: 1.30% p.a. of Unit Fund

- Critical Illness Benefit charges shall not exceed by more than 200% of the current rate.

- Switching Charge shall not exceed Rs. 200/- per switch.

- Miscellaneous Charge shall not exceed Rs. 100/- each time when an alteration isrequested.

In case the policyholder does not agree with the revision of charges the policyholder shallhave the option to withdraw the Policyholders Fund Value.

5. Surrender: The Surrender value, if any, is payable only after completion of the third policy anniversaryboth under Single and Regular premium contract. The surrender value will be thePolicyholders Fund Value at the date of surrender. There will be no Su rrender charge.

If you apply for surrender of the policy within 3 years from the date of commencement of policy, then the Policyholders Fund Value shall be converted into monetary terms. No

charges shall be deducted thereafter and this monetary value shall be paid on completionof 3 years from the date of commencement of policy.

In case of death of life assured after the date of surrender but before the completion of 3years from the date of commencement of policy the monetary value payable on thecompletion of 3 years shall be payable to the nominee/ legal heir immediately on death.


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Compulsory Surrender:

The policy shall be surrendered compulsorily in following cases:i) where the policy is not revived during the period of revival, the policy shall beterminated after completion of 3 years from the date of commencement of the policy or onexpiry of revival period, whichever is later. However, if the date of vesting falls before theexpiry of revival period, then the policy shall be terminated on the date of vesting.

ii) where premiums have been paid for less than 3 years or under single premium policies,if the balance in policyholders fund value is not sufficient to recover the relevant charges;

iii) where premiums have been paid for at least 3 years and the balance in policyholdersfund value falls below a minimum balance of one annualized premium.

Policyholders Fund Value shall be converted into monetary value as under :The NAV on the date of application for surrender or on the date when revival period is over(in case of compulsory surrender), as the case may be, multiplied by the number of units inthe Policyholders Fund as on that date will be the monetary amount.

NEW BIMA GOLD

FEATURES It is a plan where premiums paid over the term of plan are paid back during the policy termin instalments and life insurance cover is available not only during the term but also duringthe extended term of the plan.

PAYMENT OF PREMIUMPremiums can be paid regularly at yearly, half-yearly, quarterly or monthly intervals orthrough salary deductions over the policy term.

Age Annual Premium per 1000 SA

12 16 20

15 63.30 55.20 40.40

20 64.25 56.00 41.20

25 65.20 57.00 42.30

30 66.90 58.80 44.20


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35 71.05 62.40 47.55

40 78.10 68.10 52.75

45 88.45 76.45 60.15

50 103.30 88.10 -

55 121.80 - -

BENEFITS

Survival Benefit: Payable in case of life assured surviving to the end of the specified durations provided thepolicy is in full force as given below:

For policy term 12 years:15% of the Sum Assured under Basic Plan at the end of each 4th & 8th policy year

For policy term 16 years: 15% of the Sum Assured under Basic Plan at the end of each 4th, 8th &12th policy year

For policy term 20 years :10% of the Sum Assured under Basic Plan at the end of each 4th, 8th, 12th & 16th policyyear.

On expiry of policy term :Total amount of premiums (excluding extra/optional rider premiums, if any) paid plusLoyalty Additions, if any, less the amount of survival benefits paid earlier.

DEATH BENEFIT:

During the policy term: Payment of an amount equal to Sum Assured under the Basic Planon death of the Life Assured during the policy term provided the life cover is in force.

During the extended term: Payment of an amount equal to 50% of Sum Assured underthe Basic Plan on death of the Life Assured during the extended term provided all the

premiums under the policy have been paid.

Extended Term: The extended term shall be half of the policy term after the expiry of thepolicy term.


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OPTIONAL RIDER BENEFIT:

Accident Benefit rider shall be available as an optional benefit for a premium at the rate of Re.1 per thousand Accident Benefit Rider Sum Assured. Accident Benefit Rider shall beavailable for an amount not exceeding the Sum Assured under the basic plan subject tooverall limit of Rs.50 lakh taking all existing policies of the Life Assured under individual aswell as group schemes taken with Life Insurance Corporation of India and other insurancecompanies and the Accident Benefit Rider Sum Assured under the new proposal intoconsideration. This rider benefit is available only during the policy term but not duringextended term.

This rider shall be available for the Life Assured engaged in police duty either in anymilitary, naval or police organisation by payment of an additional premium at the rate of Rs.0.50 per thousand Accident Benefit Rider Sum Assured.

ACCIDENTAL DEATH AND DISABILITY BENEFIT:

On death arising as a result of accident an additional amount equal to the Accident Benefit Rider Sum Assured is payable. On total and permanent disability arising due to accident (within 180 days from the date of accident) an amount equal to the Accident Benefit RiderSum Assured will be paid over a period of 10 years in monthly instalments.

The disability due to accident should be total and such that the Life Assured is unableto carry out any work to earn the living. Following disabilities due to accident arecovered:

a) irrevocable loss of the entire sight of both eyes, orb) amputation of both hands at or above the wrists, orc) amputation of both feet at or above ankles, ord) amputation of one hand at or above the wrist and one foot at or above the

ankle

No benefit will be paid if accidental death or disability arises due to accident in caseof :

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

Assured is under the influence of intoxicating liquor, drug or narcoticb) engagement in aviation or aeronautics other than that of a passenger in anyair craft

c) injuries resulting from riots, civil commotion, rebellion, war, invasion,hunting, mountaineering, steeple chasing or racing of any kind

d) accident resulting from committing any breach of lawe) accident arising from employment in armed forces or military services or policeorganisation.


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AUTO-COVER FACILITY:

If at least two full years premiums have been paid in respect of this policy, any subsequent premium be not duly paid, full death cover shall continue for a period of two years from thedate of First Unpaid Premium(FUP) or till the end of policy term, whichever is earlier.

PAID UP VALUE :

If after at least three full years premiums have been paid in respect of this policy, anysubsequent premium be not duly paid, this policy shall not be wholly void after the expiryof two years Auto Cover Period from the due date of First Unpaid Premium, but shallsubsist as a paid up policy for an amount equal to the total premiums paid (excluding anyextra/optional premium) less the survival benefits paid earlier, if any. This amount shall becalled as Paid Up Value. This paid up value shall be payable on the date of expiry of policyterm or at Life Assureds prior death. No survival benefit shall be payable under paid uppolicies. The policy, thereafter, shall be free from all liabilities for payment of the withinmentioned premiums.

The Accident Benefit Rider will cease to apply if the policy is in lapsed condition. During theAuto Cover Period also, the Accident Benefit Rider shall not be available. The extendedterm cover shall not be available in case of paid-up policies.

GUARANTEED SURRENDER VALUE:

The Guaranteed Surrender Value shall be available after completion of at least three policy

years and at least three full years premiums have been paid. The Guaranteed S urrenderValue is equal to 30 per cent of the total amount of premiums paid excluding the premiumsfor the first policy year, all extra premiums paid, the premiums paid for Accident Benefit Rider and the amount of survival benefits paid earlier.

OTHER BENEFITS: The plan offers other benefits as follows:

Loan :Loan facility is available under this plan after the policy acquires paid up value. The rate of interest to be charged for loan amount would be determined from time to time by theCorporation. Presently the rate of interest is 9% p.a. payable half-yearly.

Grace Period :A grace period of one month but not less than 30 days will be allowed for payment of yearly, half-yearly or quarterly premiums and 15 days for monthly premiums.

Revival : Subject to production of satisfactory evidence of continued insurability, a lapsed policy can


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be revived by paying arrears of premium together with interest within a period of fiveyears from the due date of first unpaid premium. The rate of interest applicable will be asdecided by the Corporation from time to time.

Cooling-off period :If you are not satisfied with the Terms and Conditions of the policy you may return thepolicy to us within 15 days.

Eligibility Conditions and Other Restrictions:

FOR BASIC PLAN:

Minimum age at entry :14 years (completed)Maximum age at entry :57 years (nearest birthday) for Term 12 years

:51 years (nearest birthday) for Term 16 years45 years (nearest birthday) for Term 20 years

Age at expiry of extended term :Maximum 75 years (nearest birthday)Term :12, 16 and 20 years.Minimum Sum Assured :Rs. 50,000 /-Maximum Sum assured :No limit Sum Assured will be in multiples of Rs.5,000 /- only.

FOR THE ACCIDENT BENEFIT RIDER OPTION :Minimum age at entry :18 years (completed)Maximum age at entry :57 years (nearest birthday) for Term 12 years

:51 years (nearest birthday) for Term 16 years45 years (nearest birthday) for Term 20 years

Minimum Sum Assured :Rs. 50,000 /-Sum Assured will be in multiples of Rs.5,000 /- only.

REBATES / EXTRA FOR MODE OF PREMIUM PAYMENT AND HIGH SUM ASSURED:

Mode Rebate / Extra

Rebates are available at the following rates:

Yearly mode :2% of tabular premiumHalf-yearly mode :1% of tabular premiumQuarterly and SSS modes :NILMonthly mode 5% extra on tabular premium

High Sum Assured Rebates: Less than Rs. 1 Lakh :NILRs. 1 Lakh and Less than Rs.2 Lakh :Rs.5 per thousand Sum Assured


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Rs. 2 Lakh and above :Rs.7.5 per thousand Sum Assured

EXCLUSIONS: This policy will be void if the Life Assured commits suicide at anytime on orafter the date on which the risk on the policy has commenced but before the expiry of one

year from the date of commencement of risk under the policy. In case of death due tosuicide during this period, the Corporation will not entertain any claim by virtue of thispolicy except to the extent of a third party's bonafide beneficial interest acquired in thepolicy for valuable consideration of which notice has been given in writing to the office towhich premiums under this policy were paid, at least one calendar month prior to death.

THE MONEY BACK POLICY (with profit)

FEATURES Unlike ordinary endowment insurance plans where the survival benefits are payable onlyat the end of the endowment period, this scheme provides for periodic payments of partialsurvival benefits as follows during the term of the policy, of course so long as the policyholder is alive.

In the case of a 20-year Money-Back Policy (Table 75), 20% of the sum assured becomespayable each after 5, 10, 15 years, and the balance of 40% plus the accrued bonus becomepayable at the 20th year.

For a Money-Back Policy of 25 years (Table 93), 15% of the sum assured becomes payable

each after 5, 10, 15 and 20 years, and the balance 40% plus the accrued bonus becomepayable at the 25th year.

An important feature of this type of policies is that in the event of death at any time withinthe policy term, the death claim comprises full sum assured without deducting any of thesurvival benefit amounts, which have already been paid. Similarly, the bonus is alsocalculated on the full sum assured.

BENEFITS

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

For the year 2004-05 the two rates of investment return declared by the Life Insurance


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Council are 6% and 10% per annum.

Product summary : These are Money Back type Assurance plans that provides financial protection against death throughout the term of plan along with the periodic payments on survival at specified durations during the term.

Premiums: Premiums are payable yearly, half-yearly, quarterly, monthly or through salary deductionsas opted by you throughout the term of the policy, or till the earlier death.

Bonuses: This is a with- profit plan and participate in the profits of the Corporations life insurancebusiness. It gets a share of the profits in the form of bonuses. Simple Reversionary Bonuses

are declared per thousand Sum Assured annually at the end of each financial year. Oncedeclared, they form part of the guaranteed benefits of the plan. Final (Additional) Bonusmay also be payable provided policy has run for certain minimum period.

Death Benefit: The Sum Assured plus all bonuses to date is payable in a lump sum upon the death of thelife assured during the policy term irrespective of the Survival benefit /benefits paidearlier.

Survival Benefits: The percentage of Sum Assured as mentioned below will be paid on survival to the end of specified durations :

% of Sum Assured paid at the end of specified duration

DurationPlan

75 93

5 20% 15%

10 20% 15%

15 20% 15%

20 40% 15%

25 - 40%

All bonuses declared upto the maturity date will also be paid alongwith the final survivalbenefit.


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Supplementary/Extra Benefits : These are the optional benefits that can be added to your basic plan for extraprotection/option. An additional premium is required to be paid for these benefits.

Surrender Value : Buying a life insurance contract is a long-term commitment. However, surrender values areavailable under the plan on earlier termination of the contract.

Guaranteed Surrender Value: The policy may be surrendered after it has been in force for 3 years or more. Theguaranteed surrender value is 30% of the basic premiums paid excluding the first yearspremium and all survival benefits paid earlier.

Corpo rations policy on surrenders:

In practice, the Corporation will pay a Special Surrender Value which is either equal to ormore than the Guaranteed Surrender Value. The benefit payable on surrender is thediscounted value of the reduced claim amount that would be payable on death or at maturity. This value will depend on the duration for which premiums have been paid andthe policy duration at the date of surrender. In some circumstances, in case of earlytermination of the policy, the surrender value payable may be less than the total premiumspaid.

The Corporation reviews the surrender value payable under its plans from time to timedepending on the economic environment, experience and other factors.

Note: The above is the product summary giving the key features of the plan. This is for illustrativepurpose only. This does not represent a contract and for details please refer to your policydocument.

Plan/ Term 75/ 20 Years 93/ 25 Years

At the end of 5 years 20% 15%



At the end of 20 years

balance 40%+ bonus 15%

At the end of 25 years NIL

balance 40%+ bonus


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Plan Parameters:

Minimum Maximum

Entry age 13 (lbd) 50

Sum assured (Rs.) 50,000 NO LIMIT

Term (years) Fixed at 20 for plan 75and 25 for plan 93 -

Mode of Payment Maximum Maturity Age Policy loan available

Yearly, Half-yearly,Quarterly, Monthly,

Salary Saving Scheme70 years No

JEEVAN MITRA (DOUBLE COVER ENDOWMENT PLAN)

FEATURES

This is an Endowment Assurance plan that provides greater financial protection against death throughout the term of plan. It pays the maturity amount on survival to the end of the policy term.

Premiums: Premiums are payable yearly, half-yearly, quarterly, monthly or throughSalary deductions, as opted by you, throughout the term of the policy or earlier death.

Bonuses: This is a with- profit plan and participates in the profits of the Corporations lifeinsurance business. It gets a share of the profits in the form of bonuses. SimpleReversionary Bonuses are declared per thousand Sum Assured annually at the end of eachfinancial year. Once declared, they form part of the guaranteed benefits of the plan. A Final

(Additional) Bonus may also be payable provided a policy has run for certain minimumperiod.

BENEFITS

Death Benefit:Table No 88: Twice the Sum Assured plus all bonuses on the basic sum assured to date ispayable in a lump sum upon the death of the life assured.


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Table No 133: Thrice the Sum Assured plus all bonuses on the basic sum assured to date ispayable in a lump sum upon the death of the life assured.

Maturity Benefit: The Sum Assured plus all bonuses declared up to maturity date is payable in a lump sum onsurvival to the end of the policy term.

Supplementary/Extra Benefits:These are the optional benefits that can be added to your basic plan for extraprotection/option. An additional premium is required to be paid for these benefits.

Surrender Value: Buying a life insurance contract is a long-term commitment. However, surrender value will

be available under the plan on earlier termination of the contract.Guaranteed Surrender Value:The policy may be surrendered after it has been in force for 3 years or more. Theguaranteed surrender value is 30% of the basic premiums paid excluding the first yearspremium.

Corporations Policy On Surrenders :In practice, the company will pay a Special Surrender Value which is either equal to ormore

than the Guaranteed Surrender Value. The benefit payable on surrender reflects thediscounted value of the reduced claim amount that would be payable on death or at maturity. This value will depend on the duration for which premiums have been paid andthe policy duration at the date of surrender. In some circumstances, in case of earlytermination of the policy, the surrender value payable may be less than the total premiumspaid.



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KOMAL JEEVAN

FEATURES

Product summary: This is a Children's Money Back Plan that provides financial protection against deathduring the term of plan with periodic payments on survival at specified durations. Thisplan can be purchased by any of the parent or grand parent for a child aged 0 to 10 years.

Commencement of risk cover : The risk commences either after 2 years from the date of commencement of policy or fromthe policy anniversary immediately following the completion of 7 years of age of child,whichever is later.

Premiums: Premiums are payable yearly, half-yearly, quarterly, monthly or through Salary deductions,as opted by you, up to the policy anniversary immediately after the life assured (child)attains 18 years of age or till the earlier death of the life assured. Alternatively, thepremium may be paid in one lump sum (Single premium).

Guaranteed Additions: The policy provides for the Guaranteed Additions at the rate of Rs.75 per thousand SumAssured for each completed year. The Guaranteed Additions are payable at the end of theterm of the policy or earlier death of the Life Assured.

Loyalty Additions : This is a with- profit plan and participates in the profits of the Corporations life insurancebusiness. It gets a share of the profits in the form of loyalty additions which are terminalbonuses payable along with death or maturity benefit. Loyalty addition may be payabledepending on the experience of the Corporation.

BENEFITS

Survival Benefit: The percentage of sum assured as mentioned below will be paid on survival to the end of specified durations:


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On the policy anniversaryimmediately following the Life

assured attains the age of % of Sum Assured

18 years 20%20 years 20%

22 years 30%

24 years 30%

Death Benefit: In case of death of the life assured before the commencement of risk, the policy shall stand

cancelled and premiums paid (excluding the Premium for Premium waiver Benefit ) underthe policy will be refunded. However, if death occurs after the commencement of risk but before the policy matures, the full Sum Assured plus Guaranteed Additions together withLoyalty Additions, if any, is payable.

Maturity Benefit: The Guaranteed Additions together with Loyalty Additions, if any, is payable in a lump sumon survival to the end of the policy term.

Premium Waiver Benefit: This is an optional benefit that can be added to your basic plan. An additional premium isrequired to be paid for this benefit. By payment of this additional premium, the proposercan secure the benefit of cessation of premiums from his/her death to the end of thedeferment period. The deferment period for this purpose is to be taken as 18 minus age at entry of child.

Surrender Value: Buying a life insurance contract is a long-term commitment. However, surrender value isavailable on the plan on earlier termination of the contract.

Guaranteed Surrender Value:

The policy may be surrendered after it has been in force for 3 years or more. TheGuaranteed Surrender Value before the date of commencement of risk is 90% of thepremiums paid excluding the premiums paid during the first year and any extra premiumpaid. After the date of commencement of risk, the Guaranteed Surrender Value is 90% of the premiums paid before the date of commencement of risk excluding the premiums paidduring the first year and any extra premium paid plus 30% of the premiums paid after thedate of commencement of risk.


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Corporations policy on surrenders: In practice, the company will pay a Special Surrender Value which is either equal to ormore than the Guaranteed Surrender Value. The benefit payable on surrender reflects thediscounted value of the claim amount that would be payable on death or at maturity. Thisvalue will depend on the duration for which premiums have been paid and the policy at thedate of surrender. In some circumstances, in case of early termination of the policy, thesurrender value payable may be less than the total premium paid.


Note: The above is the product summary giving the key features of the plan. This is for illustrative purpose only. This does not represent a contract and for details please refer to your policy document.


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GROWTH OF PRIVATE LIFE INSURANCE COMPANIES IN THELAST 5 YEARS

The insurance industry recorded a booming growth of 35% in premium income during2004-05 with the 13 private sector players walking away with. An impressive 129% whilethe Life Insurance Corporation of India recorded a 21% growth.Thus the market share of state behemoths dropped to 78% in 2004 05 from 87% a yearago.According to ASSOCHAM Eco Pulse (AEP) Study, the industry premium increased toRs253.42bn in 2004-05 from Rs187.1bn in 2003-04. The LIC total premium for the year2004-05 amounted to Rs197.85bn as against the Rs162.84bn during previous year.

During April-June 2005, the largest private company ICICI Prudential has increased itsshare from 6.25% in 2004-05 to 7.68% in current fiscal.The opening up of the sector has given some of the most innovative products like thecustomized insurance policies and now the unit linked policies that have gained much of customer attention. The sector has huge potential and certain other new and innovativeareas can also be looked into for enhancing market share and premium income, saidSanghi.HDFC is next in the row with 2.91% market share which has increased from 1.92% last fiscal followed by TATA AIG which now shares 2% of the market from 1.18% last fiscal.Birla Sun life's share has dropped from 2.45% during FY'05 to 1.76% in first twomonths of FY'06. SBI life comes next with 1. 72% share and has infact dropped a fewpercent points from last year.

Max New York life and Aviva Life Insurance have captured more than 1% share each fromless than 1% share during FY'05. Others like ING, AMP Sanmar, Met Life and Sahara Indiahave less than 1 % share.

The detail of the market share of life insurance companies is attached. The market share of the private players has doubled every year from 5.6% in 2002-03 to, 12% in 2003-04 andclose to 22% in 2004-05.

The state run insurance company has the biggest advantage of its huge network which thecompany can use to penetrate into rural market that is still lying untapped.

Another option with the life insurance companies to capture more and more market sharecould be product innovation and constantly developing an insurance product in order tomeet the ever-changing requirements of the customer. Quality customer service andeducation can be another area where a company can differentiate itself from othercompanies.


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IT TO BOOST LIFE MARKET GROWTH

THE LIFE Insurance Corporation of India (LIC) has turned to information technology in abid to shed its image as a dinosaur among more nimble private sector companies. LIC,India's dominant life insurer, is encouraging policyholders to use its web site to pay

premiums and make claims. Last- month, it announced new mobile phone SMS (testing)services to alert policyholders of news about their plans.

These moves, unmatched by most of LIC's smaller private sector rivals, are part of an effort to open new channels to increase the speed and quality of customer service -long seen asLIC's weakness after decades as India's monopoly life insurer. LIC's performance in the

year to March 2004 suggests that these efforts are working. It sold 27 million new policiesgenerating Rs85.7 billion (US$1.9 billion) in premium income - an annual growth of about

11 percent. LIC's deployment of information technology may have helped it maintain its 88percent market share of premium sales.

Yet few believe that technology alone will drive the company's - and in effect, theIndian life industry's expansion.

"Ultimately the growth of life insurance depends on growth of the economy," said TK.Banerjee, a board member of the Insurance Regulatory Development Authority.

India's economic growth rate in March 2004 hit double-digit figures to become Asia'sfastest-growing economy. Most economists forecast growth to stabilize at around 7 percent

to 2005. Banerjee said that this climate of rising economic prosperity is Encouragingconsumers to think more about insurance.

Nonetheless, most life companies believe consumers still need Sanmar: "People still don't think that insurance is important. Most sales happen after personal interaction."

AMP Sanmar, a two-year old joint venture between south.-Indian based conglomerateSanmar and Australia's AMP, has employed some 3,000 sales agents who are targeting

small and medium-sized towns that have low penetration rates of life insurance. India's lifeinsurance penetration is less than three percent. "We're focused on places where there is

no other company - not even LIC," Subramaniam said,-remarking that unlike LIC, AMPSanmar regards the internet and mobile phones as channels for promotion, not sales.

He said that the internet is not widespread as a channel to sell consumer products in India,but Subramaniam has not ruled out deploying such technology in the future. Whatever themerits of new distribution channels, the industry fears a decline in sales following new

taxes levied on single premium products. Single premium life insurance has been popularin India mainly because guaranteed returns were tax-free.

This encouraged policyholders to pay large premiums with minimal risk cover, forpayments at maturity that often exceeded the returns of more sophisticated financial


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products such as mutual funds. But last October, the government decided to tax premiumsthat paid above 20 percent of the sum assured.

The decision has reduced sales of single premium products, which is likely to restrain the

overall growth of India's life industry. The industry regulator has forecast growth of lifepremiums to be around 20 percent to March -2004, about the same level as 1999, down

from a burst of sales in 2002 of 43.5 percent.

India's life insurers have rallied to persuade the government to rescind the ruling later thisyear ,but any decision must wait for the end of parliamentary elections currently

underway.


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CURRENT STANDING OF PRIVATE LIFE INSURANCE COMPANIES INURBAN SECTOR

Life insurance is possibly the most- retail of all financial services, and isrequired by people of all segments and in all locations. At a broad level, ICICIPrudential aims to secure the families of the middle and upper class workingpeople in urban India. To this end, they have pursued a pan-India distributionstrategy and backed it up with a range of products that meets the needs of a

wide range of people, be they from rural or urban areas.Today, they have branches in 74 locations and rural presence in more than 15

states. Certainly, the majority of the business still comes from urban areassuch as metros and mini-metros. However, they have seen rural business

grow significantly and expect it to continue making greater contribution in theyears to come.


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ROLE OF FOREIGN COMPANIES IN INDIA

Government has allowed 26% foreign equity participation in the insurance sector.This has its limitations. While most foreign insurers planning to start their services in Indiawere not pleased by this condition, they reluctantly agreed that this was expected in anopening economy and this will not change their outlook for India.

After all no insurance company can afford to ignore a market of 1bn people. But the fact remains that they: Can not appoint majority directors on the company board; Can not have say in the day to day workings of the company; Can Affect Only Special Re solutions.

This cap, however, will have a great impact on the Indian counter part to raise 74% of thefunds in their joint venture. To add to this if Indian partners like State bank of India, withover 9000 branches nationwide, will demand premium for their existing distributionnetwork, we will see the foreign insurance companies demand hefty premiums for bringingin their global

expertise and brand. Mr. Vaidya, Chairman of SBI, has recently stated that all it is lookingfor is a good and reliable partner and the question of a hefty premium to be charged to itsforeign partner is not significant. The monolith has finally come to business senses foreigncompanies are unhappy even about laws pertaining to repatriation of funds. The Stipulatedinvestment criteria is also something that all players in the sector, be it Indian or foreign,

are closingwatching.

The foreign players are essentially looking to tap their" global expertise in the varietymarkets and use that know-how to work in the Indian scenario. Designing of products,information systems, technical expertise, manpower planning etc is what oneexpects the foreign players to have a say in.

Any venture of the joint kinds needs to be between equals. If this is not there then there isevery chance that a partner in the venture will feel increasingly uncomfortable and wouldbe looking to call the joint venture off.


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FINDINGS

QUESTIONNAIRE ANALYSIS Respondents = 80Respondents Responded = 60Response Rate = 75%Respondents are taken from private, government and business sectors.

1. According to you, which have played a major role in the field of lifeinsurance companies?

privateemployees govt. employees businessman

LIC 10 13 10

HDFC 5 3 5

ICICI 3 3 4

OTHERS 2 1 1

After analyzing this data it is found that from the given three respective levelof Pvt. Govt. and Business 10 out of 20 (30%), 13 out of 20 (39%) and 10 out

of 20 (30%) are in favour of LIC, while 5 out of 20 (15%), 3 out of 20 (9%) and5 out of 20 (6%), 1 out of 20 (30%) and 1 out of 20 (30%) are in favour of other Pvt. Companies.

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L I C

H D F C I C

I C I

O T H E

R S

privateemployeesgovt. employees

businessman


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2. Which insurance companies have been successful to make strongpublic base by advertisement ?

Private employees Govt employees Business man

LIC 12 14 12

HDFC 3 2 4

ICICI 4 3 3

OTHERS 1 1 1

From the above table, it is found that from the given three sector Private, Govt.and Business 12 out of 20 (36%), 14 out of 20 (42%), 12 out of 20 (36%), are

in the favour of LIC. 3 out of 20 (9%), 2 out of 20 (6%) and 4 out of 20 (12%)are in favour of HDFC, whereas only 1 out of 20 (3%), 1 out of 20 (3%) 1 andout of 20 (3%) favour others company.

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L I C

H D F C I C

I C I

O T H E

R S

Privateemployees

Govt employees

Business man


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3. Which insurance company has gained massive public support in thecurrent fiscal year?

Privateemployees

govt.employees businessman

LIC 12 14 10

HDFC 3 2 5

ICICI 3 2 4

OTHERS 2 2 1

From the above table, it is found that from the given three sector Private, Govt.and Business 12 out of 20 (36%), 14 out of 20 (42%), 10 out of 20 (30%), arein the favour of LIC 3 out of 20 (9%), 2 out of 20 (6%) and 4 out of 20 (12%)are in favour of ICICI, whereas only 2 out of 20 (6%), 2 out of 20 (6%) 1 andout of 20 (3%) favour others company.

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LIC HDFC ICICI others

Privateemployees

govt. employees

businessman


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4. Do you think insurance policy is in the direction of public welfare?

Privateemployees

Govt.employees Businessman

YES 13 16 12

NO 7 4 8

The above table shows that from private sector 13 out of 20 (30%) agree and7 out of 20 (21%) disagree, from govt. sector 16 out of 20 (48%) think it right but 4 out of 20 (12%) dont thick it so and from business man 12 out of 20(36%) are in favour of the above statement but 8 out of 20 (24%) dont favourit.

0

5

10

15

20

Private employees Govt. employees Businessman

YES

NO


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5. Is retirement bond or pension policy launched by the number of privateplayer as well as public sector Company in the direction of secured old age?

Privateemployees


YES 15 18 13

NO 5 2 7

It is obvious from the above table that 15 out of 20 (45%), 18 out of 20 (54%)and 13 out of 20 (39%) from the given three think retirement bend or pensionpolicy alegitimate step in the direction of secure old age but 5 out 20 (15%), 2 out of

20 (6%) and 7 out 20 (21%) dont agree with the opinion of the majority class.

0

5

10

15

20

Privateemployees

Govt.employees

Businessman

YESNO


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6. Do you think that risk coverage factor included in Insurance policyattracts general public towards the policy?

Private employees Govt. employees Businessman

YES 12 16 11

NO 8 4 9

From the above table it is found that 12 out of 20 (36%) from Private sector16 out of 20 (48%). From Govt. sector and 11 out of 20 (33%) thinks risk coverage factor attractive but rest 8 out of 20 (24%), 4 out of 20 (12%) and 9out 20 (27%) from the above them sector dont think it so encouragingtowards saving trend whereas 3 out of 20 (9%), 2 out of 20 (6%) and 4 out of

20 (12%) dont think it so.

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P r i v a t e

e m p l o y e e s

G o v t .

e m p l o y e e s

B u s i n e s s m a n

NO

YES


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7. What according to you, the term plan that only covers risk and doesnt cover maturity benefit on survival at the end of the term provides securitycover over policy holders or a smart way of accumulative money frompolicy holders?

Privateemployees


security cover 12 16 11accumulativemoney 8 4 9

It is obvious from the above data that 11 out of 20 (33%), from the Pvt. Sector,15 out of 20 (45%) from Govt. sector and 12 out of 20 (36%) think term planas a security cover but 9 out of 20 (27%), 5 out of 20 (15%) and 8 out of 20(24%) from the three respective group think it as a way of accumulatingmoney insurance company.

0

5

10

15

20

Privateemployees

Govtemployees

Businessman

Security Cover

AccumulativeMoney


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8. Do you think that the arrival of so many private companies in this insurancesector envisage a lot of choice to policy holder?

Privateemployees


YES 16 18 16

NO 4 2 4

From analyzing the above data it is found that 16 out of 20 (48%) from Pvt.Sector, 18 out of 20 (54%) from Govt. sector and 16 out of 20 (48%) think that the arrival of private players envisage a lot of choice to policy holder. But 4out of 20 (12%), 2 out of 20 (6%) and 4 out of 20 (12%) dont think it so.

0

5

10

15

20

YES NO

Privateemployees

Govt. employees

Businessman


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9. Do you agree that customer-centricity and transparency are the buzzwordsfor success in this evolving industry?

Privateemployees


YES 18 20 19

NO 2 0 1

From this above data, it is found the 18 out of 20 (54%) from Pvt. Sector and20 out of 20 (60%) from Govt. Sector 19 out of 20 (57%) from Business menagree with this statement whereas only 2 out of 20 (6%) from Pvt. Sector and1 out of 20 (3%) from Business men do not agree with this statement.

0

5

10

15

20

YES NO

Privateemployees

Govt. employees

Businessman


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IMPORTANCE OF JOINT VENTURES

HDFC STANDARD LIFE INSURANCE COMPANY LIMITEDHDFC

HDFC Incorporated in 1977 with a share capital of Rs. 10 crores, HDFC has since emergedas the largest residential mortgage finance institution in the country. The corporation hashad a series of share issues raising its capital to Rs. 119 crores. The net worth of thecorporation as on March 31, 2000 stood at Rs. 2,096 crores.HDFC operates through 75 locations throughout the country with its CorporateHeadquarters in Mumbai, India. HDFC also has an international office in Dubai,V.A.E., with service associates in Kuwait, Oman and Qatar.

STANDARD LIFE

Standard Life is Europe's largest mutual life assurance company. Standard Life, which hasbeen in the life insurance business for the past 175 years, is a modern company survivingquite a few changes since selling its first policy in 1825. The company expanded in the 19thcentury from its original Edinburgh premises. Standard Life currently has assets exceedingover 70 billion under its management and has the distinction of being accorded"AAA"rating consequently for the past six years by Standard & Poor.

THE JOINT VENTURE HDFC Standard Life Insurance Company Limited was one of the first companies to begranted license by the IRDA to operate in life insurance sector. Each of the JV player ishighly rated and been conferred with many awards. HDFC is rated 'AAA' by both CRISILand ICRA. Similarly, Standard Life is rated 'AAA' both by Moody's and Standard and Poors.These reflect the efficiency with which DFC and Standard Life manage their asset base of Rs. 15,000 Cr and Rs. 600,000 Cr respectively.

HDFC Standard Life Insurance Company Ltd was incorporated on 14th August 2000.HDFC is the majority stakeholder in the insurance JV with 81.4 % stake and Standard Life

has a stake of 18.6%. Mr. Deepak Satwalekar is the MD and CEO of the venture.

HDFC Standard Life Insurance Products Money Back Endowment Term Assurance Plan Flexible Bond Development Insurance Plan


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ICICI PRUDENTIAL LIFE INSURANCE COMPANY

ICICI

ICICI Ltd. was established in 1955 by the World Bank, the Government of India and theIndian Industry, to promote industrial development of India by providing project andcorporate finance to Indian industry.Since inception, ICICI has grown from a development bank to a financialconglomerate and has become one of the largest public financial institutions in India.

ICICI has thus far financed all the major sectors of the economy, covering 6,848companies and 16,851 projects. As of March 31, 2000, ICICI had disbursed a total of Rs.

1,13,070 crores, since inception.

PRUDENTIAL POLICY

Prudential policy was founded in 1848. Since then it has grown to become one of thelargest providers of a wide range of savings products for the individual including lifeinsurance, pensions, annuities, unit trusts and personal banking. It has a presence in over15 countries, and caters to the financial needs of over 10 million customers. It managesassets of over US$ 259 billion (Rupees 11, 39,600 crores approx.) as of December 31, 1999.

Prudential is the largest life insurance company in the United Kingdom (Source:

S&P's UK Life Financial Digest, 1998). Asia has always been an important region forPrudential and it has had a presence in Asia for over 75 years. In fact Crede ntials first overseas operation was in India, way back in 1923 to establish Life and General Branchagencies.

THE JOINT VENTURE

ICICI Prudential Life Insurance Company Limited was incorporated on July 20, 2000. Theauthorized capital of the company is Rs.2300 Million and the paid up capital is Rs. 1500Million. The Company is a joint venture of ICICI (74%) and Prudential plc UK (26%). TheCompany was granted Certificate of Registration for carrying out Life Insurance business,by the Insurance Regulatory and Development Authority on November 24, 2000. It commenced commercial operations on December 19, 2000, becoming one of the first fewprivate sector players to enter the liberalized.

ICICI Prudential Life Insurance Products ICICI Prudential Forever Life ICICI Prudential Single Premium Bond


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ICICI Save 'n' Protect ICICI Prudential Cash Back ICICI Prudential Life Guard ICICI Pru Assure Investment ICICI Pru Life Link

BIRLA SUN LIFE INSURANCE COMPANY LIMITED

THE ADITYA BIRLA GROUP

Aditya Birla Group is India's second largest, business house, with a turnover of over$4.75bn and an asset base of$3.8 bn. The Group is a well diversified conglomerate with72,000 strong workforce spanning 40 Companies spread across 17 countries.

The flagship companies of the Group - Grasim, Hindalco, Indian Rayon and IndoGulf - hold leadership positions in their respective areas of business.

SUN LIFE ASSURANCE

Sun Life Assurance Co. of Canada, established in 1871, is licensed in Canada, theU.S., the Philippines, Hong Kong, and the U.K. Its major lines of business are lifeinsurance, annuities and mutual funds and investment services. Sun Life's ratingreflects extremely strong diversification of revenues and profitability, outstandingcapitalization, good fundamental earnings, and high-quality investments.

In Canada, the company is especially strong. in the corporate life and health insurance andsavings markets. In the U.S., the company is a top 20 player in the variable annuity market and a significant force in the upscale individual insurance market. In the U.K., Sun Life isamong top 20 life and health insurers.

THE JOINT VENTURE

Birla Sun Life Insurance Company, the 74: 26 joint ventures between Aditya BirlaGroup and Sun Life financial Services --of Canada, has an equity capital of Rs. 150 crore.Birla Sun Life has Mr. Nalli B Javeri as its CEO.

A six member Board, with equal representation from each of the JV Companies has beenconstituted to run the Company. Mr. Donald A. Stewart, Chairman and CEO, Sun LifeFinancial Services will head the Board. Mr. Kumar Mangalam Birla will be a director on theboard. Other directors include Mr. Douglas Henck, Executive Vice President of Sun Life'sAsian operations, Mr. Vijay Singh, Vice President India, Sun Life Financial Services, Mr. B. N.Puranmalka, Group Vice-Chairman, and Mr. S. K. Mitra, Group Director, Financial Servicesof the Aditya Birla Group.


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The area of focus will be the rural segment as the company plans to leverage thenetwork of the Aditya Birla Centre for Community Initiative and Rural Development inrural areas. Its multi-channel distribution set up comprises insurance advisors for life and

an expert marketing team for group products.

Birla Sun Life Insurance Products: Money Back Endowment Whole Life Birla Sun Life Term Plant


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CONCLUSION

After overhauling the all situation that boosted a number of Pvt. Companiesassociated with multinational in the Insurance Sector to give befitting competition to theestablished behemoth LIC in public sector.

we come at the conclusion that :

1) There is very tough competition among the private insurance companies on the level of new trend of advertising to lull a major part of Customers.

2) LIC is not left behind in the present race of advertisement.

3) The entry of the Pvt. Players in the Insurance Sector has expanded the product segment

to meet the different level of the requirement of the customers. It has brought about greater choice to the customers.

4) Private insurers have restricted reach to the customers.

5) LIC has vast market and very firm grip on its traditional customers and monopoly of lifeinsurance products.

6) Bank assurance - that allows life insurers to leverage on the risk product through bank network, was adopted by private players. But LIC was also not left behind as picking upmajority stake in the corporation Bank and large equity stake in the Oriental Bank of

Commerce.

IRDA is also playing very comprehensive role by regulating norms mandating toprivate players in this sector, that increases the confidence level of the customers to theprivate players.


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CONCLUSIONS GOT BY THE CONSUMER SURVEY ANALYSIS

1) Now days also Insurance is most popular as more plain protection against death andpeople are unaware about the other aspects of insurance.

2) According to current scenario life and mater Insur

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