A

PROJECT REPORT
ON
“A STUDY ON LIFE INSURANCE PRODUCTS OF LIC”
Submitted by
ANIL
H.NO: 1420-22-672-066

Under the guidance of

Mrs. D. SHAILA,
Assoc. Professor
VIVEK VARDHINI SCHOOL OF BUSINESS MANAGEMENT
(Affiliated To Osmania University)
(JAMBAGH, KOTI, HYDERABAD-500095)
(2022-2024)
 CONTENTS

CHAPTER PAGE
NO NAME OF THE CONCEPT NO
CHAPTER-1 INTRODUCTION
NEED OF THE STUDY
OBJECTIVES OF THE STUDY
SCOPE OF THE STUDY
RESEARCH METHODOLOGY OF
THE STUDY
LIMITATIONS OF THE STUDY
CHAPTER-2 REVIEW OF LITERATURE
CHAPTER-3 INDUSTRY PROFILE
COMPANY PROFILE
DATA ANALYSIS AND
CHAPTER-4 INTERPRETATION
CHAPTER-5 FINDINGS
SUGGESTIONS
CONCLUSION
BIBOLOGRAPHY
 CHAPTER-1
INTRODUCTION
Introduction to Life Insurance
Life insurance is a financial product that provides a payout to
beneficiaries upon the insured person's death.

It offers protection and financial security to loved ones in the event of

unexpected circumstances.

Premiums are paid regularly by the policyholder in exchange for the

coverage provided by the insurance company.

Types of Life Insurance

Term life insurance provides coverage for a specific period and pays
out a benefit if the insured dies during that term.

Whole life insurance offers coverage for the entire lifetime of the
insured and includes a cash value component that grows over time.

Universal life insurance is a flexible policy that allows for adjustments

in premiums and death benefits to suit the policyholder's changing
needs.

Benefits of Insurance for Social Security

Insurance fosters resilience by offering a safety net that allows
individuals to recover from setbacks and rebuild their lives.

Through various types of insurance coverage, such as health, life, and

disability insurance, individuals can access necessary resources to
address their specific needs.

Insurance plays a crucial role in supporting individuals, businesses,

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

Life Insurance in its modern form came to India from England in the
year 1818. Oriental Life Insurance Company started by Europeans in
Calcutta was the first life insurance company on Indian Soil. However,
later with the efforts of eminent people like Babu Muttylal Seal, the
foreign life insurance companies started insuring Indian lives. But
Indian lives were being treated as sub-standard lives and heavy extra
premiums were being charged on them. Starting as Indian enterprise
with highly patriotic motives, insurance companies came into
existence to carry the message of insurance and social security
through insurance to various sectors of society. Bharat Insurance
Company (1896) was also one of such companies inspired by
nationalism. The Swadeshi movement of 1905-1907 gave rise to more
insurance companies. The United India in Madras, National Indian and
National Insurance in Calcutta and the Co-operative Assurance at
Lahore were established in 1906. In 1907, Hindustan Co-operative
Insurance Company took its birth in one of the rooms of the Jorasanko,
house of the great poet Rabindranath Tagore, in Calcutta. The Indian
Mercantile, General Assurance and Swadeshi Life (later Bombay Life)
were some of the companies established during the same period. Prior
to 1912 India had no legislation to regulate insurance business. In the
year 1912, the Life Insurance Companies Act, and the Provident Fund
Act were passed. 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 1938However, 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.

Life Insurance Corporation 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 Life Insurance
Corporation 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 1000.00 crores only in the year 1969-70, and
it took another 10 years for Life Insurance Corporation to cross
2000.00 crore mark of new business. But with re-organisation
happening in the early eighties, by 1985-86 Life Insurance
Corporation had already crossed 7000.00 crore Sum Assured on new
policies.

Today Life Insurance Corporation functions with 2048 fully

computerized branch offices, 113 divisional offices, 8 zonal offices,
1381 satellite offices and the corporate office. Life Insurance
Corporation’s Wide Area Network covers 113divisional offices and
connects all the branches through a Metro Area Network. Life
Insurance Corporation has tied up with some Banks and Service
providers to offer on-line premium collection facility in selected cities.
Life Insurance Corporation’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,
Life Insurance Corporation 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.

Life Insurance Corporation 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. Life
Insurance Corporation 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, Life Insurance Corporation 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 Life Insurance Corporation 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.

• Some of the important milestones in the life insurance

business in India are: -

1818: Oriental Life Insurance Company, the first life insurance

company on Indian soil started functioning.

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

1912: The Indian Life Assurance Companies Act enacted as the first
statute to regulate the life insurance business.
1928: The Indian Insurance Companies Act enacted to enable the
government to collect statistical information about both life and non-
life insurance businesses.

1938: Earlier legislation consolidated and amended to by the

Insurance Act with the objective of protecting the interests of the
insuring public.

1956: 245 Indian and foreign insurers and provident societies are
taken over by the central government and nationalised. Life Insurance
Corporation formed by an Act of Parliament, viz. Life Insurance
Corporation Act, 1956, with a capital contribution of Rs. 5 crores from
the Government of India.

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

• 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 classes of general insurance business.

1957: General Insurance Council, a wing of the Insurance Association

of India, frames a code 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 the general insurance business in India with effect from
1st January 1973.

107 insurers amalgamated and grouped into four companies viz. the
National Insurance Company Ltd., the New India Assurance Company
Ltd., the Oriental Insurance Company Ltd. and the United India
Insurance Company Ltd. GIC incorporated as a company.
Introduction to the Project

LIC project stands for Low-Income Community project, aiming to

address the needs of underprivileged communities.

This initiative focuses on providing essential resources and support to

improve the quality of life for individuals in low-income areas.

By implementing sustainable solutions, the LIC project aims to create

a positive impact on marginalized communities.

This project has done to promote the product the name of the LIC and
to find out the interested people for financial advisors. The main
objective of the study is to find out the existing market for the
company and to cover all most the people, which will be helpful in
increasing the companies’ operation activities and services towards
the customers. Most importantly it explains criteria for the life
insurance products of LIC.
NEED OF THE STUDY
➢ An enquiry into the nature and factors responsible for the LIC of
India and also the private sector insurance players during the
period 2000- 01 to 2009-10 will be helpful in formulating the
future course of action in the area of product innovation and
development, asset-liability management of the insurance

➢ This will enable the Government. IRDA, LIC of India, private

sector players. employees, insurance marketers and the
policyholders to know the causes underlying the existing
position, to understand and appreciate the other stakeholder’s
attitude and to promote compromising and conciliatory 75
behaviour which is the essential pre-requisite for the healthy
growth of life insurance industry in our country.

➢ It is hoped that this study will be useful in the context of the

imperative need for toning up the efficiency of the working of
both the public and private sector units, which are expected to
play a crucial role in the years to come and give a new outlook to
the life insurance policy laid down by the Government and the
IRDA.

➢ Its aim is also to find out why certain deficiencies have occurred
and how they can be avoided. It requires naturally a lot of
objective assessment of the problems with the application of
statistical techniques.

➢ It will also be useful to bring to light many aspects, with broader

perspective, of the performance evaluation of the life insurance
industry that contribute for higher insurance penetration and
better customer service are brought to light. It is also hoped that
the data presented, the observations made and conclusions
arrived at in this study will be useful for inter-sectorial
comparison, not only in the case of other players who newly
entered and those who are proposed to enter in the years to
come in the insurance sector. Therefore, a study of this sort is
undertaken in a more judicious manner.
OBJECTIVES OF THE STUDY
Life Insurance Corporation is one of the major economic players
in Indian economy. It has wide life insurance products to offer to
the public. LIC has life, health, pension plans, ULIP but the scope
of study is confined to life insurance products of LIC of India. The
objectives of the study are as follows.
• To study various life insurance products of LIC of India.

• To identify the factors affecting the investment in products of

LIC of India.

• To identify the most preferred and viable products and

services categorically.

• To analyse the financial accounts of LIC of India (1999-2000 to

2009-10)

• To study the nexus of insurance with tax benefit.

• To study customer perception and satisfaction of life insurance

products of LIC of India

SCOPE OF THE STUDY

Because of the time constraint the study is limited to

Mahabubnagar.

The study is mainly concentrated on finding out the products of

LIC
RESEARCH METHODOLOGY
Research is endless quest for knowledge or unending search for
truth. It brings to light new knowledge or corrects previous
errors and misconceptions 6 and adds in an orderly way to the
existing body of knowledge. The knowledge obtained by
research is scientific and is a matter of rational understanding,
common verification and experience.

Research methodology is a way to systematically solve the

research problem.

Various statistical tools are available for research. But the

researcher has to determine what tools are applicable for his
study.

Proposed Research Methodology

• Research Design - Descriptive
• Instrument - Questionnaire
• Technique - Survey
• Measurement - 1 – 7
• Sources of data –
Primary and Secondary

(i) Primary Data Primary data is that which is collected from

primary sources, it is original data which will be collected from
officers and staff of life LIC of India by conducting interviews on
the basis of objectives of the study. It will also be collected from
investor customers by canvassing pre designed questionnaire.

(ii) Secondary Data The secondary data is already published data

available through books periodicals, annual reports, diaries,
magazines and newspapers, journal and websites.
• Sampling Units - The officers and agents of LIC of India and
customers of LIC.
 LIMITATIONS OF THE STUDY

While doing the project work, we made good effort, but still, we
may suffer from certain limitations like

This survey was undertaken to find out the interested

candidates, who wants to become financial advisors for the LIC
Company.

My sample size of this survey is restricted to 200 respondents

only.

The information, views & options given by the respondents may

be biased or half-truth.

This study might have become outdated by the time it is

presented to the company for their kind considerations.

➢ This survey is limited to twin cities. i.e. Mahabubnagar only.

 CHAPTER-2
REVIEW LITERATURE
Life Insurance

Life insurance is a branch of insurance in which compensation is made

available to designated survivors of a deceased person, or to a person
on their own survival after a fixed term of years, in return for
payments, or premiums. Life assurance is based on the mathematics of
probability, which determines the level of premium to be paid. and on
compound interest, which determines the growth over time. through
investment. of the fund constituted by the intake of premiums. The
two together ensure an adequate fund to provide the compensation
required.

Life insurance is insurance for the customers and their family's peace
of mind. Life insurance is a policy that people buy from a life insurance
company, which can be the protection and financial stability after
one's death. Its primary life insurance company function is to help
beneficiaries financially after the owner of the policy dies.

It can also be a form of savings in the long run if you purchase a plan,
which offers option of contributing regularly. Also, a little-known
function of life insurance can be tied in with a person's pension plan. A
person can make contribution to a pension that is founded a by a life
insurance company. These are considered private pension
arrangements.

Life insurance provides unique benefits. It is designed to help the

family in case of premature demise of the life assured and even in case
the life assured lives for too long.
A list of the benefits that life insurance provides are:

➤Protection: Against the risk for the family of the insured.

Painless savings: Complete focus of life insurance schemes is on long

term investment. The amount that the person pays every mouth as
premium is very less.

➤Liquidity: Normally life insurance schemes are accepted as

collaterals for providing loans

➤Tax Relief:

u/s 88 all premium paid is exempted from taxation (subject to limits)

u/s 10(100) all income received from life insurance is exempted from
tax

u/s 80CCC (1) contribution to the extent of Rs.10.00010 a

pension fund like LIC's Jeevan Suraksha is exempted from taxes. Some
of the life insurance plans which are designed to meet the life cycle
needs of individuals are:

Security to family at a very low cost, in the Whole life insurance

event of Whole life insurance plan untimely plan
death
Have a large sum assured at old age on Endowment plan
maturity of Endowment plan the plan.
Children’s education and marriage Specific plans are
designed
High quality with survival benefits Money back policy

Legislative and Regulatory Matters

Several Acts have been constituted for the smooth operation of the
Insurance Industry in India. Some of them date back to 1872, as in the
case of the Indian Contract Act (of course with amendments), whereas
others are as recent as 1999, as in case of the IRDA Act.

Life Insurance Industry in India

Life insurance in its existing form came in India from United Kingdom
(UK) with the establishment of a British firm, Oriental Life Insurance
Company in 1818 followed by Bombay Life Assurance Company in
1823, the Madras Equitable Life Insurance Society in 1829 and
Oriental Life Assurance Company in 1874, Prior to 1871. Indian lives
were treated as sub-standard and charged an extra premium of 15%
to 20%.
Bombay Mutual Life Assurance Society, and Indian insurer that came
into existence in 1871, was the first to cover Indian lives at normal
rates.

The Indian Life Assurance Companies Act, 1912 was the first statutory
measure to regulate life insurance business. Layer, in 1928 the Indian
Insurance companies Act was enacted, inter alia, to enable the
government to collect statistical information about life and non-life
insurance business transacted in India by India and foreign insurers,
including the provident insurance societies.

In 1938, with a view to protecting the interest of the insuring public,

earlier legislation was consolidated and amended by Insurance Act,
1938 with comprehensive provisions for detailed and effective control
over the activities of insurers. In order to administer the aforesaid
legislation, an insurance wing was established and attached first with
the Ministry of commerce and then Ministry of Finance. This ministry
was administratively responsible for policy matters pertaining to
insurance. The actuarial and operational matters relating to the
insurance industry were looked after by an attached office in Shimla,
headed first by Actuary to the Government of India, then by
Superintendent of Insurance and finally by the Controller of
Insurance. The act was emended in 1950, making far-reaching
changes such as requirement of equity capital for companies, carrying
on life insurance business, ceilings on shareholdings in such
companies, stricter control on investment of life insurance companies,
submission of periodical returns relating to investments and such
other information to the controller as he may call for, appointment of
administrators for mismanaged companies, ceilings on expenses of
management and agency commission, incorporation of the Insurance
Association of India and formation of councils and committees thereof.
By 1956, 154 Indian insurers, 16 non-Indian insurers and 75
provident societies were carrying on life insurance business in India.
Life insurance business was confined mainly to cities and the better-of
segments of the society.

On 19th January 1956, the management of life insurance business of

245 Indian and foreign insurance and provident societies, then
operating in India, was taken over by the Central government and
then nationalized on 1" September 1956. LIC was formed in
September, 1956 by an Act Parliament, viz. LIC Act. 1956. with capital
contribution of Rs. 5Crores from the Government of India.

Some of the Salient Acts which needs to be understood are:

➢ Insurance act, 1938

➢ Life Insurance Corporation Act, 1956
➢ Insurance Regulatory and Development Authority Act. 1999
➢ Consumer Protection Act. 1986
➢ Ombudsman
➢ Income Tax Act
➢ Married Women's Property Act
➢ Contact Act

Insurance Regulatory and Development Authority Act, 1999

An Act to provide for the establishment of an Authority to protect the

interest of holders of insurance policies, to regulate, promote and
ensure orderly growth of the insurance industry and for matters
connected there with or incidental there to and further to amend the
Insurance Act, 1938, the Life Insurance corporation Act, 1956 and the
General Insurance Business (Nationalization) Act. 1972
➢ The Authority replaces the Controller under Insurance Act,
1938. It states that, if "Authority" is super ceded by the Central
Government, the "controller of Insurance" may be appointed till
such time as "Authority" is reconstituted
➢ Section 2(f) defines an intermediary to include insurance
brokers, re-insurance brokers, insurance consultants, surveyors
and loss assessors
➢ The authority has the power and function to specify
qualifications, code of conduct and practical training for
intermediaries and agents

Income Tax Act

➢ An Act to consolidate and amend the law relating to income tax

and super tax.

➢ Sub section 100 of section 10 of Income Tax Act 1961, any sum
received under a life insurance is exempted from Income Tax

➢ Exception: Not applicable if the amount is to be refunded under

the Jeevan Aadhar Plan in case the handicapped dependent
predeceases the individual or under a key-man insurance
TYPES OF LIC PRODUCTS

Life Insurance Corporation

(LIC) offers a range of products
to cater to the diverse need’s
needs of its customers.
These products provide
financial security, savings,
investment opportunities, and
protection against unforeseen
circumstances.
LIC products are designed to
suit different age groups,
income levels, and risk
appetites.
Term Insurance Plans

LIC offers term insurance plans

that provide pure life cover for
a specific term. term.
These plans offer high
coverage at affordable
premiums, making them ideal
for individuals looking for
maximum protection.Term
insurance plans do not provide
any maturity or survival
benefits, but they offer a lump
sum amount to the nominee in
case of the policyholder's demise.
Endowment Plans

Endowment plans offered by

LIC combine insurance
coverage with savings and
savings and investment
components.
These plans provide a lump
sum payout on maturity or in
the event of the policyholder's
death, ensuring financial
security for the family.
Endowment plans help
individuals build a corpus over
time while offering life cover.
Money-Back Plans

LIC's money-back plans are a

type of endowment plan that
provides periodic payouts at
specified intervals during the
policy term.
Policyholders receive a
percentage of the sum assured
at regular intervals, providing
liquidity and meeting various
financial needs.
In case of the policyholder's
demise, the entire sum
assured is paid to the nominee, ensuring financial protection.
Whole Life Plans

Whole life plans offered by LIC

provide coverage for the entire
lifetime of the policyholder.
These plans offer a guaranteed
payout to the nominee upon
the policyholder's demise,
ensuring long-term financial
security.
Whole life plans also have a
savings component that helps
policyholders build a corpus
for retirement or other
financial goals.
Pension Plans

LIC's pension plans, also

known as retirement plans,
help individuals build a
retirement corpus and secure
their post-retirement life.
These plans offer regular
income in the form of
annuities after retirement,
ensuring financial stability
during the golden years.
Pension plans come with
various options like immediate
annuity, deferred annuity, and systematic withdrawal plan (SWP) to suit
different retirement needs.
Child Plans

LIC's child plans are designed

to secure a child's future by
providing financial support for
their education, marriage, or
other milestones.
These plans offer a
combination of insurance and
investment components,
ensuring financial protection
and growth for the child.
Child plans come with flexible
premium payment options and
maturity benefits to meet the evolving needs of the child.
Health Insurance Plans

LIC offers health insurance

plans that provide coverage for
medical expenses,
hospitalization, and critical
illnesses.
These plans help individuals
mitigate the financial burden
of healthcare costs and ensure
access to quality medical
treatment.
Health insurance plans also
offer benefits like cashless
hospitalization, pre and posthospitalization expenses, and coverage for
daycare procedures.
Group Insurance Plans

LIC's group insurance plans are

designed for organizations to
provide life cover to their
employees or members.
These plans offer cost-effective
coverage to a large group of
individuals, ensuring financial
protection for their families.
Group insurance plans can be
customized as per the
organization's requirements
and provide benefits like
accidental death cover, disability benefits, and group term insurance.
Conclusion

LIC offers a comprehensive

range of products catering to
various financial needs and
goals of individuals and
organizations.
Whether it's protection,
savings, investment, or
retirement planning, LIC
products provide a holistic
solution for financial well-
being.
By choosing the right LIC
product based on their requirements, individuals can secure their future
and achieve their financial goals.

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