Brief 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. All the insurance companies established during that period were brought up with the
purpose of looking after the needs of European community and Indian natives were not being
insured by these companies. However, later with the efforts of eminent people like Babu Muttylal
Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were being
treated as sub-standard lives and heavy extra premiums were being charged on them. Bombay
Mutual Life Assurance Society heralded the birth of first Indian life insurance company in the year
1870, and covered Indian lives at normal rates. Starting as Indian enterprise with highly patriotic
motives, insurance companies came into existence to carry the message of insurance and social
security through insurance to various sectors of society. Bharat Insurance 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. The
Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical
valuations of companies should be certified by an actuary. But the Act discriminated between
foreign and Indian companies on many accounts, putting the Indian companies at a disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance business. From 44
companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total
business-in-force as Rs.298 crore in 1938. During the mushrooming of insurance companies many
financially unsound concerns were also floated which failed miserably. The Insurance Act 1938 was
the first legislation governing not only life insurance but also non-life insurance to provide strict
state control over insurance business. The demand for nationalization of life insurance industry was
made repeatedly in the past but it gathered momentum in 1944 when a bill to amend the Life
Insurance Act 1938 was introduced in the Legislative Assembly. However, it was much later on the
19th of January, 1956, that life insurance in India was nationalized. About 154 Indian insurance
companies, 16 non-Indian companies and 75 provident were operating in India at the time of
nationalization. Nationalization was accomplished in two stages; initially the management of the
companies was taken over by means of an Ordinance, and later, the ownership too by means of a
comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the 19th
of June 1956, and the Life Insurance Corporation of India was created on 1st September, 1956,
with the objective of spreading life insurance much more widely and in particular to the rural areas
with a view to reach all insurable persons in the country, providing them adequate financial cover
at a reasonable cost.

LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate office
in the year 1956. Since life insurance contracts are long term contracts and during the currency of
the policy it requires a variety of services need was felt in the later years to expand the operations
and place a branch office at each district headquarter. Re-organization of LIC took place and large
numbers of new branch offices were opened. As a result of re-organisation servicing functions were
transferred to the branches, and branches were made accounting units. It worked wonders with
the performance of the corporation. It may be seen that from about 200.00 crores of New Business
in 1957 the corporation crossed 1000.00 crores only in the year 1969-70, and it took another 10
years for LIC to cross 2000.00 crore mark of new business. But with re-organisation happening in
the early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on new
policies.

Today LIC functions with 2048 fully computerized branch offices, 109 divisional offices, 8 zonal
offices, 992 satallite offices and the Corporate office. LIC’s Wide Area Network covers 109
divisional offices and connects all the branches through a Metro Area Network. LIC has tied up with
some Banks and Service providers to offer on-line premium collection facility in selected cities.
LIC’s ECS and ATM premium payment facility is an addition to customer convenience. Apart from
on-line Kiosks and IVRS, Info Centres have been commissioned at Mumbai, Ahmedabad,
Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of
providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK offices. The
satellite offices are smaller, leaner and closer to the customer. The digitalized records of the
satellite offices will facilitate anywhere servicing and many other conveniences in the future.

LIC continues to be the dominant life insurer even in the liberalized scenario of Indian insurance
and is moving fast on a new growth trajectory surpassing its own past records. LIC has issued over
one crore policies during the current year. It has crossed the milestone of issuing 1,01,32,955 new
policies by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the corresponding period
of the previous year.

From then to now, LIC has crossed many milestones and has set unprecedented performance
records in various aspects of life insurance business. The same motives which inspired our
forefathers to bring insurance into existence in this country inspire us at LIC to take this message
of protection to light the lamps of security in as many homes as possible and to help the people in
providing security to their families.

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. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital
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 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.

Objective of insurance

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

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

 Bear in mind, in the investment of funds, the primary obligation to its policyholders, whose money it holds in
trust, without losing sight of the interest of the community as a whole; the funds to be deployed to the best
advantage of the investors as well as the community as a whole, keeping in view national priorities and
obligations of attractive return.

 Conduct business with utmost economy and with the full realization that the moneys belong to the policyholders.

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

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

 Involve all people working in the Corporation to the best of their capability in furthering the interests of the
insured public by providing efficient service with courtesy.

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

Mission
"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 to societies and
Pride of India."

Members On The Board Of The Corporation

Shri. T.S. Vijayan (Chairman)

Shri. D.K. Mehrotra (Managing Director - LIC)

Shri. Thomas Mathew T. (Managing Director - LIC)

Shri. A.K. Dasgupta (Managing  Director - LIC)

Shri. Ashok Chawla (Finance Secretary, Ministry of Finance, Govt. of India)

Shri. R. Gopalan (Secretary, Department of Financial Services, Ministry of Finance, Govt. of

India.)

Shri. Yogesh Lohiya (Chairman cum Managing  Director, GIC of  India)

Shri D.L. Rawal (Chairman & Managing Director , Dena Bank)

Dr. Sooranad Rajashekhran

Shri. Monis R. Kidwai

Lt. General Arvind Mahajan ( Retd.)

IIFE INSURANCE COMPANY

The Life Insurance Corporation of India (LIC) (Hindi: भारतीय जीवन बीमा निगम) is the
largest state-owned life insurance company in India, and also the country's largest investor. It is
fully owned by the Government of India. It also funds close to 24.6% of the Indian Government's
expenses. It has assets estimated of Rs. 9.31 trillion (US$ 198.3 billion).[1] It was founded in
1956.

Headquartered in Mumbai, which is considered the financial capital of India,[2] the Life Insurance
Corporation of India currently has 8 zonal Offices and 101 divisional offices located in different
parts of India, at least 2048 branches located in different cities and towns of India along with
satellite Offices attached to about some 50 Branches, and has a network of around 1.2 million
agents for soliciting life insurance business from the public.

[edit] History
The Oriental Life Insurance Company, the first corporate entity in India offering life insurance
coverage, was established in Calcutta in 1818 by Bipin Behari Dasgupta and others. Europeans
in India were its primary target market, and it charged Indians heftier premiums. The Bombay
Mutual Life Assurance Society, formed in 1870, was the first native insurance provider. Other
insurance companies established in the pre-independence era included

 Bharat Insurance Company (1896)

 United India (1906)
 National Indian (1906)
 National Insurance (1906)
 Co-operative Assurance (1906)
 Hindustan Co-operatives (1907)
 Indian Mercantile
  General Assurance
 Swadeshi Life (later Bombay Life)

The first 150 years were marked mostly by turbulent economic conditions. It witnessed, India's
First War of Independence, adverse effects of the World War I and World War II on the
economy of India, and in between them the period of world wide economic crises triggered by
the Great depression. The first half of the 20th century also saw a heightened struggle for India's
independence. The aggregate effect of these events led to a high rate of bankruptcies and
liquidation of life insurance companies in India. This had adversely affected the faith of the
general public in the utility of obtaining life cover.

The Life Insurance Act and the Provident Fund Act were passed in 1912, providing the first
regulatory mechanisms in the Life Insurance industry. The Indian Insurance Companies Act of
1928 authorized the government to obtain statistical information from companies operating in
both life and non-life insurance areas. The subsequent Insurance Act of 1938 brought stricter
state control over an industry that had seen several financially unsound ventures fail. A bill was
also introduced in the Legislative Assembly in 1944 to nationalize the insurance industry.

[edit] Nationalization
In 1955, parliamentarian Amol Barate raised the matter of insurance fraud by owners of private
insurance companies. In the ensuing investigations, one of India's wealthiest businessmen, Ram
Kishan Dalmia, owner of the Times of India newspaper, was sent to prison for two years.
Eventually, the Parliament of India passed the Life Insurance of India Act on 1956-06-19, and
the Life Insurance Corporation of India was created on 1956-09-01, by consolidating the life
insurance business of 245 private life insurers and other entities offering life insurance services.
Nationalization of the life insurance business in India was a result of the Industrial Policy
Resolution of 1956, which had created a policy framework for extending state control over at
least seventeen sectors of the economy, including the life insurance. The company began
operations with 5 zonal offices, 33 divisional offices and 212 branch offices. LIC received
another set back with Mundra fraud but it escaped with least damage from Harshad Mehta scam.
There are intermittent rumours in media but LIC has largely escaped large scale scandals of the
type encountered by erstwhile UTI largely because of its immunity from being transparent in the
name of confidentiality in the era of RTI. Often there is consumer demand to open the
investment portfolio of LIC but no body knows if it will be good for the corporation. But there is
a great and undue reliance on the management environment of this great corporation. People are
scared after what has happened to Goldman Sachs or Lehman Brothers in USA and elsewhere,
which were equally or more big and great.

[edit] Current status

(needs editing and updating)
LIC building, at Connaught Place, New Delhi, designed by Charles Correa, 1986.

Over its existence of around 50 years, Life Insurance Corporation of India, which commanded a
monopoly of soliciting and selling life insurance in India, created huge surpluses, and
contributed around 7 % of India's GDP in 2006.

The Corporation, which started its business with around 300 offices, 5.6 million policies and a
corpus of INR 459 million (US$ 92 million as per the 1959 exchange rate of roughly Rs. 5 for a
US $ http://data.un.org/Data.aspx?d=CDB&f=srID:6080), has grown to 25000 servicing around
180 million policies and a corpus of over Rs. 8 trillion (US$ 170.4 billion).

The organization now comprises 2048 branches, 109 divisional offices and 8 zonal offices, and
employs over 1,002,149 agents.The corporate Office of LIC is in Mumbai. It also operates in 12
other countries, primarily to cater to the needs of Non Resident Indians.

With the change in the India's economic philosophy from the early 1990s, and the subsequent
relaxation of state control over several sectors of the economy, the monopolistic position of the
Life Insurance Corporation of India was diluted, and it has had to compete with a number of
other corporate entities, Indian as well as transnational Life Insurance brands. However, it still
manages to be the largest player in the Indian market, with the lion's share of 55%.

The recent Economic Times Brand Equity Survey rated LIC as the No. 1 Service Brand of the
Country.

In the financial year 2006-07 Life Insurance Corporation of India's number of policy holders are
said to have crossed a whopping 200 million (fourth in terms of population of the countries of
the world)

[edit] Subsidiaries
LIC owns the following subsidiaries:

 Life Insurance Corporation of India International: This is a joint venture offshore

company promoted by LIC which commenced operations in July, 1989 with the
objectives of offering US$ denominated policies to cater to the insurance needs of NRIs
and providing insurance services to holders of LIC policies currently residing in the Gulf.
LIC International operates in all GCC countries.
  LIC Nepal: A joint venture company formed in 2001 with the Vishal Group of
Industries, Nepal.

 LIC Lanka: A joint venture company formed in 2003 with the Bartleet Group of
Companies, Sri Lanka.

 LIC Housing Finance: Incorporated in 19 June 1989, its main objective is to provide
long term finance for construction or purchase of houses or apartments. It has a Dubai
office.
o LICHFL Care Homes: A wholly owned subsidiary of LIC Housing Finance, it
builds and operates "Assisted Community Living Centres" for senior citizens.

[edit] People
LIC is one of the largest employers in India. The organization is headed by 4 officers, namely the
Chairman and three Managing Directors. The top brass is appointed by the Government of India
after an intensive selection procedure. Though the company was accused to go by mere seniority
in number of years for the selection of the senior management, this has changed as seen in the
case of Thomas Matthew and A. Dasgupta (Managing Directors).

 The Chairman assumes authority of the CEO and chairs the board while the Managing
Directors are allotted the three main categories of the organization's functioning.
 The current Chairman, Mr. T.S. Vijayan, is particularly responsible for the major IT
infrastructure turnaround that the organization has witnessed and for its advanced EDMS
structure.
 D.K. Mehrotra manages the Marketing Units of LIC, which also happens to be one of the
largest spenders on advertising in India.
 Thomas Mathew manages the close to $187 billion investment portfolio of the company,
which is the largest investor in the country.
 A. Dasgupta manages the engineering and other functions, many of which are very
advanced in the Indian corporate scenario.

[edit] Objectives of LIC of India

 Spread and provide life insurance to the masses at a reasonable cost.
 Spread Life Insurance widely and in particular to the rural areas and to the socially and
economically backward classes with a view to reaching all insurable persons in the
country and providing them adequate financial cover against death at a reasonable cost.
 Maximize mobilization of people's savings by making insurance-linked savings
adequately attractive.
 Bear in mind, in the investment of funds, the primary obligation to its policyholders,
whose money it holds in trust, without losing sight of the interest of the community as a
 whole; the funds to be deployed to the best advantage of the investors as well as the
community as a whole, keeping in view national priorities and obligations of attractive
return.
 Conduct business with utmost economy and with the full realization that the moneys
belong to the policyholders.
 Act as trustees of the insured public in their individual and collective capacities.
 Meet the various life insurance needs of the community that would arise in the changing
social and economic environment.
 Involve all people working in the Corporation to the best of their capability in furthering
the interests of the insured public by providing efficient service with courtesy.
 Promote amongst all agents and employees of the Corporation a sense of participation,
pride and job satisfaction through discharge of their duties with dedication towards
achievement of Corporate Objective.
Lic unit links

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 the
policy is a Single premium or Regular premium contract and on the level of premium you agree
to pay. 

Four types of investment Funds are offered. Premiums paid after allocation charge will purchase
units of the Fund type chosen. The Unit Fund is subject to various charges and value 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 (through ECS mode only) intervals over the term of the policy. Alternatively, a
Single premium can be 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)

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                       -    NIL
g)  Minimum Premium                -    Regular premium (other than monthly (ECS) mode):
                                                    Rs. [5,000] p.a. for deferment term 20 years and above
                                                    Rs. [10,000] p.a.  for deferment term 15 to 19 years
                                                    Rs. [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
above
                                                     Rs. [1,500] p.m.  for deferment term 10 to 14 years

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

years 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 birthday
c) Minimum Age at vesting         -  40 years (completed)
d) Maximum Vesting Age           - 75 years (nearest birthday)
e) Minimum Deferment Term      - Regular premium: 10 years
Single premium: 5 years             
f) Minimum Premium                    - Regular premium:
                                                   Rs. [5,000] p.a.  for deferment term 20 years and
above
                                                    Rs. [10,000] p.a.  for deferment term 15 to 19 years
                                                    Rs. [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 above
                                                  Rs. [1,500] p.m.  for deferment term 10 to 14 years

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

years and above

g)  Minimum Sum Assured          -            Rs. 30,000

h) Maximum Sum Assured          -                             
Single Premium :   Equal to single premium
Regular 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 anytime during 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 the policy.

ii) Switching: You can switch between any fund types during the policy term subject to
switching charges, if any.
iii) Increase / Decrease of risk covers: No increase 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 all due premiums under the Policy have been paid. The reduced
levels of cover will be available within the limits specified in para 4 above. Further, once
reduction in risk cover is allowed, 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) and the same have not been paid within the days of
grace, the Policy will lapse. A lapsed policy can 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 and Critical
Illness Benefit riders, if any, shall continue during the revival period.

     
During this period, the charges for Mortality, Accident Benefit and / or Critical Illness Benefit
riders, if any, shall be taken, in addition to other charges, by cancelling an appropriate number of
units out of the Policyholder’s Fund Value every month. This will continue to provide relevant
risk covers:

1. for two years from the due date of first unpaid premium, or
2. till the date of vesting, or
3. till such period that the Policyholder’s Fund Value reduces to one annualized premium,

whichever is earlier.

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

A. In case of Death: Life cover Sum Assured plus the Policyholder’s Fund Value, if life
cover is opted for. If life cover is not opted for, then only the Policyholder’s Fund Value
is payable.

B. In case of Death due to accident: Accident Benefit Sum Assured in addition to the
amount 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 Policyholder’s Fund Value.

E. In case of Surrender (including Compulsory Surrender): The Policyholder’s Fund

Value. The Surrender value, however, shall be paid only after the completion of 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 charges for
these benefits shall be deducted. However deduction of all the other charges shall continue. The
benefits under such a lapsed policy shall be payable as under:

A. In case of Death: The Policyholder’s 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): Policyholder’s Fund Value /

monetary value as the case may be, shall be payable after the completion of the third
policy anniversary. No amount shall be payable within 3 years from the date of
commencement of policy.

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

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

If at least 3 years’ premiums have been paid and subsequent premiums 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 all arrears of
premium without interest shall be required to be paid, irrespective of whether life cover is opted
for or not.

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

Irrespective of what is stated above, if less than 3 years’ premiums have been paid and the
Policyholder’s Fund Value is not sufficient to recover the charges, the policy shall terminate and
thereafter revival will not be entertained. If 3 years or more than 3 years premiums have been
paid and the Policyholder’s Fund Value reduces to one annualized premium, the policy shall
terminate and Policyholder’s Fund Value as on such date shall be refunded to the Life Assured
and thereafter revival will not be allowed.

vii) Conversion to annuity at Vesting date: On surviving to the date of vesting, the
Policyholder’s Fund Value will compulsorily be utilised to provide an annuity based on the then
prevailing immediate annuity rates under the relevant annuity option.  An option will also be
there to commute up to one-third of the Policyholder’s Fund Value at the time of vesting of the
annuity, which shall be paid as a lump sum. In case commutation is opted for, the amount of
annuity/pension available will be reduced proportionately. There will also be an option to
purchase pension from any other life insurance company registered with IRDA subject to
Regulatory provisions. If you opt to purchase pension from any other life insurance Company,
you will have to inform it to the Corporation six months prior to the vesting date. In such case,
LIC will transfer the Policyholder’s 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 the Policyholder’s
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. LIC’s Market Plus – I is a Unit Linked Life Insurance product which is different from the
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 down based on
the performance of fund and factors influencing the capital market and the insured is
responsible for his/her decisions.
3. Life Insurance Corporation of India is only the name of the Insurance Company and
LIC’s Market Plus - I is only the name of the unit linked life insurance contract and does
not in any way indicate the quality of the contract, its future prospects or returns.
4. Please know the associated risks and the applicable charges, from your Insurance agent 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 financial
enactments 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 the policy
to us within 15 days. The amount to be refunded in case the policy is returned within the cooling-
off period shall be determined as under:
Value of units in the Policyholder’s Fund
      Plus      unallocated premium.
      Plus      PolicyAdministration charge deducted         
Less     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 is not
opted for.
      Less     Actual cost of medical examination and special reports, if any.

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

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 will not
entertain any claim by virtue of the policy except to the extent of the Fund Value of the units
held in the Policyholder’s Unit Account on death.

Benefit

Death Benefit:
If the Life cover is opted for, the Sum Assured under the Basic Plan together with the
Policyholder’s Fund Value shall be payable either in a lump sum or as pension. In case the
policy is taken without life cover, then the Policyholder’s Fund Value shall be payable either in
a lump sum or as pension.

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

B) Benefit  on Vesting:

On your surviving to the date of vesting, the Policyholder’s Fund Value will compulsorily be
utilised to provide a pension based on the then prevailing immediate annuity rates under the
relevant annuity option.  However, you may opt to commute up to one-third of the Benefit to be
paid as a lump sum. Further, you may choose to purchase pension from LIC or other 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 is opted
for, he/ she can choose the level of cover within the limits. This benefit will be available 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 and other
insurers). This benefit will be available only till the policy anniversary on which the age nearer
birthday of the Life Assured is 70 years. In case of death by Accident, an additional 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 life cover
subject to a minimum of Rs. 50,000 and maximum of Rs. 10 lakh (including other policies with
LIC of India) provided the policy term is 10 years and above. This benefit will be available
only till the policy anniversary on which the age nearer birthday of the Life Assured is 60 years
or for a maximum policy term of 35 years whichever is earlier. In case of diagnosis of defined
categories of Critical Illness subject to certain terms and conditions, a sum equal to the Critical
Illness Benefit shall be payable

                                                                      
  
2. Investment of Funds: The plan offers following four funds detailed below:
Investment in Short-term Investment in Details and objective of
Fund Type Government / investments Listed Equity the fund for risk /return
Government such as money Shares
Guaranteed market
Securities / instruments
Corporate
Debt
Bond Fund Not less than Not more than Nil Low risk
60% 40%
Secured Not less than Not more than Not less than Steady Income –Lower to
Fund 45% 40% 15% & Medium risk
Not more than
55%
Balanced Not less than Not more than Not less than Balanced Income and
Fund 30% 40% 30% & growth – Medium risk
Not more than
70%
Growth Not less than Not more than Not less than Long term Capital growth
Fund 20% 40% 40% & – High risk
Not more than
80%

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-Offer spread (the Bid
price and Offer price of units will both be equal to the NAV).  The NAV will be computed on
daily basis and will be based on investment performance, Fund Management Charge and whether
fund is expanding or contracting under each fund type and 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 fund management
charges less the value of any current liabilities less provisions, if any divided by 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 fund management charges less the
value of any current liabilities less provisions, if any divided by 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 par at the
place where the premium is received, the closing NAV of the day on which premium is received
shall be applicable. The premiums received after such time by the servicing branch 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, switches etc up
to such time by the servicing branch of the Corporation closing NAV of that day shall be
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 per the
instruction from IRDA.

4. Charges under the Plan:

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

Allocation charge
Premium Band (per annum)
  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 healthy life
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 will be taken every month.

The charges per Rs. 1000/- Critical Illness Rider Sum Assured per annum for some of the ages 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) and will be
levied every month at the rate of Rs. 0.50 per thousand Accident Benefit Sum Assured per policy
year.

C) Other Charges:

1) Policy Administration charge:  Rs. 60/- per month during the first policy year and Rs. 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 units at
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 to another.
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 following charges

      a)Policy Administration, Mortality, Accident Benefit and Critical Illness Benefit rider, if  
any – by canceling appropriate number of units out of the Policyholder’s Fund Value on a
monthly 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 in
the 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% thereon and
hence effective rate is 12.36%.

7) Miscellaneous Charge – This is a charge levied for an alteration within the contract, such as
reduction in policy term, change in premium mode, etc. An alteration may be allowed subject 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 the premium 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 Fund

2. Secured Fund:           1.10% p.a. of Unit Fund
3. Balanced Fund:          1.20% p.a. of Unit Fund
4. 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 is requested.

In case the policyholder does not agree with the revision of charges the policyholder shall have
the option to withdraw the Policyholder’s Fund Value.

5. Surrender:

The Surrender value, if any, is payable only after completion of the third policy anniversary both
under Single and Regular premium contract. The surrender value will be the Policyholder’s Fund
Value at the date of surrender. There will be no Surrender charge.

If you apply for surrender of the policy within 3 years from the date of commencement of policy,
then the Policyholder’s Fund Value shall be converted into monetary terms. No charges shall be
deducted thereafter and this monetary value shall be paid on completion of 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 3 years
from the date of commencement of policy the monetary value payable on the completion of 3
years shall be payable to the nominee/ legal heir immediately on death.

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 be terminated
after completion of 3 years from the date of commencement of the policy or on expiry of revival
period, whichever is later. However, if the date of vesting falls before the expiry 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 policyholder’s 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 policyholder’s fund
value falls below a minimum balance of one annualized premium.

Policyholder’s 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 in the
Policyholder’s Fund as on that date will be the monetary amount.

 
Jeevan Saral by Lic of India
LIC’s Jeevan Saral is a unique plan having good features of the conventional plans and
the flexibility of  unit linked plans.  This is a Monthly Recurring Life Insurance Plan by Lic of
India where the proposor get 250 times monthly premium + total premium paid + LA if any in
case of death. To the policyholder it provides —

 higher life cover

 a smooth return,
 liquidity & a lot of flexibility

BENEFITS

 LIC Monthly Recurring type Scheme

 This is like a Post office or Recurring Deposit Scheme. You can deposit Yearly, Hly,
Quarterly or Monthly in LIC scheme
 Maturity amount received is Tax Free under section 10-10d of income Tax act.
 Any number of partial withdrawals through partial surrendering after 10 years
 The amount deposited in LIC is exempted under section 80c of income Tax act.
 In case of death 250 times monthly premium + Total Premium paid - (1st years premium
& Extra premium paid ) + LA if any payable.

Special Features:

 High life cover at very low premium

 Extended risk cover for one year after 3 years premium payment.
 Optional higher cover available through Term Riders
 The policyholder can choose a maximum term but can surrender at any time
 without any surrender penalty or loss after 5 years

Any time money ( ATM )  Plan 165 Jeevan Saral By LIC of India call us for more details.

Features

Product Summary:
This is an Endowment Assurance plan where the proposer has simply to choose the amount and
mode of premium payment. The plan provides financial protection against death throughout the
term of the plan. The death benefit is directly related to the premiums paid. The Maturity Sum
Assured depends on the age at entry of the life to be assured and is payable on survival to the end
of the policy term. It also offers the flexibility of term and a lot of liquidity.
Premiums:
Premiums are payable yearly, half-yearly, quarterly, or monthly through salary deductions as
opted by you throughout the term of the policy or till earlier death.

Loyalty Additions:
This is a with-profits plan and participates in the profits of the Corporation’s life insurance
business.  It gets a share of the profits in the form of loyalty additions which are terminal
bonuses payable along with death benefit or maturity benefit.  Loyalty Additions may be payable
from the 10th year onwards depending upon the experience of the Corporation.

 Benefits

Death Benefit:
250 times the monthly premium together with loyalty additions, if any, and  return of premiums
excluding first year premiums and extra/rider premium, if any, is payable in lump sum on death
of the life assured during the term of the policy.

Maturity Benefit:
The Maturity Sum Assured plus Loyalty additions, if any, is payable in a lump sum.

Supplementary/Extra Benefits:
These are the optional benefits that can be added to your basic plan for extra protection/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 are
available on earlier termination of the contract. The surrender value will be the greater of the
guaranteed surrender value and special surrender. The plan also allows for partial surrenders.

Guaranteed Surrender Value:

The policy can be surrendered after it has been in force for at least 3 full years. The Guaranteed
Surrender value will be equal to 30% of the total amount of premiums paid excluding the
premiums for the first year and all the extra premiums and premiums for accident benefit / term
rider.

Special Surrender Value:

80% of Maturity Sum Assured if 3 or more years’ but less than 4 years’ premiums have been
paid; 90% of the Maturity Sum Assured, if 4 or more years’ but less than 5 years’ premiums
have been paid and 100% of the Maturity Sum Assured, if 5 or more years’ premiums have been
paid. The Maturity Sum Assured for this para will be the Maturity Sum Assured corresponding
to the term for which premiums have been paid under the policy.

Corporation’s policy on surrenders:

In practice, the Corporation will pay a Special Surrender Value – which is usually higher than
the Guaranteed Surrender Value. This value will depend on the duration for which premiums
have been paid and the policy duration at the date of surrender. In some circumstances, in case of
early termination of the policy, the surrender value payable may be less than the total premium
paid.

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

Lic wealth plus

“IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS

BORNE BY THE POLICYHOLDER”

LIC’s Wealth Plus is a unit linked plan that safeguards your investment from market
fluctuations, so that your investments are protected in financially volatile times. This plan offers
payment of Fund Value at the end of policy term, based on highest Net Asset Value (NAV) over
the first 7 years of the policy, or the NAV as applicable at the end of the policy term, whichever
is higher. NAV of the fund will be subject to a minimum of Rs. 10/-. The policy term is 8 years
with an extended life cover for 2 years after the completion of policy term. This plan will be
available for sale for a limited period.

You can pay the premium either in a single lump sum or for 3 years. You can choose the level of
cover within the limits, which will depend on your age whether the policy is a Single premium or
Limited premium contract and on the level of premium you agree to pay. 

Premiums paid after allocation charge will purchase units of the Fund. The Unit Fund is subject
to various charges and value 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, quarterly
or monthly (through ECS mode only) intervals over the 3 years premium paying term.
Alternatively, a Single premium can be paid.

2. Guaranteed NAV: In this product there is a guarantee of the highest NAV recorded on a
daily basis, in the first 7 years of the policy, subject to a minimum of Rs. 10. This means
the payment at the end of the policy term will be based on highest Net Asset Value
(NAV) recorded over the first 7 years of the policy, or the NAV as applicable on the end
of the policy term, whichever is higher. The guarantee will be applicable only for
payment made at the end of the policy term irrespective of any partial withdrawals made
during the policy term. The period of 7 years starts from the date of commencement of
policy.

3. Eligibility Conditions and Other Restrictions:

(a) Minimum Age at entry          -           10 (age last birthday)

(b) Maximum Age at entry          -           65 years (age nearer birthday)
(c) Policy Term                             -            8 years
(d) Extended Life Cover              -            2 years after the completion of policy term
 (e) Minimum Premium:
3 years Premium Paying policies            -           Rs. [20,000] p.a.
(Other than monthly (ECS) mode)
Monthly (ECS) mode                   -           Rs. [2,000] p.m.
Single premium policies               -           Rs. [40,000] p.a.
(f) Sum Assured under the Basic Plan  -  
Minimum Sum Assured:
3 years Premium Paying Term: 5 times the annualized premium
                                    Single Premium:   1.25 times the single premium.
                                    Maximum Sum assured:
3 years Premium Paying Term:
10 times the annualized premium if age at entry is upto 50 years
5 times the annualized premium if age at entry is 51 years and above
Single Premium:
5 times the Single premium if age at entry is upto 40 years.
2.5 times the Single premium if age at entry is 41 to 50 years.
1.25 times the Single premium if age at entry is 51 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. 500/-.

4. Other Features:

i) Partial Withdrawals: Youmay encash the units partially after the third policy
anniversary subject to the following:

1. In case of minors, partial withdrawals shall be allowed from the policy

anniversary coinciding with or next following the date on which the life assured
attains majority (i.e. on or after 18th birthday).
2. Partial withdrawals will be allowed twice in a policy year.
3. Partial withdrawals may be in the form of fixed amount or in the form of fixed
number of units subject to a minimum amount of Rs. 2000/-.
4. Under 3 years Premium Paying Term policies where less than 3 years’ premiums
have been paid and further premiums are not paid, the partial withdrawals shall
not be allowed.
5. Under 3 years Premium Paying Term policies where all the’ premiums have been
paid, partial withdrawal will be allowed subject to Policyholder’s Fund Value
being at least one annualized premium
6. Under Single Premium policies, the partial withdrawal will be allowed subject to
a minimum balance of 25% of the single premium in the Policyholder’s Fund
Value.

 
 ii) Increase / Decrease of risk covers:No increase or decrease of benefits will be
allowed.

iii) Discontinuance of premiums: If premiums are payable either yearly, half-yearly,

quarterly or monthly (ECS) and the same have not been duly paid within the days of
grace under the Policy, the Policy will lapse. A lapsed policy can be revived during the
period of two years from the due date of first unpaid premium.

If the policy lapses, the Life Cover and Accident Benefit rider cover, if any, shall cease
and no charges for these benefits shall be deducted. However, deduction of all the other
charges shall continue. The benefits under such a lapsed policy shall be payable as under:

7. In case of Death: The Policyholder’s Fund Value.

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

9. In case of Surrender (including Compulsory Surrender): Policyholder’s Fund

Value / monetary value of units as the case may be, shall be payable after the
completion of the third policy anniversary. No amount shall be payable within 3
years from the date of commencement of policy.

10. In case of Partial withdrawal: Partial Withdrawals shall not be allowed under
such a policy even after completion of 3 years period.

iv) Revival: If due premium is not paid within the days of grace, the policy lapses. A
lapsed policy can be revived during the period of two years from the due date of first
unpaid premium. The period during which the policy can be revived will be called
“Period of revival” or “revival period”.

The policy may be revived within two years from the due date of first unpaid premium.
The revival shall be made on submission of proof of continued insurability to the
satisfaction of the Corporation and the payment of all the arrears of premium without
interest. The mortality charge thereafter shall be based on the age nearest birthday as on
the date of revival. There will be a charge of Rs. 500/- at the time of revival.

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

Irrespective of what is stated above, if the Policyholder’s Fund Value is not sufficient to
recover the charges, the policy shall be terminated and thereafter revival will not be
entertained.

5. Reinstatement:

A policy once surrendered cannot be reinstated.

 6. Risks borne by the Policyholder:
7. LIC’s Wealth Plus is a Unit Linked Life Insurance products which is different from the
traditional insurance products and are subject to the risk factors.
8. 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 down based on
the performance of fund and factors influencing the capital market and the insured is
responsible for his/her decisions.
9. Life Insurance Corporation of India is only the name of the Insurance Company and
LIC’s Wealth Plus is only the name of the unit linked life insurance contract and does not
in any way indicate the quality of the contract, its future prospects or returns.
10. Please know the associated risks and the applicable charges, from your Insurance agent or
the Intermediary or policy document of the insurer.
11. 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.
12. All benefits under the policy are also subject to the Tax Laws and other financial
enactments as they exist from time to time.

13. Cooling off period:

If you are not satisfied with the “Terms and Conditions” of the policy, you may return the policy
to us within 15 days. The amount to be refunded in case the policy is returned within the cooling-
off period shall be determined as under:
Value of units in the Policyholder’s Fund
                        Plus      unallocated premium.
                        Plus      PolicyAdministration charge deducted      
Less       charges @ Rs.0.20per thousand Sum Assured under Basic plan
                        Less       Actual cost of medical examination and special reports, if any.

 Loan:

      No loan will be available under this plan.

 Assignment:

Assignment will be allowed under this plan.

 Exclusions:

In case the Life Assured commits suicide at any time within one year, the Corporation will not
entertain any claim by virtue of the policy except to the extent of the Policyholder’s Fund Value
on death.
Benefit

) Death Benefit:
In case of death during the policy term, the nominee shall receive Sum Assured under the basic
plan together with the Policyholder’s Fund Value as death benefit.

In case of death of the Life assured after the policy term, but before the expiry of extended
period, the nominee shall receive the Sum Assured under the Basic Plan.
     
B)Benefit at the end of Policy term:
On the Life Assured surviving the end of the policy term of the contract, an amount equal to the
Policyholder’s Fund Value based on highest Net Asset Value (NAV) recorded over the first 7
years of the policy, or the NAV as applicable on the end of the policy term, whichever is higher
is payable.

1. Option:

Accident Benefit Option:

If you are between 18 and 62 years of age, you may opt for Accident Benefit equal to the
amount of life cover subject to minimum of Rs. 50,000 and maximum of Rs. 50 lakh (taken all
policies with LIC of India and other insurers). In case of death by Accident, an additional sum
equal to Accident Benefit sum assured shall be payable.

2. Investment of Funds: The fund detail is as below:

Investment in Short-term Investment in Details and

Fund Type Government / investments Listed Equity objective of the
Government such as money Shares fund for risk /
Guaranteed market return
Securities / instruments
Corporate Debt
Wealth Plus 0% to 100% 0% to 100% 0% to 100% Medium Risk
Fund
In the period during which this product is open for sale, all premiums received shall be invested
in Money Market instruments of applicable duration i.e. the period from the date of sale to the
date of closure of the plan. After the date of closure of the plan the above investment pattern
shall be followed.

3. Method of Calculation of Unit price: Units will be allotted based on the Net Asset Value
(NAV) of the fund as on the date of allotment.  There is no Bid-Offer spread (the Bid price and
Offer price of units will both be equal to the NAV).  The NAV will be computed on daily basis
and will be based on investment performance, Fund Management Charge, Guarantee Charge
and whether fund is expanding or contracting under each fund type and 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 fund management
charges including Guarantee Charge less the value of any current liabilities less provisions, if
any divided by 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 fund management charges
including Guarantee Charge less the value of any current liabilities less provisions, if any
divided by 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 par at the
place where the premium is received, the closing NAV of the day on which premium is
received shall be applicable. The premiums received after such time by the servicing branch 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, partial withdrawal, death
claim etc up to such time by the servicing branch of the Corporation closing NAV of that day
shall be applicable. For the valid applications received in respect of surrender, partial
withdrawal, death claim 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 payment at the end of policy term, the Policyholders fund value shall be based on
the highest NAV over the first 7 years of the policy or the NAV as applicable at the end of the
policy term, which ever is higher. 

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

4. Charges under the Plan:

A) Premium Allocation Charge:

This is the percentage of the premium deducted towards charges from the premium received.
The balance constitutes that part of the premium which is utilized to purchase (Investment)
units for the policy. The allocation charges are as below:
            Single premium policies:
      Allocation Charge
        Premium Band
Up to 4,00,000 5.00%
4,00,001 and above 4.50%
3 years Premium Paying Term:

Allocation charge
Premium Band
(per annum) First year thereafter
20,000 to 2,00,000 12.00% 2.50%
2,00,001 to 4,00,000 11.75% 2.50%
4,00,001 to 7,00,000 11.50% 2.50%
7,00,001 and above 11.25% 2.50%
B)    Charges for Risk Covers:
i)  Mortality  Charge – This is the cost of life insurance cover. A level mortality charge based
on the age at entry will be taken every month during the policy term by canceling the
Policyholder’s Fund Value appropriately.
The level charges per Rs. 1000/- Basic Sum Assured for some of the ages in respect of a
healthy life are as under:

25 35 45 55
Age
Rs. 1.65 2.75 6.85 17.25
1. Accident Benefit charge - It is the cost of Accident Benefit rider (if opted
for) and will be levied every month at the rate of Rs. 0.50 per thousand
Accident Benefit Sum Assured per policy year.

C)   Other Charges:

1. Policy Administration charge  - Rs. 60/- per month during the first policy year, Rs 25/-
per month during the second year and thereafter, from the third year on wards till the
end of the policy term Rs. 25/- per month escalating at 3% p.a. These charges will be
deducted on monthly basis by canceling appropriate number of units out of
Policyholder’s Fund Value.
2. Fund Management Charge – This is a charge levied as a percentage of the value of
assets and shall be appropriated by adjusting the Net Asset Value (NAV) at 1.00% p.a.
of Fund Value.

This is a charge levied at the time of computation of NAV, which will be done on daily
basis.

3. Guarantee Charge – A charge of 0.35% p.a. of the Fund Value shall be levied for the
cost of investment guarantee.
 This is a charge levied at the time of computation of NAV, which will be done on daily
basis.

4. Bid/Offer Spread – Nil.

5. Surrender Charge –  Nil.      
6. Miscellaneous Charge – This is a charge levied for revival and alteration within the
contract, such as change in mode of payment to higher frequency within the premium
paying term decided in the beginning of the contract, Grant of Accident Benefit after
the issue of the policy etc..

The flat charges for revival shall be Rs. 500/- and for alteration shall be Rs. 250/- which
will be deducted by canceling the Policyholder’s Fund Value appropriately and the
deduction shall be made on the date of revival/alteration in the policy.

7. Service Tax Charge – A service tax charge, if any, shall be levied on the following
charges

a) Policy Administration, Mortality and Accident Benefit rider, if   any – by canceling
appropriate number of units out of the Policyholder’s Fund Value on a monthly basis as and
when the corresponding Policy Administration, Mortality and Accident 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) Guarantee – at the time of deduction of Guarantee Charge.
e)  Miscellaneous charge - on the date of revival/alteration in the 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 10% with an educational cess at the rate of 3% thereon and
hence effective rate is 10.3%.

D) Right to revise charges: The Corporation reserves the right to revise all or any of the above
charges except the Premium Allocation charge and Mortality charge. The modification in
charges will be done with prospective effect 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, Rs. 50/- per month during the second year and
thereafter, from the third year on wards till the end of the policy term Rs. 50/- per month
escalating at 3% p.a.

-   Fund Management Charge: The Maximum for each Fund will be 1.30% p.a. of Fund Value

-    Guarantee Charge shall not exceed 0.50% p.a. of the Fund Value.
 
-   Miscellaneous Charge shall not exceed Rs. 750/- for revival and Rs. 350/- for alteration each
 time when an revival/alteration is requested.

The above mentioned maximum limits are exclusive of service tax.

In case the policyholder does not agree with the revision of charges the policyholder shall have
the option to withdraw the Policyholder’s Fund Value. No Guarantee shall apply in such case.

5. Surrender:

The policy can be surrendered only during the policy term. The surrender value, if any, is
payable only after the completion of the third policy anniversary both under Single and 3 years
Premium Paying Term contract. The surrender value will be the Policyholder’s Fund Value at
the date of surrender. There will be no Surrender charge. The policy can not be surrendered
during the extended life cover period.

If you apply for surrender of the policy within 3 years from the date of commencement of
policy, then the Policyholder’s fund value of units shall be converted into monetary terms. No
charges shall be deducted thereafter and this monetary value shall be paid on completion of 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 3 years
from the date of commencement of policy the monetary value payable on the completion of 3
years shall be payable to the nominee/ legal heir immediately on death.

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 be terminated
after completion of 3 years from the date of commencement of the policy or on expiry of
revival period, whichever is later.
ii) where single premium has been paid or premiums have been paid for less than 3 years and
the policy is in force and the balance in policyholder’s fund value is not sufficient to recover
the relevant charges;
iii) where 3 full years’ premium are paid and the balance in policyholder’s fund value falls
below 50%  of one annualized premium.

The conversion in monetary value shall be 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 in the
Policyholder’s Fund as on that date.

 
Thursday, November 5, 2009
How LIC Remains Life Insurance Leader: 10 Strategies

LIC was not self-made. It was chosen from among many, more than 50 years back. Chosen to be made
the only operator in life insurance. But the acid test came in 1999. The sector was deregularized, with
multiple private operators entering the sector. Most predicted a la BSNL for LIC, if not an untimely
demise. But Life Insurance Corporation of India has emphatically proven that it has a long long life
ahead. The private life insurers are yet to do a la Airtel or la RCom. A more honest statement would be
that they are unable to do it. Unable to even figure out how to stop the LIC express. And then comes the
double whammy for them – the worldwide financial meltdown. When even giants like AIG reeled, LIC
found opportunity in distress. Their November 2008 launch, Jeevan Aastha, a close ended single
premium plan went on to become a smash hit, with a record breaking first premium collection of Rs.
10,000 crore within 45 days. From its long-back status of the chosen insurer, LIC has become the choice
insurer. What is powering the LIC juggernaut? Seasonal Magazine identifies 10 of LIC’s winning
strategies:

LIC EDGE 1:
Focus on Core Business

In an ever changing business and investment environment, where the temptations for losing one’s way
have been numerous for a financial company, it stands to LIC’s credit that it has never lost its focus on
its core business – insuring lives. This has ensured LIC’s edge against competing investment platforms
like recurring deposits, mutual funds, or equities. Because the pitch is, an LIC policy does all that, but it
also insures life.

LIC EDGE 2:
People Power

There is no doubt that people power continues to be LIC’s trump card. Even in 2008-09, LIC registered a
12.66% growth in its formidable army of agents, which now stands more than 13.44 lakh. Even while
comparable financial organizations like SBI struggle to have a performance linked pay structure in place,
this is a human resource pool that works entirely on performance status. LIC’s Post Recruitment
Orientation Training (PROT) is reputed to make top performers from average sellers. It also goes to LIC’s
credit that it didn’t opt for VRS or retrenchment for its salaried employee base, instead making them
productive through HRD initiatives.

LIC EDGE 3:
Claim Performance

LIC continues to be the most believable life insurer around, based on actual claim performance. During
2008-09, LIC settled over 1.49 crore claims, with 97% maturity claims settled on or before date, and 93%
of non early death claims settled within 20 days of intimation. Outstanding claims under death is 2.21%
and that under maturity is just 0.26%.

LIC EDGE 4:
Technology Edge

Post de-regularization, LIC had moved swiftly to implement the latest paradigms in the area of IT
implementation, so that the new agile competitors don’t have an advantage over it. Lately, LIC has
started setting the standards in IT implementation, and its new EDMS project all set to be completed
shortly, it will be LIC who is going to enjoy a huge edge due to technology.

LIC EDGE 5:
Alternate Channels

It was once thought that alternate channels like bancassurance would sound the death-bell for LIC.
Instead the company quickly adapted to the possibilities of the bancassurance model, and today has tie-
ups with 34 banks on corporate agency model, and with 57 banks on referral model. And wonder of
wonders, LIC’s alternate channels business is growing at a blistering pace of 32% annually.

LIC EDGE 6:
Rural Reach

Instead of waiting for the urban markets to get more and more saturated, LIC early on diversified its
attention to rural markets, and with excellent results. LIC continuously recruits and develops special
rural agents, and the insurer has opened a lot of satellite office in rural areas. The recently launched
Jeevan Mangal and the repositioned New Jana Raksha plan have been quick hits with farmers and rural
people.
LIC EDGE 7:
Widest Portfolio

LIC has more than 50 different plans catering to the different needs of different segments of the society.
LIC also has 13 Pension and Group Schemes. Whatever be the need, LIC has a suitable policy to match
that need. From conventional plans like endowment assurance, and money back plans to the
contemporary unit-linked plans to serve a wider category of customers, LIC offers Unit-Linked Health
Insurance Plan, Term Insurance plans, Plans for Women, Pension Plans, and a wide range of children's
plans, too.

LIC EDGE 8:
Investment Business

LIC continues to be the country’s largest investor. Even in a difficult financial year like the present, LIC
has pumped in more than Rs. 1,00,000 crore of investments, of which over Rs. 22,000 crore is into the
capital markets. LIC’s profits from equity this year is fast approaching Rs. 5000 crore, but it remains a net
buyer. LIC is also powering the nation’s infrastructure, corporate debt, and government securities. Apart
from profits, this gives the organization a lot of leverage with the Government, corporates, and the
various funds.

LIC EDGE 9:
Sensing Dangers Ahead

LIC’s response to the Swaroop Committee has been quite rational. The organization reiterated that
insurance continues to be a sold product and not a bought one, and as such the agents should not be
meted out a bad deal.

LIC EDGE 10:

Credible Ownership

Needless to say, LIC ownership continues to be a major competitive advantage. The 100% ownership by
the government makes it risk proof and in the present economic climate, it is a huge advantage
recognized by the customers.