The Life Insurance Corporation of India was established on 1st September 1956 and it is the sole life insurance company in India. LIC of India owned by the Government of India. The headquarters of LIC of India is in Mumbai, the commercial capital of India. Life Insurance Corporation of India is one of the largest life insurance companies in India. The government of India stated the Life Insurance of India Act, nationalizing the private insurance industry in India.
Life Insurance Corporation of India (LIC) was established with the consolidation of over 245 insurance companies and provident societies. LIC gives a number of life insurance plans including a range of ULIPs, child plans, pension plans, term insurance, and others. The LIC of India is quite well set in urban as well as rural areas of India. And it is well abiding by its slogan- “Yogakshemam Vahamyaham”, which means “your welfare is our responsibility”. With the advancement of technology, the LIC of India has introduced its brand’s presence online by selling a number of savings and investment products online.
Objectives of Life Insurance Corporation of India (LIC)
- Relief of Poverty or distress.
- Advancement of education.
- Medical relief.
History of Life Insurance Corporation of India (LIC of India)
In the year 1818, Life Insurance in its modern form appeared in India from England. Oriental Life Insurance Company was the first life insurance company on Indian Soil began by Europeans in Calcutta. All the insurance companies set during that period were brought up to take care the needs of the European community and Indian natives were not being insured by these companies. But, later with the struggles of renowned people like Babu Muthyala Seal, the foreign life insurance companies started insuring Indian lives. But the Indians who live there were being treated as sub-standard lives and extra premiums were being charged on them. Bombay Mutual Life Assurance Society announced the commencement of the first Indian life insurance company in the year 1870 and covered Indian lives at normal rates.
Beginning as an Indian company with extremely 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 was also one of such companies motivated by nationalism. The Swadeshi movement of 1905-1907 gave acceleration to more insurance companies. In the year 1906, National Indian and National Insurance in Calcutta, United India in Madras, and the Co-operative Assurance at Lahore were founded. Hindustan Co-operative Insurance Company starts in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta, in the year 1907. Swadeshi Life (later Bombay Life), The Indian Mercantile, and General Assurance Were some of the companies founded during the same time. Earlier in 1912, India had no legislation to administer the insurance business. The Life Insurance Companies Act, and the Provident Fund Act were passed in the year 1912. The Life Insurance Companies Act, 1912 executed it mandatory that the premium rate tables and periodical valuations of companies must be certified by an actuary. But, the Act discriminated between Indian and foreign companies on multiple accounts, setting the Indian companies at a loss.
The Central Government of India got over the charge of all 154 Indian, 16 Non-Indian, and 75 provident societies (consolidated 245 private insurance companies) which were working in India at that time on January 19, 1956. The Parliament of India announced the Life Insurance Corporation Act on the 19th of June 1956. LIC was created in the year 1956 with the consolidation of more than 245 insurance companies and provident societies. From the Government of India, It was established under an act of the parliament viz. LIC Act, 1956 by an initial capital of Rs. 5 crores.
Structure of LIC
Nowadays, the Life Insurance Corporation of India (LIC of India) works with a network of 1,537,064 Individual Agents, 109 Referral Agents, 342 Corporate Agents, 114 Brokers, and 42 Banks.
LIC has 2,048 completely computerized branch offices, 1,381 satellite offices, 113 divisional offices, and over 8 zonal offices. By the Economic Times Brand Equity Survey 2012, LIC was rated as the No. 6 Most Trusted Service Brand of India. LIC of India has been regularly winning the ‘Readers Digest Award’ from the year 2006.
The Life Insurance Corporation of India (LIC of India), which held a monopoly of soliciting and selling life insurance in India, that created large surpluses and by 2006 was contributing approximately 7% of India’s GDP.
The goal of the Life Insurance Corporation of India is to improve the quality of living of the people by providing financial products and services that provide competitive returns.
The headquarters of LIC is in Mumbai. It covers of 8 zonal offices which are located in:
- New Delhi
LIC Executive Board
The LIC Executive board contains a total of five members of which one the seat is of the Chairman, and the other 4 are the Managing Directors.
- M.R Kumar (Chairman) –
- V. Venugopal (Managing Director)
- Hemant Bhargava (Managing Director)
- Vipin Anand (Managing Director)
- T C Susheel Kumar (Managing Director)
List of all LIC Insurance Plans
At present, LIC is dealing with five different categories of insurance plans are as follows:
- Endowment Plan
- Whole Life Plan
- Money Back Plan
- Term Assurance Plan
- Rider Plan
Let’s discuss these plans below one by one.
1. Further Endowment plan comprises of –
- LICs Jeevan Pragati
- LICs Jeevan Labh
- LICs Single Premium Endowment Plan
- LICs New Endowment Plan
- LICs New Jeevan Anand
- LICs Jeevan Rakshak
- LICs Limited Premium Endowment Plan
- LICs Jeevan Lakshaya
- LICs Aadhar Shila
- LICs Aadhar Stambh
2. LICs Jeevan Umang comes under the Whole Life Plan
3. Money Back Plans are –
- LICs Bima Shree
- LICs Jeevan Shiromani
- LICs New Money back plan
- LICs New Bima Bachat
- LICs New Children’s Money Back Plan
- LICs Jeevan Tarun
4. Term Assurance Plans are –
- LICs Anmol Jeevan II
- LICs Amulya Jeevan II
- LICs e-Term
5. Rider Plans are –
- LICs Linked Accidental Death Benefit
- LICs Accidental Death and Disability Benefit Rider
- LICs Accident Benefit Rider
- LICs New Credit Illness Benefit Rider
- LICs New Term Assurance Rider
Claim Settlement Ratio
Claim Settlement Ratio is a notice of how much death claims Life Insurance Company located in any financial year. It is calculated as the total number of claims accepted against the total number of claims settled. Life Insurance Company got 100 claims, and among those, it settled 98, then the claim settlement ratio is meant to be 98%. The remaining 2% claims the Life Insurance Company denied. According to IRDAl’s annual report, LIC has settled 98.04% of individual death claims in FY 2017-18. As stated by the LIC, it had settled 215.58 lakh claims amounting to Rs 1,12,700.41 crores as the financial year 2016-17.
Frequently Asked Questions
Q1. Who is the owner of LIC of India?
Ans. Government of India
Q2. Is LIC a good investment?
Ans. Best LIC Policies for Investment in 2021. LIC is the most trusted and leading insurance provider company in India. The company has an influential customer base of more than 250 million and holds the largest market share in the life insurance business.
Q3. Is LIC better than FD?
Ans. Fixed deposits are best for both short and medium-term investments whereas life insurance plans are intended for long-term investments. We can invest for a period of as low as 7 days in fixed deposits, unlike a life insurance plan where we require to invest for at least 10 years.
Q4. Can Lic be Privatised?
Ans. The government of India stated that two public sector banks and one general insurance company will be privatized. LIC will be registered on the bourses in the financial year 2021-22 as part of the consolidation in the insurance and banking sectors.
Q5. Is LIC secure?
Ans. LIC is the only insurer that offers a sovereign guarantee, ensuring that investments are completely secure.