LIC_FINAL_1

8/4/2019 LIC_FINAL_1

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OBJECTIVE OF PROJECT

During my period of Internship at Insure µn¶ Invest ,I got a live exposure of style of working in

an organization .I observed how different customers approach Insureµ n¶ Invest for policies,how they were dealt,and provided with best suited policy for them.

Moreover I worked on my project on LIC & its products, got to learn about the various

guildelines and ways LIC deals with its customers.

And the best selling products of LIC and its reasons.



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History of insurance in india with

special referenece to LIC

Insurance in its current form has its history dating back until

1818, when Oriental Life Insurance Company was started

by Anita Bhavsar in Kolkata to cater to the needs of

European community. The pre-independence era in India

saw discrimination between the lives of foreigners (English)

and Indians with higher premiums being charged for the

latter. In 1870, Bombay Mutual Life Assurance Society

became the first Indian insurer.

In the year 1912, the Life Insurance Companies Act and the

Provident Fund Act were passed to regulate the insurance

business. 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.

However, the disparity still existed as discrimination

between Indian and foreign companies. The oldest existing

insurance company in India is the National Insurance

Company Ltd., which was founded in 1906. It is in business.

The Government of India issued an Ordinance on19th

January, 1956 nationalising the Life Insurance sector and

Life Insurance Corporation came into existence in the same

year(1-9-56). The Life Insurance Corporation (LIC)

absorbed 154 Indian, 16 non-Indian insurers as also 75

provident societies²245 Indian and foreign insurers in all.

It was in December 7, 1999 parliament passed the

Insurance Regulatory and Development Authority (IRDA) Act which paved the way for granting licences to private

sector insurance companies. After privatisation of

the insurance sector more than twentylife

insurance companies have entered the business. Therefore, monopoly of LIC of India has come to an

end and the Corporation has to perform in a competitive environment.

Life Insurance Corporation of India

Type Government-owned corporation

Industry Insurance

Founded 1 September 1956

Headquarters Mumbai, India

K ey people

D. K. Mehrotra, Thomas Mathew

and A. Dasgupta (MD)

Products Life insurance

Pensions

Mutual funds

Total assets 9.31 trillion (US$207.61 billion)

Owner(s) Government of India

Employees 115,966 (2010)



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CONCEPTS OF LIFE INSURANCE, WITH SPECIAL REFERENCE TO LIC

What Is Life Insurance?

Life insurance is a contract that pledges payment of an amount to the person assured (or his

nominee) on the happening of the event insured against.

The contract is valid for payment of the insured amount during:

y The date of maturity, or

y Specified dates at periodic intervals, or

y Unfortunate death, if it occurs earlier.

Life insurance, in short, is concerned with two hazards that stand across the life-

path of every person:

1. That of dying prematurely leaving a dependent family to fend for itself.

2. That of living till old age without visible means of support.

Life Insurance Vs. Other Savings

Contract Of Insurance:

A contract of insurance is a contract of utmost good faith technically known as uberrima fides.

The doctrine of disclosing all material facts is embodied in this important principle, which

applies to all forms of insurance.

At the time of taking a policy, policyholder should ensure that all questions in the proposal form

are correctly answered. Any misrepresentation, non-disclosure or fraud in any document leading

to the acceptance of the risk would render the insurance contract null and void.



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Protection:

Savings through life insurance guarantee full protection against risk of death of the saver. Also,

in case of demise, life insurance assures payment of the entire amount assured (with bonuses

wherever applicable) whereas in other savings schemes, only the amount saved (with interest) is

payable.

Aid To Thrif t:

Life insurance encourages 'thrift'. It allows long-term savings since payments can be made

effortlessly because of the 'easy instalment' facility built into the scheme. (Premium payment for

insurance is either monthly, quarterly, half yearly or yearly).

For example: The Salary Saving Scheme popularly known as SSS, provides a convenient method

of paying premium each month by deduction from one's salary.

In this case the employer directly pays the deducted premium to LIC. The Salary Saving Scheme

is ideal for any institution or establishment subject to specified terms and conditions.

Liquidity:

In case of insurance, it is easy to acquire loans on the sole security of any policy that has

acquired loan value. Besides, a life insurance policy is also generally accepted as security, even

for a commercial loan.

Tax R elief:

Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax. This is

available for amounts paid by way of premium for life insurance subject to income tax rates in

force.

Assessees can also avail of provisions in the law for tax relief. In such cases the assured in effect

pays a lower premium for insurance than otherwise.

Money When You Need It:

A policy that has a suitable insurance plan or a combination of different plans can be effectively

used to meet certain monetary needs that may arise from time-to-time.

Children's education, start-in-life or marriage provision or even periodical needs for cash over a



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stretch of time can be less stressful with the help of these policies.

Alternatively, policy money can be made available at the time of one's retirement from service

and used for any specific purpose, such as, purchase of a house or for other investments. Also,

loans are granted to policyholders for house building or for purchase of flats (subject to certain

conditions).

Who Can Buy A Policy?

Any person who has attained majority and is eligible to enter into a valid contract can insure

himself/herself and those in whom he/she has insurable interest.

Policies can also be taken, subject to certain conditions, on the life of one's spouse or children.

While underwriting proposals, certain factors such as the policyholder¶s state of health, the

proponent's income and other relevant factors are considered by the Corporation.

Insurance For Women

Prior to nationalisation (1956), many private insurance companies would offer insurance to

female lives with some extra premium or on restrictive conditions. However, after nationalisation

of life insurance, the terms under which life insurance is granted to female lives have been

reviewed from time-to-time.

At present, women who work and earn an income are treated at par with men. In other cases, a

restrictive clause is imposed, only if the age of the female is up to 30 years and if she does not

have an income attracting Income Tax.

Medical And Non-Medical Schemes

Life insurance is normally offered after a medical examination of the life to be assured.

However, to facilitate greater spread of insurance and also to avoid inconvenience, LIC has been

extending insurance cover without any medical examination, subject to certain conditions.

With Profit And Without Profit Plans

An insurance policy can be 'with' or 'without' profit. In the former, bonuses disclosed, if any,

after periodical valuations are allotted to the policy and are payable along with the contracted

amount.



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In 'without' profit plan the contracted amount is paid without any addition. The premium rate

charged for a 'with' profit policy is therefore higher than for a 'without' profit policy.

K eyman Insurance

Keyman insurance is taken by a business firm on the life of key employee(s) to protect the firm

against financial losses, which may occur due to the premature demise of the Keyman.



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GUIDELINES FOR ONE AND ALL BY LIC

The Policy Bond And Its Safety

The policy bond is the document that is given to one after they accept the proposal for

insurance.

The risk coverage commences after acceptance of the proposal and the conditions and

privileges of policy are mentioned in the policy bond.

This is an important document which would be referred to for various servicing interactions ±

Keep the policy bond safe. It will be required at the time of settlement of claims on the policy.

You will also require it if you are availing a loan or want to assign the policy.

Inform your spouse/Parents/Children as to where the policy is kept.

In case one is handing over the policy bond to any person or office, please take a written

acknowledgement. Keep a Photostat copy of the policy for reference.

Policy Number

The policy number is consisting of nine digits and can be found at the top left hand corner of

the schedule of your policy bond.

This is a unique identification number that distinguishes your policies from other policies and

will remain unchanged throughout the lifetime of the policy.

Remember to quote the policy number every time in the correspondence, as it helps to locate

the records for reference.

Policy Conditions

Every policy is taken for different types of needs; therefore the conditions for the policy will

vary according to the Plan and Term of the policy.

The policy schedule contains on the first page of the policy, like the ones mentioned above as

well as other information like nominee, address etc. It also shows the date of commencement of



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policy, date of birth, date of maturity, due dates and months in which the renewal premiums are

to be paid etc.

The second page onwards carries the various policy conditions like risk coverage, additional

risks coverage if opted for, standard benefits that are available for all policies, accident benefit

if opted for, exclusion of risks if any and other conditions that govern the contract of

insurance.

Alterations In Policy

There may be instances when one would like to make alterations in their policy like change of

premium payment mode, reduction in premium paying term etc.

The applications may be given in writing to the branch that services ones policy for our further

action.

After the policy is issued, the policyholder in a number of cases finds the terms not suitable to

him and desires to change them. LIC allows certain types of alterations during the lifetime of

the policy. However, no alteration is permitted within one year of the commencement of the

policy with some exceptions. The following alterations are allowed.

y Alteration in class or term.

y Reduction in the Sum Assured

y Alteration in the mode of payment of premiums

y Removal of an extra premium

y Alteration from without profit plan to with profit plan

y Alternation in name

y Correction in policies

y Settlement option of payment of sum assured by installments

y Grant of accident benefit

y Grant of premium waiver benefit under CDA policies

y Alteration in currency and place of payment of policy monies



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A fee for the change or alteration in the policy is charged by the Corporation called quotation

fee and no additional fee is charged for giving effect to the alteration.

If the Policy Is Lost

Kindly make a thorough search before concluding that one has lost the policy bond. Look for

the same within the residence, among your investment papers, at your office and even with

your agent to whom one might have entrusted the document for some reason.

It could have been even pledged with LIC/any other financial institution for availing a loan by

you. LIC retains the policy bond when one go in for a loan against the policy. Make sure that

the document one is searching is not one that has already been assigned to LIC, or to another

financial institution.

If the policy bond is partially destroyed due to natural causes like, fire, flood, etc, the remaining

portion may be returned as evidence of loss of policy to LIC, while applying for a duplicate

policy.

In case one is sure that the policy bond is untraceable due to unknown causes, there is a simple

procedure to comply with while applying for the duplicate policy at the branch.

Duplicate Policy:

A duplicate policy confers on its owner the same rights and privileges as the original policy.

The following are the requirements for issuing a duplicate policy:

1. Insertion of an advertisement at the policyholder¶s cost in one English daily newspaper

having wide circulation in the State where the loss is reported to have occurred. A copy of the

Newspaper in which the advertisement appeared should be sent to the servicing office one

month after its appearance. If no objection has been lodged with LIC regarding the policy in

question, a duplicate policy will be issued after complying further requirements, i.e., Indemnity

Bond and payment of charges for preparing duplicate policy and stamp fee.

2. However, the requirement of advertisement and Indemnity Bond may be dispensed with or

modified in certain circumstances as given below :



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y loss of policy by theft

y destruction of policy by fire

y loss of policy while in custody of an office of government

y mutilated or damaged policy

y policy in torn and a part of it is missing

y policy partially destroyed by white ants

Contact Address

Ones address is very important for. Without ones latest address they would not be in a position

to contact for any service offering. They would not like to keep any benefit that is due pending

for want of this very important information. Whenever one shift residences, please inform the

new address. Otherwise any communication they send, like premium notices, dischargevouchers for maturity and survival benefits etc., will get delayed in reaching.

LIC provides for change of addresses, inclusion of telephone numbers, mobile numbers and

email addresses in ones contact addresses information. Kindly inform servicing branch to

incorporate the same in ones policy records.

Admission Of Age

Check the policy bond and see if the date of birth is correctly given therein.

This is one of the factors on which the premiums one pay for their policy is arrived at.

This would also form the basis of all future policies one might avail.

In case ones earlier policies do not have date of birth incorporated and have a date of birth



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certificate issued by the competent authority, one may send an attested copy of the same to us,

with a request to admit his/her age .

Age Proof accepted by LIC:

The Proofs of age, which are generally acceptable to the Corporation, are as under:

y Certified extract from Municipal or other records made at the time of birth.

y Certificate of Baptism or certified extract from family Bible if it contains age or date of

birth.

y Certified extract from School or College if age or date of birth is stated therein.

y Certified extract from Service Register in case of Govt. employees and employees of

Quasi-Govt. institutions including Public Limited Companies and Pass port issued by

the Pass port Authorities in India.

Alternative Age Proof s which are accepted:

y Marriage certificate in the case of Roman Catholics issued by Roman Catholic Church.

y Certified extracts from the Service Registers of Commercial Institutions or Industrial

Undertakings provided it is specifically mentioned in such extracts that conclusiveevidence of age was produced at the time of recruitment of the employee.

y Certificate of Birth granted by Syedna v. Molana Badruddin Sahib of Baroda

y Identity Cards issued by Defence Department.

y A true copy of the University Certificate or of Matriculation/Higher Secondary

Education, S.S.L. Certificate issued by a Board set up by a State/Central Government.

y Non- standard age proof like Horoscope, Service Record where age is not verified at the

time of entry, E.S.I.S. Card, Marriage Certificate in case of Muslim Proposer, Elder¶s

Declaration, Self-declaration and Certificate by Village Panchayats are accepted subject

to certain rules.



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Nomination

Ensure that the nominees name is correctly incorporated in the policy bond.

One may change the nomination in their policy any time during the lifetime of the policy

In case one have not included the name of the nominee till now, please do not delay; inform the

nomination immediately. Kindly note that the change of nomination has to be done in the

branch that services the policy.

The nominee is the person to whom the insurance claim amounts would be payable, in case

anything unfortunate within the purview of the policy conditions happens.

The policy is usually taken by you to benefit your family ± nominate the persons who¶ll have

the welfare of your family in your absence; the usual preferences being spouse and children.

One may nominate even minors like their children, in which case one have to name another

person who¶ll have the welfare of the minor children, as an appointee.

Nomination:

The nominee is statutorily recognized as a payee who can give a valid discharge to the

Corporation for the payment of policy monies.

Nomination will be incorporated in the text of the policy at the time of its issue. After the

policy is prepared and issued and if no Nomination has been incorporated the assured can

ordinarily affect the nomination only by an endorsement on the policy itself. A nomination

made in this manner is required to be notified to the Corporation and registered by it in its

records. A nomination is not required to be stamped.

Any change or cancellation of nomination should be given in writing only by the Life Assured.

Nomination under Joint Life Policy can only be a joint nomination. Nomination in favour of a

stranger cannot be made as there is no insurable interest and moral hazard may be involved.

Nomination in favour of wife and children as a class is not valid. Specific names of the existing

wife and children should be mentioned. Where nomination is made in favour of successive

nominees, i.e., nominee ³A´ failing him to nominee ³B´ failing whom nominee ³C´, the

nomination in favour of one individual in the order mentioned will be considered. Where the

nominee is a minor, an appointee has to be appointed to receive the monies in the event of the



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assured¶s death during the minority of the nominee. No nomination can be made under a policy

financed from HUF funds.

In the case of first endorsement of nomination the date of registration of nomination will be the

date of receipt of the policy by the servicing office and in case of any other nomination or

cancellation or change thereof, the date of receipt of the policy and/or of notice whichever is

later, will be the date of registration

Assignment

In case one is raising a loan against their policy from LIC or any other financial institution, the

policy would have to be assigned to LIC or the financial institution.

When one assign the policy the title of the policy is shifted from his/her name to that of the

institution.

The policy would be reassigned to one on the repayment of the loan.

A fresh nomination should be done after reassignment of the policy.

Assignment of policies can be done even when a loan is not required or for some special purposes.

An assignment has an effect of directly transferring the rights of the transferor in respect of the

property transferred. Immediately on execution of an assignment of the Policy of life assurance

the assignor forgoes all his rights, title and interest in the Policy to the assignee. The

premium/loan interest notices etc. in such cases will be sent to the assignee. In case the

assignment is made in favor of public bodies, institutions, trust etc., premium notices/receipts

will be addressed to the official who has been designated by the institutions as a person to

receive such notice

An assignment of a life insurance policy once validly executed, cannot be cancelled or rendered

in effectual by the assignor. Scoring of such assignments or super scribing words like

'cancelled' on such assignment does not annul the assignment. And the only way to cancel such



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assignment would be to get it re-assigned by the assignee in favor of the assignor.

There are two types of assignments:

1. Conditional Assignment whereby the assignor and the assignee may agree that on the

happening of a specified event which does not depend on the will of the assignor, the

assignment will be suspended or revoked wholly or in part.

2. Absolute Assignment whereby all the rights, title and interest which the assignor has in the

policy passes on to the assignee without reversion to the assignor or his estate in any event.

R e-assignment:

Status of ones policy indicates if his/her policy is in force or has lapsed due to non-payment of

premium. It also provides other important information with respect to your policy, for your

reference.

When To Pay The Premiums

Remember to pay premium in time, even if the notices do not reach. There may be a postal

delay.

LIC usually sends premium notices one month in advance to the due month of the premium.

The months in which premiums are due are given on the first page of the Policy bond.

Grace Period For Premium Payment

In case one have not paid the premium within the due date there is still time for one to make the

payments without payment of interest on the premium. This period is called the grace period.

(With the exception of some plans)

The grace period for policies where the premium payment mode is monthly is 15 days from the

due date.

The grace period for policies where the premium payment mode is quarterly, half-yearly or

yearly is one month but not less than30 days.



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Non-f orfeiture regulations:

If the policy has run for atleast 3 full years and subsequent premiums have not been paid the

policy shall not be void but the sum assured will be reduced to a sum which will bear the same

ratio as to the number of premiums paid bear to the total number of premiums payable.The

concessions regarding claim in the above case is explained in the appropriate section.

Forfeiture in certain events:

In case of untrue or incorrect statement contained in the proposal, personal statement,

declaration and connected documents or any material information with held, subject to the

provision of Section 45 of the Insurance Act 1938, wherever applicable, the policy shall be

declared void and all claims to any benefits in virtue thereof shall cease.

How And Where To Pay The Premiums

y By cash, local cheque (subject to realization of cheque), Demand Draft at Branch

Office.

y The DD and cheques or Money Order may be sent by post.

y You can pay your premiums at any of our Branches as 99% of our Branches are

networked.

y Many Banks do accept standing instructions to remit the premiums. So by providing a

standing instruction to your Bank to debit your account for the premium amount and

send it vide a banker¶s cheque to LIC, on the due dates and months mentioned on your

policy bond.



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y Through Internet : Payment of premiums can be made through Internet through Service

Providers viz.HDFC Bank, ICICI Bank, Times of Money, Bill Junction, UTI Bank,

Bank of Punjab, Citibank, Corporation Bank, Federal Bank and BillDesk.

y Premium payment can also be made through ATMs of Corporation Bank and UTI

Bank.

y Premium payment can also be made through Electronic Clearing Service (ECS) which

has been launched at Mumbai, Hyderabad, Chennai, Kolkata, New Delhi, Kanpur,

Bangalore, Vijaywada, Patna, Jaipur, Chandigarh, Trivandrum, Ahmedabad, Pune, Goa,

Nagpur, Secunderabad & Visakhapatnam. A policyholder having an account in any

Bank which is a Member of the local Clearing House can opt for ECS debit to pay

premiums. The policyholders wishing to use this system would have to fill up a

Mandate Form available at our Branches/DO and get it certified by the Bank. The

certified Mandate Forms are to be submitted to our BO/DO.

y Policy can be anywhere in India: Citibank Kiosks at Industrial Assurance Building,

Churchgate, New India Building, Santacruz, Jeevan Shikha Building, Borivili are

dedicated for collection of premiums through cheques.

Policy status ± Where Available



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Status of your policy indicates if your policy is in force or has lapsed due to non-payment of

premium. It also provides other important information with respect to your policy, for your

reference.

The status of your policy is available at the branch that services your policies.

It is also available through our Interactive Voice Response Systems in select cities

In cities connected by our computerized networks the status will be available in any of the

branches.

Now the policy status of policies being serviced in the cities connected by network are also

available through Internet

R evival Of Lapsed Policies

If your policy has lapsed due to non-payment of premiums within the due date, the terms and

conditions of the policy contract are rendered void, till you revive your policy.

A lapsed policy has to be revived by payment of the accumulated premiums with interest as

well as giving the health requirements as required . Always keep your policy in force to ensure

that your family gets their financial protection assured by your policy.

However certain concessions dependent on the term for which you have paid the premiums are

available with the exception of some plans for claims concession.



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R evivals:

If the premium under a policy is not paid within the days of grace the policy lapses. Revival is

a fresh contract wherein the insurer can impose fresh terms and conditions. A policy can be

revived under the following types of revival:

1. Ordinary Revival

If a revival of the policy is effected within 6 months from the due of first unpaid premium no

personal statement regarding health is required and the policy is revived on collection of

delayed premium plus interest. The rate of interest to be charged for such delayed premium will

depend on the date of commencement of the policy.

2. Revival on non-medical basis

For revival of the policy on non-medical basis the amount to be revived should not exceed the

prescribed limit for non-medical assurance taken by the life assured.

3. Revival on medical basis

If a policy cannot be revived under ordinary revival or revival on non-medical basis it can be

revived with medical requirements. The medical requirements will depend upon the amount to

be revived.

4. The other schemes for revival are

A. Special R evival Scheme

B. R evival by installment

C. Loan- cum- revival

D. Survival Benefit- cum- revival



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Availing Loans On Policies

Many of the plans are of endowment type and one would be allowed to raise a loan against

their policy should one require funds.

One repay the loan with interest or continue paying the interest and allow the loan to be

deducted at the time of the claim payments.

Further loans on policies are also allowed after deduction of earlier out standings .

Most financial institutions too allow loans against LIC policies based on the value LIC quotes

on request.

Policy Loans:

The Corporation can grant a loan to the policyholder against his policy as per the terms and

conditions applicable to the policy. The requirements for granting a loan are as under :

a) Application for loan with an endorsement of terms and conditions of the loan being placed

on the policy.

b) Policy to be assigned absolutely in favour of the Corporation

c) A receipt for the loan amount

The maximum loan amount available under the policy is 90% of the Surrender Value of the

policy (85% in case of paid up policies) including cash value of bonus.

The rate of interest charged on loans is at 9% to be paid half-yearly.

The minimum period for which a loan can be granted is six months from the date of its

payment. If repayment of loan is desired within this period the interest for the minimum period

of six months will have to be paid.

In case the policy becomes a claim either by maturity or death within six months from the date

of loan interest will be charged only upto the date of maturity/death



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Surrender Value

This is the value which is the amount payable to one should one decide to discontinue the

policy and encash the same from LIC.

Surrender value is payable only after three full years premiums are paid to LIC. More over if it

is a participating policy the Bonus get attached to it as per prevalent rules.

Surrender of policy is not recommended since the surrender value would always be

proportionately low.

Should one decide to go in for another insurance at this stage further insurance would be

available to one at a much higher premium because ones age would have advanced since taking

out the earlier policy.

Therefore retention of earlier policies and continuation of all policies without allowing them to

lapse is the best strategy for continuing life insurance protection.

Maturity, Survival Benefits, Disability And Death Claims:

When ones Survival Benefits (For Money back policies) or maturity benefits are due, we send

intimations to one in advance. However, if the survival benefit amount is less than or equal to

Rs.60,000/- the same will be sent to one directly without policy or discharge forms with a few

exceptions.

If such intimations have not come to one before the due date kindly inform us so that we may

take necessary action.

Claims s

ettl

em

ent proc

edur

e:

The settlement of claims is a very important aspect of service to the policyholders. Hence, the

Corporation has laid great emphasis on expeditious settlement of Maturity as well as Death

Claims.

The procedure for settlement of maturity and death claims is detailed below :



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Maturity Claims:

1) In case of Endowment type of Policies, amount is payable at the end of the policy period.

The Branch Office which services the policy sends out a letter informing the date on which the

policy monies are payable to the policyholder at least two months before the due date of

payment. The policyholder is requested to return the Discharge Form duly completed along

with the Policy Document. On receipt of these two documents post dated cheque is sent by post

so as to reach the policyholder before the due date.

2) Some Plans like Money Back Policies provide for periodical payments to the policyholders

provided premium due under the policies are paid up to the anniversary due for Survival

Benefit. In these cases where amount payable is less than up to Rs.60,000/-, cheques are

released without calling for the Discharge Receipt or Policy Document. However, in case of

higher amounts these two requirements are insisted upon.

Death Claims: The death claim amount is payable in case of policies where premiums are paid up-to-date or

where the death occurs within the days of grace. On receipt of intimation of death of the Life

Assured the Branch Office calls for the following requirements:

a) Claim form A ± Claimant¶s Statement giving details of the deceased and the claimant.

b) Certified extract from Death Register

c) Documentary proof of age, if age is not admitted

d) Evidence of title to the deceased¶s estate if the policy is not nominated, assigned or issued

under M.W.P. Act.

e) Original Policy Document



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The following additional forms are called for if death occurs within three years from the date of

risk or from date of revival/reinstatement.

a)Claim Form B ± Medical Attendant¶s Certificate to be completed by the Medical Attendant

of the deceased during his/her last illness

b) Claim Form B1 ± if the life assured received treatment in a hospital

c) Claim form B2 ± to be completed by the Medical Attendant who treated the deceased life

assured prior to his last illness.

d) Claim Form C ± Certificate of Identity and burial or cremation to be completed and signed

by a person of known character and responsibility

e) Claim form E ± Certificate by Employer if the assured was employed person.

f) Certified copies of the First Information Report, the Post-mortem report and Police

Investigation Report if death was due to accident or unnatural cause.

These additional forms are required to satisfy ourselves on the genuineness of the claim, i.e., no

material information that would have affected our acceptance of proposal has been withheld by

the deceased at the time of proposal. Further, these forms also help us at the time of

investigation by the officials of the Corporation.

Double Accident Benefit Claims:

Double Accident Benefit is provided as an inject to the life insurance cover. For this purpose an

extra premium of Rs.1/- per Rs.1000/- S.A is charged. For claiming the benefits under the

Accident Benefit the claimant has to produce the proof to the satisfaction of the Corporation

that the accident is defined as per the policy conditions. Normally for claiming this benefit

documents like FIR, Post-mortem Report are insisted upon.

Disability Benefit Claims:

Disability benefit claims consist of waiver of future premiums under the policy and extended

disability benefit consisting in addition of a monthly benefit payment as per policy conditions.



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The essential condition for claiming this benefit is that the disability is total and permanent so

as to preclude him from earning any wage/compensation or profit as a result of the accident

Policies Under Salary Savings Scheme

If one have taken the policy under salary Saving Scheme please read the following suggestions

:

1. For each Salary Savings Scheme Policy ones employer deducts the premium from

salary and sends a consolidated cheque for all the policies of the employees to a

designated Branch of LIC, where all the policy files are maintained.

2. One can find out which Branch of LIC ones policy file will be serviced either from the

Agent or from the pay roll department of the employer.

3. One will need to know which branch of LIC services ones policy because one will

require their help in getting the Maturity/Survival Benefits, for any alterations like

change of address and for availing loans etc.

4. In case one is in a transferable job please inform the designated Branch of LIC about

his/her new place of posting. After one join his/her new place of posting please ask the

employer the LIC Branch where the premiums are being remitted by his/her office there

and inform the LIC Branch which was servicing you earlier so that your policy files can

be transferred.

5. This way ones records will be at correct place and will receive the services from us like

maturity, in time.

In case one is leaving his/her employer for a new job or joining another firm, one have

the facility to either continue the policy under the Salary Savings Scheme of the new

firm or to convert the payment mode into quarterly, half yearly or yearly mode.

6. Always ensure the continuity of premium payments to avoid frequent revivals of policy.

This may become a cumbersome process for a person who is in a transferable job.

7. Please do not send any installments directly. The premium must come through their

employer only. They do not have systems to adjust single installments received from



24

our policy holders. Otherwise please convert the mode into quarterly, halfyearly, or

yearly and pay directly. This way one also get a discount on the premium payable.

8. Leave a permanent local address with us so that we can reach one wherever one is even

after many years.



25

MOST POPULAR PLANS OF LIC

Jeevan Anand

Jeevan Anand is one of the popular plan from LIC (Life Insurance Corporation.).

LIC's Jeevan Anand is a With Profit assurance plan. The plan is a combination of the Whole Life

Plan and the most popular Endowment Assurance Plan.

Jeevan Anand Policy provides pre-decided Sum Assured and bonuses at the end of the stipulated

premium paying term, but the risk cover on the life continues till death.

Benefits:

Survival Benefits:

Sum Assured along with all vested bonuses payable at the end of the premium paying term

(Endowment term).

Accident Benefit:

The Double Accident benefit is available during the premium paying term and thereafter up to

age 70. The premium for this has been built into the tabular premium rates. Maximum accident

cover available under this plan will be Rs. 5 lakh (this limit excludes accident benefit taken

under other plans).



26

Premium Stoppage:

If payment of premiums ceases after at least three years? premiums have been paid , a free paid-

up policy for a reduced Sum Assured will be automatically secured provided the reduced sum

assured, exclusive of any attached bonus, is not less than Rs. 250/-. The reduced sum assured

will become payable on the event as stipulated in the policy.

Bonus:

If it is a With Profits Policy note that every year the LIC distributes its surplus among

policyholder to with profits polices in the form of bonuses. Substantial bonuses have been

declared in the past after each valuation of policy liabilities.

Death Benefits:

Sum Assured along with vested bonuses are payable on death during the premium paying term

and when policy ceases. An amount equal to the Sum Assured is payable if death occurs after the

premium paying term. Simple Reversionary Bonus accrues during the premium paying term and

is payable at the end of the premium paying term or on earlier death along with final additional

bonus, if any. No Bonus is paid on death after the premium paying term.

Suitablity

Being an endowment assurance + whole life policy, this plan is apt for people of all ages and

social groups who wish to protect their families from a financial setback that may occur owing to

their demise. The amount assured if not paid by reason of his death earlier will payable at the end

of the endowment term where it can be invested in an annuity provision for the rest of the

policyholders life or in any other way he may think most suitable at that time. Most ideal if you

want to ensure Permanent family financial protection + enjoy the fruits of your savings yourself

on outliving the PPT you have chosen



27

Example:

Mr. Kumar, age 25 years, takes Jeevan Anand policy for 25 years for Sum Assured Rs. 1

lakh. Now on Maturity Pankaj will receive Rs. 2,12,500/- (Rs. 1 lakh sum assured Plus

Rs.1,12,500/- is the estimated bonus at Rs.45/- per thousand per year.)

In case, Mr. Kumar, dies ( After premium paying term is over) at the age of 60 years, his

nominee will get additional Rs. 1 lakh equal to sum assured amount. Since Mr. Pankaj has

already received the bonus, LIC will not pay second time bonus.

In case, Mr. Kumar dies during the Premium Paying Term, his nominee will get Rs.1 Lakh (sum

Assured) + Accrued bonus till Mr. Kumar¶s death.

LIC¶s Jeevan saral

Under this plan death cover will be same irrespective of age at

entry and term. The sum payable at maturity however differs for

different entry ages and terms. This plan is very appropriate for

employees seeking life cover through Salary Saving Schemes (SSS).

Benefits:

On Death:

y 250 times the monthly premium, plus

y return of premiums excluding extra/rider premium and first year

y premium plus

y The loyalty addition, if any.



28

On Maturity:

y Maturity sum assured, plus

y Loyalty additions, if any.

Surrender value:

The policy can be surrendered after it has been in force for at

least 3 full years. The surrender value will be greater of

Guaranteed Surrender Value or Special Surrender Value.

Options:

Jeevan Saral offers following optional riders by payment of

additional premium:

1. Accidental death and disability benefit

2. Term Assurance benefit.

The maximum cover for the above riders will be Rs.25 lakhs under all

policies of the Corporation taken together.

Auto Cover:

The plan offers Auto Cover of 12 months after the policy has been in

force for a period of 3 years and more.

Flexible Term:

The policyholder can choose a maximum term but can surrender at any

time without any surrender penalty or loss.

Partial Surr

end

ers:

The plan will allow partial surrender from 4th year onwards subject

to certain conditions.

Due to existence of the flexible term and partial surrenders the

policyholder will enjoy a lot of liquidity under Jeevan saral.



29

Loan:

Loan is permissible under the policy.

Loyalty additions:

Only loyalty additions will be declared under the plan. The minimum

term after which a policy can earn loyalty addition will be 10 years.

However, loyalty additions will also be payable if death occurs in

the 10 year of the policy provided that the policy is in force at the

time of death. Loyalty additions will be subject to Corporations

experience, and may be paid in case of death, maturity and surrenders.

Eligibilty and conditions:

Age at entry: Minimum 12 years completed and maximum 60 years nearest birthday.

Age at maturity: Maximum 70 years.

Term: All terms from 10-35 years.

Premium: Minimum Rs.250/- per month for entry upto 49 years and

Rs.400/- per month for entry age 50 years and above. The premium

shall be in multiple of Rs.50 per month.

Mode: Yearly/ Half yearly/ Quarterly and Monthly under Salary Saving Scheme.

Money Back Policy Table75 (20yrs) and Table 93(25yrs)

This plan is suitable for professionals and businessmen as

money available at regular intervals. Once in a 5 years, a portion of SA viz., Survival Benefit is

paid as a percentage. Life risk cover for the entire sum assured even after payment of survival

benefit. The life assured should have attained majority at the time of first survival benefit.



30

General Conditions:

Min. ag

eat

entry

:13 years.

Max. age at entry: 50 years.

Min. S.A.: Rs. 50,000

Max. SA.: Any Amount.

SA in multiples: Rs. 5000

Max. Maturity age: 70 years.

Min Term: 20 years.

Max Term: 20/25 years.

Modes Allowed: All

Accident benefit per 1000 SA: Re. 1 extra.

Policy Servicing:

Term R ider Option: Yes.

Critical Illness R ider: Yes.

Policy Loan @9%: Yes.

Assignment: Yes.

R evival: Yes.

Surrender of Policy: Yes.

Survival Benefits: Yes.

Housing Load: Yes



31

Benefits:

y Maturity Benefits: Bonus is given for the full sum assured amount.

y Death Benefits: Bonus + Full SA is paid to nominee before the policy term ends in case

of death. In case of death claim, the survival benefit already paid is not deducted if any.

Following reinvestment tables will give an idea of the total amount available at the end of the

term. If the survival benefits are re-invested at 9% interest compounded annually in

Banks/company Deposits/Mutual funds/RBI bonds etc«

Examples:

1. Mr. Yadav takes a Money back Policy for 25 years for rs. 1 lakh under table 93-25. hereceives rs 15,000 each at the end of 5th, 10th, 15th, & 20th year. In the 25th year, he receives

a balance Rs. 40,000 + Bonus of rs. 1,10,000 at an estimated Rs. 44 per 1000 SA + Final

Additional Bonus of Rs 10000. Totally, Mr yadav will receive Rs. 1,60,000. the above table will

gives an insight for reinvestment.

In case Mr. Yadav dies during 12th year, his nominee will get Rs 1,52,800 (rs. 1,00,000 SA + Rs

52,800 Bonus). The survival benefit already paid during 5th and 10th year will not be deducted.

2. Mr. Yadav takes a Money back Policy for 20 years for rs. 1 lakh under table 75-20. He

receives rs 20,000 each at the end of 5th, 10th, & 15th year. In the 20th year, he receives

a balance Rs. 40,000 + Bonus of Rs. 78,000 at an estimated Rs. 39 per 1000 SA + Final

Additional Bonus of Rs 7500.

In case Mr. Yadav dies during 12th year, his nominee will get Rs 1,46,800 (rs. 1,00,000 SA + Rs

46,800 Bonus @ an estimated 39 per 1000 SA). The survivalbenefit already paid during 5th and

10th year will not be deducted. The survivalbenefit already paid during 5th & 10th year will not

be deducted



32

LIC¶s Endowment Plan (Table 14)

It is one of the oldest and popular LIC plan. Endowment plan (Table 14) provides financial

assistance to the family of the life assured in the event of policy holders early death or a

lumpsum amount on policy holders survival upto the selected term. Hence, Endowment plan

(Table 14) provides for family income in the event of unfortunate death of the life assured or

makes provision for retirement in case of living too long. Endowment Plan is best for every

reason, for all long and short term financial needs.

Benefits:

Natural Death:

Sum Assured + Bonus for number of years premium paid + Terminal Bonus if any.

Accidental Death:

Double Sum Assured + Bonus for number of years premium paid + Terminal Bonus if any.

Maturity:

Sum Assured + Bonus + Terminal Bonus.

Accident And Permanent Disability Benefit:

Accident benefit is maximum Rs.50 lakh.

Tax Benefit:

Tax beneift on your premium u/s 80C

and Maturity/Death Claim u/s 10 (10D)

Loan:

Loan Facility is available on this policy after 3 years, you can also use it as Housing Loan

collateral.

Premium Payment:

You can pay premium Yearly, Half-yearly, Quarterly, Monthly or Single premium.



33

Eligibility Conditions and R estrictions:

Minimum age: 12 years

Maximum age: 65 years

Maximum age at Maturity: 75 years

Min. Term: 5 years

Max Term: 55 years

Minimum SA: Rs.50,000/-

Max. Sum Assured: No Limit

Example:

Mr. Rajesh buy an Endowment policy under Table-14 for Rs.1Lakh for 25 years term. He dies

due to a disease after 3 yrs. In this case, Mr. Rajesh¶s family/nominee will receive Rs.1,

14,400(Rs.14, 400 being Bonus for 3 yrs at an estimated Rs.48 per 1000 p.a.). If Rajesh survive

till maturity he would receive Rs.2,70,000 as maturity benefit (Rs.1,20,000 being Bonus for 25

yrs at an estimated Rs.48 per 1000 p.a. + FAB @ 500/- per 1000 = 50,000/-)

Amulya Jeevan

Protect your loved ones from any unexpected surprises in life, any time with Life Insurance

Corporation of India¶s Amulya Jeevan. Amulya Jeevan 1 (Plan No. 190) is a Term Assurance

plan with minimum Sum Assured of Rs.25 lakh.

Benefits:

On Maturity:

On Maturity no amount will be paid to the Policyholder.



34

On Death:

On death of the Policyholder during policy term, S.A. will be paid to the nominee, provided the

policy is kept in force.

Income tax rebate:

The premium paid towards Amulya Jeevan 1 is eligible for tax deduction under section 80C of

the Income Tax Act,1961.

Eligibility Conditions and R estrictions

Minimum Age at entry: 18 years (completed)

Maximum Age at entry: 60 years (nearest birthday)

Maximum Age at maturity: 70 years (nearest birthday)

Policy Term: 5 years to 35 years

Minimum Sum Assured: Rs.25,00,000/-

Maximum Sum Assured: No Upper Limit

(Policies will be issued in multiples of Rs.1,00,000/- for Sum Assured more than the minimum

Sum Assured)

Loan: Not available

Surre

nde

r Value:

NilDating Back : Allowed

Grace Period: 15 days

Mode of Premium :

Premium can be paid either in Yearly, Half-yearly & Single Premium.

Cooling off period:

If you are not satisfied with the ³Terms and Conditions´ of the policy, you may return the policy

to Life Insurance Corporation Of India within 15 days.

Example: Mr. LIC takes a policy for 25 years for Rs.50 lakhs.

(a) On survival till maturity, Mr. LIC will not receive any amount.

(b) On death of Mr. LIC during policy term, his nominee will get Rs.50 lakh S.A



35

Komal Jeevan: (Table No.159)

LIC Komal Jeevan is a children¶s Money Back Plan that provides financial protection against

death during the term of plan with periodic payments on survival at specified durations. Komal

Jeevan can be purchased by any of the parent or grand parent or legal guardian for a child aged

between 0 year to 10 years. The payment of the premium stops at the age of 18 years.

Suitablity:

In today¶s competitive world, every parent dream for best education for their son/daughter. This

policy is suitable for parents who dream to secure money for their children¶s higher education.

Benefits:

The policy matures when the child grows up to be 26. Once the child attains majority, the

survival benefit is paid in four installments.

1. 20% on policy anniversary after completing age 18.




5. Guaranteed addition + Loyalty Addition on completing age 26 (Maturity date)

Guaranteed additions :

The policy gives guaranteed additions at Rs 75 per Rs 1,000 sum assured on every policy

anniversary till age 26.



36

Commencement of risk cover:

The risk commences only after the child attains age seven or two years after the commencement

of the policy, whichever is later.

Premium Waiver Benefit:

Premium Waiver Benefit available with some extra premium amount.

Term R ider Benefit:

Term Rider Benefit can be availed by the proposer to the extent of 20% of the basic sum assured

under the policy not exceeding Rs.1,00,000/-. The benefit will be payable in case the proposer

dies before the policy anniversary on which the child is 18 years last birthday.

Death Benefits

y In case of death of life assured before the commencement of risk, the policy is canceled

and premiums paid are refunded.

y After the commencement of risk, if the life assured dies before policy matures, full sum

assured plus guaranteed additions are payable without deduction of earlier installment

benefits paid.

y Special benefit in maturity: Loyalty additions depending on policy duration and sum

assured are paid on maturity.

Mode of premium

Premiums are payable yearly, half-yearly, quarterly, monthly or through Salary deductions, as

opted by you, up to the policy anniversary immediately after the life assured (child) attains 18

years of age or till the earlier death of the life assured. Alternatively, the premium may be paid in

lump sum (Single premium).


Min. age at entry: 0 year (Last Birthday)

Max. age at entry: 10 years (Last Birthday).

Min. S.A.: 1 lakh.

Max. SA.: 25 lakhs.



37

SA in multiples: Rs. 25,000

Max. Maturity age: 26 years (lbd)

Min. PPT: 8 years. (Premium Paying term)

Max. PPT: 18 years.

Accident benefit: NA

Term R ider Option: Available

Critical Illness R ider: No

Policy Loan: No

R evival: Yes

Surrender of Policy: Yes

Survival Benefits: Yes

Housing Loan: No

New Bima Gold (Table No.179)

Gold never loses its value, just like LIC Of Indiaµs New Bima Gold insurance policy. LIC¶s New

Bima Gold (plan no.179) is a special with profit money back plan that offers 50% of the life

cover during extended term even after maturity.

Benefits:

Survival Benefit: Payable in case of life assured surviving to the end of the specified durations

provided the policy is in full force as given below:

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

8th policy year.

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

&12th policy year.



38

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

12th & 16th policy year.

On expiry of policy term:Total amount of premiums (excluding extra/optional rider premiums,

if any) paid plus Loyalty Additions, if any, less the amount of survival benefits paid earlier.

Death Benefit:

During the policy term: Payment of an amount equal to Sum Assured under the Basic Plan on

death of the Life Assured during the policy term provided the life cover is in force.

During the extended term: Payment of an amount equal to 50% of Sum Assured under the

Basic Plan on death of the Life Assured during the extended term provided all the premiumsunder the policy have been paid.

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

term.

Mode of Premiums:

Regular premium can be paid either in yearly, half yearly, quarterly or monthly (ECS)

installments.

Eligibility Conditions and R estrictions :

FOR BASIC PLAN:

1. Minimum age at entry: 14 years (completed)

2. Maximum age at entry: 57 years (nearest birthday) for Term 12 years


4.Maximum age at entry: 45 years (nearest birthday) for Term 20 years

Age at expiry of extended term: Maximum 75 years (nearest birthday)

Policy Term: 12, 16 and 20 years.



39

Minimum Sum Assured: Rs. 50,000 /-

Maximum Sum assured: No limit

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

FOR THE ACCIDENT BENEFIT RIDER OPTION :

1. Minimum age at entry: 18 years (completed)




Minimum Sum Assured: Rs. 50,000 /-

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

Cooling off period:

If you are not satisfied with the ³Terms and Conditions´ of the policy, you may return the policy

to LIC of India within 15 days.

Jeevan Mithra (Triple Benefit)

y Sum Insured + Bonus Accrued For the Policy Term chosen, on your surviving the

premium payment term you have chosen (15 to 30 years),

y 3 times the basic sum Insured + Bonus accrued on the basic sum insured in case you do

not outlive the premium payment term you have chosen ( 15 to 30 years)

y 4 times the basic sum insured in case death is due to accident against a little extra,



40

y Waiver of further premium payable + Basic Sum Insured spread over in the form of an

Annuity for next 10 years + All other Maturity benefits in case of Total and Permanent

Disability due to Accident,

y Loan against surrender value at 9.00% per annum simple interest,

Benefits

y Financial security available to your nominee in your absence during the currency of the

plan is maximum,

y Maturity Benefit available should you outlive the PPT you have chosen is quite

impressive,

y Premium paid qualifies for Section 80 C benefit within the overall limit of Rs 1 Lakh per

annum allowed for various savings,

y Policy proceeds received by you on surviving the PPT chosen are free from income-tax

under section 10(10D) of the I.T Act.

y Policy loans available under the plan offer you additional investment facilities without

effecting any of the policy privileges,

y Most ideal as a collateral security while drawing housing or any capital loans in view of

the high security it offers

Premium Paying term

y 15 to 30 years ceasing at death, if it occurs early.

Modes of investment

y Yearly, Half-yearly or Quarterly or Monthly.



41

Jeevan Tarang

y Cash value of bonus on the full sum insured + Annual Installments @ 5.5% of the sum

insured upto your 100 years of age + Sum Insured whenever you are not alive instead of

annual installments, without any deduction towards installments already paid + Loyalty

Addition if any, on your surviving the premium payment term you have chosen (10 or 15

or 20 years),

y Sum Insured + Bonus accrued in case you do not outlive the premium payment term you

have chosen ( 10 or 15 or 20 years)

y Loan against surrender value at 9.00% per annum simple interest,

y Additional sum equal to face value but not exceeding Rs 50 Lakhs in case of fatal

accident against a small extra,

y Premium waiver in addition to the above accident benefit in case of Total and Permanent

Disability due to Accident against a small extra,

y Term Cover Rider against extra



42

Benefits

1. Under this plan, your nominee is assured of the face value of the policy on your death

whenever it occurs within your 100 years of age. Your premium payment however is

limited only for the term chosen (10 or 15 or 20 years).

2. You are assured of a regular annual income as long as you are alive upto a maximum of

100 years of age, once you outlive the premium payment term you have chosen. By going

for LIC's Jeevan Tarang every month, you can reduce the frequency of annual

installments to monthly also.

3. From income-tax point of value also, you stand to gain quite a bit through LIC's Jeevan

Tarang investment. While the premium paid qualifies for Section 80 C benefit within the

overall limit of Rs 1 Lakh per annum allowed for various savings, annual installments

received as above are free from income-tax, since they are nothing but settlement options

on the sum insured exercised by you. In otherwords, under LIC's Jeevan Tarang,you are

assured of a tax-free annuity @5.5% of the sum you have insured for rest of your life,

once you outlive the PPT chosen.

4. Bonus available before commencement of Annuity can be profitably invested to fetch

you income additional to annuity installments available under the plan.

5. Policy loans available under the plan offer you additional investment facilities without

effecting any of the policy privileges.

Premium paying term

y 10 or 15 or 20 years ceasing at death, if it occurs early.

Modes of Investment

y Single, Yearly, Half-yearly or Quarterly or Monthly



43

Anmol jeevan-I

Life Insurance Corporation Of India¶s Anmol Jeevan-I (Plan No. 164) is a unique plan of

assurance, by far the cheapest policy to buy; cheaper than even a whole life policy to start with.

Anmol Jeevan-I is a pure term cover provides only life cover unlike endowment and money back

policies which have a built-in saving element too.


Minimum Age at entry: 18 years (completed)

Maximum Age at entry: 55 years (nearest birthday)

Maximum Age at maturity: 65 years (nearest birthday)

Policy Term: 5 years to 25 years

Minimum Sum Assured: Rs.5,00,000/-

Maximum Sum Assured: Less than 25,00,000 /-

(Policies will be issued in multiples of Rs.1,00,000/- for Sum Assured above the minimum Sum

Assured)

Loan: Not available

Surrender Value: Nil

Dating Back : Allowed

Grace Period: 15 days

Payment Of claims:

No Claims concession will be applicable to this Policy.



44

Benefits of investing

On Maturity:

On Maturity no amount will be paid to the Policyholder.

On Death:

On death of the Policyholder during policy term, S.A. will be paid to the nominee.

Income tax rebate:

The premium paid towards Anmol Jeevan-I is eligible for tax deduction under section 80C of the

Income Tax Act,1961.

Modes o

f inv

estm

ent

Premium can be paid either in Yearly, Half-yearly & Single Premium.

Example: Mr.ABC takes a policy for 20 years for Rs.20 lakh sum assured.

(a) On survival till maturity, Mr. ABC will not receive any amount.

(b) On death of Mr.ABC during policy term, his nominee will get Rs.20 lakhs S.A.

Jeevan Arogya

It is LIC¶s mediclaim policy available for all Indian Investors for hospitalization in India due

to either accident or sickness for a period exceeding 24 hours. Every block of 4 hours or

more is deemed as one day. It is not a regular life insurance policy. There is no maturity

benefit or death benefit.



45

Benefits

1. Hospital Cash Benefit (HSB) under which there is cash reimbursement equivalent to

Applicable Daily Benefit (ADB) that starts with a minimum of Rs 1000/- to Rs 4000/-

per day, increasing by 5% every year, reaching a maximum of 150% . Only Condition for

this reimbursement is, hospitalization either for accident or sickness beyond 24 hours.

Every block of 4 hours is deemed as 1 day. In case of treatment in an ICU, this benefit is

doubled.

2. No Claim benefit ,

3. Major Surgical Benefit (MSB) under which there is cash reimbursement upto MSB

Sum Assured for listed major surgeries,

4. Daily Hospital Cash Benefit (DHCB) under which there is a lumpsum amount equl to

5 times the ADB applicable, regardless of the actual costs incurred for Day Care

Procedure,

5. Cash reimbursement equal to 2 times the ADB per day in case of non-listed

surgeries,

6. Ambulance f acility or Rs 1000/- in lieu of ambulance expenses,

7. Waiver of premium f or 1 year in case of major surgeries.

Premium Paying term

Upto your 80 years of age .

Income-Tax benefit

Premium paid every year enjoys income-tax exemption upto Rs 15,000/- per individual or Rs

30,000/- for the family members



46

Reasons to invest

y Medical benefit is available upto your 80 years of age without any interruption,

y Medical benefit can be extended to all family members including parents and parents-in-

law in the age group 0-75 under a single policy,

y 50% of the claim amount can be drawn in advance for meeting surgical procedures

instead of waiting for the claim to be made.

y ADB keeps increasing every year by 5%, reaching a maximum of 150%. As a result,

other benefits like HCB and MSB also stand increased.

y HCB can be availed every year upto a maximum of 30 days or as a lifetime benefit upto

720 days.



47

Tax benefits with LIC

INCOME-TAX AND TAX BENEFITS FROM LIFE INSUR ANCE

A] INCOME-TAX R ATES FOR ASSESSMENT YEAR 2011-2012 (FINANCIAL YEAR

2010-2011)

Income Slabs:

Individual & HUF

below age of 65 years

Woman below age of

65 years

Individual above age

of 65 years

Tax Rates

Income uptoRs.1,60,000



NIL

Rs.1,60,001 to

Rs.5,00,000

Rs.1,90,001 to

Rs.5,00,000

Rs.2,40,001 to

Rs.5,00,000

10%

Rs.5,00,001 to

Rs.8,00,000

Rs.5,00,001 to

Rs.8,00,000

Rs.5,00,001 to

Rs.8,00,000

20%

Above Rs.8,00,001 Above Rs.8,00,001 Above Rs.8,00,001 30%

Education Cess : An additional surcharge called as µEducation Cess¶ is levied at the rate of 2%

on the amount of Income tax and surcharge (if any) in all cases shall be levied.

Secondary and Higher : An additional surcharge, called the "Secondary and Higher Education

Cess on income- at the rate of 1% of income-tax and surcharge (not including the ³Education

Cess on Income-tax´) in all cases shall be levied.



48

B] SOME IMPORTANT INCOME TAX BENEFITS AVAILABLE UNDER VARIOUS

PLANS OF LIFE INSUR ANCE ARE HIGHLIGHTED BELOW:

1) Deduction allowable f rom Income f or payment of Life Insurance Premium (Sec. 80C).

(a) Life Insurance premia paid in order to effect or to keep in force an insurance on the life of the

assessee or on the life of the spouse or any child of assessee & in the case of HUF, premium paid

on the life of any member thereof, deduction allowed upto 20% of capital sum assured during

any financial year.

(b) Contribution to deferred annuity Plans in order to effect or to keep in force a contract for

deferred annuity, on his own life or the life of his spouse or any child of such individual,

provided such contract does not contain a provision to exercise an option by the insured to

receive a cash payment in lieu of the payment of annuity is eligible for deduction.

2) Investment under long-term inf rastructure bonds notified by the Central Government.

(Sec. 80CCF)

A deduction up to Rs. 20000/- is available to individuals and HUF for amount paid or deposited

as subscription to long-term infrastructure bonds notified by the Central Government. This is in

addition to Rs. ! lakh deduction available under section 80C.

3) Deduction under section 80D

1. Deduction allowable upto Rs.15,000/- if an amount is paid to keep in force an insurance

on health of assessee or his family (i.e. Spouse & children)

2. Additional deduction upto Rs.15,000/- if an amount is paid to keep in force an insurance

on health of parents

3. In case of HUF, deduction allowable upto Rs.15,000/- if an amount is paid to keep in

force an insurance on health of any member of that HUF

Note: If the sum specified in (a) or (b) or (c) is paid to effect or keep in force an

insurance on the health of any person specified therein who is a senior citizen, then the

deduction available will be upto Rs.20,000/-.

provided that such insurance is in accordance with the scheme framed by



49

a) the General Insurance Corporation of India as approved by the Central Government in

this behalf or;

b) Any other insurer and approved by the Insurance Regulatory and Development

Authority.



50

Bibliography

Sites:

y www.licindia.in

y www.bimadeals.in

y www.licplans.blogspot.com

y www.mylicindia.com

y www.licindiaagent.com

Books:

y Life insurance(IC-33)

y Risk Analysis & Insurance Planning-ICOFP

y Manual for agents-LIC



Documents

LIC_FINAL_1