Affiliated to Guru Gobind Singh Indraprastha

8/2/2019 Affiliated to Guru Gobind Singh Indraprastha

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(AFFILIATED TO GURU GOBIND SINGH INDRAPRASTHA

UNIVERSITY, DELHI)CONTENTS

CERTIFICATE OF COMPANY... CERTIFICATE OF INSTITUTE.. ii ACKNOWLEDGEMENT...iii

1 E X E C U T I V E S U M M E R Y2 INTRODUCTION

3 . RESEARCH OBJECTIVE & METHODOLOGY

4. INTRODUCTION OF THE COMPANY5. PRODUCT OF LIC

6. GROWTH OF PVT. LIFE INSURANCE COMPANIES IN THE LAST 5YEARS

7. CURRENT STANDING OF PVT. LIFE INSURANCE COMPANIES INURBAN

8. ROLE OF FOREIGN COMPANIES IN INDIA

9. FINDINGS10 IMPORTANCE OF JOINT VENTURE

11. CONCLUSION12. RECOMMENDATIONS

13. BIBLIOGRAPHY


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CERTIFICATE

This is to certify that project entitled Comparative Study of Life Insurance Corporation of

India submitted byMr.CHAVDA ANIRUDH has been done under my guidance and

supervision in fulfillment of the requirement for the award of Bachelor of BusinessAdministration

The work and analysis mentioned in this project report have been undertaken by thecandidate himself and necessaryreferences have been recognized and acknowledged in the

textof the report.

Mr. RUSHI KANADA

(Project guide & faculty)


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ACKNOWLEDGEMENT

Co-operation and building up of moral are the essence of success. These are two factors

that go a long way in achieving it. It is a Herculean task,whichlacksthesetwodeterminantsof success. Summer training was an ex p os ur e to co rp ora te en vi ro nme n t. It wa s

an op por tun i ty and grea t pleasure for me to be in suchan environment and having

interaction with concerned people.

I am highly obliged to Mr. Rahul Dutt Mudgal (Development officer,LIC Karol

Bagh branch) who provided me the opportunity for doing my summer training at LIC, andwould like to thank him for their guidance and help which had made it possible for me to

complete my project work successfully.

Finally, I would like to thank Dr. N.K.Kakkar(Director), MaharajaAgrasen

Institute of Management Studies andMrs. Ami tGu pt amy pro je ct gu id e atthe ins t i tu te ,

f or the i r en l i gh teni ng and met icu lous guidance for the consummation and evaluating ofthis project. I a lso wish to pay my s incere regards to all my respected teachers

who helped me build a concrete platform before sending me for training so that I

can land out firmly in all respects

ANIRUDH CHAVDA

(T Y BBA)


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I n s u r a n c e i s a s o c i a l d e v i c e

w h e r e u n c e r t a i n r i s k s o f

i n d i v i d u a l s m a y b e c o m b i n e d i n ag r o u p a n d t h u s m a d e m o r e c e r t a i n

- s m a l l p e r i o d i c c o n t r i b u t i o n s b y

t h e i n d i v i d u a l s p r o v i d e a f o u n do u t o f w h i c h t h o s e w h o s u f f e r

l o s s e s m a y b e r e i m b u r s e d . I n

a d d i t i o n t o b e i n g a m e a n s t op r o t e c t o n e s e l f , t h e i n s u r a n c e

I n d u s t r y i s a n e f f i c i e n t c o n d u i t

f o r t h e s a v i n g o f p e o p l e t o b e

c h a n n e l e d t o w a r d s e c o n o m i cg r o w t h . I n I n d i a , t h e I n s u r a n c e

I n d u s t r y 7 i s m o r e t h a n 1 5 0 y e a r s

o l d . T o d a y , i t i s m o n o p o l i z e d b y

t w o P S U ' s i n t h e i r r e s p e c t i v ef i e l d s o f l i f e a n d G e n e r a l

I n s u r a n c e . H o w e v e r , w i t ht h e s u c c e s s f u l p a s s a g e I R D A B i l l

t h r o u g h b o t h h o u s e s o f p a r l i a m e n t

i n D e c e m b e r 1 9 9 9 t h e s e c t o r h a sb e e n o p e n e d u p t o p r i v a t e

p l a y e r s . T h i s w i l l p r o v i d e d m u c h .

N e e d e d i m p e t u s t o t h e I n d u s t r y

a n d w i l l i m p r o v e t h e q u a l i t y o f s e r v i c e a n d p r o d u c t s a n d w i l l a l s o

i n c r e a s e e m p l o y m e n t o p p o r t u n i t i e s .

T h e r e a r e s t i l l s o m e i s s u e s t h e i r n e e d t o b e s o r t e d o u t ,

p a r t i c u l a r l y w i t h r e g a r d t o t h e

s t a t u s o f i n t e r m e d i a r i e s a se n v i s a g e d b y t h e I n s u r a n c e

R e g u l a t o r y A u t h o r i t y .

RESEARCH OBJECVIV

T h r e p o r t g i v e s t h e b r i e f

b a c k g r o u n d o f t h e s e c t o r a n d

p r o c e e d s t o h i g h l i g h t t h e s h o r tc o m i n g s o f t h e e x i s t i n g s e t u p a n d

p l a y e r s . T h e b e n e f i t s o f

l i b e r a l i z e d s e c t o r a r e e n u m e r a t e d .


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T h e r e p o r t a l s o t r i e s t o i d e n t i f y

t h e m a r k e t p o t e n t i a l f o r i n s u r a n c e

p r o d u c t s a n d t h e s t r a t e g y t h a t c a nw e e m p l o y e d t o e x p l o i t t h e s a m e .

T h e s t r e s s i s a l s o g i v e n o n

k n o w i n g t h e a w a r e n e s s l e v e l o f g e n e r a l p u b l i c . 7

RESEARCH METHODOLOGY

To conduct the market research first of all it is necessary to create a research design.Aresearch design is basically a blue print of how a research is to be conducted, it

mayinclude;1 . C h o o s i n g t h ea p p r o a c h 2 . D e t e r m i n i n g t h e t y p e s o f d a t a

n e e d e d . 3 . L o c a t i n g t h e s o u r c e o f

d a t a . 4 . C h o o s i n g a m e t h o d o f d a t a . 8


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RESEARCH DESIGNBasically there are 3 types of approaches used during the any

research:1 . E x p l o r a t o r y 2 . D e s c r i pt i v e 3 . E x p e r i m e n t a l . During this research

Descriptive

andExploratory

approach is taken intoconsideration because of the availability of relevant information to

describe therelationships between the marketing problem and the available information.9


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TYPES OF DATA USED:

Both primary and secondary data is used in the research.Data Collection Methods

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

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

sources from which secondary data was collected are:

Newspapers and Magazines like Economic Times, Insurance Times, andInsurance Post.

Internet

PRIMARY DATAThe primary sources of data refer to the first hand

i

nformation Primary data iscollected during the survey with the help of Questionnaires.10


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INTRODUCTION OF THE COMPANY

LIFE INSURANCE CORPORATION OF INDIA (LIC)Life Insurance Corporation of India (LIC) was formed in September, 1956, by an Actof

Parliament, viz., Life Insurance Corporation Act, 1956, with capital contributionfrom the

Government of India. The then Finance Minister, Shri C.D. Deshmukh,while piloting thebill, outlined the objectives of LIC thus to conduct the businesswith the utmost economy,

and a spirit of trusteeship; to charge premium no higher than warranted by strict actuarial

considerations; to invest the funds for obtainingmaximum yield for the' policy holdersconsistent with safety of the capital; to render prompt and efficient service to policy

holders, thereby making insurance widely popular. Since nationalization, LIC has built up a

vast network of 2,048 branches, 100divisions and 7 zonal offices spread over the country.The Life Insurance Corporationof India also' transacts business abroad and has offices in

Fiji, Mauritius and UnitedKingdom. LIC is associated with joint ventures abroad in thefield of insurance,namely, Ken-India ,Assurance Company Limited, Nairobi; United

Oriental AssuranceCompany Limited, Kuala Lumpur and Life Insurance Corporation(International) E.C.Bahrain. The Corporation has registered a joint venture company in 26

th

December,2000 in Katmandu, Nepal by the name of Life Insurance Corporation (Nepal)Limitedin collaboration with Vishal Group Limited, a local industrial Group. An off-

shorecompany L.I.C. (Mauritius) Off-shore Limited has also been set up in 2001 to tap

the11


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African insurance market.

General Insurance:

General insurance business in the country was nationalized with effect from 1stJanuary,

1973 by the General Insurance Business (Nationalization) Act, 1972. Morethan 100 non-life insurance companies including branches of foreign companiesoperating within viz., the

National Insurance Company Ltd., The New IndiaAssurance Company Ltd., The Oriental

Insurance Company Ltd., and The UnitedIndia Insurance Company Ltd. with head offices

at Calcutta, Bombay, New Delhi andMadras, respectively. General Insurance Corporation(GIC) which was the holdingcompany of the four public sector general insurance

companies has since beendelinked from the later and has been approved as the "Indian

Reinsurer" since 3rd

November 2000. The share capital of GIC and that of the four companies are held bythe

Government of India. All the five entities are Government companies registeredunder theCompanies Act, 1956. The general insurance business has grown in spreadand volume after

nationalization. The four companies have 2699 branch offices, 1360divisional offices and

92 regional offices spread all over the country. GIC and itssubsidiaries have representationeither directly through branches or agencies in 16countries and through associate locally

incorporated subsidiary companies in 14 other countries. A wholly- owned subsidiarycompany of GIC, i.e. Indian International Pvt.Ltd. is operating in Singapore and there is a

joint venture company, viz. Ken-IndiaAssurance Ltd. in Kenya. A new wholly ownedsubsidiary called New IndiaInternational Ltd., UK has also been registered.12


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PRODUCTS OF LIC

Whole Life with Profits Plan 002

Features:This plan is mainly devised to create an estate for the heirs of the policyholder as the plan

basically provides for payment of sum assured plus bonuses on the death of

the policyholder. However, considering the increased longevity of the Indianpopulation,the Corporation has amended the above provision, thereby proving for payment

of sum assured plus bonuses in the form of maturity claim on completion of age 80 yearsor

on expiry of term of 40 years from date of commencement of the policy whichever is

later.The premiums under the policy are payable up to age 80 years of the policyholderor for a term of 35 years whichever is later. If the payment of premium ceases after 3years,

a paid-up policy for such reduced sum assured will be automatically secured provided the

reduced sum assured exclusive of any attached bonus is not less thanRs.250/-. Such

reduced paid-up policy is not entitled to participate in the bonusdeclared thereafter but thebonuses already declared on the policy will remain attach, provided the policy is converted

in to a paid-up policy after the premiums are paid for 5 years.Suitable For:

This policy is suitable for people of all ages who wish to protect their families

fromfinancial crises that may occur owing to the policyholder's premature death.13

term under this plan is five years minimum and 55 years maximum.BENEFITSSurvival benefits

If the Life Assured survives the premium paying period and the policy continues infull

force, provided all premiums have been paid, but no further premiums arerequired to be

paid.


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Death Benefits:

Sum Assured plus Bonuses accrued and vested in the policy.Plan

Parameters:M i n i m um M a x i m u

m E n t r y a g e 1 2

( n e a r e r b i r t h d a y ) 6 0 S

u m a s s u r e d

( R s . ) 5 0 0 0 0N O

L I M I T T e r m

( y e a r s ) 5 5 5

( M a x .P r e m o

c e a s i n g age is 70)Mode of

Payment Maximum premium paying period Policy loanavailableY e a r l y ,

h a l f y e a r l y 8 0 y r s . o f a g e o r 4 0 y r s . o f y e s ,quarterly, monthly premium paying term from

the, s a l a r y s a v i n g d a t e o f c o m m e n c e m e n tw h i c h e v e r Scheme is later.15

ENDOWMENT WITH PROFIT PLAN - 014

FEATURES:


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Moderate Premiums

High bonus

High liquidity

Savings orientedThis policy not only makes provisions for the family of the Life Assured

in event of his early death but also assures a lump sum at a desired age. The lump sum can

bereinvested to provide an annuity during the remainder of his life or in any otherwayconsidered suitable at that time.Premiums are usually payable for the selected term of

years or until death if it occursduring the term period.

Suitable For:

Being an endowment assurance policy, this plan is apt for people of all ages andsocialgroups who wish to protect their families from a financial setback that mayoccur owing to

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

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

of the policyholder's life or in any other way he may think most suitable at that time.16

BENEFITS

Disability Benefit:

In case policy holder becomes totally and permanently disabled due to an accident beforereaching the age of 70 and the policy is in full force, he will not be required to pay further

premiums, (the Disability Benefit is available in respect of the firstRs.20000 sum assured

on anyone life) and the policy will continue to be in force.


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Accident Benefit:

By paying a small extra premium of Rs. l per Rs. 1000/- sum assured per year he or his

family are entitled to the following benefits on death or permanent disabilitycaused byaccident. Even students above the age of 18 years can avail of this benefit.

Premium Stoppage:

If payment of premiums ceases after at least THREE years' premiums have been paid , afree 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 thanRs. 250/-

.The reduced sum assured will become payable on the event as stipulated inthe policy.

Bonus:

Is there anything extra payable besides the sum assured at the time of claimsettlement?

Yes, but only if it is a 'with profits' policy. Every year the Life InsuranceCorporationdistributes its surplus among policyholder to 'with profits' polices in theform of bonuses.

Substantial bonuses have been declared in the past after eachvaluation of policy

liabilities.17

BENEFITS

Survival benefits:

Payment of full Sum' Assured + Vested Bonus + Final Additional bonus, if any.

Death Benefits:Payment of full sum assured + Vested Bonus.

Plan Parameters:Minimum Maximum

E n t r y

A g e

( y e a r s) 1 2 6 5 S


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u m

A s s u r e d

( R s . ) 5 0 0 00 n o l i m i t

T e r m

( y e a rs ) 5 5 5

M o d e O f P a y m e n t a x M a t u r i t y A g e

P o l i c y l o a n a v a i l a b l e M o n t h l y ,2 Q u a r t e r l y , 7 5 y e a r s y e s Half Yearly,

Yearly, Salary Saving Scheme.18

ANMOL JEEVAN - I (WITHOUT PROFITS)

BENEFITS

On Death during the Term of the Policy: Sum AssuredO n

M a t u r it y :

N i l

RESTRICTIONS( A ) M i n i m u m a g e a t

e n t r y : 1 8 y e a r s

( c o m p l e t e d )


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( B ) M a x i m u m a g e a t

e n t r y : 5 5 y e a r s ( n e a r e r birthday)

(C)

M a x i m u m a g e a t

m a t u r i t y : 6 5 y e a r s ( D )M i n i m u m

T e r m : 5

y e a r s ( E )M a x i m u m

T e r m : 2 5

y e a r s ( F ) M i n i m u m

S u m A s s u r e d : R s . F i v eL a k h ( G ) M a x i m u m S u m A s s u r e d : R s .

T h r e e C r o r e ( I n c l u s i v e o f a l l term Assurance plans)

Note: The policy would be issued in multiples of Rs. one lakh for Sum Assured above Rs.

five lakh.( H ) M o d e o f P r e m i u m P a y m e n t : Y e a r l y , H a l f - Y e a r l y a n d

S i n g l e p r e m i u m . (G)Rebates:

Sum Assured Rebate:

NIL in case of regular premium policies and Re. lSum Assured for policies of Rs.25 lakh

and above in case of single premium policies.

M o d e R e b a t e : 1 % o f A n n u a l p r e m i u m f o r y e a r l y m o d e

a n d n i l f o r Half-Yearly mode.

UNDERWRITING, AGE PROOF AND MEDICAL REQUIREMENTS:

The plan is available to Standard and Sub-standard lives (upto Class VI EMR). This plan is

also available to female lives (category I and II lives only) and to physicallyhandicapped

persons subject to certain conditions. Standard age proof will have to besubmitted alongwith the Proposal Form.

PAID-UP AND SURRENDER VALUE:

The policy will not acquire any paid-up value.

No Surrender Value will be available under this plan.


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GRACE PERIOD FOR NON-FORFEITURE PROVISIONS:

A grace period of 15 days will be allowed for payment of yearly or half-yearly premiums.

If death occurs within this period and before the payment of the premiumthen due, thepolicy will still be valid and the Sum Assured paid after deduction of thesaid premium as

also unpaid premiums falling due before the next policy anniversaryof the Policy. If the

premium is not paid before the expiry of the days of grace, thePolicy gets lapsed.20

REVIVAL

If the Policy has lapsed, it may be revived during the life time of the Life Assured,

but before the date of expiry of policy term, on submission of proof ofcontinuedinsurability to the satisfaction of the Corporation and the payment of all the

arrears of premium together with interest at such rate as may be prevailing at the time of

the payment. The corporation reserves the right to accept or decline the revival

of discontinued policy. The revival of the discontinued policy shall take effect onlyafter the same is approved by the Corporation and is specifically communicated to the


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LifeAssured. The cost of the Medical reports, including Special Reports, if any, requiredfor

the purposes of revival of the policy, should be borne by the Life Assured.

PAYMENT OF CLAIMSNo Claims concession will be applicable to this Policy.

BACK-DATING INTEREST

The policy can be back dated within the financial year. No dating back interest shall becharged.

BENEFITSSurvival benefits:

If one or both the lives survive to the maturity date, the sum assured, along withtheaccumulated bonus, is payable.21

Death Benefits:

In case either of the couple dies during the policy's term, two things happen. One, LIC pays

to the surviving spouse the full sum assured. And, two, the policy continues onthe life ofthe surviving partner without him/her having to pay any further premiums,i.e. the life cover

on the survivor continues free of cost.The sum assured is again be payable on the death of

the other partner in case both thehusband and wife were to die during the term of thepolicy. Vested bonus would also be paid along with the sum assured on the second death.

NEW INSURANCE SCHEMESUniversal Health Insurance Scheme


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The Universal Health Insurance policy is available to groups of 100 or more families.The

policy provides for reimbursement of medical expenses upto Rs.30000/-

towardshospitalization floated amongst the members of the family, death cover due toanaccident for Rs.25000 to the earning head of the family and compensation due to lossof

earning head of the family @ Rs.50/- per day upto a maximum of 15 days, after awaiting

period of three days, when the earning head of the family is hospitalized. The premiumunder the policy is Rs.1! - Per day (Le. Rs.365/-per annum) for anindividual, Rs. 1.50 per

day for a family of five limited to spouse and children (i.e.Rs.548 per annum), and Rs.2/-

per day (i.e. Rs. 730 per annum) for coveringdependent parents within the overall familysize of seven. A subsidy of Rs. 100 per year towards annual premium for "Below Poverty

Life" families is also provided22

under the Scheme.For purpose of this policy HOSPITAL means:

Any Hospital/Nursing home registered with the local authorities and under thesupervisionof a registered and qualified Medical practitioner.


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Hospital, Nursing Home runs by Government.

Enlisted hospitals run by NGOs/ Trusts/ selected private hospitals with fixedschedule ofcharges.

Hospitalization should be for a minimum period of 24 hours.However, this time limit is notapplied to some specific treatments and also where dueto technological advancement

hospitalization for 24 hours may not be required.

Main Exclusions:

All pre-existing diseases.

Corrective, cosmetic or aesthetic dental surgery or treatment.

Cost of spectacles, contact lens and hearing aid.

Primarily diagnostic expenses not related to sickness/injury.

Treatment for Pregnancy, Childbirth, Miscarriage, abortions etc.Age Limitations:

This policy covers people between the age of 3 months to 65 years.

Floater Basis:The benefit of family' will operate on floater basis i.e. the total reimbursement of

Rs.30,000/- can be availed of individually or collectively by members of the family.23


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A.


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Unit plans:Unit plans are investment plans for those who realize the worth of hard-earnedmoney.These plans help you see your savings yield rich benefits and help you savetax even if you

dont have consistent income.

Jeevan plus

Future plus25


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Bima plusMarket plus

Money plus

Profit plusFortune plus

Fortune plus:

It is a unit linked assurance plan where premium payment term (PPT) is 5 years andthe

premium payable in the first year will be 50% of total premium payable under the policy.The level of cover will depend on the level of premium you agree to pay.Four types of

investment funds are offered. Premiums paid after allocation charge will purchase units ofthe Fund type chosen. The Unit Fund is subject to various chargesand value of the unitsmay increase or decrease, depending on the Net Asset Value(NAV). The plan therefore

serves the purpose of insurance-cum-investment.

1. Payment of Premiums:You may pay premiums regularly at yearly, half-yearly,quarterly or monthly (ECS)

intervals for 5 years. The minimum First year premiumwill be Rs.20,000/- and you may

pay any amount exceeding it. From second year onwards each years premium will be 25%

of the first year premium.Other Features:i) Partial Withdrawals:

You may encash the units partially after the third policyanniversary subject to the

following:i) In case of minors, partial withdrawals shall be allowed from the policyanniversarycoinciding with or next following the date on which the life assured attains

majority(i.e. on or after18th birthday).ii) Partial withdrawals may be in the form of fixed

amount or in the form of fixednumber of units.iii) For 2 years period from the date ofwithdrawal, the Sum Assured under the Basic plan shall be reduced to the extent of the

amount of partial withdrawals made.iv) Under policies where less than 3 years premiums

have been paid and further premiums are not paid, the partial withdrawals shall not beallowed.v) Under policies where atleast 3 years premiums have been paid, partial

withdrawalwill be allowed subject to Policyholders Fund Value being atleast Rs. 10,000/-.

ii) Switching:

You can switch between any fund types for the entire Fund Value26


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during the policy term subject to switching charges, if any.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 duringthe period of two years from the due date of first unpaidpremium.I) Where atleast 3 years premiums have been paid, the Life Cover and

AccidentBenefit rider, if any, shall continue during the revival period.During this period,

the charges for Mortality and Accident Benefit cover, if any, shall be taken, in addition toother charges, by canceling an appropriate number of units outof the Policyholders Fund

Value every month. This will continue to provide relevantrisk covers for:i. two years from

the due date of first unpaid premium, or ii. Till the date of maturity, or iii. Till such periodthat the Policyholders Fund Value reduces to Rs. 5,000/-,whichever is earlier.The benefits

payable under the policy in different contingencies during this periodshall be as under:

A.

In case of Death: Higher of Sum assured under the Basic Plan or the PolicyholdersFundValue. The Sum Assured shall be subject to provisions of Partial Withdrawalsmade, if any.

B.

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

C.

On Maturity: The Policyholders Fund Value.D.

In case of Surrender (including Compulsory Surrender): The Policyholders FundValue.

The Surrender value, however, shall be paid only after the completion of 3 policy years.E.

In case of Partial Withdrawals: For 2 years period from the date of withdrawal, thesum

assured under the basic plan shall be reduced to the extent of the amount of partial

withdrawals made.II)

Where the policy lapses without payment of at least 3 years premiums, the LifeCover and

Accident Benefit rider cover, if any, shall cease and no charges for these benefits shall bededucted. However, deduction of all the other charges shall continue.The benefits under

such a lapsed policy shall be payable as under:27


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

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

In case of Surrender (including Compulsory Surrender): Policyholders FundValue /

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 dateof commencement ofpolicy.

I.

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

iv)

Revival: If due premium is not paid within the days of grace, the policy lapses. Alapsedpolicy can be revived during the period of two years from the due date of firstunpaid

premium or before maturity, 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 beenpaid for at least 3 full years, the policy may be revivedwithin two years from the due date

of first unpaid premium. The revival shall be madeon submission of proof of continued

insurability to the satisfaction of the Corporationand the payment of all the arrears of

premium without interest.If at least 3 full years premiums have been paid and subsequentpremiums are not paid, the policy may be revived within two years from the due date of

first unpaid premium but before the date of maturity. No proof of continued insurability

shall berequired but all arrears of premium without interest shall be required to be paid.The

Corporation reserves the right to accept the revival at its own terms or decline therevival ofa 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 writingto the Proposer /Life Assured.Irrespective of what is stated above, if less than 3 years premiums have been

paid andthe Policyholders Fund Value is not sufficient to recover the charges, the policy

shall be terminated and thereafter revival will not be entertained. If 3 years or more than

3years premiums have been paid and the Policyholders Fund Value reduces to Rs.5000/-,the policy shall terminate and Policyholders Fund Value as on such date shall be refunded

to the Life Assured and thereafter revival will not be allowed.

v)Settlement Option: When the policy comes for maturity, you may exerciseSettlement

Option and may receive the policy money in instalments spread over a period of not morethan five years from the date of maturity. There shall not be anylife cover during thisperiod. The value of installment payable on the date specifiedshall be subject to investment

risk i.e. the NAV may go up or down depending uponthe performance of the fund.

Reinstatement:A policy once surrendered will not be reinstated.28


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Risks borne by the Policyholder:

i) LICs Fortune Plus is a Unit Linked Life Insurance product which is different fromthe

traditional insurance products and are subject to the risk factors.ii) The premium paid in

Unit Linked Life Insurance policies are subject to investmentrisks associated with capitalmarkets and the NAVs of the units may go up or down based on the performance of fund

and factors influencing the capital market and theinsured is responsible for his/her

decisions.iii) Life Insurance Corporation of India is only the name of the InsuranceCompanyand LICs Fortune Plus is only the name of the unit linked life insurance contract

anddoes not in any way indicate the quality of the contract, its future prospects or

returns.iv) Please know the associated risks and the applicable charges, from yourInsuranceagent or the Intermediary or policy document of the insurer.v) The various funds

offered under this contract are the names of the funds and do notin any way indicate the

quality of these plans, their future prospects and returns.vi) All benefits under the policyare also subject to the Tax Laws and other financialenactments as they exist from time to

time.

Cooling off period:

If you are not satisfied with the Terms and Conditions of the policy, you may returnthepolicy to us within 15 days.

Loan:

No loan will be available under this plan.

Assignment:Assignment will be allowed under this plan.

Exclusions:any amount exceeding it. From second year onwards each years premium will be 25% of

the first year premium.In case the Life Assured commits suicide at any time within one

year, the Corporationwill not entertain any claim by virtue of the policy except to the extent

of thePolicyholders Fund Value on death.29


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MARKET PLUSIN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO

ISBORNE BY THE POLICYHOLDER"

LICs MARKET PLUS:

This is a unit linked deferred pension plan. You can take the plan with or without

risk cover. You can also choose the level of cover within the limits, which will dependonwhether the policy is a Single premium or Regular premium contract and on the levelof

premium you agree to pay.The allocated premiums will be applied to purchase units as per

the Fund type chosen.Your Unit Account will be subject to deduction of charges as

specified in the PolicyConditions. The value of the units in the Unit Fund may increase ordecrease,depending on the investment return of the assets representing the chosen Fund.i.

Payment of Premiums:

You may pay premiums regularly at yearly, half-yearly or quarterly intervals over the termof the policy. The minimum annual premium will be Rs.5, 000/- increasing thereafter in

multiples of Rs.1, 000/-.Alternatively, a Single premium can be paid subject to a minimum

of Rs.10,000 and thereafter in multiples of Rs.1, 000.ii.Benefits:

A) Death Benefit:

If the Life cover is opted for, the Sum Assured under the Basic Plan together with the Fund

Value of units either as a lump sum or as pension. In case the policy is taken without lifecover, then the Fund Value of the units held in thePolicyholders Unit Account shall be

payable either as a lump sum or as a pension.The amount of pension will depend on thethen prevailing immediate annuityrates under the annuity option chosen.

B) Benefit on Vesting:


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On your surviving to the date of vesting, the Fund Value of the units held inyour Unit

Account will compulsorily be utilized to provide a pension based onthe 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 asa lump sum. Further, you may chooseto purchase pension from LIC or other life insurance company.

Accident Benefit Option:

If you have opted for life cover, you may opt for Accident Benefit equal to life coversubject to minimum Rs. 25,000 andmaximum 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 will be payable.Eligibility Conditions And Other Restrictions:

Basic PlanM i n i m u m A g e a t e n t r y : 1 8 y e a r s

c o m p l e t e d M a x i m u m A g e a t e n t r y : 7 0 y e a r s

( a g e n e a r e r b i r t h d a y ) . H o w e v e r i f life cover is opted for,

then 65 yearsM i n i m u m A g e a t v e s t i n g : 4 0 y e a r s ( a g el a s t b i r t h d a y ) M a x i m u m V e s t i n g A g e : 7 5 y e a r s

( a g e l a s t b i r t h d a y ) M i n i m u m D e f e r m e n t T e r m : 5

y e a r s M i n i m u m S u m A s s u r e d : R s . 2 5 , 0 0 0 f o r

S i n g l e p r e m i u m Rs. 50,000 for Regular premiumM a x i m u m S u mA s s u r e d : S i n g l e P r e m i u m - E q u a l t o s i n g l e

p r e m i u m Regular Premium - 20 times of the annualized premiumi.Investment of Funds:

The premiums allocated to purchase units will bestrictly invested according to the

investment pattern committed in various fundtypes. Various types of fund and their

investment pattern will be as under:F u n d

T y p e I S h o r t - t e r m

i n v e s t m e n t s such as moneymarketinstruments(including Govt.Securities & CorporateDebt)Investment inListed

EquitySharesBond FundN o t l e s st h a n

8 0 % 1 0 0 % N i l

Secured FundN o t l e s s t h a n 6 5 % N o t m o r e t h a n 8 5 % N o t

l e s s t h a n 15% & not morethan 35%31


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Balanced Fund

N o t l e s s t h a n 5 0 % N o t m o r e t h a n 7 0 % N o t

l e s s t h a n 30% & not morethan 50%

Growth FundN o t l e s s t h a n 2 0 % N o t m o r e t h a n 4 0 % N o t

l e s s t h a n 60% & not morethan 80%i i .The Po l i cyho lde r has t he op t i on

to ch oo se an y ON E of th e ab ov e 4 fu nd s. In case no fund has been opted for,the allocated premiums shall, by default, beinvested in the SECURED FUND.iii.

Method of Calculation of Unit price:

Units will be allotted based on the NetAsset Value (NAV) of the respective fund as on the

date of allotment. There isno Bid-Offer spread (the Bid price and Offer price of units willboth be equalto the NAV). The NAV will be computed on daily basis and will be based

oninvestment

inGovernment / Government Guaranteed Securities /Corporate Debtnt

performance, Fund Management Charge and whether fundis expanding or contractingunder each fund type.iv.

Charges under the Plan:

Units will be allotted based on the Net Asset Value(NAV) of the respective fund as on thedate 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

oninvestment performance, Fund Management Charge and whether fund isexpanding or

contracting under each fund type.(A) Premium Allocation Charge

: This is the percentage of the premiumappropriated towards charges from the premium

received. The balance knownas allocation rate constitutes that part of the premium which isutilized to purchase (Investment) units for the policy. The allocation charges are as below:

For Single premium policies: 3.3%For Regular premium policies

:

Premium Band (per annum)Allocation charge

F i r s t Y e a r T h e r e a f t e r 5 , 0 0 0 t o 7 5 , 0 0 0

1 6 . 5 0 % 2 . 5 0 % 7 5 , 0 0 1

t o1 , 5 0 , 0 0 0 1 5

. 7 5 % 2 . 5 0 % 1

, 5 0 , 0 0 1 t o3 , 0 0 , 0 0 0 1 5 .

0 0 % 2 . 5 0 % 3,00,001 to 5,00,000

14.25% 2.50%5,00,001 and above 13.50% 2.50%32


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v.

Allocation charge for Top-up: 1.25%

(B) Charges for Risk Covers:Mortality Charge:

This is the cost of insurance cover. These are age specificand will be taken every month.

Accident Benefit charge:This is the cost of Accident Benefit rider and will be levied every month at the rate of Rs.

0.50 per thousand Accident BenefitSum Assured per policy year.vi.

(C) Other Charges:Policy Administration charge:Rs. 60/- per month during the first policyyear and Rs. 20/- per month thereafter, throughout

the term of the policy.

Fund Management Charge:

This is the charge levied as a percentage of thevalue of units and shall be appropriated byadjusting NAV at following rates:0.75% p.a. of Unit Fund for Bond Fund 1.00% p.a. of

Unit Fund for ?Secured?Fund 1.25% p.a. of Unit Fund for Balanced Fund 1.50% p.a. of

Unit Fund for Growth Fund.Switching Charge:

This is the charge levied on switching of monies from onefund to another. Within a given

policy year 4 switches will be allowed free of charge. Subsequent switches in that yearshall be subject to a switching chargeof Rs. 100 per switch.

Bid/Offer Spread:

Nil.Surrender Charge:

Nil

Service Tax Charge:

A service tax charge shall be levied on the Mortalityand Accident Benefit rider charge, ifany, on a monthly basis. The level of thischarge 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 2% thereon and hence effective rate is 12.24%.Miscellaneous Charge:

This is a charge levied for an alteration within thecontract, such as reduction in policy term,

change in premium mode, etc. Analteration may be allowed subject to a charge of Rs. 50/-.(D) Right to revise charges:

The Corporation reserves the right to revise allor any of the above charges except the

premium allocation charge and chargesfor risk covers, with the prior approval of

IRDA.vi i .Al though the charges are reviewable, they wi l l be subject toa cap for which please refer to the policy document.33


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viii.Surrender:

The surrender value, if any, is payable only after the completionof the third policyanniversary both under Single and Regular premiumContract. No partial withdrawal of

units will be allowed under this plan.ix.

Other Features:i) Top-up (Additional Premium):

The policyholder can pay additional premium in multiples of Rs.1, 000 without any limit atanytime during theterm of the policy. In case of yearly, half-yearly or quarterly 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 termsubject to switching charges,if any.

iii) Discontinuance of premiums and revival:

If premiums are payableyearly, half-yearly or quarterly and the same have not been duly

paid withinthe days of grace under the Policy, the Policy will lapse. A lapsed policy can berevived during the period of two years from the due date of first unpaid premium.If you

have opted for life cover, under Regular premium policies where atleast 3 years premiums

have been paid, and the subsequent premiums are not paid, the life cover and accidentbenefit cover, if any, will be compulsorilyavailable under the policy and the charges for the

same if any, shall be taken,in addition to other charges, by canceling an appropriate number

of units outof the Policyholders Unit Account every month subject to the following :twoyears from the due date of first unpaid premium, or two years from the due date of first

unpaid premium, or till such period that the Policyholders Unit Account reduces to one

annualized premium, whichever is earlier.iv) Increase / decrease of benefits:

No increase (except to the extent of Top-up stated above) or decrease of benefits will be

allowed under the plan.

iiv) Conversion to annuity at vesting date:The rate at which the amount atvesting date will be converted to an annuity is not

guaranteed and will be based on the prevailing immediate annuity rates under the relevant

annuityoption at the vesting date.x.Reinstatement:

A policy once surrendered cannot be reinstated.xi.

Risks borne by the Policyholder:34


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i) Unit Linked Life Insurance products are different from the traditionalinsurance products

and are subject to the risk factors.ii) The premium paid in Unit Linked Life Insurance

policies are subject toinvestment risks associated with capital markets and the NAVs of the

unitsmay go up or down based on the performance of fund and factors influencingthecapital market and the insured is responsible for his/her decisions.iii) Life Insurance

Corporation of India is only the name of the InsuranceCompany and LICs Market Plus is

only the name of the unit linked lifeinsurance contract and does not in any way indicate thequality of the contract,its future prospects or returns.iv) Please know the associated risks

and the applicable charges, from your Insurance agent or the Intermediary or policy

document of the insurer.v) The various funds offered under this contract are the names ofthe funds and donot in any way indicate the quality of these plans, their future prospects

andreturns.vi) All benefits under the policy are also subject to the Tax Laws and

other financial enactments as they exist from time to time.xii.

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.xiii.

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

Assignment:

Assignment will not be allowed under this plan.xv.Exclusions:

In case the Life Assured commits suicide at any time, theCorporation will not entertain any

claim by virtue of the policy except to theextent of the Fund Value of the units held in thePolicyholders Unit Accounton death.35


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Benefit IllustrationStatutory

warningsome benefits are guaranteed and some benefits are variable with returns basedonthe future performance of your life insurance company. If your policy offersguaranteed

returns then these will be clearly marked guaranteed in theillustration table on this page. If

your policy offers variable returns then theillustrations on this page will show two differentrates of assumed investmentreturns. These assumed rates of return are not guaranteed and

they are notupper or lower limits of what you might get back as the value of your policy

isdependant on a number of factors including future investment performance

Documents

Affiliated to Guru Gobind Singh Indraprastha