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Overview

The Life Insurance Corporation of India (LIC) is the largest state-owned life insurancecompany in India, and also the country's largest investor. It is fully owned by theGovernment of India. It also funds close to 24.6% of the Indian Government's expenses.It has assets estimated of 9.31 trillion (US$206.68 billion). It was founded in 1956 withthe merger of more than 200 insurance companies and provident societies.

Headquartered in Mumbai, financial and commercial capital of India, the Life InsuranceCorporation of India currently has 8 zonal Offices and 101 divisional offices located indifferent parts of India, at least 2048 branches located in different cities and towns ofIndia along with satellite Offices attached to about some 50 Branches, and has a networkof around 1.2 million agents for soliciting life insurance business from the public.

Histor y

The Oriental Life Insurance Company, the first corporate entity in India offering life

insurance coverage, was established in Calcutta in 1818 by Bipin Bernard Dasgupta andothers. Europeans in India were its primary target market, and it charged Indians heftierpremiums. The Bombay Mutual Life Assurance Society, formed in 1870, was the firstnative insurance provider. Other insurance companies established in the pre-independence era included

Bharat Insurance Company (1896) United India (1906) National Indian (1906) National Insurance (1906) Co-operative Assurance (1906) Hindustan Co-operatives (1907) Indian Mercantile General Assurance Swadeshi Life (later Bombay Life)

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

The Life Insurance Act and the Provident Fund Act were passed in 1912, providing thefirst regulatory mechanisms in the Life Insurance industry. The Indian InsuranceCompanies Act of 1928 authorized the government to obtain statistical information fromcompanies operating in both life and nonlife insurance areas. The subsequent InsuranceAct of 1938 brought stricter state control over an industry that had seen severalfinancially unsound ventures fail. A bill was also introduced in the Legislative Assemblyin 1944 to nationalize the insurance industry.www

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Some of the impor tant mil estones in the l ifeinsur ance business in India:

1818 : Oriental Life Insurance Company, the first life insurance company on Indian soilstarted functioning.1870 : Bombay Mutual Life Assurance Society, the first Indian life insurance company

started its business.1912 : The Indian Life Assurance Companies Act enacted as the first statute to regulatethe life insurance business.1928 : The Indian Insurance Companies Act enacted to enable the government to collectstatistical information about both life and non-life insurance businesses.1938 : Earlier legislation consolidated and amended to by the Insurance Act with theobjective of protecting the interests of the insuring public.1956 : 245 Indian and foreign insurers and provident societies are taken over by thecentral government and nationalised. LIC formed by an Act of Parliament, viz. LIC Act,1956, with a capital contribution of Rs. 5 crore from the Government of India.

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

Some of the impor tant mil estones in the general insur ancebusiness in India:

1907 : The Indian Mercantile Insurance Ltd. set up, the first company to transact allclasses of general insurance business.1957 : General Insurance Council, a wing of the Insurance Association of India, frames a

code of conduct for ensuring fair conduct and sound business practices.1968 : The Insurance Act amended to regulate investments and set minimum solvencymargins and the Tariff Advisory Committee set up.1972 : The General Insurance Business (Nationalisation) Act, 1972 nationalised thegeneral insurance business in India with effect from 1st January 1973. 107 insurersamalgamated and grouped into four companies viz. the National Insurance CompanyLtd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. andthe United India Insurance Company Ltd. GIC incorporated as a company.

National ization

In 1955, parliamentarian Amol Barate raised the matter of insurance fraud by owners ofprivate insurance companies. In the ensuing investigations, one of India's wealthiestbusinessmen, Ram Kishan Dalmia, owner of the Times of India newspaper, was sent toprison for two years.

Eventually, the Parliament of India passed the Life Insurance of India Act on 1956-06-19,and the Life Insurance Corporation of India was created on 1956-09-01, by consolidatingthe life insurance business of 245 private life insurers and other entities offering lifewww

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insurance services. Nationalization of the life insurance business in India was a result ofthe Industrial Policy Resolution of 1956, which had created a policy framework forextending state control over at least seventeen sectors of the economy, including thelife insurance.

SPREAD IN THE COUNTRY

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

The Corporation, which started its business with around 300 offices, 5.6 million policiesand a corpus of INR 459 million (US$ 92 million as per the 1959 exchange rate ofroughly Rs. 5 for a US $ , has grown to 25000 servicing around 180 million policies anda corpus of over 8 trillion (US$177.6 billion).

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

of the Country. The slogan of LIC is "Zindagi ke saath bhi, Zindagi ke baad bhi"in hindi.In english it means "with life also,after life also. According to The Brand Trust Report2011, LIC is the 8th most trusted brand of India

OBJECTIVES

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

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

Bear in mind, in the investment of funds, the primary obligation to itspolicyholders, whose money it holds in trust, without losing sight of the interestof the community as a whole; the funds to be deployed to the best advantage ofthe investors as well as the community as a whole, keeping in view nationalpriorities and obligations of attractive return.

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

Act as trustees of the insured public in their individual and collective capacities. Meet the various life insurance needs of the community that would arise in the

changing social and economic environment. Involve all people working in the Corporation to the best of their capability in

furthering the interests of the insured public by providing efficient service withcourtesy.

Promote amongst all agents and employees of the Corporation a sense ofparticipation, pride and job satisfaction through discharge of their duties withdedication towards achievement of Corporate Objective.www

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BRIEF OVERVIEW OF SCHEMES OF LIC

LIC GROUP PLAN | GROUP GRATUITY SCHEME | LIC | OVERVIEW |ADVANTAGES | BENEFITS TAX BENEFIT | FEATURES SPECIAL FEATURES

Key to a successful business is keeping your employees motivated. Happy and securedemployees work better, which in turn reduces the employers tension. Group Insurance is

an insurance which covers a group of people (like employees of a common employer orprofessionals in a common group).

LIC brings you LICs GRATUITY PLUS PLAN, a unit linked plan for management ofGratuity Funds. This plan is different from the traditional Cash Accumulation Plan as thereturns under the Plan are linked to the performance of the chosen fund. GRATUITYPLUS PLAN is suitable for companies who desire to entrust Gratuity Fund managementto an insurer and wish to have the flexibility of choice of investments.

ADVANTAGES

1. Choice of 4 funds to meet various risk appetites.2. Flexibility in structuring the Gratuity Costs based on performance of Fund.3. Facility of Switching between various funds. One switch every year is free of

cost.4. It provides for life insurance cover at a very minimal cost. Cover can be equal to

the gratuity payable for anticipated service. Alternatively, the company can alsochoose for each member a uniform level of cover equal to a minimum of onemonths salary or more .

5. There is no bid offer spread under this scheme.6. Scheme can be surrendered at any time. There is no surrender penalty imposed.7.

Hassle Free Administration of Scheme8. Assistance for execution of legal documents and installation of scheme.

BENEFITS

1. Gratuity Benefits to Members whenever payable as per Rules of the Scheme shallbe paid to the Policy Holder by debiting the requisite no of units to the PolicyHolders Unit Account at NAV applicable at that time.

2. In case of death of member, life insurance cover as opted for by Policyholder willalso be paid by the Corporation.

3. The policy can be surrendered at any time. The benefit available on surrender ofthe policy will be the value of total number of units held in the Policy HoldersUnit Account at the time of surrender.

At all times the Policyholders unit account should be sufficient to cover the relevantcharges and benefits payable at such point of time, subject to a minimum balance of Rs.Five lacs in the Policyholders Unit Account. In case the Policyholders Unit Accountwww

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falls below this limit, the policy shall compulsorily be terminated and the balance amountin the policy holders Unit Account will be refunded to the policy holder.

TAX BENEFITS:

The provisions relating to the approved Superannuation Scheme are set out in Part B of

the Fourth Scheme of the Income-Tax Act, 1961 and Part XIII of the Income Tax Rules,1962. The income tax concession will be available only if the scheme is approved by theCIT.

1. The annual contribution is treated as a deductible business expense in term ofSection 36(1) (IV) of the I.T. Act.

2. In terms of a Notification issued by the Central Board of Direct Taxes .80% ofthe contribution (s) towards the past service liability are treated as deductiblebusiness expenses spread over in the subsequent years of payment.

3. The employees contribution, in the case of the Contributions scheme qualifies forexemption under Section 80C of the Income-Tax Act.

Jeevan Anur ag

BenefitsLICs Jeevan Anurag is a with profits plan specifically designed to take care of theeducational needs of children. The plan can be taken by a parent on his or her ownlife. Benefits under the plan are payable at prespecified durations irrespective ofwhether the Life Assured survives to the end of the policy term or dies during theterm of the policy. In addition, this plan also provides for an immediate payment ofBasic Sum Assured amount on death of the Life Assured during the term of the

policy.

Assured Benefit

Payment of 20% of the Basic Sum Assured at the start of every year during last 3policy years before maturity. At maturity, 40% of the Basic Sum Assured along withreversionary bonuses declared from time to time on full Sum Assured for the full termand the Terminal bonus, if any shall be payable. For example, if term of the policy is20 years, 20% of the Sum assured will be payable at the end of the 17th,18th, 19thyear and 40% of the Sum Assured along with the reversionary bonuses and theterminal bonus, if any, at the end of the 20th year.

Death Benefit

Payment of an amount equal to Sum Assured under the basic plan immediately on thedeath of the life assured.www

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DETAILS OF WHOLE LIFE SCHEME AND ENDOWMENT SCHEME

Summary:Jeevan Anand is the combination of Endowment Assurance and Whole Life plan. Therisk cover will continue even after the maturity, that means Zindagi Ke Saath Bhi ZindagiKe Bad Bhi Jeevan Anand plan no. 149 provides financial protection against deaththroughout the lifetime of the life assured with the provision of payment of a lump sum at

the end of the selected term in case of his survival.

For Example: Mr. Pankaj, age 25 years, takes Jeevan Anand policy for 25 years for SumAssured Rs. 1 lakh. Now on Maturity Pankaj will receive Rs. 2,12,500/- (Rs. 1 lakh sumassured Plus Rs.1,12,500/- is the estimated bonus at Rs.45/- per thousand per year.)

In case, Mr. Pankaj, dies ( After premium paying term is over) at the age of 60 years, hisnominee will get additional Rs. 1 lakh equal to sum assured amount. Since Mr. Pankajhas already received the bonus, LIC will not pay second time bonus.

In case, Mr. Pankaj dies during the Premium Paying Term, his nominee will get Rs.1

Lakh (sum Assured) + Accrued bonus till Mr. Pankajs death.

Key Features:1. Jeevan Anand is the combination of Whole Life and Endowment Assurance plan.2. Even after the Premium Paying Term (PPT) is over, risk cover continues till the

death of the policy holder.3. Accident Benefit is available during the Premium paying term and thereafter upto

age 70.4. Limited premium payments.5. Double accidental cover upto age 70.6. Tax Savings

Modes of Premium Payment:

You can pay premium yearly, half-yearly, quarterly, monthly or through salarydeductions as opted by you throughout the selected term of the policy or till earlier death.

Jeevan Anand Plan Premiums are limited. You only pay till the selected term of years oruntil death if it occurs during the term period. This policy not only makes provisions forthe family of the life assured in the event of early death but also assures a lump sum at adesired age. The lump sum can be reinvested to provide an annuity during the remainderof policy holders life or in any other way considered suitable at that time.

Premium Stoppage:If payment of premiums ceases after at least 3 years premiums have been paid, a freepaid-up policy for a reduced sum assured will be automatically secured provided thereduced sum assured, exclusive of any attached bonus, is not less than Rs. 250/-. Thereduced sum assured will become payable on the event as stipulated in the policy.www

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Bonuses :

Jeevan Anand is a with-profit insurance plan and participates in the profits of theCorporations life insurance business. You will get the profit in the form of Bonuses.Simple Reversionary Bonuses are declared per thousand Sum Assured annually at the endof each financial year. Once the bonus is declared, they form part of the guaranteedbenefits of the plan. Bonuses will be added during the selected term or till death, if it

occurs earlier. Final (Additional) Bonus may also be payable provided the policy has runfor certain minimum period.

Maturity Benefit:

Sum Assured along with all vested bonuses payable at the end of the term to the policyholder.(Endowment term)

Death Benefit :

Sum Assured along with vested bonuses are payable on death during the premium payingterm. An amount equal to the Sum Assured is payable if death occurs after the premiumpaying 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 finaladditional bonus, if any. No Bonus is paid on death after the premium paying term.

Accident Benefit:Double Accident Benefit is available during the premium paying term and thereafter upto age 70. Maximum Accident Cover available under this plan will be Rs 5 lakh (thislimit excludes accident benefit taken under other plans).

In case of permanent disability of the life assured due to accident this additional Sumassured is payable in instalments.

Eligibility Conditions and Restrictions:

a) Minimum Entry Age: 18 Years completedb) Maximum Entry Age: 65 Yearsc) Max. PPT Mat. Age: 75 yearsd) Min. Premium term: 5 yrse) Max Premium term: 57 yrsf) Minimum Sum Assured: Rs. 1,00,000/-g) Maximum Sum Assured: No Limith) Risk cover: Sum Assured + Bonusi) Loan on policy: Availablej) Housing loan : Available

Surrender Value:

Buying a life insurance contract is a long-term commitment. However, surrender valuesare available on the plan on earlier termination of the contract.www

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Guaranteed Surrender Value:The policy may be surrendered after it has been in force for 3 years or more. Theguaranteed surrender value is 30% of the basic premiums paid excluding the first yearspremium. Any extra premium(s) paid and premium(s) towards Accident Benefit are alsoexcluded.

LICs policy on surrenders:

In practice, the Corporation will pay a Special Surrender Value which is either equal toor more than the Guaranteed Surrender Value. The benefit payable on surrender reflectsthe discounted value of the reduced claim amount that would be payable on death or atmaturity. This value will depend on the duration for which premiums have been paid andthe policy duration at the date of surrender. In some circumstances, in case of earlytermination of the policy, the surrender value payable may be less than the total premiumpaid.

Who should buy Jeevan Anand policy?Since Jeevan Anand is an endowment assurance plus whole life policy, this plan is apt forpeople of 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 reasonof his death earlier will payable at the end of the endowment term where it can beinvested in an annuity provision for the rest of the policyholders life or in any other wayhe may think most suitable at that time

REASONS W HY LIC IS A MARKET LEADER IN LIFE INSURANC ESECTOR

Positions:

1. Largest insurance Company in the world in Customer Base (23 crore customers)2. No.1 insurance company in the world in terms of agency (about 1.1 Million agents)

3. LIC is No.1 insurer in the world in Volume & Sold around 3.75 Cr.Policies in 2007-2008.4. 2nd Biggest Real Estate Owner next to Indian Railways.5. LIC is one of the Highest income tax playing Organization. For Financial Year 2007-08, LIC has paid advance Tax Rs.2627. 14 Cr. & Service Tax Rs.1292. 15 Cr.6. Has Highest insurance Professionals ( Club Member agents )7. Only 4 countries in the world have more population that LIC`s policy holders.

Award Recognition :8. Adjudged "The most trusted service Brand" in India, by "Economic Times and ACNEILSEN ORG MARG" for the year 2007 for the 5th consecutive year.

9. "Golden Peacock" award for Excellence in "corporate Governance"10.LIC adjudged as "Best life insurance Company of the year" at the "2nd"NDTV ProfitBusiness Leadership Awards-2007.11.LIC adjudged the "Most Preferred Life insurance Company of the year" at the "CNBCAWAAZ" consumer award 2007 for 3rd time in succession.12.Awarded Reader Digest's "Trusted Brand"2006,2007&2008 (Voted by Consumers)13. "Outlook Money NDTV Profit Award 2007"www

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14. "Web 18-Genius of the web Award" Conferred for the best website in insuranceCategory15. "SKOCH Challengers Award 2008" for "Jeevan Madhur".16. "Loyalty Awards 2008"- insurance Sector.17. Double crown for LIC in corporate Olympics 2008, Most Sporting CorporateChampionship Award Winner-2008

Honouring of the Commitment - Settlement of Claims18.No.1 insurance Company in the world in terms of claims paid.19.LIC Settles 2.21 claims per second, LIC settled 139 lakhs claims during the year2007-2008.20.Prompt settlement of claims (97% maturity claim settled on or before due date)21.One of the Lowest outstanding Claim Ratio in the world ( Maturity+S B Claim-0.07%)

Advanced Technology-For better Customer Service22.Computerized and networked 2048 branch offices and 159 satellite offices throughoutthe country.

23.Use of High Tech-WAN,LAN,IVRS & EDMS24.LIC is second largest PC user in the country.25.EDMS to make LIC a paperless office- Enabling Policy servicing & payments throughall branchs in the country.26. Premium Payment Facility extended through networked 2048 branches, ECS, ATM'sthrough internet, online portals, collecting bank (Axis Bank), AP online, through SMS,through selected agents, Now LIC Premium can also be paid through.

"Suvidha info Serve KIOSKS" all over India.

27.Policy Holder's Portal allow on line access to policy status and other details.28.Info centre set up in 12 cities for customers to interact easily. Dial- 1251 for details.

29.45 interactive Voice Response System (IVRS) centers all over the country to provideinformation on policy servicing. Facility is available 24 7, Facility can be availed onfollowing phone Nos. 1251 OR 020-25514248.

Social Strength30.LIC - an institution builder promoting many financial and insurance institutes likeNSE, NCDEX, LIC Mutual Fund, Stock Holding Corporation of India, Nationalinsurance Academy, insurance institute of India etc.31.LIC has foreign operations in Mauritius, Fiji and London and has joint ventureoperating in Sri lanka, Nepal, Bahrain & Saudi Arabia. New offices will be hortly oprnedin Australia, USA&Canada.32.LIC is known as "Pension Provider" of the country.33.1st Pension company in India is floated by LIC as "LIC Pension Fund Ltd" on 21stNov 2007.34.First to create waves in micro insurance sector by insuring people below the povertyline. In year 2007-2008, 8.54 lac policies sold through "Jeevan Madhur"Plan.35.Widest range of plans (about 48) for every need of the customer of 0 to 79 years ofage.36.Biggest Portfolio of Group insurance schemes available.www

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37."Jeevan Saral" one of the product of LIC got "Best innovation product " award fromI.R.D.A.38.LIC has covered lick Risk of 1.13 crore citizens through "AAM ADMI BIMAYOJANA" & " JANASHREE BIMA YOJANA".39.Very Unique Salary saving Portfolio.40.Highest Number of Corporate Clients in Group insurance Scheme.41.Expending Distribution Channel through Bancassurances, Corporate

Agencies, Broker ship & Chief Life insurarance Advisor (CLIA).42. New East - Central Zonal Office opened at patina to caterto the needs of states ofBihar, Jharkhand and Orissa. 5 new Divisional offices were also opened in 2007-08. PuneD.O.was splited in 2 divisions, viz Pune Division (i) and Pune Division (ii).43. "Golden Jubilee Foundations" established for undertaking charitable activities likeeducation, health, relief of poverty etc.

People's Money for People's Welfare

44.LIC invested more than 11,630 crores, in infrastructure sector is Rs.56,691 crores45.In socially oriented sector like water, drainage & housing etc, LIC has investedRs.5,635 crores during 2007-08 & total investment in this sector is Rs.32,321 crores.

46.Total investment in Social Sector Rs.89,000 Crs.47.Different incentive schemes for villages, Schools and Banks under Bima Gram, BimaSchool and Bima Banks.48.Total investment in Nation Building Activities is 5,76,000 Crs.

Financial Strengths49.LIC's investment income in 2007-08 was Rs.40,655 crores. Out of Total income of Rs,1,76,559.28 Crs.50.Total Assets of the corporation as on 31.3.07 were Rs. 6,74,514.78 Crs.51.Largest institutional investor in Share Market. On an average Rs.100 crore investedevery day. During theyear 2007 LIC earned the profit Rs.10,000 Crs. from the Sale of

Equity.52. Largest Financial institutional investor both Equity market & Term House.

KEY ACHIEVEMENTS

During the 2008/09 financial year, LIC sold more than 35.9 million policies generating afirst year premium income of Rs. 52,953.92 crore (US$ 11 billion) despite the globalslowdown (Source: IRDA). During this period, the corporation settled 577,000 deathclaims and 1.44 million maturity claims.To its resounding credit, the Corporation wasable to settle 97% of all maturity claims on or before the due date signing out Rs.29,105.85 crore (US$ 6.10 billion) in settlement. Additionally, the corporation paid Rs.

5606.90 crore (U S$ 1.20 billion) in death claims.

Current figures show the outstanding claims ratio under the death category at no morethan 2.20% and in the maturity segment at an exemplary low of 0.26%. LIC has a proudrecord of innovative products that find instant acceptance and success. For example, theCorporations Jeevan Aastha scheme, a close-ended, singlepremium plan sold about 1.84million policies collecting Rs.10,664 crore (US$ 2.20 billion) in premiums in 45 days oflaunch in the year 2009. It is a remarkable achievement that not only has LIC continuedwww

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to maintain the trust of consumers during the economic downturn but has also beenfelicitated with several awards.

It was bestowed the Readers Digest Trusted Brand Platinum Award, in both 2008 and2009, the CNBC Awaaz Consumer Award in 2009 and the Customer and Brand LoyaltyAward in 2009. In the same year, LIC emerged as the Top Brand in the InsuranceCategory in the survey conducted by ACNielsen for Brand Equity. In fact, Brand Equity

rated LIC as the Most Trusted Service Brand, five years in a row. In the recent past, too,its brand leadership has been on evidence. In 2008, for instance amongst several awards,LIC was felicitated with the NDTV-Profit Business Leadership award as also the AsiaBrand Congress- Brand Leadership Award. Even in the field of technology,

LICs innovations and practices were recognized when it won the NASSCOM Award forthe Best IT User

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