PROJECT REPORT

ON
THE STUDY OF LIFE INSURANCE WITH REFERENCE TO LIFE
INSURANCE CORPORATION (LIC)
IN THE PROGRAMME

Bachelor of Management Studies

SUBMITTED BY
JIYA KAUSHIK SHAH
ROLL NO 42
TYBMS B
SEMESTER VI
UNDER THE GUIDANCE OF
MRIDULLA AGARWAL
ACADEMIC YEAR

2021 - 2022
 CERTIFICATE

This is to certify that Ms. Jiya Kaushik Shah, roll number 42

of Third Year Bachelor of Management Studies Semester VI
(2021 - 2022) has successfully completed the Project on The
Study Of Life Insurance With Reference To Life Insurance
Corporation (LIC) as per the guidelines of KES’ Shroff
College of Arts and Commerce, Kandivali(W), Mumbai-
400067.

Teacher In-charge Principal

Name & Signature Dr. L. Bhushan
 KANDIVALI EDUCATION SOCIETY’S
B.K. Shroff College of Arts & M.H. Shroff College of
Commerce
Bhulabhai Desai Road, Kandivali (West), Mumbai-400067
An Autonomous College NAAC Reaccredited ‘A’ Grade (CGPA 3.27) and ISO 9001:2015 Certified

CERTIFICATE

This is to certify that Ms. Jiya Kaushik Shah has worked and duly
completed her project work for the Degree of Bachelor in Management
Studies and her project is entitled, ‘The Study of Life Insurance with
Reference to Life Insurance Corporation (LIC)’ under my guidance and as
per his/her declaration no part of it has been submitted previously for any
Degree or Diploma of any University and it is her own work and facts are
reported by her personal findings and investigations.

Ms. Mridulla Agrawal

Principal Project Guide

Date of submission: External Examiner

 DECLARATION BY LEARNER

I, the undersigned, Miss Jiya Kaushik Shah hereby declare that the work embodied in this
project work titled ‘The Study of Life Insurance with Reference to Life Insurance
Corporation (LIC)’, forms my own contribution to the research work carried out under the
guidance of Ms. Mridulla Agarwal and is a result of my own research work. It has not been
previously submitted to this or any other University for any other Degree/Diploma.

Whenever reference has been made to previous works of others, it has been clearly
indicated as such and included in the bibliography.

I, hereby further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.

Name of the student

Jiya Kaushik Shah

Guided by

Ms. Mridulla Agarwal

 ACKNOWLEDGEMENTS

To list who all have helped me is difficult because they are so numerous and the depth is
so enormous.

I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do this
project.

I would like to thank my Principal, Dr. Lily Bhushan for providing the necessary facilities
required for completion of this project.

I take this opportunity to thank our Coordinator, Ms. Sweta Mishra, for her moral support
and guidance.

I would also like to express my sincere gratitude towards my project guide Ms. Mridulla
Agarwal whose guidance and care made the project successful.

I would also like to express my gratitude to my College Library and the Librarian Dr.
Alka Wadhwana for having provided various reference books and magazines related to
my project.

Lastly, I would like thank each and every person who directly or indirectly helped me in
the completion of the project especially my Parents and Peers who supported me
throughout my project.
INDEX

SR. NO TITLE PAGE NO.

1 Introduction 1
1.1 Executive Summary 1
1.1.1 Objectives of Insurance 3
1.1.2 Importance of Insurance 3
1.1.3 Disadvantages of Insurance 4
1.2 Types of Insurance 5
1.2.1 General Insurance 5
1.2.2 Life Insurance 6
1.2.2.1 History 8
1.2.2.2 Types of Life Insurance 9
1.2.2.3 Disadvantages of Life Insurance 9
1.3 Life Insurance Corporation 11
1.3.1 Objectives 12
1.4 Methodology used to collect Data 13
1.5 The Scope of the Study 14
2 Literature Overview 16
3 Conceptual Framework 27
3.1 Insurance 27
3.1.1 How Insurance Work? 27
3.1.2 Insurance Policy Components 28
3.2 Life Insurance 30
3.2.1 Historical Background 30
3.2.2 The Functional Definition of Life Insurance 32
3.2.3 The Contractual Definition of Life Insurance 33
3.2.4 Role of Life Insurance 34
3.3 Types of Life Insurance 36
3.3.1 Term Life Insurance 36
3.3.2 Permanent Life Insurance 36
3.4 Principles of Life Insurance 38
3.5 Life Insurance Corporation 42
3.5.1 The following are the Aims that LIC has set 42
for itself
3.5.2 Mission 43
3.5.3 Vision 43
3.5.4 Functions of the Corporation 44
3.6 Investment Portfolio of LIC in India 45
3.7 Some of the Important Milestones in the Life 46
Insurance Business in India
3.8 Difference over Service Tax on Life Policies 47
3.9 In a Perspective of LIC 48
4 Research Methodology 49
4.1 Research Methodology 49
4.2 Types of Research 50
4.3 Source of Data 53
4.4 Universe of the Study 55
4.5 Sample Size and Sample Unit 55
4.6 Sampling Technique 56
4.7 Data Representation Tools 57
5 Data Interpretation 58
5.1 Gender 58
5.2 Age 59
5.3 Occupation 60
5.4 Breadwinner of the Family 61
5.5 Monthly Income 62
5.6 Which Insurance company will you choose 63
5.7 Awareness of LIC 64
5.8 Do they have Life Insurance Policy? 65
5.9 Which factor do you consider 66
5.10 Purpose of buying Insurance 67
5.11 Medium for Policy buying 68
5.12 Satisfied with the service of LIC of India 69
5.13 Reason for insuring with LIC 70
5.14 Source of information about Life Insurance 71
6 Finding & Recommendation 72
6.1 Conclusion 72
6.2 Major findings 74
6.3 Suggestions regarding Life Insurance 76
7 Bibliography and Annexure 77
7.1 Bibliography 77
7.2 Annexure 78
 CHAPTER ONE

1 INTRODUCTION ABOUT THE TOPIC

EXECUTIVE SUMMARY

With the increase in human activities of adventures and risky nature, the need for insurance
has grown substantially. Life is full of risks. Being a social animal and risk average human
being always tries to reduce risk. An age old method of sharing of risk through economic
operation laid to development of the concept of Insurance. “Insurance” are meant to protect
one from financial loss. Insurance policies are used to hedge against the risk of financial
losses, both big small, that may result damage to the insured or their property.

The loss may or may not be financial, but it can be counted in financial terms, and usually
it involves something in which the insured has an insurable interest established by
ownership, possession, or pre-existing relationship. Any person or any establishment seeks
protection against such risk is called as “insured‟ or “assured” and who undertakes to
protect such person or entity from financial losses or some miss happening is called the
“insurer” or “assurer” or “underwriter” or “insurance carrier”. Policyholder and insured are
often used together but are not necessarily synonyms, as coverage can sometimes extend

1
to additional insureds who did not buy the insurance. Small periodic contribution by the
individual and providing a fund out of which those who suffer losses may be reimbursed.
Thus, “Insurance” is an assurance that if any such kind of event happens, then the person
will be paid the money. The consideration for which the insurer under take to bear the risk
of the insured is called “premium”.

Insurance not only protects the individual from unexpected danger but also acts as an
instrument of social progress and economic development of nation. As an instrument of
social security it provides security and safety against the loss on happening of a particular
event. Insurance also acts as an instrument of economic development. The insurance
money collected by the insurer is invested in organized commerce and industry. Further,
by insuring the industry and establishment the employer is relieved from all the worries
and stress and can put their heart and soul in their work.

Thus, Prof. R.M. Ray Introduction has righty said insurance is one of those agencies which
improve the mental, moral and national circumstance and raise the condition to the
community of which they are members. Insurance reduces the uncertainty in business,
accelerate production, inherent credit, reduces inflation, encourage foreign trade and in this
way improves the economy of nation. Therefore, in brief it can be said that the present
world is moving in the vehicle of insurance.

Origin and development of insurance law in India is highly influenced by English origin
and development. The maiden law on insurance at the global label is the Bubble Act, 1720
which created the monopoly in marine insurance in England. The monopoly could be
abolished only after the passing of the Joint Stock Companies Act, 1862. Then came
English Marine Insurance Act, 1906. The British in India extended the British law to Indian
marine insurance business till India received her freedom.

After this privatization, both public and private sector entities were allowed to play their
role under the supervision of Insurance Regulatory and Development Authority of India
established under IRDAI Act, 1999. The Liberalization, Privatization and Globalization of
insurance business resulted in more competitive environment and rapid expansion in

2
insurance sector. This development necessitated an efficient legal regime to regulate,
promote and ensure orderly growth of insurance business in India.

The state has a legitimate compelling interest to regulate the insurance sector. The
regulation, however, to be within the constitutional framework. In particular, it should not
be inconsistent with fundamental rights of both insured and insurer. Though the term
“insurance‟ has not expressly mentioned anywhere in the Indian Constitution, the concept
of socio-economic justice envisaged in the Preamble of the Indian Constitution gives a
message to the State to ensure orderly growth of insurance business in India. Further, the
Directive Principles of State Policy through not directly but indirectly promote insurance
business by mandating the state to achieve socio-economic security for its subjects.

1.1.1 OBJECTIVES OF INSURANCE

1. Granting Security to People
2. Minimization of Losses
3. Risk Diversification
4. Anxiety and fear are reduced.
5. Savings are mobilized
6. Capital Formation

1.1.2 IMPORTANCE OF INSURANCE

1. Ensure your safety and security

2. Provides financial resources
3. Life insurance encourages savings.
4. Encourages economic insurance
5. Medical assistance
6. Spreading of risk
7. The source of collecting funds:

3
1.1.3 DISADVANTAGES OF INSURANCE

In the case of a specific loss, damage, or injury, insurance is meant to give cash and other
benefits. Homeowners, automobiles, health, and life insurance are the most frequent forms
of personal insurance in the United States. Some forms of insurance, such as vehicle
insurance, are mandated by law. The most significant benefit of insurance is that it protects
against potential losses, but this piece of mind comes with certain drawbacks.

 The biggest disadvantage of insurance is that there is no assurance that the benefits
you receive will be equivalent to the premiums you pay over time.
 You're paying for security that you may or may not require.
 Many consumers never submit a claim or only file one or two claims against their
homes or vehicle insurance. During the course of their lives Insurance firms profit
from this inequity.
 Limits can be set for a specified time period, such as an annual limit on medical
claims, or for a specific occurrence, like as a car accident or a home fire. Higher
limits are more expensive, which is one of the downsides of insurance.
 Many policyholders are unable to afford the level of coverage they need or require.
 A portion of the cost that an insurance customer will pay out of pocket for a claim
first before insurer pays out. A greater deductible can lead to significant savings
overall your insurance premium, but it will cost you more if you need to file a claim.
 To avoid unpleasant surprises, it's critical to understand your coverage deductibles.
Health coverage deductibles may be a major burden for people with chronic health
problems.

4
 TYPES OF INSURANCE

1.2.1 GENERAL INSURANCE

General insurance or non-life insurance policies. It includes automobiles, health, travel,

fire, marine, and home-owner policies. It provides payments depending on the loss from a
particular financial event. General insurance is basically defined as any insurance that is
not related to one’s life. It is called property and casualty insurance in the United
States and Canada and non-life insurance in Continental Europe.

 Health Insurance: Health insurance is a type of insurance plan that covers the cost
of an insured individual’s medical and surgical costs. Based on the type of health
insurance protection, either the insured pays costs out-of-pocket and is then repaid,
or the insurance company makes payments directly to the service provider.

 Motor Insurance: A motor insurance policy is purchased to protect any individual

or business from any financial losses that may occur due to damage or theft of the

5
 vehicle. A private car, a commercial vehicle, or a two-wheeler owner can buy motor
insurance.

 Travel Insurance: Travel insurance is purchased to cover unforeseen losses such

as pickpocketing or misplacing of a passport, loss of baggage, or delays of flights
incurred while travelling, either internationally or domestically. In today's polarised
world, issues of concern are much more serious. Theft, smuggling, hi-jacking, and
so on are dangerous situations. A safe travel insurance plan is just one way to ensure
safety.

 Home Insurance: Home Insurance are the safety to one’s property structure as
well as its content from unexpected loss or damage. Home insurance are type of
property insurance which covers private residences.

 Fire Insurance: Fire insurance is the contract which is signed between insurance
company and the policyholder so if any damage is cause to policyholder’s property
due to accidental fire or lightning or explosion so loss will be paid by insurance
company.

1.2.2 LIFE INSURANCE

There are numerous definitions of life insurance in life insurance literature. However,
these definitions can be divided into two main groups, viz., the functional and the
contractual.

DEFINITIONS

The functional definitions concentrate on the functional. The concept of life insurance
as a social or collective device to provides protection against life risks.

Contractual definitions, on the other hand, focus on the contract of life insurance as
legal evidence of a contractual relationship between two parties; the insurer, the
promise to pay a certain amount of money in the case of the failure of the risk insured

6
against (death of life insured or and the insured, who bears the financial risk premium
as a consideration for such a promise.

A contract in which a policyholder pays recurring premiums in return for a lump-sum

death benefit that may be given to the policyholder's beneficiaries is known as life
insurance. When the policyholder dies or a certain length of time has passed, the lump-
sum payment is paid. By restoring lost income and offsetting costs, life insurance plans
can assist give financial security.

So long as a family's survival is based on the breadwinner's earning power, and earning
capacity might be eliminated by death, old age, or disability, life insurance will
continue to be the cornerstone of the individual and those who rely on him. On the basis
of all religious beliefs and scientific reasoning, "one Who is born must die, "is the
greatest truth of life." A wise man, therefore, he continues to endeavour to secure his
self-protection and the protection of his dependents against the perils of his premature
death or unforeseen physical disability. He was disabled, rendering him jobless. Every
bread winner feels worried about provision for old age or the security of his kith and
kin. if he does it early

Individuals face two major risks related to their lives dying too young; or living too
old. The first, premature death, produces financial hardship for dependents left behind.
The second, growing very old, results also in financial problems caused by the decrease
in income accompanied by increasing in expenditure usually occurs in old ages.

During human history, there have been many efforts, both Individually and
collectively, to face and reduce the effects of such risks and contingencies. The joint
family system has made it possible invaluable services and complete protection for all
of its members. For example, in India, the joint family system ensures the real social
security for all of its members, such that taking care of the elderly and infirm members,
the maintenance of unfortunate widows was the responsibilities of the family members.

Life insurance plans are agreements, and the conditions of each contract specify the
covered event's restrictions. Exceptions in insurance contracts often restrict the

7
 insurance company's obligation; prominent examples include claims involving suicide,
fraud, war, disturbances, and civil unrest. When an event isn't precisely described,
problems might develop. For example, by agreeing to a new medical treatment or using
medicine that resulted in harm or death, the insured knowingly took a risk. Insurance
coverage now resembles the wealth sector in some ways, [failed validation], and
insurance companies have expanded their product offerings to include retirement items
like pension.

Contracts for the rest of one's life usually fall under two categories:

 In the case of a defined incident, protection insurance is meant to offer a benefit,

usually in the form of a lump-sum payout. Term insurance is a popular type of
protection policy design that was more widespread in the past.
 Investment policies: The fundamental goal of these policies is to encourage capital
growth by way of recurring or one-time premiums. Whole life, universal life, and
variable life insurance are common in the United States.

1.2.2.1 HISTORY

In India after independence, the businesses of life insurance and general insurance were
nationalized in 1956 and 1972, respectively, by the Life Insurance Corporation Act, 1956
and the General Insurance Business (Nationalization) Act, 1972. In the tenure of the
insurance sector, the participation of private insurance entities on the recommendation of
the introduction is mandatory. Life insurance coverage against disablement and death of
the insured is an instrument of socio-economic security for the dependents. This is to make
the right to life meaningful and worth living, and the right to livelihood a means of
sustenance, as observed in the case of Olga Tellis and ors Vs. Bombay Municipal
Corporation.

1 AIR 1986 SC 180

2 AIR 1995 SC 181
3 AIR 1975 SCC 421

8
Therefore, it gave without saying that an appropriate life insurance policy within the paying
capacity of the insured is one of the social security measure, which is propose under Indian
Constitution, as held in LIC vs. Consumer Education and Research Centre 2, social security
is a face of socio-economic justice to the people in particular to the middle class and lower
middle class.

1.2.2.2 TYPES OF LIFE INSURANCE

It's difficult to analyze the goals and objectives of insurance plans without first
understanding the many sorts. They're as follows:

 Term life insurance: Term life insurance as the name indicates, is meant to endure
for a set period of time. For example, you'll buy a 10-year term life insurance policy.
You can choose to renew at the conclusion of the term, but you'll likely pay
substantially higher rates. The most significant advantage of term life insurance is
that it is generally less expensive in the beginning.
 Universal life insurance: These plans are meant to protect you for the rest of your
life, with the option to adjust your coverage levels and premiums as needed.
 Whole life insurance: Premiums for this type of reimbursement are predetermined
and cover you for the rest of your life. Although the insurance company's purpose
appears to be more essential than the insured's, these contracts have genuine
monetary value and may be utilized as a financial instrument while you're still alive.
Term life insurance, on the other hand, is not constrained in this way. If you wish
to retain funds for your dependents, whole or global life insurance may be the best
option for you because of its monetary value. Term life insurance is designed to
replace your wages if something happens to you during your working life.

1.2.2.3 DISADVANTAGES OF LIFE INSURANCE

The following are the major drawbacks of life insurance:

 The biggest downside of life insurance plans is the high rates for the elderly. This
is owing to the fact that when a person's risk level rises, so does the premium.

9
 It's tough to compute the returns since the returns on life insurance contracts are
intricate, and predicting them is extremely difficult. Life insurance returns are
solely determined by market circumstances and performance. In comparison to PPF
and other fixed deposit plans, it is impossible to arrive at a specific value in the case
of life insurance.
 There are several insurance organizations in India that offer various sorts of life
insurance policies. You can pick the greatest life insurance plan that meets your
needs. However, because various insurance policies have distinct characteristics, it
might cause clients to get confused. Some policies are straightforward, while others
are not.
 Insurance firms use a number of strategies to avoid paying benefits long after the
policy has matured, also deny the policyholder the sum guaranteed. To reduce the
payoff, they'd propose a bunch of hidden fees or requirements.
 Any financial product offered on the market almost probably contains certain
exclusions and hidden clauses. For example, most plans do not cover suicide in the
first year, and virtually all policies do not cover death caused by a drug overdose
or engagement in criminal activities.

10
 LIFE INSURANCE CORPORATION (LIC)

The Life Insurance Organization Act of 1956 established the Life Insurance Corporation
of India as a public corporation. On July 1, 1956, the Act went into effect, and the
corporation commenced operations on September 1, 1956. After the nationalization of life
insurance on January 19, 1965, the organization was founded as India's only life insurance
firm. The Nationalization Ordinance called for the control of 154 insurers, 16 of which
were non-Indian insurers, and 75 provident societies to be transferred to LIC. Since then,
and during its 38-year history, LIC has engaged in a variety of life insurance and associated
businesses.

The Life Insurance Company of India (LIC), a statutory corporation with a monopoly in
the life insurance sector, is responsible for the life insurance business in India. Its goals
include covering the risk of the insured's life and encouraging savings. The corporation
began its operations with two types of policies: whole life and endowment. Later, the LIC
launched a variety of new life insurance policies in order to attract more investors and
provide new types of benefits to the insured, such as money return policies, double benefits,
triple benefits, pension plans, unit linked insurance plans, and so on.

The LIC evolved into a life insurance supermarket, offering a wide range of life insurance
products to investors. The Government of India aided the LIC's life insurance business by
providing income tax benefits to policyholders' deposits in life insurance policies, allowing
policyholders to pay premiums through payroll deductions and paying no income tax on

11
rewards from life insurance policies. Aside from covering the insured's risk, the LIC also
provides a bonus to the sum assured beginning with the first year of the policy.

Finance Minister Nirmala Sitharaman revealed a plan to undertake an initial public offering
for LIC in the Union Budget for 2021. The initial public offering is scheduled for 2022.
After the public listing, the Indian government will remain the primary stakeholder.
Existing LIC policyholders will get 10% of the shares, according to the proposal. In 2021,
the Indian government recommended expanding the LIC of India's allowed capital to 250
billion rupees in order to support the company's public listing, which is set to commence
on April 1. The sale has been dubbed "India's Aramco moment" due to the size of the
offering and LIC's ownership structure, a reference to Saudi Aramco's 2019 IPO, which is
of equal importance and magnitude.

1.3.1 Objectives:

The Life Insurance Corporation is one of India's most important economic players. It offers
a comprehensive range of life insurance products to the general market. The LIC offers
life, health, pension, and ULIP plans. However, the focus of this research is on the LIC of
India's life insurance products. The following are the study's aims:

 To investigate the LIC of India's numerous life insurance packages

 To determine the elements that influence the investment in LIC of India products.
 To categorize and determine the most popular and feasible items and services.
 To examine the financial statements of the Indian Life Insurance Corporation (LIC)
 To investigate the relationship between insurance and tax benefits.
 To investigate client perceptions and satisfaction with LIC of India's life insurance
products.

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 METHODOLOGY USED TO COLLECT DATA

To obtain the above mentioned objectives, the study will make use of the following
techniques. To achieve the main objectives of the study the following conceptual
framework which contains the elements of life insurance scheme was developed. In
analyzing the life insurance schemes issued by any insurer a number of measures and terms
are necessary to be used. Therefore, they should be explained before starting the task of
analysis. Researchers must also be aware of the assumptions that underpin particular
methodologies, as well as the criteria by which they may determine whether certain
techniques and processes are appropriate for specific situations and which are not. All of
this means that the researcher must tailor his or her approach for the topic at hand, as it
may differ from one to the next.

The risk covered by any life insurance scheme is the most important factor since it
determines the rest of the elements of the scheme, such as premium, term of insurance, etc.
Risk covered is the basic factor that classifies the life insurance plans, i.e., it is this element
that makes the difference among the life insurance schemes. Therefore, the risk covered
under a scheme should be the first element to be studied when analyzing a life insurance
scheme.

Some insurance regulations in developed nations are comparable to those in first-place

countries in terms of insurance penetration and density. A research like this might not only
help us better understand insurance law and policy, but it could also help us uncover gaps,
ambiguities, and loopholes in current regulations, as well as recommend ways to enhance
the present insurance regulatory system.

The current research is a modest step in that direction. Its goal is to offer a comprehensive
picture of Indian insurance law and policy, as well as to explore and evaluate their
suitability for tackling the difficulties that modern India poses. Because insurance law and
policy are such large issues, it is impossible to do justice to all elements of insurance within
the confines of study. Since insurance law and policy are vast subjects, doing justice to all
aspects of insurance is not possible within the narrow compass of research study like the
present one. Hence, some selected issues are explored and examined to arrive at a
conclusion.

13
 THE SCOPE OF THE STUDY

From the discussion of the title of the study presented above, this study will be subject to
the following limitations:

1. The analysis covered the life insurance policies issued by LIC, which means the
analysis did not cover any other activities or schemes presented by LIC other than
the life insurance business, such as housing, mutual funds, etc. Moreover, this study
did not also cover the life insurance policies issued by any other insurer other than
LIC, such as postal life insurance, because these plans are restricted to certain
groups in relation to the public sector, such as Central and State government
employees, Defence Services Personals, etc., or the Unit-Linked Insurance Plan,
because it is a contractual saving-cum-insurance and not a pure life insurance
policy, and including them in the analysis would take the study far beyond its scope.
2. The study analyzed life insurance schemes of LIC in operation except Asha Deep,
the Jeevan Sarita, and Marriage Endowment/Educational Annuity. This means 24
life insurance schemes were analyzed in this study. This limit is important since the
information and data needed for analysis for the years beyond the years 1993–94
were not available while working on this research.
3. The analysis of the performance of the life insurance business began in 1979–80
and ended in 1994–95, i.e., from 1979–80 to 1994–95, 15 years of life insurance
business were analyzed using some statistical techniques in order to obtain some
indicators that help in understanding the behaviour of the life insurance business
during the study period. The years 1979–80 were chosen as a starting point for After
analysing the behaviour of the life insurance business of LIC, because many
revolutionary changes and reforms occurred in LIC during that year, These changes
came as a result of many reviews and evaluations that were conducted by many
committees. We ended up with many recommendations that indicate the necessity
of reforms to LIC. The most important reports were: the Report of the re-
organization of LIC's Working Committee The Committee of Actuaries, the S.N.
Vaidya Committee, and the Report of the Era Sezhain Committee are all part of the
"split proposal."

14
 As a result of these recommendations and many other factors, many changes
occurred in LIC. Some of these changes are listed below:

1. Organizational changes

2. Reduction in the premium rate.

3. With effect from 1 April 1980, 13 new plans were introduced, 17 plans were
withdrawn, and 3 were modified.

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 CHAPTER TWO

2 LITERATURE OVERVIEW

1. Alsayaghi, Abdulkarim Kassim, 1998, Analysis of life insurance schemes a

case study of LIC. In this research, the researcher has explained life insurance, its
schemes, the life insurance corporation (LIC), factors affecting demand for life
insurance corporations, alternative methods of calculating premiums and reserves,
literature on LIC, LIC premiums, customer service and other related services, legal
factors, actuarial factors, economic and social factors, participation in profits, study
on paid-up insurance value, surrender value, and categories of lives allowed under
the scheme.

2. Irshad Ahmed, 2013, A study on performance evaluation of life insurance

corporation of India and selected private life insurance companies in Tamil
Nadu. In this research, the researcher has explained a few operational definitions
such as insurance agent, life funds, bonus, reversionary bonus, insurer, insured,
reneval premium, annuity commission, contract of insurance, policy, premium,
subject matter of insurance insurable interest, and fundamental elements of
insurance. The researcher even discussed life insurance, re-insurance, double
insurance, evolution of insurance, kinds of insurance, and contemporary issues in
insurance. He even gave some tabular information about private joint venture
insurance companies, market share of private players and LIC, and many more
things.

3. Sathyeshwar, S, May 30, 2018, Foreign direct investment in life insurance and
its impact on Indian insurance sector a study conducted with reference to LIC
and two private life insurance companies in India. In this research, the
researcher explained insurance meaning, evolution of insurance in the world, and
the origin of life insurance in India. He also gave some of the tabular information:

16
 landmarks of insurance regulation after 1911, post-new industrial policy 1991,
milestones of insurance regulation after 1992, and post-1999 insurance sector. He
also detailed the Indian economy since Independence, India’s Economic Policy
from Mixed Economy to LPG Size of the Market, Investments in the Insurance
Sector, (Report, Feb 2017). Government initiatives for the insurance sector in the
Union Budget 2017-2018 The government of India's initiatives to improve the
insurance industry, the role of IRDA in the insurance industry, reducing inflation,
an important determinant of FDI, and even sharing many more things in his study.

4. Raja, S, May 4, 2009, A study on perception of policy holders towards

marketing of life insurance products by the LIC of India. In this research,
researcher explained about sampling technique, also gave some tabular represent
such as number of policies and sum assured gender wise, classification of sample
on the basis of sex, age and profession, profile of the Paramathi velur taluk,
population of Velur area, panchayat and gender wise classification, location,
education, potential, agriculture, population of paramathi velur taluka, he also deal
about historical evaluation, insurance, insurance superior to other forms of savings,
who can buy a life insurance policy, medical and non-medical schemes, with profit
and without profit plans, keyman insurance, qualifying investment eligible for
rebate, important income-tax benefit and various plans of life insurance are
highlighted.

5. Vijay Vyankatesh Bidnur, 2013, An Analytical Study On New Insurance Plans

in Life Insurance Corporation Of India And ICICI Prudential Life Insurance
With Special Reference To Sangli Division Maharashtra. In this research
researcher has gave some tabular representation on Country wise Percentage of
Insured People in Asia, Foreign Market Share, he gave some detailed information
regarding statement of problem, he reviewed the origin and growth of insurance
sector, he studied the existing various insurance plans of LIC. and ICICI profile,
chapter deals with the review of past studies on insurance plans in LIC and
conceptual back around related to life insurance and various life insurance policies,

17
 studied the growth and development of insurance sector in globe and in India and
Profile of LIC of India and ICICI Prulife in Sangli Division in particular were
convert.

6. Sukhapure, Mohini A, 1998, A study of group dynamics with reference to

relationship of development officers with agents of the LIC of India. In this
research researcher has explained importance of Development officer - Agent
relationship to the LIC, Concept of Group Dynamics and its relevance to research,
historical background of the Life Insurance Corporation, Pre-nationalization
insurance era, Post Nationalization of Insurance Industry (till 1990), currently
emerging insurance business environment, Organizational structure of the LIC,
Functions of the LIC Offices, Recruitment Methods, Training policy, Training
methods, Remuneration policy, Duties of Development Officer.

7. Shaikh, Chand Basha Nabi Saheb., July 31, 2011, Business performance
appraisal of life insurance corporation of India a study with reference to post
insurance sector reforms. In this research, researcher explained about meaning of
life insurance, history of insurance in India, an aggregative view of Indian
insurance, role of insurance in economic growth, benefits of life insurance,
principles of insurance, life insurance - types of policies, Endowment Assurance,
Non-Participating Endowment Assurance, Participating Endowment Assurance,
Money Back Plan, Whole Life Assurance, Unit Linked Plan, Term Assurance,
Immediate Annuity, Deferred Annuity, Tax Breaks, need for reforms in the
insurance sector, INSURANCE REGULATORY AND DEVELOPMENT
AUTHORITY (IRDA) ACT, 1999

8. Jain, Sulabh Kumar, 2013, A study of financial management in LIC of India.

In this research, the researcher explained the definition of insurance, general
definition, fundamental definition, contractual definition, characteristics of
insurance, objectives of LIC of India, investment of funds, reduction in cost of

18
 insurance, effect on prices, invisible export, reducing cost of social services,
functions of insurance institutions, primary functions, secondary functions, indirect
functions, genesis and evolution of life insurance, the fundamental principles of
insurance, actuary, underwriting, policy owner services, claim administration,
marketing, investment, accounting, information systems, legal and compliance,
distribution channels.

9. Gupta, Meenakshi, march 10, 2014, Life insurance in India A study with
special reference to insurance regulatory and development authority act, 1999.
In this research, the researcher explained about insurance a matter of union list,
development and growth of the insurance industry in India, formation of the
insurance industry in India, nationalization of the insurance business in India,
tabular representation of some key statistics of pre and post liberalization period,
Entry of Private Players, the liberalization ERA, Role of IRDA, Role of IT,
Insurance Information Bureau (IIB), Initiatives towards Policyholders Protection,
foreign direct investment (FDI) in insurance sector, global insurance market.

10. Kurian, Jomon, October 6, 2015, An analytical study of plans and schemes of
life insurance corporation LIC of India. In this research, the researcher explained
about historical background of LIC, establishment & development of LIC in M.P.
& Chhattisgarh, premium income of LIC, performance of LIC in Chhattisgarh,
subsidiaries of LIC of India, tabular representation of city branches of LIC in
Chhattisgarh, mofussil branches of LIC in Chhattisgarh highlights of claims
performance (LIC OF India divisional office, Raipur), settlement of claims on or
before due date (speed ratio) (LIC OF INDIA DIVISIONAL OFFICE, RAIPUR )

11. G.,Suneetha, December 31, 2018, Impact of privatization on life insurance

sector in India a comparative study of LIC with private insurers. In this
research, the researcher explained about post liberalization of private insurance
companies vs LIC, post liberalization life insurance industry, the scenario of life
insurance industry after privatization, struggles for sustainability for the private

19
 companies, losses of private life insurers, profits of life insurers, sustainability in
the market, progress of life insurance in India after privatization, the likely scenario
by 2010-11, development aspects of life insurers apart from growth and market
share, marketing strategies of insurance companies in India, marketing mix,
objectives of life insurance marketing.

12. SUGANTHA MANI C V, July 25, 2017, A Study On the Performance

Evaluation of Life Insurance Corporation of India During Post Liberalization
Period. In this research, the researcher explained about Untapped potential,
Distribution channels, Focus on financial inclusion, insurance sector and the
progress of LIC of India, performance of LIC of India during the post liberalization
period, he reviewed about past studies relevant to performance of life insurers of
India, profile of selected area, selection of samples and tools of analysis.

13. Nainoor Srinivas.R, February 9, 2019, Insurance Sector Reforms in Post

Liberalization Period a Study with Special Reference to Life Insurance in
India. In this research researcher explained about Principle of utmost good faith,
Principle of insurable interest, Principle of indemnity, Principle of subrogation,
Principle of contribution, Principle of causa proxima, Principle of attachment of
risk, Principle of mitigation of losses, development of Life Insurance System in
India, Life Insurance System in India in Pre-Independence Period, Life Insurance
System in India in Post- Independence Era, Insurance Sector Reforms in India,
Insurance Regulatory and Development Authority (IRDA), Liberalization of
Insurance Sector in India, Insurance Penetration and Density, a detailed profile of
all public and private sector life insurance companies in India has been presented.

14. Narula, Sarang, August 5, 2013, Service quality: A study of life insurance
industry in Punjab. In this study, the researcher discusses life insurance
companies in India, as well as reform and growth in the Indian life insurance sector;
the researcher evaluates and compares the service quality of LIC and other private
insurance companies. It also assesses the impact of reforms on the performance of

20
 LIC, the impact of service quality on customer loyalty, the problems faced by the
agents and receives suggestions from them regarding the changes they expect in the
life insurance industry.

15. Chandhok, Gunita Arun, 2009, Performance analysis of LIC and ICICI
prudential. In this research, the researcher explained about Global Life Insurance,
The Engines of Expansion in Global Life Insurance, the Indian Life Insurance
Industry, The Post-Liberalization Scenario, views on performance, pilot study,
scaling techniques, statistical tool used, study limitations, provides a synoptic view
of LIC and ICICI Life Insurance companies and their product features, and analyses
LIC and ICICI primary data on customer perceptions, secondary data analysis to
determine the performance of LIC and ICICI Prudential Life Insurance Company.

16. Ramalakshmi, C, 2014, A study on micro insurance with special reference to

life insurance corporation of India in Madurai district. In this research, the
researcher explained about operational definition of concepts, micro insurance,
micro-insurance policy, micro-insurance product, general micro-insurance
products, life micro-insurance products, authority, regulations, policyholder,
awareness, attitude, factor analysis, factor loadings, eigen value, communality,
limitations of the study evolution and growth of insurance sector, roots of insurance
in world, Global insurance markets, milestones in the Indian insurance industry,
insurance penetration and density.

17. Mittal, Rupesh, 2013, A comparative study of traditional and electronic

commerce system in insurance sector with reference to LIC of India Indore
division. In this research, the researcher explained the traditional approaches of
business (traditional commerce, conventional commerce (traditional commerce)
approach, buyer's side of traditional commerce, seller's side of traditional
commerce, latest commerce (electronic-commerce) approach, security features,
clarification of title, models of e-commerce i.e. business to consumer (B2C),
business to business (B2B), consumer to consumer (C2C), consumer-to-business

21
 (C2B), m-commerce, the role of ICT, and about the organization (L1C of India,
Indore Division).

18. Ajay Kumar, 2012, Role of insurance services in economic development a

study in context of India. In this research, the researcher explained the concept of
insurance. How does insurance work?, the fundamental principles of insurance, the
contract parties, costs, insurability, and underwriting, death proceeds, insurance vs.
assurance, various approaches, mortality table, insurance and indemnity, human
life value, capital need analysis, a 21st century approach to life insurance, the
history of Life Insurance Corporation, the history of LIC, and the current status of
LIC.

19. Bhagat, Ram, 2016, An analysis of investment portfolio of life insurance

corporation of India. The researcher explained insurance in the ancient world,
insurance in the mediaeval era, the origin of modern insurance business, property
insurance, business insurance, life insurance, national insurance, insurance act
1938, the life insurance companies act 1912, the provident insurance societies act
1912, the progress of life insurance business (1914–57), the nationalization of the
Indian life insurance industry, and the organizational structure of the Indian life
insurance industry in this study.

20. Meena S. Kasthuri, May 31, 2009, A study on the perception satisfaction and
problems of life insurance policy holders. In this research, the researcher provides
a brief statement of the problem and the objectives of the study. He also provides a
theoretical basis to understand the evolution and services of the Life Insurance
Corporation of India and private insurance companies. definition of life insurance,
the need for insurance, Insurance covers the risk of death, encourages compulsory
saving, easy settlement and protection against creditors, helps to achieve the
purpose of life assurance, insurance facilitates liquidity, loan facilities, and tax
relief, the role of life insurance, functions of insurance companies, and customer
services.

22
21. Thacker, Nirupama R, 2018, An analytical study of life insurance corporation
of India and selected private life insurance companies of India with reference
to Kutch district Gujarat. In this study, the researcher looked at the Malhotra
committee's report on the Indian insurance industry, the insurance regulatory and
development authority (IRDA), its duties, powers, and functions, the key players in
the Indian life insurance industry, the major life insurance players in the Kutch
district, the public sector, and the life insurance corporation of India, the meaning
and concept of insurance, the principles of insurance, the functions of insurance,
the importance of insurance, and the features of insurance.

22. Kakad, Ramesh B, 2012, An analytical study of impact of privatization on life

insurance corporation of India LIC. The researcher's research gives an analytic
introduction to the subject matter under study. It also gives a statement and
significance of the problem under study. It also states the objectives and limitations
of the study. One of the chapters gives a historical sketch of Nanded district. The
research provides a brief overview of the historical development of the life
insurance sector prior to and following independence. It gives an analytic view of
the role of the insurance system with reference to life insurance in India. The
chapters also review the overall performance of the Life Insurance Corporation of
India.

23. Rao, K Nagaraja, July, 2011, Study of rural insurance market in India with
special reference to life insurance. In this research, the researcher explained the
brief history of life insurance, the ancient idea of risk sharing, the story of life
insurance in India, the birth of Indian insurance, The major milestones of insurance
regulations of this century, the emerging trends in the wake of globalization, the
entry of private players, the extent of rural penetration, the IRDA regulations, The
rationale of the questions designed in the questionnaire for agents and customers,
the analysis of the answers with reference to the object of study, and the thorough
review of secondary data are made with regard to the rural potential.

23
24. Prakruthi M.V, 2020, The performance of life insurance corporation of India
a macro study. In this research, the researcher explained about the key objectives
of the life insurance corporation of India (LIC), types of insurance policies,
insurance plans of LIC, factors affecting life insurance policies, growth of LIC, of
India-a review, features of insurance, difference between assurance and insurance,
functions of insurance, and the role of insurance in the development of industry and
commerce, The life insurance corporation of India's SWOT analysis, the historical
background and genesis of life insurance in India, the necessity of life insurance in
India, the benefits of life insurance, and the organizational structure of the LIC of
India are all covered.

25. K. Rajaselvi, June 23, 2015, A comparative study on the satisfaction of the
policyholders on the services offered by public and private life insurers in
Nilgiris district. In this research, the researcher deals with the overview of
insurance companies in India and the profile of the companies. history of insurance,
world insurance scenario, life insurance penetration, insurance in India, insurance
regulatory and development authority, life insurance, life insurance density in
India, market share of life insurance, profile of the insurance companies, life
insurance corporation of India, Housing Development Finance Corporation
Limited (HDFC) standard life insurance company limited (LIC), max New York
life insurance company limited, ICICI prudential life insurance company limited,
Kotak Mahindra old mutual life insurance company limited and many more.

26. Kumari Geetha C, 2018, A study on the job satisfaction of the agents of life
insurance corporation of India with special reference to Kanyakumari district.
In this research, the researcher talked about job satisfaction, insurance, role and
importance of insurance, distinguishing features of life insurance service, insurance
agency, code of conduct of agents, operational definitions of key terms, importance
of job satisfaction life insurance marketing, profiles of LIC agent in Kanyakumari
District, researcher discussions about job satisfaction and role of agents in LIC of

24
 India, deals with socio-economic profile and related aspects of LIC agents, analyses
personality traits and attributes of the agents in relation to their job satisfaction,
analyses the marketing practice and the performance of the agents.

27. Jain, Vikas, 2015, Impact of liberalization on the business of life insurance. In
this research, the researcher about concept of insurance, insurance in financial
sense, insurance in legal sense, general insurance, emergence of insurance on global
surface level, marine insurance, fire insurance, life insurance, sundry insurance,
classification of insurance, business point of view, kinds of insurance from risk
point of view, pre-liberalization, post liberalization, milestones of insurance
regulations in the 20th century, milestones in the general insurance business in
India, milestones in the life insurance business in India.

28. Limna M, 2018, Customers Perception towards Micro Insurance Products and
Services of LIC in Kerala. In this research, the researcher about risk, insurance,
life insurance, micro insurance, micro insurance policy, life micro insurance,
assignment, beneficiary, free look period, premium, grace period, lapsed policy,
maturity benefit, paid-up policy, paid-up value, commission, surrender, surrender
value, revival period, revival of a policy, sum assured on maturity, claim amount,
awareness, perception factors influencing, collection of secondary data, collection
of primary data, determination of sample customers, tools/ instruments for data
collection, factors influenced for purchasing micro insurance policy, sources of
information about life micro insurance policies of LIC, influenced person to choose
policy from lic, final decision maker, encouraging factors for buying life micro
insurance policy of LIC, objectives of buying life micro insurance policy, motivated
marketing mix to purchase policy, customers’ awareness.

29. Mittra, Uday Krishna, 2004, A study of the performance of life insurance
corporation of India with special reference to insurance reforms. In this
research, the researcher gave brief history of life insurance business in India before
1956 has been discussed, the parameters of growth rates, mean levels and

25
 instabilities of performance indicators of Life Insurance Corporation of India
during the period of 1962-63 to 1999-2000 have been examined, analyses of
growth, mean level and instability for two sub-periods (taking 1980 as the break
year) and for four decades (i.e., 1960s, 1970s, 1980s and 1990s). The performance
appraisal of LICI through ratio analysis has been taken into consideration, analyze
different internal accounting ratios and globally recognized external ratios related
to life insurance business in India have been computed and compared over time.

30. Chaturvedi Vinay, Customer perspective of offerings of life insurance

corporation of India. In this research, the researcher explained about The Concept
of Insurance, The Asset, Physical Property, Human Capital, The Risk Event,
Property Risk, Liability Risk, Personal Risk, Risk Pooling, The Insurance Contract,
Fundamental Principles of Insurance, The Principle of Insurable interest, The
Principle of Indemnity, The Principle of Contribution, The Principle of
Subrogation, The Principle of Utmost Faith, The Principle of Proximate Cause,
Operational Terms, Type of Policy, Some important milestones in the life insurance
business in India are as under, Establishment of IRDA, Operation of Ombudsman
Scheme (Redressal of Public Grievance Rules 1998), Establishment of LIC As the
Sole Performer of Life Insurance Business.

26
 CHAPTER THREE

3 CONCEPTUAL FRAMEWORK

INSURANCE

The loss may or may not be financial, but it can be counted in financial terms, and usually
it involves something in which the insured has an insurable interest established by
ownership, possession, or pre-existing relationship. With the increase in human activities
of adventures and risky nature, the need for insurance has grown substantially. Life is full
of risks.

Being a social animal and risk average human being always tries to reduce risk. An age old
method of sharing of risk through economic operation laid to development of the concept
of Insurance. “Insurance” are meant to protect one from financial loss. Insurance policies
are used to hedge against the risk of financial losses, both big small, that may result damage
to the insured or their property.

Insurance not only protects the individual from unexpected danger but also acts as an
instrument of social progress and economic development of nation. As an instrument of
social security it provides security and safety against the loss on happening of a particular
event. Insurance also acts as an instrument of economic development. The insurance
money collected by the insurer is invested in organized commerce and industry. Further,
by insuring the industry and establishment the employer is relieved from all the worries
and stress and can put their heart and soul in their work.

3.1.1 HOW INSURANCE WORKS?

There are many different forms of financial plans to choose from, and almost anybody or
any firm can find another insurance carrier eager to insure them—for a fee. Auto,
healthcare, homeowners, and insurance products are the most frequent forms of personal
insurance plans. Car insurance is needed by law in the United States, and most people have
at least one of these forms of insurance. Businesses require specialized sorts of insurance

27
plans that protect them against distinct dangers. A fast-food establishment, for example,
requires coverage for damage or injury resulting from deep-frying operations. Although a
car dealer is not exposed to this sort of risk, it still required coverage in the event of damage
or theft. Kidnap and ransom (K&R), caused by negligence, and public liability, often
known as faults and automobile insurance, are examples of insurance plans provided for
extremely specialized reasons.

3.1.2 INSURANCE POLICY COMPONENTS

It is essential to comprehend what life works before selecting a coverage. A thorough grasp
of these ideas will go a long way toward assisting you in selecting the coverage that best
meets your needs. Complete life insurance, for example, might not be the best sort of life
health coverage for you. Any sort of insurance has three essential components

Premium

The premium is the cost of an insurance, which is usually represented as a monthly fee.
The premium is set by the insurer depending on the risk profile of you or your business,
that might include solvency.

Limitations on Policy

The policy limit is the most an insurer will pay for a covered loss under the terms of a
policy. Maximums can be established for a certain time period (e.g., yearly or policy term),
for a specific loss or injury, or for the whole policy term, often described as the lifespan
maximum.

Larger premiums are usually associated with higher limitations. The face value of a general
annuity is the sum paid to a successor upon the insured's death, and it is the maximum
amount that the agree to pay.

28
Deductible

The premium is a pre-determined sum that the client must pay directly even before insurer
will cover a claim. Healthcare costs act as a barrier to filing a high number of minor claims.

According on the provider and the kind of coverage, deductibles may apply per-policy or
per-claim. Policies with extremely large deductibles are frequently less expensive since the
substantial and in expense leads to fewer minor claims.

Aspects Unique to You

Those with illnesses or who require frequent medical treatment should seek for options
with smaller deductibles when it comes to health insurance.

Although the yearly premium is more than a similar coverage with a larger deductible, the
lower cost of medical treatment during the year may well be worth it.

29
 LIFE INSURANCE

Before delving into the intricacies of LIC schemes, it's important to note that it may be
necessary to review LIC's historical background, as well as certain broad measurements of
the company's operating outcomes, in relation to the overall life insurance industry and life
insurance schemes during the study period. It is critical to do so, because both the historical
context and the measures I will present will provide a basic overview of the firm that
adopted them.

The strategies that will be scrutinized Such a broad perspective will serve as a solid
foundation for LIC scheme analysis. Accordingly, this chapter will be divided into two
sections. The first section will provide a historical background on LIC presented, while in
the second section, measures such as new business, business in force, premium income,
outgo, ratio of Expenses, lapse, life insurance fund, and investment will all be deducted
discussed These indicators will be analyzed using some quantitative techniques such as
rate of change over time, growth, and so on rate over the period of the study, and graphical
presentation.

3.2.1 HISTORICAL BACKGROUND

The British colonizers were the ones who brought death benefit to India in its modern form.
According to Kumar, the Oriental Life Insurance Company was created in Calcutta in 1818
and issued the first insurance policy. The Eastern, one of India's first insurance companies,
was originally created by Europeans to support their widows.

Several life insurance companies cropped up in the early nineteenth century, the bulk of
which offered policies on the lives of European settlers working for the East Indies and the
Indian government. An additional premium of 15 to 20% was imposed to the premium
because Indian life was regarded inappropriate for insurance.

"Bombay Mutual" was the first Indian life insurance firm. The Life Assurance Society was
formed in 1870 in Bombay. This was the first life insurance firm to offer conventional life

30
insurance to Indians at a reasonable price. Many Indian and non-Indian life insurance firms
have come and vanished since then, up until life insurance was nationalized. Life was
different a few years before the nationalization. The insurance business was failing to meet
its obligations. All attempts to raise the standards were in vain.

The Indian life insurance sector has been beset by two key issues during the last few years.
The premium battle, as well as ineffective investment management. When New India cut
their premium, the premium battle began. Since March 1, 1954, which was rejected, the
rate has increased by 15% by several insurance companies Those insurers put up a lot of
effort to help putting pressure on the government and parliament to put an end to it. Since
New India, this individual's premium has been reduced. The prestige of life insurance has
been harmed by action, although it was decided that demand would be rejected. As a result,
every business has cut back on its expenditures.

On January 19th, the life insurance industry was nationalized. In 1956, the government
owned 243 life insurance companies. Nationalization's aims, as declared by the then-
Finance Minister. In a radio interview, "convey the word of insurance as far and wide as
possible by more effectively mobilizing people's funds and utilizing them to their greatest
advantage. Providing policyholders with a combination of protection and efficient service
by expanding outside the more prevalent metropolitan regions and rural areas, which had
previously been disregarded.

"The Life Insurance Corporation Bill was signed into law on July 1, 1956. On September
1st, 1956, it became legislation, and the Life Insurance Corporation of India (LIC) was
founded. In 1956, LIC purchased 243 units, 153 Indian insurers, and 16 insurance firms
under the Life Insurance. 75 provident societies and non-Indian insurers these containers
were used to store there has been a total of Rs. 410 crores in aid given, with 50 lakh policies
in place securing an amount of Rs. 1250 crores in insurance there were 27,000 people in
attendance. Salaried personnel work in these departments.

31
3.2.2 THE FUNCTIONAL DEFINITION OF LIFE INSURANCE

The following are some instances of life insurance functions that were utilized in stating
the:

Providing financial assistance to those who have suffered financial losses as a result of the
death of a loved one. Malhotra used the phrase "breadwinner" to define life insurance when
he said, "Life Insurance is a method of reducing the financial burden." The burden that an
early loss of a breadwinner may cause dependents, as well as a way to save for the future.
By noting the financial savings, this formulation provided two functions to account for
elderly age. Life insurance provides protection against both premature death and living too
long.

When Huebner and Black defined life insurance as "the social device for making
accumulation to meet the uncertain loss caused by premature death or disability, which is
carried out by the transfer of risks from "many people to one person or group of people,"
they were referring to another function of life insurance. The function of life insurance as
a social instrument, according to this definition, is to cover the loss resulting from
premature death. However, another threat to human life is being disregarded in this study:
the risk of living too long.

In his book, "Organization of Indian Insurance," Sharma wrote, "Life is a series of

accidents, and life insurance is a social device to minimize the financial burden of those
accidents. Through life insurance, financial security, and business and the family is secret.
"

According to Sharma, the ultimate purpose of life insurance is to provide the financial
stability of both company and family. This is one of the most significant, if not the most
important, functions of life insurance. Many other social devices, on the other hand,
perform the same function but aren't termed life insurance.

It can be observed from the preceding definitions that functional definitions of life
insurance focused on the following elements:

32
 1. Communal action (social instrument or method)
2. The goals of life insurance are:

 Protection against the breadwinner's premature death by providing payment

of the stipulated sum upon the occurrence of a specified event on the
breadwinner's demise.
 Providing a savings and investment vehicle through Endowment Schemes
(which will be explored in further detail later), which provide the
policyholder with a predetermined sum at a specific age and allow them to
invest it. If the insured person dies before reaching that age, the
predetermined payment is paid to the beneficiary is given to the recipient
this means that life insurance is necessary. contains two crucial
components: protection and conserving element.

3.2.3 THE CONTRACTUAL DEFINITION OF LIFE INSURANCE:

Some academics studied insurance from a contractual standpoint. Others considered the
life insurance contract to be a legal instrument. The following are some definitions of both
groups: "Life insurance is a contract whereby the insured promises to pay a uniform rate
premium at fixed intervals of time against which the insurer agrees to pay a fixed amount
on the occurrence of the event, which may be the insured's death or the expiration of a
certain number of years," says Gopalakrishnan.

The definition includes the most important elements of any life insurance contract, such as
the contract's parties, insured and insurer, as well as each party's obligations (the insured
pays the premium and the insurer pays the benefit) and the risks covered by life insurance,
which include the insured's death (premature death) or the insured's living to a certain age.

Huebner and Black introduced a new concept of life insiirance. According to them, life
insurance may be described as "a contract wherein one party (the insurer) promises to pay
the other (the insured) or a beneficiary a specific sum upon the occurrence of death or some
other specified event for a stated payment the premium" (Huebner).

33
The beneficiary is another party participating in a life insurance transaction, as defined
under the definition. The recipient is the policyholder's selected person is the individual
who will receive the stated benefits. Payment is made after the insured's death. M.N.
Mishra, on the other hand, described life insurance as "the contract whereby the insurer, in
exchange for a premium, agrees to pay a certain quantity of money either on the "Mishra"
(Mishra) 1995, p. 49). It should be noticed that the previous definition made no indication
of who should be paid "a particular quantity of money."

3.2.4 ROLE OF LIFE INSURANCE

The First Role: Life Insurance as a "Investment"

Insurance is an appealing investment choice. While most consumers are aware of

insurance's risk hedging and tax-saving possibilities, many are unaware of its
advantages as an investment option. In addition to the extra incentives (read
bonuses supplied) by insurers, insurance products earn a lot more than traditional
investing options. You can't compare associate degree insurance products to
various investment strategies for the simple reason that insurance protects your
money from hazards, whereas non-insurance goods don't.

The Second Role: Life insurance as "Risk Coverage".

First and foremost, insurance is about risk mitigation and protection - specifically,
money protection to help you survive life's unforeseeable losses. Insurance, which
is designed to protect you against losses caused by any unforeseen occurrence,
gives you a sense of confidence that no other investment can match.

By purchasing life insurance, you get peace of mind and are prepared to meet any
financial obligations that may arise in the event of an unexpected death. Insurance
companies gather contributions from a large number of people who are exposed to
the same risk in order to provide such protection. A loss claim is reimbursed from
the premiums received by insurance companies, which function as trustees for the
funds.

34
Insurance also serves as a safety net in the event of an accident or a financial gain
upon retirement. An accident or disability can be terrible, and an insurance policy
can provide immediate assistance to the family. It also serves as a great benefit once
you retire, in the event that no unfortunate events occur throughout the policy's
duration. With the advent of private sector businesses into the insurance market,
you now have a wide range of products and services to choose from. Furthermore,
some of them are frequently tailored to meet the special needs of individuals or
groups. Given the amount you've already paid, it's worth investing in some
additional sleep.

The Third Role: Life insurance as "tax planning".

Insurance might also help you save money on taxes. To stimulate the flow of cash
into productive assets, the Government of Republic of India has granted tax benefits
to life assurance products. An individual is entitled to a 20% discount on the yearly
premium paid on his or her life and the lives of his or her children or adult children
under Section 88 of the Income Tax Act of 1961. The refund is deducted from the
individual's or a Hindu Undivided Family's tax liability.

35
 TYPES OF LIFE INSURANCE

There are several different forms of life insurance to suit a variety of requirements and
tastes. The key decision of whether to get partial or total health insurance is vital to consider
dependent on the individual to be insured's short and medium or lengthy needs.

3.3.1 Term life insurance

Term life insurance lasts a certain number of years, then ends. You choose the term when
you take out the policy. Common terms are 10, 20, or 30 years. The best term life
insurance policies balance affordability with long-term financial strength

 Decreasing Term Life Insurance decreasing term is renewable term life insurance
with coverage decreasing over the life of the policy at a predetermined rate.
 Convertible Term Life Insurance convertible term life insurance allows
policyholders to convert a term policy to permanent insurance.
 Renewable Term Life Insurance is a yearly renewable term life policy that
provides a quote for the year the policy is purchased. Premiums increase annually
and is usually the least expensive term insurance in the beginning.

3.3.2 Permanent life insurance

Unless the insurer ends up paying monthly or surrenders the policy, permanent life
insurance remains in effect for the rest of the insured's life. It is usually costly than
credit facilities.

 Whole life insurance is a sort of term life that builds its cash value over time.
 Cash value life accommodates the user to use the financial value for a variety of
things, including obtaining loans or cash, as well as paying cash flows.
 International Life is a form of annuity with an interest-bearing cash value feature.
Premiums for National Life are adjustable. With phrase including whole income
protection, rates can be changed over time, and the sum assured can be set at a
fixed amount or increase over time.

36
 Indexed Universal Life Insurance's cash value component allows policyholders to
receive a set or equity-indexed interest rate.
 Variable Universal Life Insurance: With variable universal life insurance, the
policyholder can invest the policy's cash value in a separate account if one is
available. It also offers adjustable premiums and may be customized to provide a
fixed or growing death benefit.

37
 PRINCIPLES OF LIFE INSURANCE

Life insurance principles can be divided into two categories. The principles of life
insurance as a form of insurance, i.e. the principles of insurability, are included in the first
category. The legal principles that rule, govern, and organize the life insurance contract as
a legal instrument are found in the second category. In addition, the legal principles may
be separated into two sub-groups: one comprises the basics of each commercial transaction,
and the other contains legal concepts relating to life insurance. The three sorts of principles
are explored in the sections that follow.

1. Principles Related to Insurability: The application of general insurance

principles to life insurance is covered in this section. Because life insurance is a
form of insurance, all life risks that are covered by life insurance must meet the
standards of insurability. The following are some of these conditions:

a. Large Number of Persons: The use of an insurance mechanism requires a

large number of equivalent independent exposure units. For life insurance
to be useful, a substantial number of people in each age group must be
present, as this is the basis for predicting the rate of death, or mortality rate,
which is the most important element that influences life insurance
premiums.
b. Spread of Risk: In general insurance, a significant number of people
exposed to the same risk should not be geographically or financially
concentrated. That is, the insured people should not be confined to a single
location at all times. Despite the fact that there is no limit on the amount of
personal life insurance, life insurance firms will not take any policy sum
greater than eight to ten times the insured's yearly income in order to
distribute financial loss. If, for economic, political, or other reasons, the life
insurance firm enters contracts that do not match these conditions, it shares
the risk through reinsurance.

38
c. Fortuitous Loss: This criterion means that in order for a risk to be
insurable, it must be a possibility, and the risk's occurrence must be beyond
the insured's control. In this regard, two aspects should be stressed.

 Because death is unavoidable, life insurance does not cover the

incidence of death, which is definite, but rather the moment of
death, which is uncertain.
 Even if the insured purposefully causes the loss to occur, insurers
accept the suicide risk after a specified number of years, generally
two years, for humanitarian and societal reasons. This is true
because if the benefit is not paid, the entire purpose of life insurance
as a means of protecting the dependents left behind is undermined.
Furthermore, the dependents of a suicide victim are in desperate
need of the benefits of a life insurance policy, just as they would be
if the insured had died for any other cause. Only the premiums paid
by the insured will be returned to the beneficiary if suicide occurs
before that period (i.e. three years).

d. Calculable Chance of Loss: The chance of the risk occurring, among other
factors, is used to calculate insurance premiums. As a result, the likelihood
of the risk or danger of loss occurring must be calculable in order to
determine the premium. The likelihood of the occurrence of the event that
causes the loss, such as the chance of dying at a specific age or the
probability of being alive until a certain age, may be determined using
mortality tables in life insurance.

A mortality table is an instrument that is used to calculate the chances of

survival and death for people of various ages. Because mortality tables are
a record of past events, they are used to forecast future events by assuming
that future conditions would be the same

39
 e. Definite Loss: Because the loss in life insurance is determined by its
nature, the death or life is extremely evident and thus certain, this principle
is less significant than it is for general insurance. Furthermore, unlike
general insurance, the insurance sum is set, and it is not necessary to
determine the loss in order to pay the claim.
f. Economic Feasibility: It is critical for a firm to be fiscally viable, just like
any other business. The cost of life insurance, like any other form of
insurance, is determined by the extent of the potential loss to the insured as
well as the cost of insurance to the insurer.

2. Features of General Contract and its Application in Life: As a contract, life

insurance policy must have the same essentialities of any other business contract.
These essentialities are required by the law for any contract to be enforceable. For
example, these essentialities are stated in Indian Contract Act, 1872 Chapter II
Section (10). Features of General Contract are explained below:
i) Agreement Offer and Acceptance: For any contract to be valid, all parties
involved in the contract must agree on the terms and conditions of the contract.
The agreement usually occurs when one party make an "offer" and the other
accept that offer. Life insurance contract may be created by three ways.
a) The proposer pays the premium along with the application and receives
a conditional receipt or temporary note. Then the policy sent to him
later. In this case the proposer (the applicant) made an “offer" and the
dispatch of acceptance letter by the insurer is the "acceptance". The
insured will be covered from the date of the payment of the first
premium. In the United States, life insurance becomes effective at the
time of medical examination or date of conditional receipt of the later
of acceptance, provided that the applicant is found insurable. Moreover,
in some states such as California, "interim insurance is effective upon
payment irrespective of the insurability of the applicant.
b) The applicant submits the proposal without payment of the premium.
The proposal, in this case is considered to be "an invitation from the

40
 proposer to the insurer to make an offer", the insurer send the proposer
a latter asking him for the payment of the first premium without any
alteration, then the insurer latter is considered to be an "offer" and the
payment of the first premium by the proposer.
c) Case 2, if the insurer's letter contains demand of making some changes,
the proposal would be called "counter-offer" (Indian Contract Act,
1872).

41
 LIFE INSURANCE CORPORATION (LIC)

In 1912, the Life Insurance Act and the Provident Fund Act were approved, establishing
the industry's first regulated framework. The Indian Insurance Businesses Act of 1928 gave
the government the authority to gather statistics data from both life and non-life insurance
companies. Following the Insurance Act of 1938, the government tightened its grip on a
sector that had seen numerous financially disastrous businesses fail. In 1944, a measure to
nationalize the insurance business was proposed in the Legislative Assembly.

The Corporation has expanded from about 300 offices, 5.6 million policies, and a corpus
of INR 459 million (US$ 92 million at the 1959 exchange rate of roughly Rs. 5 for a US)
to over 25000 offices, 180 million policies, and a corpus of more over INR 8 trillion (US$
173 billion). The company presently has 2048 branches, 109 divisional offices, and 8 zonal
offices, with a total workforce of 1,002,149 agents. LIC's headquarters are located in
Mumbai. It also has a presence in 12 additional countries, largely serving the interests of
non-resident Indians.

LIC has been the greatest company in the insurance field for more than 53 years, providing
excellent service and a wide selection of products, as well as providing the best returns to
customers in the insurance market. Pension Plans, Children Plans, Marriage Endowment
Plans, Special Plans, ULIP Plans, and many other plans are available via the LIC. We'll
locate the widest selection of plans, and the company will also provide decent returns. In
the fiscal year 2008-09, LIC returned around 7.5 percent, whereas ULIP returned over 22
percent, and LIC has a 75 percent market share in India's insurance sector.

In June 1974, following the Administration Reforms Commission's advice that the
government give a clear explanation of each of the public sector's objectives, the
government did so.

3.5.1 The following are the aims that LIC has set for itself.

1. Spread life insurance considerably more extensively, especially in rural regions and
among the socially and economically disadvantaged, in order to reach all insurable

42
 people in the country and providing them with sufficient financial resources at a
low fee, you can protect yourself against death.
2. Maximize the mobilization of people's savings through enacting legislation.
Insurance kinked savings were enough appealing.
3. Keep principal duty in mind when investing finances to its policyholders, whose
funds it keeps in trust, losing sight of the community's overall interests the fund that
will be used to the benefit of investors as well as the entire community, bearing in
mind the Priorities and duties of national importance with a high rate of return.
4. Run your company in the most cost-effective and efficient way feasible. The fact
that the money belongs to the policyholders.
5. In both individual and collective capacities, act as trustees for the insured public.
6. Fulfil the community's different life insurance demands as they arise as the social
and economic environment changes.
7. Involve all employees to the best of their skills increase their ability to protect the
insured's interests. By offering prompt and courteous service.
8. Encourage all of the company's agents and workers to participate a sense of
belonging, pride, and fulfilment at work discharging their responsibilities with a
commitment to accomplishment of business goals.

3.5.2 MISSION

"Explore and enhance the quality of life of people through financial security by providing
products and services of aspired attributes with competitive returns and by rendering." 81

3.5.3 VISION

"A trans-nationally competitive financial conglomerate of significance to societies and

price of India."

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3.5.4 FUNCTIONS OF THE CORPORATION

The Corporation's general responsibility shall be to carry on life insurance business,

whether in or beyond India, and the Corporation shall exercise its powers under this Act in
such a way that life insurance business is promoted to the community's benefit. 70

a) to engage in capital redemption, annuity certain, or reinsurance business, inasmuch

as such reinsurance business relates to the life insurance company.
b) To invest the Corporation's funds as it sees fit, and to take all necessary or
expedient steps for the protection or realization of any investment, including taking
over and administering any property offered as security for the investment until a
suitable opportunity for its disposal arises.
c) To acquire, hold, and dispose of any property for the Corporation's business.
d) Transfer the entire or a portion of the life insurance business conducted outside of
India to any other person or people if it is in the Corporation's best interests.
e) To advance or lend money in exchange for any moveable or immovable property
or other security.
f) To borrow or raise funds in any manner and on any security that the Corporation
deems appropriate.
g) To conduct any other business, either directly or via a subsidiary, in any case where
such other business was previously conducted by a subsidiary of an insurer whose
controlled business was transferred to and vested in the Corporation under the Act.
h) To engage in any other activity that seems to the Corporation to be capable of being
easily conducted in connection with its business and that is designed, directly or
indirectly, to make the Corporation's business profitable.

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 INVESTMENT PORTFOLIO OF LIC OF INDIA

Since its inception in 1956, the Life Insurance Corporation of India has been a nation
builder. The LIC, in keeping with the nationalization goal, has mobilized the monies
invested by people in life insurance for the benefit of the whole community. True to the
spirit of nationalization, the firm has used the revenues to benefit policyholders as well as
the community as a whole. Its key investing criteria are national interests and the duty to
provide adequate returns to policyholders.

As of March 31, 2008, the total money invested for the welfare of the population at large
amounted to Rs 751129 crores (provisional). The investment of the corporation's money is
controlled by Section 27 A of the Insurance Act of 1938, as well as the IRDA's rules and
subsequent guidelines/instructions issued thereunder by the Government of India from time
to time.

As per corporate shareholdings filed for March 31, 2022, lic of india publicly holds 9 stocks
with a net worth of over Rs. 16,492.6 Cr. These are shares held by lic of india as per the
shareholding data filed with the exchanges. The latest quarter tends to have missing data
since not all companies may have reported their shareholding data till now.

45
 SOME OF THE IMPORTANT MILESTONES IN THE LIFE
INSURANCE BUSINESS IN INDIA

 1818: Oriental Life Insurance Company, the first life insurance company on Indian
soil started functioning.
 1870: Bombay Mutual Life Assurance Society, the first Indian life insurance
company started the business.
 1912: The Indian Life Assurance Companies Act enacted as the first statute to
regulate the life insurance business. 83
 1928: The Indian Insurance Companies Act enacted to enable the government to
collect statistical information about both life and non-life insurance businesses.
 1938: Earlier legislation consolidated and amended to by the Insurance Act with
the objective of protecting the interests of the insuring public.
 1956: 245 Indian and foreign insurers and provident societies are taken over by the
central government and nationalized. LIC formed by an Act of parliament, viz. LIC
Act, 1956, with a capital contribution of Rs. 5 crores from the Government of India.

46
 DIFFERENCE OVER SERVICE TAX ON LIFE POLICIES

The Insurance Regulatory Authority (IRDA) and the Revenue Department are at odds over
how to calculate the risk premium component of life insurance plans on which the
government wants to apply a 5% service charge. The introduction of the new tax has been
delayed due to a dispute between the two. While the revenue department believes that the
risk premium should be computed at a flat rate of 10% of the aggregate premium of a life
insurance policy and adds a 5% surcharge to the calculated amount, the IRDA believes that
the computation should be based on correct actuarial calculations.

In 1994, one of the three services originally included by the Service Tax net was general
insurance. Following that, Life Insurance Services and Insurance Auxiliary Services were
added to the list of taxable services. Insurance Services, along with other services such as
banking and other financial services, telecommunications services, and business auxiliary
services, have been a key income contributor during the last two decades. According to the
2012-13 Finance Accounts, Service Tax receipts from insurance-related services such as
general insurance, life insurance, insurance auxiliary services, and investment management
under unit-linked insurance plans were 11,034 crore (8.32 percent of total Service Tax
income).

If the proposal to levy service tax on life insurance only applies to new policies, all life
insurance companies should make a small fineprint amendment to the policy terms and
conditions that specifically states that the policy holder is responsible for all taxes,
surcharges, and payments of any kind, including service tax levied from time to time by
the state or federal government in respect of life insurance. The foregoing clauses may only
be inserted in new insurance policies, according to the industry, and cannot be included in
current insurance policies provided by LIC and other private companies.

47
 IN A PERSPECTIVE OF LIC

Consider a client who comes to LIC to receive a loan and sees +over people who are also
waiting for this and other services. Physical settings, such as a structure, its interior, and its
furnishings, are also visible to the client. The balance between 'greater' and 'high touch'
services should be maintained by IC. Knowledge, talent, technology, equipment, financial
strength, and other high-tech qualities of LIC brand services are included. Gearing,
affective values, and mediational values are all part of high touch.

48
 CHAPTER FOUR

4 RESEARCH METHODOLOGY

RESEARCH METHODOLOGY

The practical "how" of any specific piece of analysis is referred to as research technique.
Rather than how an investigator plans a study in a methodical way to guarantee that the
results are accurate and trustworthy and that the research goals are met.

The report is generally theoretical based it has already been done by the scholars. Finding
areas and upheld and appropriate responses of the questions been asked by different
customers. Information sources would incorporate secondary information from various
materials. Different Research Papers and articles from the main diaries, papers,
magazines. Likewise perspective and conclusions from the experts from the main
industry were also consolidated during this report.

A section of the research contains the topics described above and can be found in a thesis,
thesis, or academic journal article. A strong chapter basically in a project paper also
discusses why methodological decisions were adopted. To put it another way, the methods
section should explain the design decisions by demonstrating that the methodologies and
mode of entry are the best match for the study targets and can provide valid and trustworthy
findings. A solid research approach ensures that the findings are scientifically valid.

The research methodology comprises of the sources of data, methods adopted to collect
such data, sampling techniques, statistical tools for analysis, data interpretation etc.

49
 TYPES OF RESEARCH

Research is a type of public relations management that necessitates the use of specialist
technologies. When we require a specific fact in usually private information firsthand and
especially vital to a favorable purchaser or campaign, we use the phrase significant
research.

Primary research is the most expensive type of data to obtain since it is unique to the
business and research issue.

Secondary research is research that is normally in the public domain but is relevant to our
customer, company, or industry and may be utilized to round out and support the findings
of primary research. Secondary search is typically done on the internet, in libraries, or
through industry and alternative organizations. Secondary research can be found for free
or cheap in reference books, encyclopedias, and exchange press publications. As a
starting point for exploration. As a starting point for determining the type of main lookup
that has to be done.

The type of research are as follows.

1. Observation Method
The observation approach is the most effective way to guide expressive
investigation, while the exploration technique makes use of both quantitative and
qualitative perception.

2. Quantitative Observation
The greatest target collection of knowledge revolves mostly around numbers and
attributes. Following that, the consequences of quantitative perception are
calculated using factual and mathematical data. Quantitative research has the
advantage of allowing you to understand who your public's politics are, where you
can acquire data, where they can get data, and the number of accepted perceptions
where the connection has the most profound reverberations with their conviction.
Segment Factors are used to divide publics into distinct groups. Gender, training,

50
 race calling, geographical location, yearly family salary, political affiliations, rigid
association, and family size are all examples of demographics.

3. Qualitative Observation
It excludes the estimate of numbers or the estimation of numbers based on the
qualities. In this case, scientists must pay close attention to replies. The traits
identified are prevalent and successful because the respondents are in a pleasant
environment. The specialist might choose to be a whole eyewitness in a fascinating
examination. Quantitative research is adopt at responding to questions posed by
experts. Why or how did you do it? This form of inquiry allows the analyst to ask
the participants to categorize their reasoning in terms of dynamism, conviction,
frameworks, values, and thinking styles.

4. Case study method

It includes both the interior and outside, as well as exams and investigations of
individuals or groups. A case study might lead to a theory and broaden the scope
of pondering a miracle. Another reason why case studies are not a precise technique
of guiding illuminating research is that there may be an unusual responder in the
study, and depicting them depicts helpless assumptions and moves away from other
validity. The detailed investigation of a single situation is included in a case study.
Different approaches for gathering information and inquiry are used, but the most
typical are perceptions and meetings, which may involve counselling others and
individual or publicly published reports.

5. Survey Method
Data from truly large groups of people is collected using polling methods and other
procedures in survey methodologies. There are several types of overviews. Is an
example of an individual at a certain point managed as expected? Another kind is
a research in which people compete before a key event or experience and then
compete again afterwards; the method used for this investigation is the Survey
Method. Members of the research team respond to the address regulated through

51
meetings or polls using the review approach. After members have responded to the
questions, professionals will present the answers. In order for a review to be both
reliable and valid, it is critical that the questions are constructed correctly.
Questions should be written down.

52
 SOURCES OF DATA

1. Primary Data
Primary data is information obtained directly from primary sources by analysts
through meetings, research, and tests, among other methods. The most ideal type
of information in an investigation is acquired from the source - where the
information first begins.
The wellsprings of primary data are often gathered and custom filled to meet the
objectives or requirements of individual research. Similarly, elements like the
point of investigation and the target population should be identified before
choosing an information collection source. The researcher created a structured
questionnaire and used the survey approach to collect primary data

Advantages of primary research are

 There is no doubt about the nature of the information acquired for the
customer, and it may be possible to get further information throughout the
investigation period if necessary.

Disadvantages of primary research

 Every issue of the data arrangement must be fought by the examiner.
 Deciding why, what, how, and when to collect data
 Obtaining the gathered data
 All of the ideal data is collected appropriately, and it is used in the course
of the action.
 There is no fabricated or prepared information.
 Data that is unnecessarily/silly has not been consolidated.
 The cost of obtaining data is always a significant price in evaluations.

53
 2. Secondary Data
Secondary data is information that has recently been gathered from primary sources
and made readily available to scientists for their own evaluations. It is a type of
information that has lately been compiled.
A researcher may have gathered data for a specific project and then made it
available for another topic specialist to use. Similarly, the data might have been
gathered for broad use without any special exploratory purpose in mind, such as the
virtue of public enrollment. For the collection of optimum information for this,
course readings, magazines, diaries, papers, and websites were used

Advantages of Secondary Research

 There is now no data arrangement issue
 It is more moderate
 It is easy to obtain
Disadvantages of Secondary Research are
 The agent can’t choose what is gathered.
 One can dare to dream that the information is of acceptable quality
 Business
 Not Ideal
 You are not the proprietor of data

The data for the study have been collected from primary sources. Primary data have been
collected through - responses received from google form questionnaire.

54
 UNIVERSE OF THE STUDY
The universe consists of consumers of both traditional as well as ecommerce businesses are
selected at random for the purpose of the study.

SAMPLE SIZE AND SAMPLE UNIT

The primary purpose of the study is to establish the level of knowledge regarding life
insurance in India. The number of subjects included in a sample size is referred to as the
sample size in market research. When we talk about sample size, we're talking about a
group of people chosen from the general population and considered representative of the
real population for that particular research.

For the study a sample of 83 consumers has been selected on the basis of convenient
sampling for the purpose of the research.

The final judgment's legitimacy and accuracy are critical, and they are heavily contingent
on the amount of data gathered in the first phase. Because data quality has a substantial
influence on conditions, this method must be given high importance, and every effort
should be taken to assure correctness when collecting data. One of the main challenges
with this technique is the justification of sample size. The sample size calculation takes
into account how much data is required to make an educated decision regarding a study.
The judgement will be more correct if there is more data, and the parameter estimate will
be less inaccurate. This isn't to argue that larger is always better when it comes to sample
size calculations.

55
 SAMPLING TECHNIQUE

The sampling strategy is a technique for selecting people or a subset of the population to
form statistical inferences and estimate population characteristics. Several sampling
procedures are widely used in market research so that researchers do not have to explore
the entire population in order to obtain useful information.

For the study convenient sampling technique method has been applied on the basis of
suitability for the availability of information and in market research, there are two forms
of sampling: probability sampling and non-probability sampling. Let's take a closer look at
these two methods.

Probability sampling is a sampling approach in which a researcher selects a few criteria

and selects individuals from a population at random. If the selection criteria are met, all
members have an equal chance of being included in the sample.

When a researcher uses non-probability sampling, volunteers are chosen at random for the
study. This isn't a predefined or specified sampling method. This makes it difficult to
ensure that everyone in a population has an equal chance of being included in a sample.

56
 DATA REPRESENTATION TOOLS

The data collected are classified, tabulated and represented through chart and bar diagram.
This research aims to study about life insurance with reference to LIC. Quantitative survey
was conducted in this study to investigate the perceptions of the people regarding insurance
sector precisely life insurance and their awareness about LIC, Methods & practices to
structure the life insurance. The questionnaire is designed in order to gather information
about awareness about LIC, life insurance. What are their insurance company preference?
Which factor do they consider before investing? What's their purpose of buying life
insurance policy? Are people satisfied by policies or services provide by LIC Give reason
for insuring with LIC. The questionnaire was designed in line with the research objectives.
The questionnaire was circulated among the people between the age group of 15 to 45 &
above.

57
 CHAPTER FIVE

5 DATA INTERPRETATION

A survey was conducted where 83 people participate. The data has been interpreted with
the help of simple pie chart. This survey really helped one to known people perspective
regarding insurance, life insurance, and Life Insurance Corporation (LIC).

GENDER

The survey was carried out among group of people through google form where it shows
44.6% was males and 55.4% was females.

58
 AGE

The chart shows that the out of 83 people who filled the form 62.7% of the whole were
from the age group of 15 – 25, 12.0% were from the age group of 26 – 35, 18.1% were
from the age group of 36 – 45 and 7.2% were from the age group of 46 & above. So as per
the chart it’s really appreciated that the new age or youth is aware about concepts like
insurance, life insurance etc.

59
 OCCUPATION

Out of all 49.4% people who filled the form are students, 22.9% of people do service,
8.4% people who filled the form are homemaker and rest 19.3% people are self
employed.

60
 BREADWINNER OF THE FAMILY

The breadwinner in a family is the only person who earns money for the rest for their
survival and needs. 77.1% of whole are not the only breadwinners of their family and
22.9% of whole are the sole earner of the family, which means that their family's expenses
are their responsibility.

61
 MONTHLY INCOME

78.3% of the chart are the members who earn less than 50000 per month, 14.5% of the
people who filled the form are the people who earn between 50000 to 100000 per month
and rest 7.2% are the people who earn above 100000 per month.

62
 WHICH INSURANCE COMPANY WILL YOU CHOOSE

The pie chart shows that people who rather buy insurance from the public company or
private company. 75.9% of people willing to buy from public company and rest 24.1%
people are willing to buy insurance from private company. In all it shows people trust
public company more than private company.

63
 AWARENESS ABOUT LIC

When we ask to people that they are aware about LIC out of whole 97.6% people are aware
about it, rest 2.4% of people are not aware about it watching this still there are people who
need to get aware about LIC or life insurance because it’s must for one to know about it
and even should have one insurance to make their life secure.

64
 DO THEY HAVE LIFE INSURANCE POLICY?

When asked people that do they have insurance policy or not out of 100%, 78.3% of people
have insurance policy rest all do not have. So we need to educate them about the insurance
that how necessary is for one to buy insurance for their safe future, post retirement plans,
and a helping hand after their demises to their family in financial terms.

65
 WHICH FACTOR DO YOU CONSIDER

The pie chart explain that what people think before investing in insurance out of all 3.6%
people think that investing in insurance is low risk subject, 10.8% invest because they think
insurance is safety of principal. 8.4% of the people insvest for high return, 77.1% people
think that invest in insurance can be all of the above i.e. low risk, safety of principal and
high return.

66
 PURPOSE OF BUYING INSURANCE

50.6% of people who filled the form, their purpose to buy insurance is to ensure that their
family has some financial support after their demises, 31.3% of people invest to fund their
retirement, 14.5% people invest in insurance to provide an income to replace the lost of
earnings at the time of need. 3.6% invest in insurance to pay for education of their family.

67
 MEDIUM FOR POLICY BUYING

When asked people that from what medium they would like to buy insurance 26.5% would
like to buy insurance from online, 57.8% people would like to buy through agent so they
can understand the concept of insurance clearly and even they will be completely aware
about terms and condition of insurance. 15.7% of people will like to buy from bank so their
money would be safe.

68
 SATISFIED WITH THE SERVICES OF LIC OF INDIA

When asked to people are they satisfied with the services provide by Life Insurance
Corporation (LIC) of India 73.5% people really satisfied from the services provided by
LIC India. 2.4% of people are not satisfied and 24.1% of people don’t known whether
services satisfied them or not so they choose maybe option.

69
 REASON FOR INSURING WITH LIC

When asked the group of people why they are insuring with LIC so responses are like 6.0%
insure themselves with LIC because it’s a public sector, 6.0% people insure because it’s a
brand with a lot of goodwill from a long period of time. 6.0% people insure because of
company profile and rest 81.9 agree with all the three reasons i.e. company profile, brand,
public sector for insuring with LIC.

70
 SOURCE OF INFORMATION ABOUT LIFE INSURANCE

When asked people what’s their source of getting information regarding life insurance
67.5% people says that they got information from insurance advisor, 12.0% seek
information from website or online, 2.4% people got information from newspaper and rest
18.1% got information from TV.

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 CHAPTER SIX

6 FINDING & RECOMMENDATION

CONCLUSION

According to the study various aspects were defined or explained such like insurance, types
of insurance, detailed information regarding life insurance given even the public sector
company LIC is been detailed explained, objectives, methodology, data interpretation and
many more. The need for insurance has increased dramatically as a result of the rise in
adventurous and dangerous human activities. There are many dangers in life. As a social
animal and a risk taker, the normal person strives to minimize danger. The genesis of the
notion of insurance was based on an age-old approach of risk sharing through economic
operations.

"Insurance" is a term used to describe a policy that protects a person against financial loss.
Insurance plans are intended to protect against financial losses, both large and minor, that
may occur as a consequence of harm to the insured or their property.

In the life insurance literature, there are several definitions of life insurance. These
definitions, however, can be separated into two categories: functional and contractual. It's
difficult to analyze the goals and objectives of insurance plans without first understanding
the many sorts. They're as follows: Term Life Insurance, Universal Life Insurance, Whole
Life Insurance

The life insurance industry in India is managed by the Life Insurance Company of India
(LIC), a statutory company with a monopoly in the field. Its objectives include protecting
the insured's life and promoting savings. The company started off with two different types
of policies: whole life and endowment. Later, in order to attract more investors and give
new sorts of benefits to the insured, the LIC introduced a range of new life insurance
policies, including money return policies, double benefits, triple benefits, pension plans,
unit linked insurance plans, and so on.

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Until 2010, the topline was the only thing that mattered to insurance firms. Companies
have been deploying cash and developing their branch networks across the country. After
2010, regulators began focused on the bottom line, and as a result, we are not seeing enough
money deployed for expansion. Even firms who raised funds through a public offering or
private placement did not use the funds to distribute buildings. Now is the time for
scalability, and more cash must be deployed.

Efficiency is, without a doubt, a critical factor in the insurance industry's success, but it has
its own limitations. Given that we are still only at 2.76 percent penetration, we must begin
focusing on rapid expansion. After we've reached a volume that's proportional to our
potential, we should concentrate on increasing profitability and efficiency.

So clearly shows that one should have life insurance to secure their and their loved ones
future. It helps one to educate themselves or helps one post retirement, substitute income
for one facing losses, and can be helping hand for one’s family after their demises in
financial terms.

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 MAJOR FINDINGS

1. Through a major finding from Google form, it was discovered that 44.6 percent of
the participants were men and 55.4 percent were females.
2. According to the finding, 62.7 percent of the 83 persons who filled out the form
were between the ages of 15 and 25, 12.0 percent were between the ages of 26 and
35, 18.1 percent were between the ages of 36 and 45, and 7.2 percent were between
the ages of 46 and above. So, according to the graph, it's great that the new
generation, or young, is aware of things like insurance, life insurance, and so on.
3. 49.4 percent of those who filled out the form are students, 22.9 percent perform
volunteer work, 8.4 percent are homemakers, and the remaining 19.3 percent are
self-employed.
4. A family's breadwinner is the lone one who makes money for the rest of the family's
survival and necessities. 77.1 percent of people are not the primary breadwinners
in their families, while 22.9 percent are the sole earners, meaning they are
responsible for all of their family's costs.
5. Members earning less than $50,000 per month make up 78.3 percent of the chart,
while those earning $50,000 to $100,000 per month make up 14.5 percent, and
those earning $100,000 or more per month make up the remaining 7.2 percent.
6. The pie chart depicts whether individuals choose to buy insurance from a public or
private firm. 75.9% of individuals prefer to buy insurance from a public firm, while
the remaining 24.1 percent prefer to buy insurance from a private company.
Overall, it demonstrates that individuals have higher faith in public companies than
private companies.
7. When we ask people if they are aware of LIC, 97.6% of people are aware of it,
while the remaining 2.4 percent are unaware. Despite this, there are still people who
need to become aware of LIC or life insurance because it is necessary to be aware
of it and to have one insurance to make one's life secure.
8. When asked if they have insurance or not, 78.3 percent of individuals say they do,
while the remaining 97.3 percent say they don't. So we need to teach them about
insurance and how important it is to acquire insurance for a secure future, post-
retirement plans, and financial assistance to their families when they pass away.

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9. The pie chart depicts what individuals assume before investing in insurance. While
3.6 percent believe that insurance is a low-risk investment, 10.8 percent believe that
insurance is a secure haven for their money. 8.4% of individuals invest for high
returns, whereas 77.1 percent believe that investing in insurance may provide all of
the above, i.e. low risk, safety, and high returns.
10. 50.6 percent of those who filled out the survey said they bought insurance to ensure
that their families would have some financial support after they died, 31.3 percent
said they bought insurance to fund their retirement, and 14.5 percent said they
bought insurance to provide an income to replace lost earnings in a time of need.
3.6 percent put money into insurance to pay for their children's education.
11. When consumers were asked where they would want to buy insurance, most said
they would like to buy it online. 26.5 percent prefer to buy insurance online, while
57.8% prefer to buy through an agent so that they can fully comprehend the concept
of insurance and be fully informed about the terms and conditions of the policy.
15.7 percent of individuals prefer to purchase via a bank, therefore money would
be safe.
12. When consumers are asked if they are pleased with the services provided by the
Life Insurance Corporation of India (LIC), the majority say yes. 73.5 percent of
individuals are extremely happy with LIC India's services. 2.4 percent of
individuals are dissatisfied, and 24.1 percent are unsure whether the services they
received were satisfactory, therefore they pick the maybe option.
13. When asked why they insure with LIC, the group's replies range from 6.0 percent
insuring because it's a public sector, to 6.0 percent insuring because it's a brand with
a lot of goodwill over a long period of time. 6.0 percent of consumers insure
because of the company's profile, while the remainder do not. 81.9 percent agree
with all three grounds for insuring with LIC: firm profile, brand, and public sector.
14. When consumers are asked where they receive information about life insurance,
the most common response is the internet. 67.5 percent of respondents said they
acquired information from an insurance counsellor, 12.0 percent from a website or
internet, 2.4 percent from the newspaper, and the remaining 18.1 percent via
television.

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 SUGGESTION REGARDING LIFE INSURANCE

Suggestion as per my research

1. Getting insured is must: One should get

2. Everyone should insure themselves / buy insurance to avoid financial loss
3. Just invest
4. Start early
5. Spend and know your spending limits
6. Start investing early
7. Insurance help one in building a safe and secure future
8. Insurance policy for family members for good future
9. Financial planning will help in efficient use of money and helps to work towards
our goal. Most importantly, money should be used wisely.

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 CHAPTER SEVEN

7 BIBLIOGRAPHY AND ANNEXURE

BIBLIOGRAPHY

1. https://www.wikipedia.org\

2. https://shodhganga.inflibnet.ac.in

3. https://www.investopedia.com

4. https://www.researchgate.net/

5. www.indiastudychannel.com

6. www.coverfox.com

7. https://gradcoach.com/

8. http://www.dspace.dtu.ac.in/

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 ANNEXURE

COPY OF QUESTIONAIRE

1. Name

2. Email Id

3. Gender
a) Male
b) Female
c) Prefer not to say

4. Age

a) 15 – 25
b) 26 – 35
c) 36 – 45
d) 46 & above

5. Occupation

a) Student
b) Homemaker
c) Service
d) Self Employed
e) Unemployed

6. Are you the only breadwinner of the family?

a) Yes
b) No

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7. Monthly Income

a) Less than 50000

b) 50000 to 100000
c) Above 100000

8. Which insurance company will you choose

a) Public Company
b) Private Company

9. Are you aware of LIC life insurance policy?

a) Yes
b) No

10.Do you have life insurance policy?

a) Yes
b) No

11.Which factor do you consider before investing?

a) Safety of principal
b) Low risk
c) High return
d) All of the above
12.What's your purpose of buying life insurance policy?

a) To fund retirement
b) To provide an income to replace the lost of earnings
c) To pay for education expenses
d) To ensure that your family has some financial support after your demise

13.Medium for policy buying

a) Online
b) Through bank
c) Through agent

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14.Are you satisfied with the services of LIC of India?

a) Yes
b) No
c) Maybe

15. Give reason for insuring with LIC

a) Company Profile
b) Brand
c) Public Sector
d) All of the above

16.What is your source of information about life insurance?

a) TV
b) Newspaper
c) Website
d) Insurance advisor

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