LIC was incepted in 1956 in India, and it has now completed sixty-two years, and today It stands proud of the fact that it has been able to attain and become what was envisioned way back at the time of its inception.
When this is said, it does not mean its achievements in terms of premium collection and growth but its steadfastness on the motto from The Geeta “Yogakshemam Vahamyaham”. The company derive fulfillment from the fact that it have been able to secure the lives of the many crores of Indians till now in its journey.
LIC and the Backdrop of Insurance Sector in India
LIC was formed by the nationalization of the insurance sector in India in 1956 after merging 245 insurance companies and provident societies. This was a period when the insurance sector in India was witnessing a national fervor that sought basic life cover for all Indians at nominal costs.
Insurance sector during the British period was partial towards the British as the insurance companies only insured British lives. Indians seeking basic life cover were charged unreasonable high premiums as Indian lives were considered deficient by these insurance firms.
The insurance sector began to see reforms due to the efforts of national reformists, and the sector was brought under the legislation of Acts. The Insurance Act was passed in 1938 to regulate the insurance sector and bring all the life insurance and general insurance firms under the gamut of common regulation and legislation.
Nationalization and After
Prior to nationalization, there were many private players operating in the insurance sector. The Indian Government brought about a merger of all these through the nationalization movement as at that time it directly wanted to control the insurance and banking sector and ensure authenticity as these sectors were at that time crucial to ensure the well-being of Indians.
Later on, the insurance sector was again opened to the private sector after the establishment of the Insurance Regulatory Development Authority (IRDA) in 1999, the pivotal government body that regulates the entire Indian insurance sector. IRDA came into existence through Indian Parliament Act called IRDA Act of 1999.
What is Life Insurance?
The need for insuring life starts with life itself and slowly gets expressed as we progress along the journey of life. In life, we meet so many risks that we are left wondering what would happen if certain events were to impair our life as well as the lives of our family members?
Modern age man insures his/her life by paying nominal periodic amounts called premiums. Should any incident that has been covered by the policy occur during the policy term, then the policyholder or beneficiaries are entitled to claim the applicable benefits.
The most basic type of life insurance product is sole life cover. Under this policyholder can insure his life against death for the benefit of his/her survivors. In the event of the demise of policyholder within the policy, term beneficiaries can claim the sum assured and other benefits if applicable.
Other insurance based products can be health based insurance, units based insurance. Insurance products can have several riders and optional features.
Life insurance products are generally for the long term and can be renewed.
Who can Subscribe Life Insurance Policies?
All Indian, as well as non-resident Indians, can avail life insurance plans. Certain plans can be only be availed upon attaining the age of maturity whereas certain other plans like child plans and endowment plans can be availed for minors under the guardianship of an adult who is generally a parent or relative.
In order to subscribe life insurance policy one needs to submit along with the form, certificate of age, identity and income as well as address proof. Documents in support for the same can be Adhaar card, Pan card, Ration Card, matriculation certificate, income statement, passport, electricity or gas bill.
LIC Mission and Objectives
LIC was formed as an outcome of a national movement to safeguard the well-being of the citizens of our country, to equip its vast and diverse nation with at least basic life cover so as to enable its citizens to attain financial security for themselves as well as their family members in the face of crisis.
Just by paying a nominal monthly premium citizens have been able to avail life cover so that in the event of their demise their dependents continue to be adequately provided for.
It has been LIC’s objective to ensure that:
- Life insurance products are made widely available all over India, especially in the rural and backward regions and for the socially and economically deprived segment.
- It offers basic as well as enhanced and optional life cover options to suit the differential requirements of the vast and diverse nation and maximize the mobility of policy holder’s savings.
- It places utmost importance on safeguarding the interests of our policyholders.
- Invest in a manner that safeguards the interests of the nation, society and community and maximize returns.
- While investing policyholders money, LIC keeps in mind that the money belongs to our policyholders and we are the trustees of the same and invest in the best possible way.
- Participation and involvement of our employees and agents so that they provide best services to the people of the nation.
LIC operates through its zonal, divisional and branch offices. When it began operations in 1956, it had five offices at the zonal level, 33 offices at the divisional level and 212 offices at the branch level.
Since then it has evinced continuous expansion, at present it is serving over ten crore policies, and till date it has eight offices in the zonal level, 113 offices in the divisional level and 2048 offices at the branch level. All its offices are fully computerized and equipped with advanced technology.
In addition to the above, in order to maximize its accessibility by the people of the country, the company has entered into partnerships with various banking and other financial institutions to provide information on its products as well as enable premium collection through online mode. Also for getting more closer to its customers, it has set up online kiosks, Interactive Voice Response Systems (IVRs) and Satellite Sampark offices.
LIC - Product & Services
LIC has a whole gamut of insurance-based savings products that cater to the needs of every type of insurance seeker including the micro insured. It has several plans under insurance category and health plans. It also has plans for the common man, special plans, unit plans, pension plans and micro insurance plans.
LIC has a broad and deep product spectrum so as to address the needs of the different people. The products have differential features so as to suit the various requirements and priorities.
At present, its popular life insurance products include Anmol Jeevan II and Amulya Jeevan II as well as its E-term plan. The company keeps its insurance products in tune with the need of time and keeps phasing out or withdrawing older product versions and introducing newer ones.
It offers individual as well as group insurance products. The group insurance products benefit a group of people which can be a company, society or association. The employer or head of the group can avail group insurance for its members whereby members can avail cover options at reduced costs.
LIC is a completely digitalized setup, and holds digital data of more than ten crore policies. The digitalized set up is based on modern day technologies.
Computers and information technology are not new for the company. It introduced computers in its set up as early as 1964, and the older machines were timely phased out to be replaced by new generation devices.
The online drive is also not new to the company as it started promoting online services way back since 1995 so that people can access status of their policy through their online computer devices.
Today people can buy LIC’s e-policies online; they needn’t personally visit the office, they can just upload documents and pay premiums online.
LIC Claim Settlement
In the event of any crisis, LIC provides full support to its policyholders or their beneficiaries. It has a well-defined claim settlement process whereby claims can be raised and settled without any hassles.
It tries to settle maximum claims within the stipulated time frame and its claim settlement ratio for the year 2016-17 was 98.14 as per data of IRDA annual report, which was the highest in the insurance sector. In the past years also LICs claim settlement ratio has been similar and it have been continuously assessed as being the top insurance company by financial experts.
The company generally settles almost all genuine claims except those that fall under our exclusions list, and these include suicide by policyholder within one year of availing policy and situations including acts of self-injury, criminal and unlawful acts, undertaking abnormal risks and other such abnormal activities.