100 marks project on rural life insurance

8/12/2019 100 Marks Project on Rural Life Insurance

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UNIVERSITY OF MUMBAI

PROJECT ONRURAL INSURANCE

SUBMITTED BYPRIYANKA HIRAN

PROJECT GUIDEPROF. V.S. GOPAL

BACHELOR OF MANAGEMENT STUDIES

SEMESTER V(2007-08)

V.E.S. COLLEGE OF ARTS SCIENCE ! COMMERCESINDHI COLONY CHEMBUR " #0007$


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UNIVERSITY OF MUMBAI

PROJECT ONRURAL INSURANCE

S%&'*+I, P/ F%///'*, 1 * *3%*'*,4

1 * A5+ 1 * D*6** 1

B*/1 1 M,6*'*,B

PROJECT GUIDEPROF. V.S. GOPAL

BACHELOR OF MANAGEMENT STUDIES

SEMESTER V(2007-08)

V.E.S. COLLEGE OF ARTS SCIENCE ! COMMERCESINDHI COLONY CHEMBUR " #0007$


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D*/1,

I 4%+*, 1 BMS "

S*'*4* V (2007-08) **& +*/* I 9*

1':/**+ 4 :1;* 1,

T* ,1'1, 4%&'*+ 4 %* ! 16,/ 1 *

&*4 1 '


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C E R T I F I C A T E

T4 4 1 * M. >M44.

1 TYBMS 4 4%*44%// 1':/**+ * :1;*

1,

, * +*' *

2007-2008. T* ,1'1, 4%&'*+ 4 %* ,+

16,/ 1 * &*4 1 '


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ACKNO@LEDGEMENT

I would like to thank with gratitude to PROF. V.S. GOPAL for guiding me

throughout the project. i! knowledge and e"perience in the field of marketing ha!

helped in #etter under!tanding of the intricacie! of the !u#ject. $ithout hi! co%

operation it would ha! #een difficult to compile the project.

I would al!o like to thank &R. S'R(S RA)O* +*e,elopment Officer- Fort- LI/for taking their ,alua#le time out and pro,iding me with ,alua#le input! for the

project.

I would al!o like to thank our o%ordinator &RS. A. &AR)I0A- college li#rar1 !taff-

m1 PAR(0)S and m1 friend! who ha,e directl1 or indirectl1 contri#uted toward! the

completion of thi! project.


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TABLE OF CONTENT

AP)(RS )OPI PAG( 0OS.

2. I0)RO*')IO0

%Principle! of In!urance

%)1pe! of In!urance

%Rele,ance to pre!ent da1 pro#lem!

%$hat i! Life In!urance

%Life In!urance ,! Other Sa,ing!

3. I0S'RA0( I0 I0*IA

%)he In!urance Regulator1 and *e,elopment

Authorit1 +IR*A/

%*utie!- Power! and Function! of IR*A

%India ,! Glo#al market

4. I0)RO*')IO0 )O LIF( I0S'RA0(

ORPORA)IO0 OF I0*IA

%LI5! di!tri#ution !tructure

% Importance of Life In!urance &arketing

%Life In!urance &arketing &i"

6. R'RAL I0S'RA0( SIG0IFIA0( A0*

LI5S I0I)IA)IV(

%Legal Pro,i!ion

%)he Rural Sector

%)he Social Sector

7. POLII(S I0)RO*'(* 89 LI FOR

R'RAL 8(0(FI)

%:ana!hree 8ima 9ojana

%;ri!hi Shramik Samajik Surak!ha 9ojana

%8unker 8ima 9ojana For andloom $ea,er!

%Group In!urance Scheme for Aanganwadi

$orker! and elper!

%Scheme for Auto Rick!haw *ri,er!


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EECUTIVE SUMMARY

Life i! fraught with ten!ion! and apprehen!ion! regarding the future and what it hold!for the indi,idual. *e!pite all the planning and preparation one might make- no one

can accuratel1 guarantee or predict how or when death might re!ult and the

circum!tance! that might en!ue in it! aftermath. People generall1 regard in!urance a!

a !cheme when and where 1ou ha,e to lo!e a lot to gain a little. 0e,erthele!!-

in!urance i! !till the mo!t relia#le tool an indi,idual can u!e to plan for hi! future.

Life in!urance polic1 owner! can turn to the ca!h ,alue of the polic1 in ca!e of a

financial emergenc1 when all a,enue! are either #locked or denied. )he1 know that

the1 can a,ail of loan! #a!ed on their in!urance policie!.

In!urance polic1 owner! can u!e the ca!h ,alue of their policie! to meet their long%

term financial need! a! well. )he1 ma1 ha,e purpo!efull1 in,e!ted in in!urance to u!e

the ca!h in the polic1 for their children>! future marriage e"pen!e! or higher education

fee!.

0o financial in!titution can do what life in!urance doe!. 0o indu!tr1 can #ack it!

product! with re!er,e! and !urplu! a! !ound a! tho!e of the in!urance indu!tr1.

)he proof of !trength and !afet1 that in!urance companie! ha,e en!ured e,en under

the mo!t ad,er!e of condition! i! a matter of pride for the entire in!urance indu!tr1.

For generation after generation- life in!urance ha! #een acclaimed a! the ,er1

#enchmark of !ecurit1 again!t which the other indu!trie! are mea!ured.

)he main purpo!e of thi! project wa! knowing the importance- the !cope and

!ignificance of the concept of rural in!urance and !ocial !ecurit1.

CHAPTER $


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INTRODUCTION

Some#od1 named ?&urph1? ha! once !tated !omething called ?law? which dictate!

that if !omething wrong can happen- it will. )he pro#a#ilit1 of !omething happening

which i! not going to ha,e fa,ora#le effect on it! en,ironment can #e termed a! ri!k.

&ore the pro#a#ilit1 higher the ri!k. Since the ri!k it!elf depend! upon the happening

of a future e,ent- 1ou cannot a!!ure 1our!elf that ri!k can #e eliminated in entiret1.

)hat i! wh1 to reduce the impact of that unfa,ora#le e,ent@ e,er1 enterpri!e trie! to

manage the ri!k !o that it! impact ma1 #e minimied in ca!e of happening of that

e,ent. Ri!k &anagement toda1 ha! #ecome a ,er1 comple" and demanding

profe!!ion. Ri!k manager! ha,e greater re!pon!i#ilitie! than e,er #efore. Increa!ingl1

the1 are #eing a!ked to manage #oth ri!k! and opportunitie! with an e1e on impro,ing

!hareholder ,alue. Ri!k i! a #urden not onl1 to the indi,idual #ut to the !ociet1 a!

well. )here e"i!t !e,eral techniBue! for meeting the pro#lem of ri!k- of which

in!urance i! the mo!t practical method for handling major ri!k!.

)he #u!ine!! of in!urance i! related to the protection of the economic ,alue of a!!et!.

(,er1 a!!et ha! a ,alue. )he a!!et would ha,e #een created through the effort! of theowner- in the e"pectation that- either through the income generated therefrom or !ome

other output- !ome of hi! need! would #e met. In the ca!e of factor1 or a cow- the

production i! !old and income generated. In the ca!e of motor car- it pro,ide! comfort

and con,enience in tran!portation. )here i! n direct income. )here i! a normall1

e"pected life time for the a!!et during which time it i! e"pected to perform. )he

owner can !o manage hi! affair! that #1 the end of that lifetime- a !u#!titute i! made

a,aila#le to en!ure that the ,alue or income i! not lo!t. If the a!!et get lo!t earlier-

#eing de!tro1ed or made non%functional- through an accident or other unfortunate

e,ent- the owner and tho!e deri,ing #enefit! therefrom !uffer. In!urance i! a

mechani!m that help! to reduce !uch ad,er!e con!eBuence!.

)he ommi!!ion on In!urance )erminolog1 of the American Ri!k and In!urance

A!!ociation ha! defined in!urance a! follow!C


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?In!urance i! the pooling of fortuitou! lo!!e! #1 tran!fer of !uch ri!k! to in!urer!- who

agree to indemnif1 in!ured for !uch lo!!e!- to pro,ide other pecuniar1 #enefit! on

their occurrence- or to render !er,ice! connected with the ri!k.?

In!urance i! #a!ed on the principle of ri!k pooling. It i! the tran!fer of financial

re!pon!i#ilit1 for the ri!k at the point of occurrence- and con,entionall1 in,ol,e! the

in!urer in a commitment to pa1. Pro,ided the term! and condition! of the polic1 are

met- pa1ment of the premium !ecure! a !ource of fund! in the e,ent of lo!!. )he

in!ured i! thu! e"changing the uncertain co!t of lo!!e! for the certain and known co!t

of the premium. )he co!t ari!ing from pure lo!!e! during the period of co,er are then

fi"ed for the in!ured. )he !ta#iliation of lo!! co!t! mean! that earning! are le!!

!u!cepti#le to the effect! of pure lo!! than when the!e are retained.

In!urance howe,er doe! not alwa1! full1 compen!ate the in!ured for lo!!e! !uffered.

)hi! ma1 #e the re!ult of limitation of the lia#ilit1 accepted #1 the in!urer- poor

management of in!tance #1 the in!ured leading to gap! in co,er or unin!ura#le lo!!e!.

PRINCIPLE OF INSURANCE

In!urance i! a contract #etween two partie! i.e. the in!urer and the in!ured. )he

contract i! go,erned #1 certain principle! a! under%C

1. UTMOST GOOD FAITH

8oth the partie! i.e. the in!ured and the in!urer mu!t ha,e utmo!t good faith toward!

each other- in re!pect of the in!urance contract.

)he in!ured mu!t pro,ide to the in!urer complete- correct- and clear information of

the !u#ject matter of in!urance. )he in!urer can a,oid hi! lia#ilit1 to pa1

compen!ation- if certain material fact! were not di!clo!ed #1 the in!ured at the time of

taking the polic1.


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For in!tance- at the time of taking a life in!urance polic1- the a!!ured doe! not

di!clo!e of a pre,iou! heart attack- and if the a!!ured die! with another heart attack

after the in!urance polic1- the in!urance compan1 ma1 refu!e to pa1 the claim.

Again- a trader while taking a fire in!urance polic1 doe! not di!clo!e the pre,iou!

occurrence of a fire in the factor1- and !u#!eBuentl1 after taking polic1- there i!

another fire- the in!urance compan1 ma1 refu!e to pa1 the compen!ation- if it learn!

a#out the pre,iou! occurrence of fire which wa! not di!clo!ed at the time of taking a

polic1.

Similarl1- the in!urer mu!t pro,ide complete- correct and clear information regarding

the term! and condition! of the contract. Failure to pro,ide complete and correct

material fact! regarding the mode and amount of premium and other detail!- make!

the contract of in!urance ,oid at the di!cretion of the in!ured.

)hi! principle i! applica#le to all contract! of in!urance- i.e. life- fire and marine

in!urance.

2. INSURABLE INTERST

It i! an important principle of in!urance. )he in!ured mu!t ha,e an in!ura#le intere!t

in the !u#ject matter of in!urance. In!ura#le intere!t mean! !ome pecuniar1 or

financial intere!t in the !u#ject matter. )he in!ured !tand! to gain due to it! e"i!tence

and !uffer! a lo!! on account of it! non%e"i!tence.

$hen In!ura#le Intere!t mu!t #e pre!entD

% In life in!urance- the in!ura#le intere!t refer! to the life in!ured. )he in!ura#le

intere!t mu!t e"i!t at the time of taking a life in!urance polic1.

% In marine in!urance- it i! enough if in!ura#le intere!t e"i!t! onl1 at the time of

occurrence of the lo!!.

% In ca!e of fire and general in!urance- the in!ura#le intere!t mu!t pre!ent at the

time of taking the polic1 and al!o at the time of occurrence of the lo!!.

)he owner of a propert1 i! !aid to ha,e in!ura#le intere!t a! long a! he i! the owner of

it. If he !ell! hi! propert1- he no longer ha! in!ura#le intere!t in the propert1. e

cannot claim compen!ation if the propert1 which he ha! alread1 !old get! de!tro1ed

#1 fire.

owe,er- it i! to #e noted that to ha,e in!ura#le intere!t in the propert1- it i! not

nece!!ar1 to #e the owner of that propert1. (g. )he #anker who ha! ad,anced loan on

the !ecurit1 of the propert1 ha! an in!ura#le intere!t in that propert1.


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In ca!e of a hou!e on lea!e- #oth the le!!or and le!!ee ha,e !uch an in!ura#le intere!t.

Similarl1- a tru!tee holding propert1 on #ehalf of another ha! the in!ura#le intere!t in

that propert1.

Like principle of utmo!t good faith- the principle of in!ura#le intere!t i! applica#le to

all contract! of in!urance.

3. PRINCIPLE OF IDEMNITY

)hi! principle i! applica#le to fire- marine and general in!urance. It i! not applica#le

to life in!urance contract!. )hi! principle i! not applica#le to life in!urance #ecau!e

the lo!! of life or the lo!! of a leg or hand or an1 part of the #od1 due to an accident

can ne,er #e mea!ured in monetar1 term!. In the ca!e of death- the actual !um a!!ured

i! paid and in ca!e of an accident- the a!!urer agree! to pa1 a !um of mone1 called

#enefit mone1.

Indemnit1 mean! a guarantee or an a!!urance to put the in!ured in the !ame po!ition

in which he wa! immediatel1 prior to the happening of the uncertain e,ent. )he

in!urer undertake! to make good the lo!!.

'nder thi! principle- the in!urer agree! to compen!ate the in!ured for the actual lo!!

!uffered. )he amount of actual compen!ation i! limited to the amount a!!ured or the

actual lo!! whiche,er i! le!!. For in!tance- if a propert1 worth R! 3 lakh! i! in!ured

for R! 2 lakh- and if the entire propert1 i! de!tro1ed #1 fire- then the in!ured per!on

can claim compen!ation for R!. 2 lakh.

Another e"ample of principle of indemnit1. If a car wa! in!ured for R! 3 lakh and if it

wa! depreciated #1 R!. 2-7E-EEE at that time of it! lo!! due to an accident- then the

owner of the car can claim onl1 R!. 7E-EEE +the ,alue of the car on the da1 of it! lo!!/

)he purpo!e of thi! principle i! to put the in!ured in the !ame po!ition prior to the

happening of the e,ent. Another o#ject i! to !ee to it that the in!ured doe! not make

an1 profit #1 reco,ering more than the amount of financial lo!! !uffered #1 him.

4. PRINCIPLE OF CONTRIBUTION

)hi! principle i! a corollar15 of the principle of indemnit1. It i! applica#le to all

contract! of indemnit1- where the in!ured ha! taken out more than one polic1 on the

!ame matter.


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'nder thi! principle- the in!ured can claim the compen!ation onl1 to the e"tent of

actual lo!! either from an1 one in!urer or from all in!urer!. If one of in!urer! pa1 full

compen!ation- then that in!urer can claim proportionate claim from other in!urer!.

(g. If &r. Sand1 in!ure! hi! propert1 worth R!. E-EEE with two in!urer!- !a1 HA"e

Ltd for R!. E-EEE and HJed Ltd for R!.


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(g. If the fire take! place- the in!ured mu!t take nece!!ar1 !tep! to put off the fire and

to !a,e the propert1 a! far a! po!!i#le.

7. PRINCIPLE OF CAUSA PROXIMA

)he lo!! to the inured propert1 can #e cau!ed #1 more than one cau!e in !ucce!!ion to

one another. )he propert1 ma1 #e in!ured again!t !ome cau!e! and not again!t all

cau!e!. In !uch an in!tance- the pro"imate cau!e or neare!t cau!e of lo!! i! to #e found

out. If the pro"imate cau!e i! the one which i! in!ured again!t- the in!urance compan1

i! #ound to pa1 the compen!ation. If the pro"imate cau!e i! one which i! not in!ured-

then the in!urance compan1 i! not #ound to pa1 the lo!! to the in!ured.

(g. If the in!ured )ea #o"e! get damaged doe to water #eing entering the !hip. )he

water entered the !hip due to !ea rat! making a hole to the !hip. )hu!- the lo!! i!

cau!ed due to two rea!on!C Sra $ater- and Sea Rat!. )he neare!t and direct cau!e of

damage to tea #o"e! i! due to !ea water. If the tea #o"e! were in!ured again!t the lo!!

due to !ea water- then the in!urance compan1 i! #ound to pa1 the compen!ation.

TYPES OF INSURANCE

% LIFE INSURANCE

% FIRE INSURANCE

% MARINE INSURANCE

% MISCELLANEOUS INSURANCE

LIFE INSURANCE

The life insurance is a contract between the assurer and the assured, whereby the assurer

agrees to compensate to the assured a certain agreed sum on the expiry of a certain

period. Or on death, whichever is earlier, for a consideration, i.e. premium.

FIRE INSURANCE

The fire insurance protects the insured against the loss of property due to fire. There is

always a risk to property and goods of being destroyed by fire. A fire insurance contract is


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as an agreement whereby the insured in return for consideration (premium) undertakes to

indemnify the insured against loss to property due to fire.

MARINE INSURANCE

arine insurance is a contract under which the insurer undertakes to indemnify the insured

against losses, caused due to perils of sea. !t may be defined as a form of insurance

contract covering loss or damage to vessels or to cargo or passengers during

transportation on the high seas.

RELEANCE TO PRESENT!DAY PROBLEMS"NEEDS OF THE

SOCIETY" COUNTRY

)he late!t !erie! of #om# attack!- attack on parliament- attack on A1od1a- attack! of

the &aoi!t!- nature calamitie! like t!unami- flood! and drought- ragging are pre,ailed

in the countr1 and need not to !a1 a#out the farmer who ha! #een in!ecure a#out rain!-

!eed!- crop! and !uita#le price for hi! crop. In de,eloped countrie!- the owner! ha,e

in!ured e,en pet dog!. $herea! in India- a#out KE percent of human #eing! and major

natural re!ource! ha,e not #een in!ured in glo#aliation era.

8a!ed on the a#o,e fact- thi! !eminar ha! Buite rele,ance to the pre!ent da1 pro#lem!

of life in!urance- non%life in!urance- rural health in!urance- ragging in!urance- natural

calamitie! in!urance- pen!ion in!urance and terrori!m in!urance.

After li#eraliation of in!urance !ector- in!urer! ha,e introduced inno,ati,e product

and tailor made product! which are a#!olutel1 !it to rural population. (ffort! at

increa!ing con!umer awarene!! and putting the regulator1 framework for protection

of polic1holder5! intere!t ha,e #een made #oth the indu!tr1 and regulator1 le,el.

Glo#al market condition! ha,e al!o re!ulted in dri,ing down premium rate!charge! in

re!pect of certain product! and in impro,ing the Bualit1 of !er,ice! offered #1 the

in!urer. Finall1- in!urance !ector ha! #een penetrating in India- thu! the propo!ed

!eminar ha! Buite rele,ant to the !ociet1.


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#HAT IS LIFE INSURANCE$

Life in!urance i! a contract that pledge! pa1ment of an amount to the per!on a!!ured

+or hi! nominee/ on the happening of the e,ent in!ured again!t. )he contract i! ,alid

for pa1ment of the in!ured amount duringC

)he date of maturit1- or

Specified date! at periodic inter,al!- or

'nfortunate death- if it occur! earlier.

Among other thing!- the contract al!o pro,ide! for the pa1ment of premium

periodicall1 to the orporation #1 the polic1holder. Life in!urance i! uni,er!all1

acknowledged to #e an in!titution@ which eliminate! >ri!k>- !u#!tituting certaint1 for

uncertaint1 and come! to the timel1 aid of the famil1 in the unfortunate e,ent of death

of the #readwinner.

81 and large- life in!urance i! ci,iliation5! partial !olution to the pro#lem! cau!ed #1

death. Life in!urance- in !hort- i! concerned with two haard! that !tand acro!! the

life%path of e,er1 per!onC

)hat of d1ing prematurel1 lea,e! a dependent famil1 to fend for it!elf.

)hat of li,ing till old age without ,i!i#le mean! of !upport.

LIFE INSURANCE "S OTHER SAINGS

C%&'()*' %+ I&,-()&*/

A contract of in!urance i! a contract of utmo!t good faith technicall1 known a!

u#errima fide!. )he doctrine of di!clo!ing all material fact! i! em#odied in thi!


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important principle- which applie! to all form! of in!urance. At the time of taking a

polic1- polic1holder !hould en!ure that all Bue!tion! in the propo!al form are correctl1

an!wered. An1 mi!repre!entation- non%di!clo!ure or fraud in an1 document leading to

the acceptance of the ri!k would render the in!urance contract null and ,oid.

P(%'*'0%&/

Sa,ing! through life in!urance guarantee full protection again!t ri!k of death of the

!a,er. Al!o- in ca!e of demi!e- life in!urance a!!ure! pa1ment of the entire amount

a!!ured +with #onu!e! where,er applica#le/ wherea! in other !a,ing! !cheme!- onl1

the amount !a,ed +with intere!t/ i! pa1a#le.

A0 '% T(0+'/

Life in!urance encourage! >thrift>. It allow! long%term !a,ing! !ince pa1ment! can #e

made effortle!!l1 #ecau!e of the >ea!1 in!tallment> facilit1 #uilt into the !cheme.

+Premium pa1ment for in!urance i! monthl1- Buarterl1- half 1earl1 or 1earl1/.

For example: )he Salar1 Sa,ing Scheme popularl1 known a! SSS pro,ide! a

con,enient method of pa1ing premium each month #1 deduction from one>! !alar1. In

thi! ca!e the emplo1er directl1 pa1! the deducted premium to LI.

L0-00'/

In ca!e of in!urance- it i! ea!1 to acBuire loan! on the !ole !ecurit1 of an1 polic1 that

ha! acBuired loan ,alue. 8e!ide!- a life in!urance polic1 i! al!o generall1 accepted a!

!ecurit1- e,en for a commercial loan.

T) R0+/

Life In!urance i! the #e!t wa1 to enjo1 ta" deduction! on income ta" and wealth ta".

)hi! i! a,aila#le for amount! paid #1 wa1 of premium for life in!urance !u#ject to

income ta" rate! in force. A!!e!!ee! can al!o a,ail of pro,i!ion! in the law for ta"

relief. In !uch ca!e! the a!!ured in effect pa1! a lower premium for in!urance than

otherwi!e.


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M%& #& Y%- N I'/

A polic1 that ha! a !uita#le in!urance plan or a com#ination of different plan! can #e

effecti,el1 u!ed to meet certain monetar1 need! that ma1 ari!e from time%to%time.

hildren>! education- !tart%in%life or marriage pro,i!ion or e,en periodical need! for

ca!h o,er a !tretch of time can #e le!! !tre!!ful with the help of the!e policie!.

Alternati,el1- polic1 mone1 can #e made a,aila#le at the time of one>! retirement

from !er,ice and u!ed for an1 !pecific purpo!e- !uch a!- purcha!e of a hou!e or for

other in,e!tment!.

#HO CAN BUY A POLICY$

An1 per!on who ha! attained majorit1 and i! eligi#le to enter into a ,alid contract can

in!ure him!elfher!elf and tho!e in whom he!he ha! in!ura#le intere!t. Policie! can

al!o #e taken- !u#ject to certain condition!- on the life of one>! !pou!e or children.

$hile underwriting propo!al!- certain factor! !uch a! the polic1holder5! !tate of

health- the proponent>! income and other rele,ant factor! are con!idered #1 the

orporation.


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CHAPTER 2

INSURANCE IN INDIA

HISTORY

)he in!urance lea!ure! ha! a hi!tor1 which date! #ack to the 1ear 27EE5!. )he

#u!ine!! of in!urance !tarted with ma!!i,e #u!ine!!. )rader!- who u!ed to gather in

the Llo1d5! offee hou!e in (ngland- agreed to !hare their lo!!e! to their good! while

#eing carried #1 !hip!. )he lo!!e! u!ed to occur #ecau!e of pirate! who ro##ed on the

high !ea! or #ecau!e of #ad weather !poiling the good! on !inking the !hip!. )he fir!t

in!urance polic1 wa! i!!ued in 27K4 in (ngland. In India- in!urance #egan n 2K=E

with life in!urance #eing tran!acted #1 an (ngli!h compan1- the (uropean and the

Al#ert. )he fir!t Indian in!urance compan1 wa! 8om#a1 &utual a!!urance Societ1

Ltd. Formed in 2K=E. 8ut the #u!ine!! of in!urance in India e"i!ting form !tarted in

the 1ear 11with the e!ta#li!hment of ' O(0&') L0+ I&,-()&* C%89)& 0&

C)*-''). )hi! compan1 wa! !tarted #1 the (uropean! in the countr1. In the !ame

1ear the 8riti!h Go,ernment #rought out the in!urance act. )hi! wa! followed #1 the

formation of the Oriental Life A!!urance compan1 in 2K=6. Prior to thi! )he )riton

In!urance ompan1 wa! e!ta#li!hed in 2K7E which dealt onl1 in non%life in!urance

#u!ine!!.

)hi! wa! followed #1 the formation of the 8harat in 2K< and the (mpire of India in

2K=. Later with the Swade!hi mo,ement and the !truggle for Independence-

companie! like- indu!tan o%operati,e! in alcutta- )he 'nited India in &adra!-

)he 8om#a1 Life in 8om#a1- )he 0ational in alcutta- )he new India in 8om#a1-

)he :upiter in 8om#a1 and the Lak!hmi in 0ew *elhi were Formed in the earl1

2EE5!. )he Indian Life A!!urance ompanie! Act enacted a! the fir!t !tructure to

regulate the life In!urance #u!ine!! in the 1ear 223. In the 1ear 23K the IndianIn!urance ompanie! Act ena#led the go,ernment to collect !tati!tical information


19/69

a#out #oth Life and 0on%life In!urance #u!ine!!. In the 1ear 24K the earlier

legi!lation con!olidated and amended #1 the In!urance Act with the o#jecti,e of

protecting the intere!t of the in!uring pu#lic. 81 the independence period the tall1 of

in!urance companie! in India reached to a! high a! 367. )he!e companie! in the po!t

independence period !tarted unethical practice! to gain #u!ine!!. )hi! affected the

in!uring people #adl1.

In tho!e uncertain atmo!phere the finance mini!ter Shri. .* *e!hmukh- in

con!ideration with Prime &ini!ter Shri. :awaharlal 0ehru took a momentou! deci!ion

to nationalie the Life In!urance #u!ine!! #1 promulgating the ordinance and taking

o,er the management of all Life In!urance ompanie! in the 1ear 27


20/69

change! currentl1 underwa1 and recogniing that in!urance i! an important part of

o,erall financial !1!tem where it wa! nece!!ar1 to addre!! the need! to !imilar

reform!M In 26- the committee !u#mitted the report and !ome ke1

recommendation includedC

2. Structure

Go,ernment !take in the in!urance ompanie! to #e #rought down to 7EN

Go,ernment !hould take o,er the holding! of GI and it! !u#!idiarie! !o that

the!e !u#!idiarie! can act a! independent corporation!. All the in!urance

companie! !hould #e gi,en greater freedom to operate.

3. ompetition

Pri,ate companie! with a minimum paid up capital of R!. 2#n !hould

#e allowed to enter the indu!tr1.

0o compan1 !hould deal in Life and General In!urance through a

!ingle entit1.

Foreign companie! ma1 #e allowed to enter indu!tr1 in colla#oration

with dome!tic companie!.

Po!tal Life In!urance !hould #e allowed to operate in the rural market.

Onl1 one !tate Le,el Life In!urance ompan1 !hould #e allowed to

operate in each !tate.

4. Regulator1 8od1

)he In!urance Act !hould #e changed and In!urance Regulator1 #od1 !hould

#e !et up ontroller of In!urance +urrentl1 a part from the Finance mini!tr1/

!hould #e made independent.

6. In,e!tment!

&andator1 in,e!tment! of LI Life Fund in go,ernment !ecuritie! !hould #e

reduced from =7N to 7EN GI and it! !u#!idiarie! are not to hold more than

7N in an1 compan1+)here currentl1 holding! !hould #e #rought down to thi!

le,el o,er a period of time/


21/69

7. u!tomer Ser,ice

LI !hould pa1 intere!t on dela1! in pa1ment! #e1ond 4E da1!.

In!urance ompanie! mu!t #e encouraged to !et up unit linked pen!ion plan!.

omputeriation! of operation! and updating of technolog1 to #e carried out

in the in!urance indu!tr1. )he committee empha!ied that in order to impro,e

the cu!tomer !er,ice! and increa!e the co,erage of the in!urance indu!tr1

!hould #e opened up to competition. 8ut at the !ame time- the committee felt

the need to e"erci!e caution a! an1 failure on the part of new pla1er! could

ruin the pu#lic confidence in the indu!tr1.

ence it wa! decided to allow competition in a limited wa1 #1 !tipulating

the minimum capital reBuirement of R!.2EE crore!. )he committee felt the

need to pro,ide greater autonom1 to in!urance companie! in order to impro,e

their performance and ena#le them to act a! independent companie! with

economic opportunitie!. For thi! purpo!e it had propo!ed !etting up of an

independent #od1. )hu! in the 1ear 2= the In!urance Regulator1 and

*e,elopment authorit1 +IR*A/ wa! formed. From the 1ear 3EEE thi! IR*A

!tarted gi,ing licen!e to pri,ate in!urer! according to the term! of the &alhotra

ommittee. III Prudential and *F Standard Life were the fir!t pri,ate

pla1er! to !ell Life In!urance polic1 in India. In 3EE2 Ra1al Sundaram alliance

#ecame the 2!t0on%Life in!urance compan1 to !ell a polic1. In the 1ear 3EE3

another major !etup of allowing #ank! to !ell in!urance policie! wa! taken.


22/69

THE INSURANCE REGULATORY AND DEVELOPMENT

AUTHORITY (IRDA)

)he In!urance Act- 24K had pro,ided for !etting up of the controller of In!urance to

act a! a !trong and powerful !uper,i!or1 and regulate authorit1 of in!urance. Po!t

nationaliation- the role of ontroller of in!urance dimini!hed con!idera#l1 in

!ignificance !ince the Go,ernment owned the in!urance companie!.

8ut the !cenario changed with the pri,ate and foreign companie! fora1ing in to the

in!urance !ector. )hi! nece!!itated the need for !trong- independent and autonomou!

In!urance regulator1 Authorit1 wa! felt. A! the enacting of legi!lation would ha,e

taken time- the then go,ernment con!tituted through a Go,ernment re!olution an

interim in!urance Regulator1 Authorit1 pending the enactment of a comprehen!i,e

legi!lation.

)he in!urance regulator1 and *e,elopment Authorit1 Act- 2 i! an act to pro,ide

for the e!ta#li!hment of an authorit1 to protect the intere!t of holder! of in!urance

policie!- to regulate- promote and en!ure orderl1 growth of the in!urance indu!tr1 and

for matter! connected therewith or incidental there to and further to amend the

in!urance Act- 24K- the Life In!urance orporation Act- 27< and the General

in!urance 8u!ine!! +0ationaliation!/ Act- 2=3 to end the monopol1 of the Life

In!urance orporation of India+ for life in!urance #u!ine!! / and General In!urance

orporation and it! !u#!idiarie!+ for general in!urance #u!ine!!/.

)he act e"tend! to the whole of India and will come into force on !uch date a! the

entral Go,ernment ma1- #1 notification in the official Gaette !pecif1. *ifferent

date! ma1 #e appointed for different pro,i!ion! of thi! act.

)he act ha! defined certain term!- !ome of the mo!t important one! are a! follow!C%

Appointed da1 mean! the date on which the Authorit1 i! e!ta#li!hed under the act.


23/69

Authorit1 mean! the e!ta#li!hed under thi! act.

Interim In!urance Regulator1 Authorit1 mean! the In!urance Regulator1 Authorit1 !et

up #1 the Go,ernment through Re!olution 0o. 2=+3/ 6%In!%V dated the 34 rd:anuar1-

2


24/69

DUTIES PO#ERS AND FUNCTIONS OF THE IRDA

Section 26 of the IR*A Act- 2 la1! down the dutie!- power! and function! of the

IR*A.

2. Su#ject to the pro,i!ion! of the act and an1 other law for the time #eing in

force- the IR*A !hall ha,e the dut1 regulate promote and en!ure orderl1

growth of the in!urance #u!ine!! and re%in!urance #u!ine!!.

3. $ithout prejudice to the generalit1 of the pro,i!ion! contained in !u#%!ection

+2/- the power! and function! of the IR*A !hall includeC

a/ I!!ue to the applicant a certificate of regi!tration- renew- modif1-

withdraw- !u!pend or cancel !uch regi!tration@

#/ Protection of the intere!t of the polic1 holder! in matter! concerning

the a!!igning of polic1- nomination #1 polic1 holder!- in!ura#le

intere!t- !ettlement of in!urance claim!- !urrender ,alue of polic1 and

other term! and condition! of contract! of in!urance@

c/ Specif1ing reBui!ite Bualification!- code of conduct and practical

training for intermediar1 or in!urance intermediarie! and agent!@

d/ Specif1ing the code of conduct for !ur,e1or! and lo!! a!!e!!or!@

e/ Promoting efficienc1 in the conduct of the in!urance #u!ine!!@

f/ Promoting and regulating profe!!ional organiation! connected with

in!urance and re%in!urance #u!ine!!@

g/ Le,1ing fee! and other charge! for carr1ing out the purpo!e! of thi!

Act@

h/ alling for information from- undertaking in!pection of- conducting inBuerie! and in,e!tigation! including audit of the in!urer!-

intermediarie!- in!urance intermediarie! and other organiation!

connected wit the in!urance #u!ine!!@

i/ ontrol and regulation of the rat!- ad,antage!- term! and condition!

that ma1 #e offered #1 in!urer! in re!pect of general in!urance #u!ine!!

not !o controlled and regulated #1 the )ariff Ad,i!or1 ommittee

under !ection


25/69

j/ Specif1ing the form and manner in which #ook! of account! !hall #e

maintained and !tatement! of account! !hall #e rendered #1 in!urer!

and other in!urance intermediarie!@

k/ Regulating in,e!tment! of fund! #1 in!urance companie!@

l/ Regulating maintenance of margin of !ol,enc1@

m/ Adjudication of di!pute! #etween in!urer! and intermediarie! or

in!urance intermediarie!@

n/ Super,i!ing the functioning of the )ariff Ad,i!or1 ommittee@

o/ Specif1ing the percentage of premium income of the in!urer to finance

!cheme! for promoting and regulating profe!!ional organiation!

referred to in clau!e +f/

p/ Specif1ing the percentage of life in!urance #u!ine!! and general

in!urance #u!ine!! to #e undertaken #1 the in!urer in the rural or !ocial

!ector@ and

B/ ("erci!ing !uch other power! a! ma1 #e pre!cri#ed.

)hu! the in!urance !ector of India wa! opened up in the 1ear 2. All companie!

around the world realied the ,a!t potential in the Indian market. )hu! companie!

from all o,er the world ru!hed to find a foothold in the lucrati,e Indian market.(,olution of technolog1 and con,ergence of !er,ice! witne!!ed the in!urance

product! #eing offered #1 #ank! al!o.

)he potential for growth of the Indian in!urance indu!tr1 can #e gauged #1 the fact

that the Indian in!urance market regi!tered the highe!t growth in the A!ian region

e,en though India5! glo#al !hare of in!urance premium i! le!! than E.7 N +2/

compared with that of '.S.A at 36.3 N and that of :apan at 32 N. )he pri,ate pla1er!

are well aware that onl1 37 N of the in!ura#le population ha! #een e"tended co,er-

which mean! that market penetration i! low- and the potential to e"ploit it i! ,er1

high.

Some of the other factor that make the Indian In!urance Indu!tr1 highl1 lucrati,e are

that the In!urance premium per capita i! ,er1 low i.e. 'S = and there i! pre!ence of

huge middle cla!! of per!on 4EE million. Al!o the lack of comprehen!i,e !ocial


26/69

!ecurit1 !1!tem!tate #enefit! and welfare mean! that demand for pen!ion product! i!

high.

INDIA "S GLOBAL MARET

India5! in!urance penetration i! a! low a! 2.7 N and rank! 72 in the world. In

premium collection the record i! #etter- at 34rd po!ition. )he ratio of premium

collected to the gro!! dome!tic product +G*P/ i! a mere E.7K N compared with an

a,erage of =.2 N in mo!t indu!trialied nation!. India i! !till at ,er1 na!cent !tage

with an K% +R!. 6EE%67E/ pre capita e"penditure on in!urance out of which 3 to

3.7 +R!.2EE%27E/ will #e on general in!urance. )hi! i! #ecau!e in the countr1 non%

life in!urance i! not gi,en the nece!!ar1 importance and i! con!idered a! an

unnece!!ar1 e"pen!e.

)he opening up of the In!urance !ector wa! a part of the ongoing li#eraliation in the

financial !ector of India. )he domain of !tate%run in!urance companie! wa! thrown

open to pri,ate enterpri!e! on *ecem#er =- 2- with the introduction of the IR*A

i.e. In!urance Regulator1 and *e,elopment Authorit1 #ill.

India- with a#out 3EE million middle cla!! hou!ehold!- pre!ent! a huge untapped

potential for pla1er! in the in!urance indu!tr1. Saturation of market! in man1

de,eloped economie! ha! made the Indian market e,en more attracti,e for glo#al

in!urance major!.

$ith the per capita income in India e"pected to grow at o,er


27/69

CHAPTER

INTRODUCTION TO

LIFE INSURANCE CORPORATION OF

INDIA

(,er1 da1 the1 wake up to the fact that more than 2=E million li,e! are

part of their famil1 called LI.

)he1 are hum#led #1 the magnitude of the re!pon!i#ilit1 the1 carr1 and

realie that the li,e! that are a!!ociated with them are ,er1 ,alua#le

indeed.

Although thi! journe1 !tarted fi,e decade! ago- the1 are !till con!ciou! of

the fact that- while in!urance ma1 #e a #u!ine!! for them- #eing part of

million! of li,e! e,er1 da1 for the pa!t 7E 1ear! ha! #een a proce!! called

)R'S).

50 Years of Trust

Thy Name Is LIC

Life Insurance Corporation of

T%4 ,'* 4 LIC


28/69

MISSION

?("plore and enhance the Bualit1 of life of people through financial !ecurit1 #1

pro,iding product! and !er,ice! of a!pired attri#ute! with competiti,e return!- and #1

rendering re!ource! for economic de,elopment.?

ISION

?A tran!%nationall1 competiti,e financial conglomerate of !ignificance to !ocietie!

and Pride of India.?

OB;ECTIES

Spread Life In!urance widel1 and in particular to the rural area! and to the

!ociall1 and economicall1 #ackward cla!!e! with a ,iew to reaching all

in!ura#le per!on! in the countr1 and pro,iding them adeBuate financial co,er

again!t death at a rea!ona#le co!t.

&a"imie mo#iliation of people>! !a,ing! #1 making in!urance%linked

!a,ing! adeBuatel1 attracti,e.

8ear in mind- in the in,e!tment of fund!- the primar1 o#ligation to it!

polic1holder!- who!e mone1 it hold! in tru!t- without lo!ing !ight of the

intere!t of the communit1 a! a whole@ the fund! to #e deplo1ed to the #e!t

ad,antage of the in,e!tor! a! well a! the communit1 a! a whole- keeping in

,iew national prioritie! and o#ligation! of attracti,e return.

onduct #u!ine!! with utmo!t econom1 and with the full realiation that themone1! #elong to the polic1holder!.

Act a! tru!tee! of the in!ured pu#lic in their indi,idual and collecti,e

capacitie!.

&eet the ,ariou! life in!urance need! of the communit1 that would ari!e in the

changing !ocial and economic en,ironment.

In,ol,e all people working in the orporation to the #e!t of their capa#ilit1 in

furthering the intere!t! of the in!ured pu#lic #1 pro,iding efficient !er,icewith courte!1.


29/69

Promote among!t all agent! and emplo1ee! of the orporation a !en!e of

participation- pride and jo# !ati!faction through di!charge of their dutie! with

dedication toward! achie,ement of orporate O#jecti,e.

$e ha,e !een the formation of LI and the circum!tance! at that time in the earlier

chapter!- in addition to that- LI had 7 onal office!- 44 di,i!ional office! and 323

#ranch office!- apart from it! corporate office in the 1ear 27


30/69

the mile!tone of i!!uing 2-E2-43-77 new policie! #1 27th Oct- 3EE7- po!ting a health1

growth rate of 2


31/69

From then to now- LI ha! cro!!ed man1 mile!tone! and ha! !et unprecedented

performance record! in ,ariou! a!pect! of life in!urance #u!ine!!. )he !ame moti,e!

which in!pired our forefather! to #ring in!urance into e"i!tence in thi! countr1 in!pire

u! at LI to take thi! me!!age of protection to light the lamp! of !ecurit1 in a! man1

home! a! po!!i#le and to help the people in pro,iding !ecurit1 to their familie!

CHAPTER #

RURAL INSURANCE

SIGNIFICANCE AND LIC=S INITIATIVES


32/69

)he united nation! declaration of human right! 26K pro,ide! that He,er1one ha! a

right to a !tandard of li,ing adeBuate for the health and well #eing of him!elf and hi!

famil1- including food- clothing- hou!ing- and medical care and nece!!ar1 !ocial

!er,ice! and the right to !ecurit1 in the e,ent of unemplo1ment- !ickne!!- di!a#ilit1-

widow hood- other lack of li,el1 hood in circum!tance! #e1ond hi! control

$hen the #read winner die!- to that e"tent- the famil15! income die!. (,er1

economicall1 #ackward or rural area ha! the concept of #a!icall1 one or ma"imum

two #read winner! in a famil1. )he economic condition of the famil1 i! affected #adl1

unle!! other arrangement! come to #eing to re!tore the !ituation. Life In!urance

pro,ide! !uch an alternate arrangement. If thi! did not happen another famil1 would

#e pu!hed into the #ackward !trata of !ociet1- increa!ing po,ert1 le,el!. Poor people

co!t the nation #1 wa1 of !u#!idie! and dole! and !o on. Poor people al!o co!t the

nation #1 wa1 of large growth in population- poor education and ,agarie! in #eha,ior

of children. Life In!urance tend! to reduce !uch co!t!. In thi! !en!e- the life in!urance

#u!ine!! i! complimentar1 to the !tate! effort in !ocial management

In India- !ocial !ecurit1 find! a place in our con!titution. Article 62 reBuire! the !tate-

within the limit! of it economic capacit1 and de,elopment- to make effecti,e

pro,i!ion for !ecuring the right to work to education and to pro,ide pu#lic a!!i!tance

in ca!e of unemplo1ment- old age- !ickne!! and di!a#lement and in other ca!e! of

unde!er,ed want. Part of !tate! o#ligation to the poorer !ection are met through the

mechani!m of Life In!urance. A! per the law and the direction! of the regulator1

authoritie!- In!urance companie! in India are o#liged to e"tend in!urance #enefit! to

economicall1 weaker !ection! of the !ociet1 in the unorganied !ector

LEGAL PROISIONS


33/69

Vide paragraph 2 of the 2!t!chedule of the In!urance regulator1 and de,elopment

authorit1 act- 2- !ection 438 and 43 ha,e #een added to the in!urance act of

24K. )he!e !ection! read ac underC

438. insurance business in rural or social sector e,er1 in!urer !hall- after the

commencement of the in!urance regulator1 and de,elopment authorit1 act of 2-

undertake! !uch percentage! of Life In!urance #u!ine!! and general in!urance

#u!ine!! in the rural or !ocial !ector a! ma1 #e !pecified in the official Gaette- #1 the

authorit1- in thi! #ehalf.

43.obligation of insurer in respect of rural or unorganized sector and backward

classes e,er1 in!urer !hall- after the commencement of the in!urance regulator1 and

de,elopment authorit1 act of 2- di!charge the o#ligation! !pecified under !ection

438 to pro,ide Life In!urance or general In!urance policie! to the per!on! re!iding in

rural !ector- worker! in the unorganied or informal !ector or for economicall1

,ulnera#le or #ackward cla!!e! of the !ociet1 and other categorie! of per!on! a! ma1

#e !pecified #1 regulation! made #1 the authorit1 and !uch In!urance policie! !hall

include In!urance for crop!

)he Regulation made #1 IR*A- in term of the!e pro,i!ion!- were notified in the

official Gaette on 2.=.3EEE. )he1 were amended in Octo#er 3EE3 and were notified

in the official Gaette on 2


34/69

con!truction worker!- fi!herman- hamal!- handicraft arti!an!- handloom and

khadi worker!- lad1 tailor!- leather and tanner1 worker!- papad maker!- power

loom worker!- ph1!icall1 handicapped !elf emplo1ed per!on!- primar1 milk

producer!- rick!haw puller!- !afai karmachari!- !alt grower!- !ericulture

worker!- !ugarcane cutter!- tendu leaf collector!- todd1 tapper!- ,egeta#le

,ender!- wa!her women- working women in hill! or !uch other categorie! of

per!on!.

)he informal !ector i! defined a! the !mall !cale- !elf emplo1ed worker!

t1picall1 at a low le,el of organiation and technolog1 with the primar1 o#ject

of generating emplo1ment and income with heterogeneou! acti,itie! like

retailed trade- tran!port- repair and maintenance- con!truction- per!onal and

dome!tic !er,ice!- and manufacturing with the work #eing mo!tl1 la#our

inten!i,e- ha,ing of written and informal emplo1er%emplo1ee relation!hip .

People #elow the po,ert1 line are included in the e"pre!!ion economicall1 ,ulnera#le

or #ackward cla!!e!. )he e"pre!!ion other categorie! of per!on!5 include! per!on

with di!a#ilit1 a! defined in the Per!on! and *i!a#ilitie!5 +(Bual Opportunitie!-

Protection of Right! and Full Participation/- act- 27- and who ma1 not #e gainfull1

emplo1ed and al!o include! guardian! who need in!urance to protect !pa!tic per!on!

with di!a#ilit1.

)he!e !ection! of !ociet1 are normall1 neglected #1 In!urer!. )he1 are difficult to

reach and the !cope for in!urance i! limited. 8ut- the1 need In!urance more than the

other !egment!. In!urer! who #egin to tran!act Life In!urance #u!ine!! in the 1ear

3EEE or later are reBuired #1 the!e regulation! to write- in the rural !ector-

At lea!t 7N of total policie! return direct- in the 2!tfinancial 1ear- going up to

N in the 3ndfinancial 1ear-

23N in the 4rdfinancial 1ear-

26N in the 6thfinancial 1ear and

2


35/69

3N in the 2!tfinancial 1ear-

4N in the 3ndfinancial 1ear-

7N there after.

of the total gro!! premium income written direct in that 1ear.

$ith regard to the !ocial !ector- the o#ligation! are laid down a! follow!-

7EEE li,e! in the 2!tfinancial 1ear-

=7EE li,e! in the 3ndfinancial 1ear-

2E-EEE li,e! in the 4rdfinancial 1ear-

27-EEE li,e! in the 6thfinancial 1ear and

3E-EEE li,e! in the 7thfinancial 1ear

It ha! al!o #een pro,ided that in the 2 !t1ear- if the period of operation i! le!! than 23

month! the o#ligation of li,e! in the !ocial !ector could #e proportionatel1 le!!. It i!

al!o pro,ided that the IR*A ma1 normall1 re,i!e the o#ligation! once in Fi,e 1ear!.

$ith regard! to e"i!ting in!urer! the regulation! pro,ide that o#ligation! would #e

decided #1 the IR*A after con!ultation- #ut the Buantum would not #e le!! than what

ha! #een recorded for the 1ear ended 42.4.3EE3. )he in!urer! would de,elop

appropriate policie! to compl1 with the o#ligation! under the act. )he e"tent of the

compliance will depend on the ,igor with which the agent! will carr1 forward the

effort! in the!e !ector!.

Report! at the end of the 1ear 3EE2%3EE3 are that all the in!urer! ha,e e"ceeded the

limit! laid down #1 the IR*A.

THE RURAL SECTOR

)here are more than 7 lakh ,illage! in India with a total population of nearl1 =7

crore!. )hi! repre!ent! a ,a!t potential. 8ut 0earl1 37N of them are #elow the po,ert1

line compared to onl1 a#out =Nin the ur#an area!. )he1 are !cattered and not

contiguou! a! in the ur#an area!. )herefore- to contact people- one ha! to tra,el long


36/69

di!tance!- along road! that are not well con!tructed. Onl1


37/69

A! mentioned a#o,e there are certain o#ligation! of the in!urer! toward! the !ocial

!ector. )he #enefit! of life In!urance are needed mo!t #1 people in thi! !ector- a! the1

are relati,el1 poor and ha,e ,er1 little !a,ing!- if at all. An1 lo!! of income through

earl1 death would make the !ur,i,ing famil1 poorer than #efore. )he condition would

#e wor!t if the decea!ed had not repaid loan!- taken for the purpo!e of hi! work! or

per!onal reBuirement.

Soon after nationaliation of Life In!urance- thi! need wa! recognied and effort!

were made to introduce what wa! called ma!!5 in!urance!. )he concept wa! to co,er

,er1 large num#er! of poor people in one !cheme. )he difference #etween !uch plan!

under the !ocial !ector and group in!urance policie! i! that the former are not policie!

taken ,oluntaril1 #1 an1 emplo1er or organiation or a!!ociation- #ut are part of the

!cheme! of the go,ernment #eing implemented through the #u!ine!! of life in!urance.

)ill earl1 3EEE there were !ocial !ecurit1 group in!urance !cheme! +SSGIS/

!eparatel1 for recognied operation!. 36 occupation! had #een pro,ed and a! at the

end of 2- the!e !cheme! co,ered at lea!t 7E lakh! per!on! for a total !um a!!ured

of nearl1 R!. 2=7E crore!. )ho! a,eraged out to nearl1 R!.47EE per head. In fact- the

!um a!!ured differ form !cheme to !cheme. )he #enefit of death #1 accident wa!

R!.37-EEE. )he premium for co,er wa! paid #1 the !tate or from the !ocial !ecurit1

fund !etup #1 LI in 2KK%K- for thi! purpo!e.

)here wa! al!o the Rural Group Life In!urance Scheme +RGLIS/- where under

per!on! aged #etween 3E and 7E 1ear! are co,ered for !um! of R!.7EEE- pa1a#le on

death #efore the age of


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minimum num#er in the group ha! to #e of 37 people. Further detail! will #e gi,en in

the following chapter!.

Another !uch initiati,e wa! the Integrated Rural *e,elopment Program taken up #1

LI and co,ered #1 the Swarna :a1anti Gram!warojgar 9ojana. A !eparate fund ha!

#een !etup #1 Go,ernment of India for funding thi! !cheme. )he !cheme i!

admini!tered through di!trict rural de,elopment agenc1- coming under the Jilla

Pari!had. All the people #etween age of 2K and


39/69

in cla!!e! thto 23th- who!e parent! are #elow the po,ert1 line and are mem#er! of the

:ana!hree 8ima 9ojana. )he pa1ment will #e made out of !ocial !ecurit1 fund of the

go,ernment through the educational in!titution! concerned.

Apart form LI there are not man1 companie! who ha,e taken into con!ideration the

concept of rural in!urance and !ocial !ecurit1 a! !eriou!l1 a! it !hould #e. )he Po!t

office in!urance !cheme ha! not worked well for the go,ernment. Other companie!

ha,e introduced !cheme! for the rural poor and for the purpo!e of !ocial !ecurit1 ju!t

a! an o#ligation.

CHAPTER

POLICIES INTRODUCED BY LIC FOR

RURAL BENEFIT


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;ANASHREE BIMA YO;ANA

It i! difficult to !mile when 1ou are !truggling to make end! meet. (,en more !o-

when the future of 1our famil1 i! grim and uncertain e,er. )hat5! wh1 Janashree

Bima Yojanafor LI i! rea!on enough to light up million face!.

ELIGIBILITY

2. Per!on! #etween age 2K 1r! and


41/69

i,. Lo!! of one e1e or one lim# in a accident R!. 37- EEE %

PREMIUM

a/ Initiall1 R!. 3EE % per mem#er per annum to #e !hared a! under.

% 7E N of the premium to #e paid #1 mem#er! 0odal

Agenc1 State Go,ernment.

% )he 8alance 7EN of the premium will #e #orne #1

Social Securit1 Fund

#/ ("perience Rating Adju!tment will #e allowed after 4 1ear! on the #a!i! of

claim e"perience- if the group i! of minimum 3EEE mem#er!. If the claim

e"perience i! ad,er!e- LI ma1 re,i!e the premium rate!.

NODAL AGENCIES

0odal Agenc1 !hall mean Pancha1at!- 0GO5!- Self elp Group! or an1 other

In!titutionalied arrangement.

)he 0odal Agenc1 will act for and on #ehalf of the in!ured mem#er! in all

matter! relating to the Scheme

CLAIM PROCEDURE.

laim procedure i! !imple. )he #eneficiar1 of the decea!ed mem#er will #e reBuired

to furni!h the original death certificate to the 0odal Agenc1 who will arrange to

forward the !ame along with the claim form to the LI i.e. the #ranch that i! !er,ing

the !cheme. LI will !ettle claim! #1 !ending A Pa1ee cheBue! directl1 to the

#eneficiarie!. Inca!e of death #1 accident Police inBue!t report- po!t mortem report

will al!o #e reBuired to #e !u#mitted.


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)he e"i!ting !cheme at the time of renewal will ha,e option to !witch o,er to new

!cheme on re,i!ed term! and re,i!ed #enefit!. )he !cheme will #e admini!tered

through Pen!ion and Group Scheme! *ept. of LI of India.

)he !ettlement of *eath laim! would #e !u#ject to 0odal agenc1 !u#mitting to the

corporation claim%cum%di!charge form and cop1 of the death Regi!tration certificate

in re!pect of the decea!ed mem#er

I&@%@8&' %+ NGO, 0& 0&'(%-*0&?Janashree Bima Yojana

)hi! further to our circular 0o.


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MODEL RULES FOR ;ANASHREE BIMA YO;ANA

SUBSIDISED FROM THE SOCIAL SECURITY FUND

1 DEFINATIONS/

In the!e rule!- the following word! and e"pre!!ion! !hall- unle!! repugnant to the

conte"t- ha,e the following meaning!C%

i/ H)he Scheme !hall mean the :ana!hree 8ima 9ojana.

ii/ H0odal Agenc1 !hall mean the QQQQQQQQQQQQQQQQQQQQQQQQQQ in the

!tate'.). of India for the time #eing appointed to admini!ter the !cheme.

iii/ H)he orporation !hall mean the Life In!urance orporation of India

e!ta#li!hed under Section 4 of the Life In!urance orporation Act- 27


44/69

the effecti,e date- the date on which the1 ha,e #een admitted a! mem#er! of

the !cheme and entered in the Regi!ter of In!ured &em#er!.

i"/ HAnnual Renewal *ate !hall mean in relation to the !cheme the 2!tda1 of

QQQQQQQQQQ and the 2!tda1 of QQQQQQQQQQ in each !u#!eBuent 1ear.

"/ H)erminal *ate !hall mean in re!pect of each In!ured &em#er the date on

which he complete! the age of


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3/ (ngaged a! QQQQQQQQ in the occupation of QQQQQQQQ@

4/ &em#er! of QQQQQQQQQQQQ Societ1 'nion

6/ 8elow the po,ert1 line or marginall1 a#o,e po,ert1 line- and

7/ An1 other Bualif1ing condition +to #e !pecified/- !hall #e eligi#le to

join the !cheme.

Pre!ent mem#er! who on the effecti,e date !ati!f1 the a#o,e eligi#ilit1

condition! !hall join the !cheme! a! from that date. Pre!ent mem#er! who are

not within the a#o,e categor1 on the effecti,e date and future mem#er! !hall

join the !cheme on the date on which the1 !ati!f1 the a#o,e eligi#ilit1

condition!.

#/ 0o In!ured mem#er! !hall withdraw from the !cheme while he i! !till an

eligi#le mem#er !ati!f1ing the condition! of eligi#ilit1 de!cri#ed a#o,e.

c/ An In!ured &em#er !hall participate in the #enefit! of the !cheme a! long

a! he i! eligi#le. e !hall cea!e to #e an In!ured &em#er a! from the date

on which he cea!e! to fulfill the eligi#ilit1 condition!.

d/ &inimum mem#er!hip !hould #e 37.

5 ADMISSION OF AGE/

)he 0odal Agenc1 !hall en!ure that e,idence of age !ati!factor1 to the

orporation i! furni!hed #1 e,er1 mem#er at the time of hi! joining the

!cheme.

6 ADMISSION OF MEMBER/

For the purpo!e of admi!!ion into the !cheme- a mem#er !hall make an

application in the pre!cri#ed form +Anne"ure III/. )he application form dul1

completed #1 the mem#er and the nodal agenc1 along with two copie! of the


46/69

regi!ter of mem#er! in the pre!cri#ed form !hall #e maintained #1 the nodal

agenc1 +Anne"ure IV/. If the declaration of health made #1 the mem#er and

other particular! in the application form are found to #e !ati!factor1- the nodal

agenc1 !hall admit him into the !cheme. )he deci!ion of the nodal agenc1 in

thi! regard !hall #e final. )he nodal agenc1 !hall maintain the cop1 of the

Regi!ter of &em#er! co,ered under the !cheme and !u#mit one cop1 thereof

to the orporation.

7 ASSURANCE/

An a!!urance !hall #e effected in the life of each In!ured &em#er under One

1ear Renewa#le Group )erm A!!urance Plan for a !um a!!ured of R!.

3E-EEE%. Su#ject to the pro,i!ion! of the!e rule!- the A!!urance !hall #e

renewed on each Annual Renewal *ate. )he A!!urance held #1 the 0odal

agenc1 'PO0 )R'S) for the #enefit of the per!on! entitled to in accordance

with the!e rule!.

ANNUAL PREMIUM AND CONTRIBUTION/

)he annual Premium pa1a#le for !ecuring a!!urance! in para +=/ !hall #e at the

rate of R!. 2E% +Rupee! )en/ per thou!and Sum a!!ured per mem#er.

Out of the annual Premium of R!. 3EE% mentioned a#o,e for e,er1 mem#er-

each mem#er!ociet1A!!ociation'nionState Go,t. !hall contri#ute 7EN of

the premium i.e. a !um of R!. 2EE%- unle!! re,i!ed. )hi! contri#ution !hall #e

pa1a#le on the entr1 date and each !u#!eBuent Annual Renewal *ate.

)he #alance of 7EN of the premium per mem#er pa1a#le on the entr1 date and

each !u#!eBuent Annual Renewal *ate !hall #e adju!ted out of the Social

Securit1 Fund !et up #1 the orporation.

)he ondition! of a!!urance and rate! of premium ma1 #e re,i!ed upward or

downward #1 the corporation #a!ed on claim e"perience on Annual Renewal

*ate !u#ject to 4 month!5 notice #eing gi,en to the nodal agenc1.


47/69

)he nodal agenc1 !hall arrange to remit the amount of mem#er!5 !hare of

premium +i.e. 7EN of the total premium/ to the de!ignated office of the

orporation- a! ma1 #e intimated.

: BENEFITS ON DEATH PRIOR TO TERMINAL DATE/

'pon the death of an In!ured &em#er whil!t he i! in!ured prior to )erminal

date- the !um A!!ured of R!. 3E-EEE% !hall #ecome pa1a#le to the nodal

agenc1 for the #enefit! of the #eneficiar1 of the In!ured &em#er.

In ca!e of death or partialtotal permanent di!a#ilit1 due to accident +a! herein

after defined/ the following #enefit! !hall #ecome pa1a#le.

On death R!. 7E-EEE

Permanent total di!a#ilit1 R!. 7E-EEE

Lo!! of 3 e1e! or 3 lim#! OR

2 e1e and 2 lim# R!. 7E-EEE

Lo!! of 2 e1e or 2 lim# R!. 37-EEE

H*eathPartial)otal permanent di!a#ilit1 due to accident !hall mean the

deathdi!a#ilit1 occurring within three calendar month! of the happening of

#odil1 injur1- re!ulting !olel1 and directl1 from accident cau!ed #1 ,iolent-

e"ternal and ,i!i#le mean! independentl1 of an1 other cau!e- #ut not the

deathdi!a#ilit1 #1 the followingC

2/ au!ed #1 intentional !elf injur1- !uicide or attempted

!uicide- in!anit1 or immoralit1 or whil!t the &em#er i! under the

influence of into"icating liBuor- drug or narcotic.

3/ au!ed #1 injurie! re!ulting from riot!- ci,il commotion-

re#ellion- war +whether war #e declared or not/- in,a!ion- hunting-

mountaineering- !teeple%cha!ing or racing of an1 kind@ or


48/69

4/ Re!ulting from mem#er committing an1 #reach of the law.

1 TERMINATION OF ASSURANCE/

)he A!!urance on the life of an In!ured &em#er !hall immediatel1 terminate

upon the happening of an1 of the following e,ent! and no #enefit will #ecome

pa1a#le there under-

a/ *i!continuance of contri#ution! relating to the a!!urance or

#/ )he in!ured mem#er reaching the )erminal *ate- or

c/ )he In!ured &em#er cea!ing to !ati!f1 one or more of the eligi#ilit1

condition!- or

d/ )he In!ured &em#er cea!ing to #e a mem#er of the QQQQQQQQ

Societ1A!!ociation'nion QQQQQQQQQQ- or

e/ )he In!ured &em#er failing to pa1 hi! !hare of contri#ution.

11 RESTRAINT ON ASSIGNMENT/

)he #enefit! a!!ured under the !cheme are !trictl1 per!onal and cannot #e

a!!igned- charged or alienated in an1 wa1.

12 DISCONTINUANCE OF THE SCHEME/

)he nodal agenc1 re!er,e! the right to di!continue the !cheme at an1 time or

an1 Annual Renewal *ate- !u#ject to 4 month!5 notice #eing gi,en to the

orporation. )he orporation al!o re!er,e! a !imilar right to di!continue the

!cheme gi,en 4 month!5 notice.


49/69

13 ;URISDICTION/

All A!!urance! i!!ued under the !cheme !hall #e Indian contract!. )he1 will

#e !u#ject to Indian Law! including the Indian In!urance Act- 24K a!

amended- )he Lifer In!urance orporation Act 27


50/69

T %=*' %+ '0, ,*8 0, '% 9(%@0 0+ 0&,-()&* 9(%'*'0%&

9(0%0*) -89 ,-8 ,-(@0@) =&+0' )& 9&,0%& '% ' )?(0*-'-()

%(>(,

ELIGIBILITY/

a/ Per!on! #etween age 2K 1ear! and 7E 1ear!.

#/ Per!on! following one or more of the following agricultural occupation! in

the capacit1 of a la#ourer on hire- whether paid in ca!h or kind or partl1 in

ca!h and partl1 in kind a/ farming #/ dair1 farming c/ production-

culti,ation- growing and har,e!ting of an1 horticulture commodit1 d/

rai!ing of li,e!tock- #ee%keeping or poultr1 farming and e/ an1 practice

performed on a farm a! incidental to or in conjunction with the farm

operation.

c/ &inimum mem#er!hip !hould #e 3E.

BENEFITS/ +while the mem#er!hip i! in force/

A D)'

On death #efore age


51/69

a/ In ca!e of total permanent di!a#ilit1 i.e. lo!! of two e1e! or two lim#!

of u!e or one e1e and one lim# of u!e- R!. 7E-EEE%

#/ In ca!e of partial permanent di!a#ilit1 i.e. lo!! of one e1e or one lim#

of u!e R!. 37-EEE%

C S-(@0@) B&+0', /

Lump Sum Sur,i,al #enefit! will #e pro,ided at the end of e,er1 2E th 1ear

after entr1 into the !cheme till the mem#er attain!


52/69

In ca!e of withdrawal of mem#er #efore reaching age


53/69

2. )he !cheme would #e com#ination of :ana!hree 8ima 9ojana and ordinar1

Group In!urance Scheme. )he unit! !hould #e i!!ue !eparate &a!ter Policie!

for

i/ :ana!hree 8ima 9ojana and

ii/ Ordinar1 Group In!urance.

3. )he co,er under Ordinar1 Group In!urance Scheme i! R!. 4E-EEE% for natural

a! well a! accidental death. In other word! addition #enefit i! not pa1a#le in

ca!e of death! due to accident

4. )he premium of R!. 2EE% under :ana!hree 8ima 9ojana will #e contri#uted a!

follow!C

R!. 6E % #1 the mem#er!

R!.


54/69

:ana!hree 8ima 9ojana and R!. E % under Group In!urance. )hi! amount i!

l1ing in #ook! of entral Office a! depo!it! and will #e adju!ted toward!

premium on the #a!i! of information recei,ed from 'nit! in thi! regard! on

&onthl1 #a!i!.

2E. *e,elopment ommi!!ioner+andloom!/ ha! propo!ed to co,er eight lakh!

handloom wea,er! during the tenth plan

22. If the mem#er!hip for !ome of the policie! i! ,er1 le!! the !ame #e taken up

with State *irector%in%harge of handloom! and te"tile! and it! !u#ordinate5!

officer! in the field at the renewal !tage and if po!!i#le the ma!ter5! policie!

!hould #e merged at the time of renewal.

)he change! are gi,en #elow for read1 reference.

F%( ;)&),( B08) Y%)&)/

*efinition!C K. annual premium and contri#ution Para +II/ to #e changed a!

under.

Out of the annual premium of R!. 3EE % mentioned a#o,e for e,er1 mem#er

7EN of the premium i.e. a !um of R!. 2EE % unle!! re,i!ed- will #e contri#uted

a! follow!C

R!. 6E % will #e paid #1 each mem#er

R!.


55/69

#alance R!. E% +Rupee! 0inet1/ !hall #e paid #1 the *e,elopment ommi!!ioner+andloom/ i.e. i! a !um of R!. 2KE % unle!! re,i!ed

GROUP INSURANCE SCHEME FOR

AANGAN#ADI #ORERS AND HELPERS

)he Group In!urance !cheme for Aanganwadi $orker! and elper! ha! #een

finalied with the *epartment of $omen and hild $elfare- &ini!tr1 of uman

Re!ource *e,elopment. )he !cheme i! implemented all o,er India- from all the

PGS unit! from 2!tApril- 3EE6.

It i! called the AANGAN#ADI ARYAARTRI BIMA YA;ANA.


56/69

OB;ECTIES

)he o#jecti,e of the !cheme i! to pro,ide life in!urance protection along with

certain female critical illne!! #enefit! to Aanganwadi $orker! and helper!

aged #etween 2K to 7 1ear! up their attaining age


57/69

)he total annual premium under the a#o,e !cheme i! R!. 3KE % pre mem#er

i.e. R!. 3EE % for :89 and R!. KE % +for pro,iding critical illne!! #enefit/

R!. 2KE % per annum i! to #e contri#uted #1 the mem#er Go,ernment a!gi,en #elowC

i. R!. 2EE % #1 the Go,ernment of India- and

ii. R!. KE % #1 the in!ured Aanganwadi $orker elper.

8alance R!. 2EE % will #e #orne #1 the Social Securit1 Fund.

BENEFITS UNDER ;BY

*eath +other than #1 accident/ R!. 3E-EEE %.

*eath or )otal Permanent *i!a#ilit1 due to accident R!. 7E-EEE %.

Permanent partial *i!a#ilit1 due to accident R!. 37-EEE %.

FEMALE CRITICAL ILLNESS FCI BENEFITS

An amount of R!. 3E-EEE % i! pa1a#le on the diagno!i! of in,a!i,e cancer!

+malignant tumor!/ manife!t in the following organ! +!u#ject to proof of

affliction !ati!factor1 to LI/.

i. 8re!t

ii. er,i" 'teri

iii. orpu! 'terii,. O,arie!

,. Fallopian tu#e!

,i. Vagina Vul,a

A malignant tumor characteried #1 the uncontrolled growth and !pread of

malignant cell! and the in,a!ion of ti!!ue that originate! in one of the a#o,e

anatomical !ite! i! co,ered.

owe,er following are e"cludedC

i. All tumor! that are de!cri#ed hi!toricall1 a! pre malignant.


58/69

ii. All tumor! that are de!cri#ed hi!toricall1 a! arcinoma in itu.

iii. *1!pha!ia of the er,i" +I0 I- I0 II- I0 III/.

SURIAL PERIOD

)o claim the a#o,e mentioned #enefit! the life a!!ured !hould #e ali,e for a

minimum period of two month! from the date of fir!t diagno!i! of the critical

illne!!.

SHISHA SAHAYOG YO;ANA

A free add on !cholar !hip #enefit i! a,aila#le for the children of the mem#er!

who are co,ered under the !cheme a! on the 42 !tma1 of the immediatel1

following academic 1ear.

OTHER OPERATIONAL MODALITIES

An Aanganwadi helper worker who de!ire! to join the !cheme !hall #e

reBuired to fill up an application cum nomination form and !u#mit the !ame to

the nodal agenc1. )he nodal agenc1 mu!t en!ure that the mem#er i! not

alread1 co,ered under an1 other :89 related !cheme.

On receipt of the premium amount- the li!t of mem#er! co,ered along with the

&a!ter Propo!al form from the nodal agenc1- LI !hall i!!ue to the nodal

agenc1 a &a!ter Polic1. &a!ter Polic1 will #e i!!ued in fa,our of the

identified nodal agenc1 onl1 after Go,ernment5! !hare of premium i! recei,ed.

In ca!e of death di!a#ilit1 affliction #1 an1 of the ritical illne!!e!

de!cri#ed- the nominee #eneficiar1 !hall !u#mit the pre!cri#ed claim form

through the nodal agenc1. )he nodal agenc1 !hall forward the claim to the

PGS unit within 27 da1! of the date of receipt of the claim.

)he claim !hould #e !ettled promptl1- if the claim form! with the allied report!

if an1 are found in proper order. )he claim amount !hould #e !ent #1 a cheBue

drawn in fa,our of the nominee mem#er to the &a!ter Polic1 holder for

onward tran!mi!!ion to the nominee.


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CLAIM REJUIREMENTS

For :89 )he reBuirement! for natural death! and accidental death! ordi!a#ilit1 #enefit! are a! per :89 rule!.

For ritical Illne!!C A report from the appropriate medical practitioner and

diagno!tic report! !uch a! i!topathological report- report from the attending

ph1!ician and report from Oncologi!t and or other te!t which the corporation

ma1 pre!cri#e from time to time.

SCHEME FOR AUTO RICSHA# DRIERS

Social Securit1 group In!urance !cheme A-'% R0*>,) D(0@(, K R0*>,)

9-(, R-,.

*atedC 6thOcto#er- 2KK

In the !cheme Rule! in Section II lau!e


60/69

=. ontri#utionC For !ecuring a!!urance mentioned in rule < a#o,e the ontri#ution

!hall #e at the rate of R!. 4E% per mem#er pa1a#le on the (ntr1 *ate and on

rele,ant Annual Renewal *ate! in re!pect of each mem#er.

Out of the annual premium of R!. 4E% mentioned a#o,e e,er1 mem#er !hall

contri#ute a !um of R!. 27%+R!. Fifteen onl1/. )hi! contri#ution !hall #e pa1a#le

on the (ntr1 *ate and each !u#!eBuent Annual renewal date.

)he amount of contri#ution of R!. 27% per mem#er pa1a#le on (ntr1 *ate and

each Su#!eBuent Annual Renewal *ate !hall #e adju!ted out of the Social Securit1

Fund !et up #1 the corporation.

K. 8enefit! pa1a#le on death and di!a#ilit1 prior to terminal date C

A/ 'pon the death of a mem#er prior to terminal date the !um a!!ured of R!.

4-EEE% under the a!!urance then in force !hall #ecome pa1a#le to the 0odal

agenc1 for the #enefit of the #eneficiar1.

8/ If the death of the mem#er take! place due to accident and without au!e

inter,ening- an additional !um of R!. 4EEE% !hall #ecome pa1a#le to )he

nodal agenc1 for the #enefit of the #eneficiar1.

0oteC *eath due to Accident5 !hall meanC

*eath occurring within E da1! of the happening of #odil1 injur1 re!ulting

!olel1 and directl1 from accident cau!ed #1 ,iolent- and ,i!i#le mean!

independentl1 of an1 other cau!e. owe,er- due to accident !hall not include

death

2. cau!ed #1 intentional !elf%injur1- !uicide or attempted !uicide- in!anit1-

immortalit1 or whil!t the #eneficiar1 i! under the intake of into"icating liBuor-

drug or narcotic- or

3. )aking place a! a re!ult while the #eneficiar1 i! engaged in a,iation or

aeronautic! in an1 capacit1 other than that of a fare pa1ing- part pa1ing or


61/69

non%pa1ing pa!!enger in an1 aircraft which i! authoried #1 rele,ant

regulation! to carr1 !uch pa!!enger! and fl1ing #etween e!ta#li!hed

aerodrome!- the #eneficiar1 ha,ing at that time no dutie! on #oard the aircraft

or reBuiring de!cent there from.

4. au!ed #1 injurie! re!ulting from riot!- ci,il commotion- re#ellion

war+whether war declared or not/- in,a!ion- hunting- mountaineering- !teeple

cha!ing or racing of an1 kind or

6. Re!ulting from #eneficiar1 committing an1 #reach of the law or

7. Ari!ing from emplo1ment #eneficiar1 in the armed force! or militar1 !er,ice-

of countr1 at war +whether war #e declared or not/ or from #eing engaged in

police dut1 in the militar1- na,al or police organiation.

/ If- a! a re!ult of accident #efore the terminal date- the mem#er #ecome!

permanentl1 di!a#led with lo!! of !ight of #oth e1e! or amputate of #oth

hand! at or a#o,e wri!t or amputation of #oth feet at or a#o,e the ankle!- a

minimum !um of R!. 3-37E % !hall #ecome pa1a#le to the nodal agenc1. )he

#alance !um of R!. =7E % !hall #ecome pa1a#le on the mem#er! death.

*/ If- a! a re!ult of accident #efore the terminal date- if partial di!a#ilit1 occur! #1

wa1 of lo!! of one e1e onl1 or amputation of one hand onl1 at or a#o,e the

wri!t or amputation of one foot onl1 at or a#o,e the ankle- a minimum !um of

R!. 2-7EE% !hall #ecome pa1a#le to the nodal agenc1 and the #alance amount

of R!. 2-7EE% !hall #ecome pa1a#le the death of the mem#er


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CHAPTER 6

RECOMMEDATIONS AND

SUGGESTIONS

A! far a! the !cheme! are concerned- the1 ha,e #een de!igned ,er1 accuratel1 in order

to meet the need! of in!urance of the Rural on!umer. LI ha! done a fairl1 e"cellent

jo# #1 taking into con!ideration all the a!pect! of the rural life !t1le and income le,el!


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while de!igning the!e !cheme!. )hu! the !cheme! a! !uch do not ha,e an1 major

flaw! and are an e"cellent product to !ell to rural ma!!e!.

)he ne"t point to highlight the 0@( 8*)&0,8of the!e !cheme! to the rural

people. A! !pecified earlier LI ha! a ,er1 !pecific link for the deli,er1 of the!e

!cheme!. )he link i! #etween LI to 0odal agenc1 to the actual Rural on!umer.

)hu! the major link #etween LI and the rural con!umer i! a 0odal Agenc1. )hu!

ideall1 e,er1 po!!i#le nodal agenc1 !hould #e knowing what kind! of !cheme! are

offered- !hould #e their reach- who can it co,er and !o on. )hi! re!pon!i#ilit1 lie! in

the hand of #oth the LI and the nodal agenc1. 8ut there i! a complete lack of

communication #etween LI and their major intermediator1 i.e. a nodal agenc1. )he

re!pon!i#ilit1 of LI to rethink their link and the deli,er1 mechani!m of the!e!cheme!. )he1 mainl1 need to identif1 what kind of a pro#lem i! there in thi!

mechani!m and ha,e can it #e rectified in order to make rural in!urance !ucce!!ful

concept.

)he pro#lem! will #e !ol,ed onl1 when !uch marketing and pu#licit1 practice! are

taken up #1 the in!urance !ector in general and not con!idered a! the #urden of the

IR*A or the LI alone. (,en the IR*A ha! to make effort! to educate the rural

ma!!e! on the concept of in!urance.

La!t #ut not the lea!t- rural in!urance and it! !ignificance i! well under!tood #1 LI of

India #eing a go,ernment entit1- #ut thi! concept and it! importance need! to #e

communicated to all the other pla1er! in the market to achie,e all round de,elopment

of the in!urance !ector in rural area!. )hi! re!pon!i#ilit1 fall in the hand! of the

IR*A. )he Authorit1 !hould take nece!!ar1 !tep! and form nece!!ar1 rule! and

regulation! if reBuired to communicate to the pri,ate pla1er! the importance of rural

in!urance in the o,er all de,elopment of the !ector.


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CHAPTER 7

CONCLUSION

An attempt ha! #een made in thi! project to ,iew in detail the concept of rural life

co,erage and rural in!urance in a countr1 like our!. Rural India i! !een a! one of the

#igge!t market! in the world. It ha! ma"imum potential and thi! potential i! #eing

tapped #1 all the companie! in all the po!!i#le !ector! #e it F&G or 8anking-

)elecom or Information )echnolog1 and !o on. 8ut for no ,alid rea!on the in!urance

companie! are !till reluctant to enter the rural area! e,en after !eeing !uch wide


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potential and !uch a!!urance of !ucce!!. )he rea!on #eing unknown apart from LI of

India- no other compan1 !eem! to #e actuall1 intere!ted in tapping the huge market of

o,er =E N out of the 2 #illion people.

)he Bue!tion i! not onl1 of tapping the untapped market #ut al!o u!ing life in!urance

a! a tool for !ecurit1 and progre!! of Rural India. It need! to #e e"plained to the

people that thi! concept of rural in!urance i! much #etter than their traditional and

mo!t of the modern form! of !a,ing! and the !udden need for mone1 can #e !ati!fied

,er1 well in an1 ca!e. )he popularit1 of in!urance i! not a! e"pected in the!e area!.

(,en though LI ha! done 7E N of it! #u!ine!! in the rural area! thi! 1ear- thi! ha! all

come from the richer !ection of rural population in India. )he under de,eloped !till

remain to #e illiterate a#out the concept.

A! far a! I am concerned- I ha,e learned a lot a#out the potential reBuirement! of rural

India while doing thi! project. It5! not onl1 related to in!urance #ut all #a!ic

reBuirement! and ha,ing condition! in Rural India. )he num#er of !cheme! and

policie! #rought out #1 LI and a few other companie! are Buiet remarka#le and work

toward! the cau!e need! to #e inten!ified. )o !um up the project it5! #een an e"cellent

learning e"perience o,er all

#0 LIC (8)0& I&,-(( N%. 1$

)he Life In!urance orporation +LI/ !o far reigned !upreme. And the re!ult- LI

#ecame almo!t !1non1mou! with life in!urance. $ith an arm1 of 6231 dedicated

agent!- thou!and! of polic1holder!- and 3E6K #ranche! around the countr1- it can trul1

afford to #oa!t of it! gigantic !ie. )he in!urance indu!tr1 i! witne!!ing a ne,er #efore

tran!formation. )he LI i! no more a monopol1. Pri,ate in!urer! ha,e charged in and

new!paper! the!e da1! are !plattered with in!urance ad,erti!ement! like ne,er #efore.

Glo#al in!urer! are all !et to woo cu!tomer! with their product! and ha,e #rought in

their profe!!ionali!m and impro,ed !er,ice- which will hopefull1 en!ure a much

#etter treat for the Indian cu!tomer. )he #attle for garnering a larger market !hare ha!

#egun alread1 #etween the #ehemoth and a num#er of pri,ate in!urer!. $hile the


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pri,ate in!urer!- to create awarene!! ha,e increa!ed their media!pend- if recent report!

are an1 indication LI !eem! to #e #enefiting out of the e"erci!e. Pri,ate in!urer! are

learning from LI! failure! and draw#ack! and LI5! ad,antage i! the monopol1 it

enjo1ed !o far- the long !tanding goodwill % it! a!!et a! al!o it! huge e!ta#li!hed

network of agent! while pri,ate in!urer! ha,e onl1 made a #eginning and ha,e a long

wa1 to go. It i! too earl1 for pri,ate in!urer! to take on a giant a! the LI. 8ut it i!

certain that competition will increa!e and in cour!e of time inno,ati,e- ne,er%#efore

in!urance product! will hopefull1 #e rolled out. And the ultimate winner will #e the

con!umer.

ANNEURES

SCHEMES BY ICICI PRUDENTIAL

R-() P)&,

III PruLife Rural Product! are de!igned to meet the need! of the rural con!umer!.

)he!e product! offer the following feature!C

2. Low and Afforda#le Premium!

3. Life o,er


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4. Sa,ing! Option

6. a!!le free procedure

III Prudential offer! 3 !peciall1 de!igned rural plan!.

III Pru &itr (ndowment Plan

III Pru Surak!ha % Regular Premium

ICICI P(- M0'(offer! the following feature!C

Life o,er and Sa,ing!

Regular Premium!

Age at entr1 C 2K % 67 9r!

Premium &ode C alf 9earl1 9earl1

)erm C 7-2E-27 9r!

Sum A!!ured C R!.7-EEE %3E-EEE

Premium 9ear C R!. 7E= % 774 + SAC R!.2E-EEE/

&aturit1*eath #enefit C Sum A!!ured

ICICI P(- S-()>,)i! a regular premium polic1 with the following feature!C

Indi,idual polic1

Onl1 Life co,er

)erm % 4 7 9r!

Age independent premium

Age at entr1 C 2K % 67 9r!

Sum A!!ured C Single

Premium 9ear C R! 7E % 3EE


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&aturit1*eath #enefit C R!.7-EEE % 3E-EEE

*eath 8enefit C Sum A!!ured

BIBLIOGRAPHY

BOOS REFERED

I 44 LIF( I0S'RA0(- 81 In!urance In!titute of India.

ORGA0ISA)IO0 OF O&&(R( 81 Vipul Praka!han


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#EBSITES REFERED

www.lic%india.com

www.google.com

www.mone1control.com

100 marks project on rural life insurance

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