Any Traditional policy of LIC OF INDIA can be surrendered only after 3 years from DOC ( Date of Commencement) of the LIC POLICY. In ordered to surrender the LIC POLICY, the LIC POLICYHOLDER needed to submit the surrender form duly signed by the POLICYHOLDER on the 1st and 2nd page( sign on the 2nd page should be across the revenue stamp) along with the LIC POLICY BOND at the home branch.
The surrender form can be downloaded from
Note:- LIC POLICY can be surrendered only at the home LIC BRANCH from which the LIC POLICY belongs to.
India Infrastructure Finance Company Ltd (IIFCL) and Life Insurance Corporation (LIC) have drawn up plans to invest Rs 10,000 crore during 2011-12 in the infrastructure sector, through the take-out financing route.
They have agreed to jointly buy out up to 40 per cent of infrastructure loan portfolios of banks, each having 20 per cent exposure.
“IIFCL will take all the initiatives with the banks regarding the portfolios. We have earmarked a total of Rs 10,000 crore, each investing Rs 5,000 crore, for the current financial year,” S K Goel, chairman IIFCL told Business Standard.
Under the scheme, IIFCL is allowed to take up to 75 per cent of bank loans for an infrastructure project on to its books, thereby freeing banks’ capital and enabling them to lend in new projects.
Since IIFCL has inherent expertise in infrastructure financing, it will carry out all the due diligence of the projects, Goel added.
A senior LIC official said there are some issues that need to be addressed.
“The main issue is the sharing of the liabilities. We are yet to take a call on the extent of liability which LIC can bear in case an asset becomes non-performing. We need to understand the risk carefully before entering into a particular project. Then we also need to understand to what extent we can invest under the sector investment norms,” the official added.
According to the Insurance Regulatory and Development Authority (Irda) guidelines, LIC’s exposure in a single project is capped at 10 per cent of the total investiable fund. The insurance regulator also mandates life insurers to invest at least 15 per cent of their controlled funds in infrastructure and social sectors.
According to sources, the idea of roping in LIC to partner IIFCL in the take-out financing scheme was mooted by the finance ministry in the wake of the lukewarm response of the take-out financing scheme floated by the infrastructure financier. So far, IIFCL has been able to disburse only Rs 90 crore of the total sanctioned amount of Rs 3,000 crore under the take-out financing scheme.
The government-owned Life Insurance Corporation of India (LIC) has registered a six per cent increase in market share to 78 per cent of all new life insurance policies bought by customers since April 1 during the current financial year. LIC’s market share at the end of March 31, 2011, had stood at 72 per cent of all new policies sold during the last financial year (2010-11) with the 23 rival life insurance companies, most of which are tied up with international giants, holding 28 per cent share. The combined market share of these companies has now fallen to 22 per cent during the current fiscal, according to the latest figures.
LIC‘s north zone chief Nilesh Sathe said the share of the private sector companies has come down as customers are turning away from the unit-linked life insurance products (ULIPs) offered mainly by the private sector companies as these have become risky because of the volatility in the stock market. Investments in LIC‘s conventional life insurance products that are not linked to the stock market are considered much safer.
However, though in terms of the number of policies LIC has a 78 per cent share, in terms of the percentage of first time premium income the company’s share is at 72.43 per cent. This is because the private sector companies focus more on big ticket premiums, which has given them a larger average income per policy.
The average ticket size of the first premium income of private sector companies works out to Rs 23,293 while the corresponding figure for LIC is Rs 12,806. The average ticket size for the insurance industry as a whole is Rs 15,070. Sathe explained that LIC offers a much wider range of policies, starting at a minimum premium of Rs 250 with life insurance value of Rs 30,000. This enables the public sector company to achieve the social objective of taking its insurance cover to a wider range of the country’s population.
LIC also has the lowest outstanding claims ratio of a mere 0.37 per cent. The figures also show that during 2009-10 while LIC had settled 99.8 per cent of death claims, the private sector companies had settled 96.8 per cent of such claims. There were also variations among the private sector companies with some doing better than others.
Sathe said the LIC claims that have not been settled were mainly due to family disputes with one member moving court against another. “There have been instances where the mother was named the beneficiary of the policy in the case of death but the wife has moved court to assert her claim,” he said. Some claims have also come in the doubtful category as the insured person has died shortly after buying the policy. In such cases, it often turns out that the person had some illness that he had concealed from the company at the time of insurance.
currently charges higher premium for its term plans than private competitors. For example, a 30-year-old non-smoker has to pay an annual premium of 7,300 for a 25-lakh policy under LIC’s term plan Amulya Jeevan, while she can buy online policies such as ICICI Prudential’s iProtect for 3,350 and Kotak Life’s e-term plan for 2,750.LIC plans to reduce this gap with the launch of its online term policy, where it can save on agent commission. Its move is expected to make private insurers reduce their rates further. The state-owned insurer is also betting big on Bancassurance, or selling policies through bank branches.
LIC’s ED Vipin Anand said the insurer has set a target to double its income from Bancassurance this financial year to 5% of its total new business income. The insurer is targeting new business income of 54,000 crore this year. At present, 20 banks, including United Bank,
UCO Bank, Central Bank, Corporation Bank, BoM and PNB, sell LIC policies.LIC has announced a bonus of 21,580 crore for its policyholders for 2010-11, which is 95% of its net surplus of 22,716 crore. The rest 5% has gone to the government.
It has announced a higher bonus rate under seven with-profit plans, namely Jeevan Anand, Jeevan Tarang, Jeevan Madhur, Child Future Plan, Jeevan Shree I, Jeevan Bharti I and Jeevan Pramukh. It also announced loyalty additions for the first time in other seven plans.
After a gap of two years, Life Insurance Corporation of India (LIC) has raised bonus by up to 15 per cent for 2010-11.
The country’s largest life insurer, which reported a 10.3 per cent rise in net actuarial surplus at Rs 22,716 crore for 2010-11, compared to Rs 20,586 crore in the previous year, allocated Rs 21,580 crore for paying annual bonus to policyholders.
“The bonus rates have gone up after a gap of two years. We will be providing higher bonus rates under seven plans like Jeevan Anand, Jeevan Tarang, Jeevan Madhur, Child Future Plan, Jeevan Shree I, Jeevan Bharti I and Jeevan Pramukh. This apart, we have also brought in seven other plans under loyalty additions,” a LIC spokesperson told reporters.
In the traditional plans category, which accounts for more than 60 per cent of its incremental sales, the insurer will launch cheaper products, in line with the rates offered by private insurance companies. “Currently, our traditional plans are costlier than offered by the competition. So, we will come out with plans with competitive rates,” he said.
In 2010-11, LIC collected Rs 86,444.7 crore by selling new policies, 22 per cent more than Rs 70,891.5 crore garnered in the previous corresponding period. Total investment in debt and equities stood at Rs 2,00,000 crore and the solvency margins improved to 154.07 per cent from 153.96 per cent.
Jeevan Arogya is the first defined health insurance product to be introduced by India’s largest life insurance company, LIC of India. It will pay the customer a fixed daily cash amount as well as cover specific surgeries.
The product is a Hospital Cash Benefit Plan (HCB) that offers daily hospital cash benefit for a fixed number of days that one is hospitalised. Besides that, it will cover 140 surgeries with the maximum amount one can avail for surgeries being 100 times the daily limit.
The product also offers a lump sum amount that is twice the daily cash limit per hospitalisation day, even for surgeries not listed. This feature is similar to the HCB plan offered by Aegon Religare Life Insurance. Life insurer Tata AIG’s Wellsurance Family Classic offers a standard daily cash plan without any surgery benefits.
Jeevan Arogya has a number of features that should take care of rising health care costs.
For instance, it increases the limits on the initial daily benefits every year. So, one’s daily cash limits will rise to a maximum of five per cent or up to 1.5 times of the initial amount each year. This would be in addition to the five per cent added to one’s daily cash limit as part of one’s cumulative or no-claim bonus. Together, this could lead to a 10 per cent rise in one’s daily cash benefit.
No doubt, even other health insurers (both life and general) offer a nearly five per cent rise in the sum assured as part of one’s cumulative bonus. However, Jeevan Arogya customers are assured of getting a five per cent rise, even if they are not eligible for no-claim benefits.
Besides, since all other benefits are linked to the person’s daily limits, a rise in the daily limit translates into higher day care and major surgery benefits.
Another feature allows automatic waiver of the subsequent year’s annual premium for customers who make a claim for major surgical benefits.
However, Jeevan Arogya is a complicated product with both yearly and lifetime limits on how many times a claim can be made. So, one is allowed only three day care claims and only one major surgery claim in a year.
In terms of costs, it is much cheaper than the Aegon Religare product. If you opt for a daily cash limit of Rs 2,000, you would be paying an annual premium of Rs 4,000 for Jeevan Arogya. For the same limit, Aegon Religare’s premium would be Rs 13,800.
However, health products from life insurers are more restrictive in nature. While HCBs pay a lump sum, the hospital cash offered by general insurers covers the actual expenses falling within the amount sum insured.
Also, HCBs only cover illnesses mentioned in their policy document. They also permanently exclude pre-existing ailments. In comparison, four years of continuous cover with a general insurer will get you a cover for a pre-existing disease. Except hospitalisation due to accidents, life insurers’ policies usually have longer cooling periods of 90 days from the effective date of the policy.
Insurance experts caution consumers against opting for such HCBs as a standalone health insurance product. Instead, they advise customers to buy health products from a life insurer as an add-on to a basic health policy that will cover actual expenses.
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