Life Insurance in India

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INSURANCE SECTOR IN INDIA

SUBMITTED BY: Aashish Dutt Semwaal Akash Chaudhary Ankita Bansal Aditi Shah

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TABLE OF CONTENTS
1. OVERVIEW TO INSURANCE SECTOR…………………………………… 3 2. LIST OF INSURANCE COMPANIES………………………………………. 4 3. INTRODUCTION TO LIC……………………………………………………. 7 4. BRIEF HISTORY…………………………………………………………….

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5. OVERVIEW OF LIC………………………………………………………….. 8 6. MISSION……………………………………………………………………….. 9 7. VISION…………………………………………………………………………. 10 8. PRODUCT S OFFERED……………………………………………………. 10 9. TAX BENEFITS………………………………………………………………

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10.REFERENCES……………………………………………………………….. 15

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INSURANCE SECTOR IN INDIA
A increase in insurance sector stabilizes a country’s economy by facilitating long-term funds for infrastructural development and strengthening the overall risk-taking ability. India’s Rs. 221, 400 crore (US$ 40.26 billion) insurance industry is at a stage where many foreign players are eyeing the immense potential of the fastgrowing economy. Indian insurance industry is rapidly opening up to foreign players. Currently, 22 out of 24 life insurance players and 18 out of 27 non-life insurers have foreign partners, and many more are trying to enter the Indian landscape. Industry experts believe that capital infusion through FDI will not only attract additional foreign funds to the sector, but will also increase the access of insurance and improve penetration. Foreign players would bring in the much needed technical aspects of insurance business, including product innovation, streamlining the claims settlement processes and introducing technological best practices which would eventually lead to innovative products and focus towards the large uninsured and rural population. The reform will introduce an entirely new phase of development to the Indian insurance sector.

SWOT ANALYSIS
STRENGHTS:    Relatively lower insurance penetration, rising income levels of the middle-class population and increasing awareness about the concept of insurance

WEAKNESSES:  Life insurance products’ penetration in India is around 4.5 per cent  general insurance products is around 1 per cent. OPPORTUNITIES:  Cabinet’s approval to raise foreign direct investment (FDI) limit in insurance sector from 26 % to 49%
has opened gateways for foreign insurers.

 IRDA’s final nod to ‘insurance repositories’ will now facilitate demat policies in the insurance industry.  The regulator has also introduced major relaxations in investment guidelines for life insurance
companies wherein they would be allowed to buy credit protection through derivatives.

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 World Economic Forum’s latest report ‘Financial Development Report 2012’ has named India as the
world's top-ranked country in terms of life insurance density.

Threats:
No threat as such in this industry as it is a prospering and new sector which has vast opportunities. Only threat faced by new entrants is of established players in this sector

LIST OF INSURANCE COMPANIES IN INDIA
This list of Indian insurance companies is based on the list of insurance companies registered and approved with the Insurance Regulatory and Development Authority.

General Insurance Company
Public Sector Government of India Fully owned 4 companies:
   

National Insurance Co Ltd (public sector) New India Assurance Co Ltd (public sector) Oriental Insurance Co Ltd (public sector) United India Insurance Co Ltd (public sector) Private Sector

           

Bajaj Allianz General Insurance Bharti AXA General Insurance Cholamandalam MS Future Generali India Insurance HDFC ERGO General Insurance ICICI Lombard IFFCO Tokio Liberty Videocon General Insurance Co Ltd L & T General Insurance Magma HDI General Insurance Co Ltd Raheja QBE General Insurance Reliance General Insurance

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     

Royal Sundaram SBI General Insurance Shriram General Insurance Tata AIG General Universal Sompo General Insurance Star allied

Standalone Health Insurance Company
Private Sector
   

Apollo Munich Health Insurance Max Bupa Health Insurance Religare Health Insurance Company Ltd Star Health and Allied Insurance company Ltd

Export Credit Guarantee Insurance Companies
Public Sector


Export Credit Guarantee Corporation of India

Agriculture Insurance Companies
Agriculture insurance co.of India Ltd.

Life Insurance Companies
Public Sector Government of India Fully owns 1 company:


Life Insurance Corporation of India

Private Sector


AEGON Religare Life Insurance

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                     

Aviva Life Ia-life" Bajaj Allianz Life Insurance Bharti AXA Life Insurance Co Ltd Birla Sunlife Canara HSBC Oriental Bank of Commerce Life Insurance Star Union Dai-ichi Life Insurance DLF Pramerica Life Insurance Edelweiss Tokio Life Insurance Co. Ltd Future Generali Life Insurance Co Ltd HDFC Standard Life Insurance Company Limited ICICI Prudential IDBI Federal Life Insurance IndiaFirst Life Insurance Company ING Vysya Life Insurance Kotak Life Insurance Max Life Insurance MetLife India Life Insurance Reliance Life Insurance Company Limited Sahara Life Insurance SBI Life Insurance Company Limited Shriram Life Insurance TATA AIA Life Insurance

Re Insurance Companies
Public Sector Government of India Fully owns 1 company:


GIC Re (General Insurance Corporation of India - Re-Insuer)

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Life Insurance Corporation of India (LIC)
Life Insurance Corporation of India (LIC) is the largest privately held state-owned insurance group in India, and it is also the largest investor of India. It is fully owned by the Government of India. It also funds around 24.6% of the Indian Government's expenses, which is a huge percentage. It has assets estimated of 13.25 trillion (US$291.5 billion). It was founded in 1956. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September, 1956. The objective of the act was to spread life insurance more widely and particularly to the rural areas with the aim to reach all insurable people in the country, providing them adequate financial cover at a very reasonable cost which would suit their needs. LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate office in the year 1956. Large numbers of new branch offices were opened by LIC after that. The Headquarter of LIC is in Mumbai, financial and commercial capital of India, LIC of India currently has 8 zonal Offices and 113 divisional offices located in different parts of India, around 3500 servicing offices including 2048 branches, 54 Customer Zones, 25 Metro Area Service Hubs and a number of Satellite Offices located in different cities and towns of India and has a network of 13,37,064 individual agents, 242 Corporate Agents, 79 Referral Agents, 98 Brokers and 42 Banks for expanding life insurance business and reach the people. LIC also has the lowest outstanding claims ratio of 0.37%. The figures also shows that during 2009-10 LIC had settled 99.8% of death claims, while the private sector companies had settled 96.8 per cent of such claims.LIC has taken a leap ahead of them. There were also variations that could be seen among the private sector companies with some doing better than others.

HISTORY
Life Insurance came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company in India. The first two decades of the twentieth century saw huge growth in insurance sector. From 44 companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total business-in-force as Rs.298 crore in 1938.

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The Insurance Act 1938 was the first legislation governing life insurance and non-life insurance to provide strict state control over insurance sector. The demand was made repeatedly in the past for nationalization of life insurance industry but it started in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly. However, it was much later on the 19th of January, 1956, that life insurance in India was nationalized.

An overview
Type Private state-owned Industry Founded Headquarters Key people Products Financial services 1 September 1956 Mumbai, India D. K. Mehrotra, (Chairman) Life and health insurance, investment management, mutual fund Total assets Owner(s) Employees Subsidiaries 13.25 trillion (US$291.5 billion) Government of India 13,37,064(2011) LIC Housing Finance Limited LIC Cards Services Limited LIC Nomura Mutual Fund LIC(Nepal)Ltd LIC(Lanka)Ltd LIC(International)BSC(C) Website www.licindia.in

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Board of directors
1. Shri D.K. Mehrotra, (Current-in-Charge CHAIRMAN, LIC)

2.Shri T. S. Vijayan, (Managing Director, LIC)

3.Shri Thomas Mathew T. (Managing Director, LIC )

4.Shri R. Gopalan, (Secretary, Department of Economic Affairs, Ministry of Finance, GOI.)

5. Shri D.K. Mittal, (Secretary, Department of Financial Services,Ministry of Finance, GOI)

6.Shri A.K. Roy, (Officiating Chairman cum MD, GIC.) 7. Shri M.V. Tanksale, (Chairman & MD Central Bank of India )

8.Lt. General Arvind Mahajan (Retd.)

9. Shri Anup Prakash Garg

10.Shri Sanjay Jain

11.Shri Ashok Singh

12.Shri K.S. Sampath

13.Shri Amardeep Singh Cheema

MISSION "Explore and enhance the quality of life of people through financial security by providing products and services of aspired attributes with competitive returns, and by rendering resources for economic development."

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VISION "A trans-nationally competitive financial conglomerate of significance to societies and Pride of India."

CORPORATE PLAYERS

1% 3% 6% 6% 6%

Market Share
LIC ICICI Pru Life SBI Life

HDFC Life
78% Bajaj Allianz Others

OFFERINGS BY LIC

Products Insurance Plans Pension Plans Special Plans Withdrawn Plans

Unit Plans

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Insurance Plans
As each individual differ from each other. The insurance needs and requirements of each individual differs from that of others. LIC's Insurance Plans are policies that are made according to individual’s needs and demands and give each individual the most suitable options that can fit their requirement. LIC’s Insurance Plans are made after a very careful planning, analysis, survey and study of the requirements and prevailing trends and needs in the market. LIC has given the term “Insurance” all new meaning and has gained importance. LIC offers a wide variety of plans to offer to it’s customers as per their needs and requirements. A list of all has been given below:• • • • •


Jeevan Arogya Plan. Bima Account Plans. Endowment Plus. Children Plans. Plans For Handicapped Dependents. Endowment Assurance Plans. Plans For High Worth Individuals. Money Back Plans. Whole Life Plans. Joint Life Plans

• • • •

Pension Plans
Pension Plans are Individual Plans that look into individual’s future and foresee financial stability during the individual’s old age. It is a kind of security to individuals in their old age. These policies are most suited to the needs of the senior citizens and those individuals who are planning for a secured future, so that the individual never gives up on the in life and can fulfill their needs during old age when they have no other source of income.In other words, pension plans (also referred to as retirement plans) are offered to help individuals build a retirement corpus. On maturity the amount of corpus is invested for generating a regular income for the individuals, which is referred to as pension or annuity. Pension plans are distinct from life insurance plans, which are taken to cover risk in case if any unfortunity takes place. • Jeevan Akshay-VI

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Unit plans
Under unit plans comes the unit linked insurance plan (ULIP) which is a type of life insurance where the cash value of a policy is directly proportional to the current net asset value of the underlying investment assets. The main advantage it offers is of the protection and flexibility in investment which is not present in other investments. People who value their hard earned money go for this investment as it helps to yield rich benefits and also save tax for people who don’t have consistent income.

SPECIAL Plans
With consideration to the growing needs and trends of the industry these plans are a perfect mix of insurance and investment. It assures the needs of policyholders ranging from insurance claims to Unit investments. According to the NEED OF THE HOUR situation LIC has developed various plans for each of its potential customers.

• • • • • •

New Bima Gold. Health Protection Plus. BimaNivesh. JeevanSaral. JeevanMadhur JeevanMangal

WITHDRAWAL PLANS According to the” systematic withdrawal plan” an investor receives a set amount of funds from the total fund on a periodic basis, as it is a form of a payment structure arranged with a mutual fund. This type of arrangement helps the investors to earn a regular income during their retirement years while the remaining money remains invested in the mutual fund for further growth. • • • • • • • • Wealth Plus JeevanAastha JeevanVarsha Fortune Plus Health Plus Market Plus Money Plus Profit Plus

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• • • • • • •

Pension Plus Health Plus Jeevan Nidhi Samridhi Plus Jeevan Suraksha JeevanSaathi Plus JeevanNischay

Tax Benefits
1. Deduction Allowable from income for payment of Life Insurance Premium (Sec 80 C)
Deduction upto 20% is allowed on the capital sum assured for any life insurance premium paid to keep intact an insurance on the life of an assesse , life of the spouse or any child of assesse and in case of HUF , the life of any member.

Contribution to deferred annuity plans to keep intact the life of assesse , life of spouse and any child. Contribution to pension/Annuity plans – New JeevanDhara –I and JeevanAkshaya – VI 2. Jeevan Nidhi Plan & New Jeevan Suraksha - I Plan (U/s. 80CCC) From the fund set up by the Corporation under the Pension Scheme , a deduction is allowed to an individual for any amount paid or deposited by him from his taxable income in the above annuity plans to receive pension from this fund The premium can be paid upto Rs.1,00,000/- to avail deduction u/s.80C, 80CCC & 80CCD. 3. Investment under long-term infrastructure bonds notified by the Central

Government. (Sec. 80CCF)
In addition to Rs. 1 lakh deduction available under Section 80C , a deduction of up to Rs. 20000 is also available to individuals and HUF for the amount paid or deposited as subscription to long term infrastructure bonds as mentioned and notified by the Central Government.

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4. Deduction under section 80D Under this section deduction uptoRs. 15000 is allowed if an insurance is made for the health of the assesse and his family. If the insurance is made for the health of the parents then an additional deduction is allowed for Rs. 15000. In case of HUF deduction allowed is Rs. 15000 if the insurance is made for the health of any member of HUF. If the insurance is made for any person who is a senior citizen then the deduction available will be uptoRs. 20000. provided that such insurance is in accordance with the scheme framed by: a) the General Insurance Corporation of India as approved by the Central Government in this behalf or; b) Any other insurer and approved by the Insurance Regulatory and Development Authority.

5. Jeevan Aadhar Plan (Sec.80DD) :
Deduction from total income upto Rs.50000/- is allowed on the amount deposited with LIC under Jeevan Aadhar Plan for maintenance of an handicapped dependent .

6. Exemption in respect of commutation of pension under JeevanSuraksha& JeevanNidhi Plans:
Under Section 10(10A) (iii) of the Income-tax Act, any payment received by way of commutations of pension out of the JeevanSuraksha &JeevanNidhi Annuity plans is exempt from tax under clause (23AAB).

7. Income tax exemption on Maturity/Death Claims proceeds under Section 10(10D)
Under the provisions of section 10(10D) of the Income-tax Act, 1961, death claims proceeds of any life insurance policy other than the amount to be refunde under Jeevan Aadhar Insurance Plan in case of handicapped dependents ,is exempted from income tax.

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REFERENCES
 WWW.GOOGLE.COM  WWW.WIKEPEDIA.COM  WWW.LICINDIA.IN  WWW.SLIDESHARE.COM

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