LIC- Life Insurance Corporation of India

LIC Full Form and Definition

LIC stands for Life Insurance Corporation of India. It started its operations as a corporate firm in September 1956 after the Life Insurance of India Act was passed by India’s Parliament in June 1956. The LIC Act came into effect from July 1956. It helped in the nationalization of the private insurance industry in India. LIC of India was formed by merging 154 life insurance companies, 16 foreign companies and 75 provident companies. It is one of the largest financial institutions in India. It has an asset value of over 2,529,390 crores. The headquarters of LIC is in Mumbai, Maharashtra.

The main slogan of LIC is- “Yogakshemam Vahamyaham” meaning “Your welfare is our responsibility”. It is in Sanskrit and is obtained from the 22nd verse of the Bhagavad Gita’s 9th chapter. The chairman of Life Insurance of India is Mr M.R Kumar.

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Role of LIC in Indian Economy

LIC is known as India's largest government-owned life insurance and investment corporation. The main role of LIC is to invest in global financial markets and different government securities after gathering funds from people through their various life insurance policies. At least 75% of these gathered funds are to be invested in Central and State Government securities, as stated by one of the LIC rules.

Functions of LIC

The major functions of LIC are as follows:-

  • Collect people’s savings in exchange for an insurance policy and promote savings in the country.

  • Protect the capital of the people by investing funds into government securities.

  • Issue insurance policies at affordable rates

  • Provide various loans like direct loans to industries, housing loans, loans to various national projects at reasonable interest rates.

Objectives of LIC

  • LIC aims to spread awareness about the importance of life insurance among people living in rural areas and people who are a part of socially and economically backward classes.

  • It aims to meet several life insurance needs of the community people who are subjected to change with the changing social and economic environment.

  • It aims to conduct business economically while taking into consideration that the money belongs to the policyholders. 

  • It aims in maximization of the mobility of people’s savings through attractive insurance-linked savings. 

  • It aims in providing utmost job satisfaction to all the agents and employees of the corporation and promotes building a co-operative work environment to deliver efficient service with courtesy to its insured public.

  • It aims to deploy the funds to the best advantage of the investors and the community as well.

Types of LIC Life Insurance Plans

LIC provides numerous schemes to its policyholders. It offers different schemes for different categories and segments of the Indian economy. It is the largest insurance policy company in terms of the number of policies it has issued to date. Some of the policies are as follows:-

  • LIC’s Jeevan Pragati

  • LIC’s Jeevan Labh

  • LIC’s Single Premium Endowment Plan

  • LIC’S Jeevan Lakshya

  • LIC’s Jeevan Tarun

Did you know?

The first company in India that provided insurance coverage was The Oriental Life Insurance Company, established in 1818, in Kolkata. Surendranath Tagore founded the Hindustan Insurance Society which later became Life Insurance Company.

Solved Examples

1. LIC was Established in Which Year?

  1. June 1956

  2. September 1956

  3. July 1956

  4. October 1956

Ans: (b) September 1956  

2. Where is LIC Headquartered in?

  1. Kolkata 

  2. Pune

  3. Mumbai

  4. Chennai 

Ans: (c) Mumbai

FAQs (Frequently Asked Questions)

Q1. What are the Benefits of Buying from Life Insurance Corporation?

Ans. The benefits of buying from Life Insurance Corporation of India are:-

  • The policyholder will get the most advanced and efficient service as they are associated with an industry leader which has a technologically advanced network throughout the industry. 

  • Maximum benefits are ensured to the policyholder and their family by designing innovative plans.

  • LIC provides an effortless and simple claim procedure for the policyholder when needed.

  • It has an excellent customer support service that provides 100% grievance settlement facilities.

  • It also provides online customer service to make the lives of policyholders easier. One can get the entire details of their policy via SMS.

Q2. What are the Processes of Maturity Claim and Death Claim of Life Insurance Company of India?  

Ans. The maturity claim process of LIC of India is:-

  • A letter is sent by the branch office that serves the policyholder two months before the maturity date.

  • The policyholder is required to respond with a duly filled ‘Discharge form’ along with the original copy of the policy document.

  • The branch office upon receiving of these two documents sends a post-dated cheque via post to the policyholder.

Suppose the insured person dies before the date of maturity. In that case, the branch office asks for the claimant’s statement including details of the claimant and the deceased, original copy of policy document, death certificate of the deceased, documentary proof of age.