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 the Life Insurance Corporation of India is Mr. M.R. Kumar.
LIC was established in 1956 through the nationalization of over 240 private life insurance companies operating in the country. As a state-owned enterprise, the Life Insurance Corporation of India plays a crucial role in the Indian financial sector, providing economic security and promoting life insurance across the country. With a strong presence in both urban and rural areas, LIC is known for its wide distribution network, innovative product offerings, and customer-centric approach, making it a trusted brand in the Indian insurance industry.
Role of LIC in Indian Economy
The Life Insurance Corporation of India (LIC) plays a significant role in the economy. Here are some of the key roles LIC plays
Mobilisation of Savings: LIC is one of the largest institutional investors in India, mobilising funds through the sale of life insurance policies. This helps channel domestic savings into productive investments, supporting economic growth.
Investment in Infrastructure: LIC invests a significant portion of its funds in government securities, bonds, and other instruments, providing much-needed capital for the development of infrastructure projects in the country.
Financial Inclusion: LIC has a vast network of branches and agents, extending life insurance coverage to the remotest parts of the country, promoting financial inclusion and risk protection for the masses.
Retirement Planning: LIC’s range of pension and annuity products cater to the retirement planning needs of the growing middle class, ensuring financial security for the elderly.
Social Security: LIC’s various insurance schemes, such as the Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana, provide affordable life and accident insurance coverage, contributing to the social security net in India.
Macroeconomic Stability: As a major institutional investor, LIC’s investments and asset allocation decisions can stabilise the financial markets, contributing to overall macroeconomic stability.
LIC’s pivotal role in mobilising savings, investing in critical sectors, promoting financial inclusion, and providing social security makes it an indispensable institution for the growth and development of the Indian economy.
Also Check: LIC Investment Plans
Types of LIC Policies In India
The Basic Policies of the Life Insurance Corporation of India (LIC) are as follows:
1. Life Insurance Policies:
Life insurance policies are financial agreements between an individual and an insurance company. Here are the major basic policy:
- Whole Life Policy
- Endowment Policy
- Money-back Policy
- Term Insurance Policy
- Unit-Linked Insurance Policy (ULIP)
- Pension and Annuity Plans
2. Health Insurance Policies:
Health insurance policies are designed to cover or offset the costs of medical care. Moreover, they work on the principle of risk pooling, where individuals pay regular premiums to an insurance company, which in turn provides financial coverage for medical expenses.
- Aarogyam Health Insurance
- Corona Rakshak Policy
- Corona Kavach Policy
- Micro Insurance Plans
3. Investment-Linked Policies:
- Jeevan Saral
- Jeevan Shanti
- LIC New Pension Plan
- LIC Pradhan Mantri Jeevan Jyoti Bima Yojana
4. Group Insurance Policies:
- Group Term Life Insurance
- Group Credit Life Insurance
- Group Leave Encashment
5. Social Security Schemes:
- Aam Aadmi Bima Yojana
- LIC Pradhan Mantri Jeevan Jyoti Bima Yojana
- LIC Pradhan Mantri Suraksha Bima Yojana
These are the basic policies and schemes offered by the Life Insurance Corporation of India, which aim to provide life insurance, health insurance, investment, and social security options to individuals and groups.
Loan Against LIC Policy
Here are the key points regarding taking a loan against an LIC (Life Insurance Corporation of India) policy:
Loan Eligibility:
LIC policyholders can avail of a loan against their life insurance policies, provided the policy has acquired a surrender value. Surrender value typically refers to the cash value that an insurance policyholder is entitled to receive, which is typically around 90% of the surrender value.
Loan Interest Rates:
The interest rate on loans against LIC policies is lower than the interest rates on other personal loans or bank loans.
The interest rates are set by LIC and are subject to change from time to time.
Loan Repayment:
You can repay the loan in installments, and the repayment period usually lasts until the policy matures.
If you fail to repay the loan, then the outstanding amount, along with interest, will be adjusted from the policy’s death or maturity benefits.
Loan Utilisation:
The loan can be used for various purposes, such as medical expenses, children’s education, or any other personal or financial needs.
Loan Documentation:
To apply for a loan against an LIC policy, the policyholder needs to submit the policy document and a loan application form. Additional documents, such as ID proof and income proof, may be required depending on the loan amount.
Loan Approval Process:
LIC processes the loan application; moreover, the approval is based on the policy’s surrender value and the policyholder’s repayment capacity. Additionally, the loan is typically sanctioned within a few days of the application.
Impact on Policy:
Taking a loan against an LIC policy does not affect the policy’s coverage or benefits, as long as the policyholder continues to pay the premiums. The outstanding loan amount, along with interest, will be deducted from the policy’s death or maturity benefits.
Borrowing against an LIC policy can be a convenient option for policyholders in times of financial need, but it is essential to understand the terms and conditions carefully before applying for the loan.
LIC Link with Aadhar
The Life Insurance Corporation of India (LIC) has integrated its services with the Aadhaar card (Unique Identification Number) issued by the Unique Identification Authority of India (UIDAI), consequently enhancing accessibility and streamlining customer verification processes.
Here’s how the LIC-Aadhaar link works:
Aadhaar Integration: LIC has made it mandatory for policyholders to link their Aadhaar number with their LIC policies, thereby allowing LIC to authenticate the identity of policyholders and their nominees/beneficiaries, thereby facilitating secure and efficient service delivery.
Benefits of LIC-Aadhaar Link: Ease of Policy Management: The LIC-Aadhaar link enables policyholders to access their policy details, update personal information, and avail various services through the LIC portal or mobile app, all using their Aadhaar-verified identity.
Prevent Fraud: The Aadhaar integration helps LIC to identify and prevent any fraudulent activities, such as multiple policies in the same name or unauthorized claims.
Compliance with Regulations: The Insurance Regulatory and Development Authority of India (IRDAI) and the government have set regulatory requirements mandating Aadhaar linking.
Aadhaar Linking Process: Policyholders can link their Aadhaar number with their LIC policy through various channels, such as the LIC portal, mobile app, or by visiting a LIC branch. Policyholders need to provide their Aadhaar number and consent for the Aadhaar-LIC integration.
Exceptions and Exemptions: LIC provides exemptions from the mandatory Aadhaar linking requirement for certain categories of policyholders, such as minors and individuals without an Aadhaar number. In such cases, policyholders can provide alternative identity proofs to avail of LIC services.
The integration of LIC services with Aadhaar aims to improve security, convenience, and efficiency for policyholders, while ensuring regulatory compliance.
Importance of LIC’s Life Insurance
The Life Insurance Corporation of India (LIC) plays a crucial role in the life insurance landscape of the country. LIC’s life insurance policies are important because of the following factors:
Financial Security:
LIC’s life insurance policies provide financial protection to individuals and their families in the event of unexpected death, disability, or retirement. Moreover, these policies help in securing the future of dependents and ensuring their financial stability.
Risk Management:
Life insurance policies offered by LIC help in mitigating the financial risks associated with uncertain life events, such as premature death, critical illness, or long-term disability. LIC’s investment-linked policies, such as Unit-Linked Insurance Plans (ULIPs) and endowment policies, combine life insurance coverage with investment opportunities.
These policies allow policyholders to save and invest for their long-term financial goals, such as retirement, children’s education, or wealth creation.
Social Security:
LIC’s social security schemes, such as Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana, offer affordable life and accident insurance. They aim to provide financial protection to economically weaker sections, promoting financial inclusion and social security.
Trust and Brand Reputation:
LIC’s extensive operations and vast pool of funds contribute significantly to the overall economic development of the country. LIC has been a trusted life insurance provider in India for decades, with a strong brand reputation and recognition among the public.
The reliability and customer trust in LIC’s products and services contribute to the company’s importance in the life insurance market.
Also Read: PPF Vs LIC Which Is the Better Option?
Conclusion
The Life Insurance Corporation of India (LIC) is a vital player in the country’s life insurance landscape. Moreover, LIC’s policies offer financial security, manage risk, and provide investment opportunities. Additionally, they contribute to social security and economic development. Furthermore, LIC is a trusted brand, catering to diverse financial needs, securing dependents’ futures, and enabling long-term savings and investments.
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Frequently Asked Questions
Q. What are the different types of life insurance policies offered by LIC?
A. LIC offers a wide range of life insurance policies, including Whole Life, Endowment, Money-back, Term, Unit-Linked, and Pension/Annuity plans.
Q. What are the advantages of investing in LIC policies?
A. Key advantages include financial security, risk management, tax benefits, long-term savings and investment opportunities, and the trust and reliability associated with the LIC brand.
Q. How can I purchase an LIC policy?
A.You can purchase LIC policies directly from LIC offices, through LIC agents, or online through the LIC website or authorized third-party platforms.
Q. What is the claim settlement process for LIC policies?
A. LIC has a well-defined claim settlement process, where the beneficiaries can submit the required documents, and LIC processes the claims promptly.
Q. What are the eligibility criteria for LIC’s social security schemes?
A. LIC’s social security schemes, like the Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana, have specific eligibility criteria based on age, income, and other factors.
Q. Can I surrender my LIC policy before maturity?
A. Yes, LIC policyholders can surrender their policies before maturity, subject to the terms and conditions of the specific policy.
Q. What is the role of LIC in the Indian economy?
A. LIC plays a significant role in the Indian economy by channeling its vast pool of funds into various sectors, contributing to economic growth and development.
