Life Insurance Corporation of India (LIC) is a state-owned insurance company and investment firm headquartered in Mumbai, India. As a profit-making organization, LIC’s primary objective is to generate profits by selling insurance policies and investing the premiums collected from policyholders.
- The company operates as a financial service provider and is subject to regulatory oversight by the Insurance Regulatory and Development Authority of India (IRDAI).
- Like any other business, the ultimate goal of LIC is to generate profits for its shareholders, but it also serves a social purpose by providing insurance coverage to individuals and families in India.
Top 10 things you should know about life Insurance corporation of India (LIC):
1. Largest life insurance company in India:
The LIC is the largest life insurance company in India, with a market share of over 70%. It was established in 1956 as a state-owned insurance company, with the goal of providing affordable and reliable life insurance to the citizens of India.
- The company was formed by the merger of over 200 insurance companies and provident societies, and it is now the sole provider of life insurance in India.
- The LIC serves a customer base of over 300 million policyholders in India and offers a wide range of life insurance products. In addition to its insurance products, the LIC also offers a range of financial products and services, including mutual funds and pension plans.
2. LIC has a strong customer base in rural areas:
The LIC serves a customer base of over 300 million policyholders in India.
- The company has a strong presence in rural and semi-urban areas, where it has helped to increase financial literacy and access to insurance.
- The LIC has a network of over 12,000 branches and over 1.3 million agents across the country, which makes it easy for customers to access its products and services.
3.Profit-making organization:
The LIC is a profit-making organization, with the profits being used to fund various government programs and initiatives. The company’s profits are also used to pay dividends to policyholders and shareholders.
As a publicly-traded company, its financial performance is disclosed in its annual reports, which are available on the company’s website and on the Securities and Exchange Board of India (SEBI) website.
- According to the company’s most recent annual report, for the fiscal year ending March 31, 2021, LIC reported a net profit of INR 575.5 billion (approximately $7.8 billion) and total revenue of INR 3.3 trillion (approximately $45.7 billion).
- These figures include both the company’s insurance and investment operations. It is worth noting that these figures are subject to change from year to year and may vary based on a number of factors, including market conditions and the company’s investment performance.
4. LIC brand presence:
Life Insurance Corporation of India (LIC) is a leading insurance company in India and has a strong brand presence in the country.
- As a state-owned enterprise, it is the largest life insurance company in India and has a significant market share in the domestic insurance industry.
- It has a widespread network of branches and agents across the country, and its brand is well-recognized and respected in India.
However, it is worth noting that LIC’s brand presence is primarily limited to India. While the company does have a small presence in some international markets, it is not a major player in the global insurance industry and may not have a strong brand presence in other countries.
5. Social responsibility initiatives:
Life Insurance Corporation of India (LIC) has a number of social responsibility initiatives that aim to contribute to the development of the communities in which it operates. Some of these initiatives include:
- Community development: LIC supports various community development projects, such as building schools, hospitals, and infrastructure facilities in rural areas.
- Health care: The company supports various health care initiatives, including sponsoring medical camps and providing financial assistance for medical treatment to the underprivileged.
- Education: LIC supports education initiatives through sponsorships and scholarships for students from disadvantaged backgrounds.
- Environment protection: The company has a number of initiatives aimed at protecting the environment, including supporting renewable energy projects and promoting eco-friendly practices.
- Disaster relief: LIC provides financial assistance to individuals and families affected by natural disasters and other emergencies.
Overall, the company’s social responsibility initiatives are aimed at improving the quality of life in the communities in which it operates and contributing to the overall development of the country.
6. Ownership and regulations:
The LIC is owned by the Government of India and is governed by the Life Insurance Corporation Act, 1956.
- It is regulated by the Insurance Regulatory and Development Authority of India (IRDAI), which is responsible for regulating and supervising the insurance sector in India.
- The IRDAI ensures that the LIC complies with all relevant laws and regulations and that it operates in a transparent and fair manner.
7. Claim settlement ratio:
The claim settlement ratio refers to the percentage of claims that are settled by the insurance company.
- The LIC has a high claim settlement ratio, which means that it pays out a high percentage of the claims it receives.
- In 2020-2021, the LIC had a claim settlement ratio of 97.28%, which is one of the highest among life insurance companies in India.
- A high claim settlement ratio is an important consideration when choosing a life insurance policy, as it indicates the likelihood that a claim will be paid in the event of the policyholder’s death.
8. Types of life insurance products offered by the LIC:
- Term insurance: Provides coverage for a specific period of time and pays a sum of money to the designated beneficiary in the event of the policyholder’s death during the term of the policy. Term insurance is a simple and affordable way to provide financial protection to loved ones in the event of the policyholder’s untimely death.
- Endowment policies: Provide both insurance coverage and savings, with the policyholder receiving the accumulated savings if they survive the term of the policy. Endowment policies are a good option for those who want to provide financial protection for their loved ones and also build up savings for the future.
- Money-back policies: Provide both insurance coverage and regular payments to the policyholder during the term of the policy. Money-back policies are a good option for those who want to provide financial protection for their loved ones and also receive regular income during their lifetime.
- Annuity plans: Provide a regular income to the policyholder, either during their lifetime or for a specified period of time. Annuity plans are a good option for those who want to secure a regular income stream in retirement or during their lifetime.