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Which are the Subsidiaries of LIC of India?

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Which are the Subsidiaries of LIC of India?

When it comes to Life Insurance Industry in India, the Life Insurance Corporation of India (LIC) is the most popular household name. The institution has cemented its name in the Indian Insurance sector from its very inception in the year 1956. However, you may not be aware that the Life Insurance Corporation of India (LIC) has many subsidiaries that operate in various areas of the insurance sector across the world.

In this article, we will talk about the following subsidiaries of Life Insurance Corporation of India (LIC), the company’s objective, and shareholding patterns.

  • LIC Housing Finance Limited
  • LIC Pension Fund Limited
  • LIC International Limited
  • LIC Cards Services Limited
  • IDBI Bank Limited
  • LIC Mutual Fund Limited
  • LIC Lanka Limited
  • LIC Singapore Limited

What are the subsidiaries of LIC?

Below given are some notable subsidiaries of the Life Insurance Corporation of India (LIC):

1.) LIC Housing Finance Limited

LIC Housing Finance Limited was incorporated on the 19th of June, 1989, and it is amongst the most trusted housing finance institution in India. The company’s main goal is to provide long-term funding to individuals for the construction, purchase, and renovation of houses, flats, and other residential properties.

Along with providing home loans, LIC Housing Finance Limited also provides business loans to professionals for purchasing or constructing nursing homes, clinics, office spaces, diagnostic centers, and buying equipment.
LIC Housing Finance Limited has served more than 25 Lakh families in India and has disbursed loans of more than Rs 3.35 lakh crore since inception. As of 2019, the company has 450+ centers, 9 regional offices, 20+ back offices, and 10,000+ intermediaries across the country.

As of March 2023, below given is the shareholding pattern of LIC Housing Finance Limited:

Shareholders

Holding %

Promoter

45.24%

Non- Promoter

41.84%

Institutions

12.92%

2.) LIC Pension Fund Limited

LIC Pension Fund Limited was the first company to receive a business license to begin its operations in India under the Pension Fund Regulatory and Development Authority (PFRDA), the regulatory body for the governance and regulation of pensions in India.
LIC Pension Fund has been appointed as one of the Pension Fund Managers (PFMs) to manage funds under the National Pension Scheme (NPS) by the Pension Fund Regulatory and Development Authority (PFRDA.)

The company offers various types of pension-related schemes for government employees. LIC Pension Fund manages the funds of its depositors and invests them into a diversified portfolio of investments like bonds, equities, fixed-income instruments, etc. The main objective of the company is to provide efficient pension services and long-term financial security to retired individuals.

Shareholding Pattern of LIC Pension Fund Limited:

Shareholders

Holding %

Life Insurance Corporation of India (LIC)

100%

3.) LIC International Limited

LIC International Limited is a subsidiary of the Life Insurance Corporation (LIC) of India, which is owned by the Government of India. The company was established on the 20th of July, 1989 in Bahrain with the main objective of providing life insurance coverage to Indians residing in the Gulf countries. LIC International operates and provides its services in four Gulf countries namely Bahrain, Kuwait, Oman, and UAE. Along with offering life insurance plans, the company also provides multiple wealth management plans, pension plans, health plans, and so on to its customers.

As of today, the company has reported an asset base of more than US $ 2 Billion and a Life Fund of over US $1.8 Billion. LIC International is one of the largest insurance companies in GCC with a market share of 45% in premium income.

 Shareholding Pattern of LIC International Limited:

Shareholders

Holding %

Life Insurance Corporation of India (LIC)

98.90%

The International Agencies Company Limited

1.10%

4.) LIC Cards Services Limited

LIC Cards Services Limited is a fully-owned subsidiary of the Life Insurance Corporation of India (LIC). The company was established on the 11th of November, 2008 to provide credit card services to its employees, policyholders, and its club member agents. The company is headquartered in Delhi and has tied up with leading banks like Union Bank of India, Axis Bank, and IDBI for the issuance of credit cards to its customers.

As of 31 March 2021, LIC Cards Services Limited has reported a revenue of Rs. 11.85 Crore and also reported a gross profit of Rs 5.29 Crore.

As per the annual reports of FY 2021- 2022, the shareholding pattern is given below:

Policyholders

Holding %

Life Insurance Corporation of India (LIC)

100%

5.) IDBI Bank Limited

IDBI was established in 1964 under the ownership of the Government of India and the Life Insurance Corporation of India. The entity was established as a development financial institution to provide financial services and assistance to the industrial sector of the country.

Later in the year 2005, it was converted into a banking institution that is popularly recognized today as IDBI Bank Limited.

IDBI Bank Limited offers a plethora of financial services like NRI banking, personal banking, Agri banking, and more to its customers. It also provides various loan products like housing loans, education loans, cooperate loans, and so on.

The bank has 1500+ branches and more than 35000 ATMs around the country. As of the annual reports of Q2 FY 2023, IDBI Bank Limited has reported a net profit of Rs. 826 Crores and an operating profit of Rs. 2,208 Crores.

Shareholding Pattern of IDBI Bank Limited:

Shareholders

Holding %

Government of India

45.48%

Life Insurance Corporation of India (LIC)

49.24%

Foreign Institutions

0.06%

Mutual Funds

0.01%

Others

5.06%

6.) LIC Mutual Fund Limited

LIC Mutual Fund formerly known as LIC Nomura Mutual Fund is a 100% owned subsidy of the Life Insurance Corporation of India. The company was incorporated on the 20th of April 1989 and is headquartered in Mumbai. and has a PAN India presence with 2000+ branches.

LIC Mutual Fund is a professional asset management institution offering a wide range of mutual fund schemes like savings funds, debt funds, hybrid funds, equity funds, etc to its investors.
The company has reported a revenue of Rs. 56.79 Crore during the FY 2021-2021 and has managed over Rs. 15002.38 Crore worth of assets.

Shareholding Pattern of LIC Mutual Fund Limited:

Shareholders

Holding %

Life Insurance Corporation of India

100%

7.) LIC Lanka Limited

LIC Lanka Limited is a joint venture between Life Insurance Corporation of India and the Barleet Group, a Sri Lankan financial conglomerate having expertise in stock broking, fund lending, etc.
The company offers a plethora of insurance products and plans like money-back plans, endowment plans, life insurance covers, health plans, and so on.

LIC Lanka Limited is known to offer high life insurance coverage to residents of Sri Lanka at an affordable premium.

8.) LIC Nepal Limited

LIC Nepal is a joint venture between the Life Insurance Corporation of India and Vishal Group, a leading business group based in Nepal. The company was established in 2001 and is headquartered in Kathmandu. LIC Nepal offers a plethora of insurance products including savings plans, retirement plans, endowment plans, and so on.

Share Holding Pattern of LIC Nepal:

Shareholder

Holding

Life Insurance Corporation of India

55%

Vishal Group

25%

Others

20%

9.) LIC Singapore Limited

Life Insurance Corporation Singapore Limited was established in Singapore on the 30th of April 2012. It is a wholly owned subsidy of LIC of India. The main objective of LIC Singapore is to expand its operations and explore opportunities in South Asian markets. The company offers non-participating, single premium plans, two-pay endowment plans, and term insurance plans.

Share Holding Pattern of LIC Singapore Limited:

Shareholders

Holding

Life Insurance Corporation of India

100%

Author Bio

This article is written by Team InsuranceLiya.com, an independent website that writes about insurance, finance, health, and more. Our writers have a wealth of knowledge, experience, and degrees in the fields of insurance, finance, economics, and beyond.

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Frequently asked questions

  • Does LIC have an international presence?

    Yes, LIC of India has international presence in Sri Lanka, Singapore, Nepal, and beyond.

  • What services does LIC Cards Services Limited offer?

    LIC Cards Services is a subsidiary of Life Insurance Corporation of India that offers credit card services to its employees, policyholders, and associated agents.

  • How can I contact the subsidiaries of LIC for any queries?

    You contact a subsidiary company of LIC through the information given on their official websites.

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    Life Insurance

    Artificial intelligence in life insurance (The Road Ahead)

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    Artificial Intelligence in Life Insurance (The Road Ahead)

    Even though we may or may not ever achieve artificial general intelligence (AGI), it is safe to say that artificial intelligence (AI) technology has been moving forward at a breakneck pace in recent times. You may have heard about Open AI’s ChatGPT and Google’s Bard AI.

    These are AI systems designed to drastically increase their users’ productivity and capacity. Will similar AI innovations happen in the insurance sector? The answer is an unequivocal yes. In fact, there is rampant AI implementation in the life insurance sector as we speak. Let us look at some of the most important aspects of AI and its synergy with life insurance below:

     

    • Scope of AI in life insurance
    • Life Insurance Companies Incorporating AI
    • A.I. start-ups synergizing with life insurance

    Scope of A.I. in life insurance

    A.I. systems have massive potential to disrupt the status quo in the life insurance sector in India and worldwide. In fact, it is estimated that AI implementations could increase productivity and reduce expenses by a whopping 40%. Top CIOs have understood this potential and are willing to increase spending on AI technologies to improve their insurance businesses. In fact, even InsuranceLiya.com has leveraged AI to create a robust AI chatbot that can answer insurance related questions.

    According to a survey conducted, over 40% of CIOs are willing to increase their expenses on A.I. and related technologies. These are big numbers, and the shift is imminent. Now, let us understand some of the scope of AI and where it will be used in the sector.

    • Risk Assessment: The fundamental task of an insurance company is to assess risk. An insurance company’s profit or loss depends on the quality of its risk assessment; if the quality is high, then the insurance company will likely be profitable; if it is sub-par, then the company will be in troubled waters. How can AI increase the quality of risk assessment? Well, here’s a real-world example of how insurance companies are currently using A.I. and machine learning to assess risk. An insurance company will leverage AI  and ML algorithms to screen through a variety of data that includes credit score data, social media data, and more. They will use this data to crunch the numbers using AI and ML algorithms and come up with a risk assessment score for the client. This score states the likelihood of a client initiating a claim in the future.
    • Insurance Underwriting: Insurance underwriting is similar to risk assessment. Once the risk is assessed, the insurance company may or may not choose to underwrite the insurance policy. This is a critical decision that needs to be taken. AI and ML assist insurance underwriters in making this decision. Gradient AI is a firm that analyses the risk for insurance companies and advises on the underwriting process.
    • Claims Processing: Imagine processing your insurance claim on your insurance company’s website, and an online AI assistant is beside you throughout the claim submission stage. This AI will answer all your queries and help you in your claim submission journey. Once a claim is submitted, similar AI systems will process and analyze this claim submission and give the claim a genuineness score. If the score is above 70/100, then the claim is passed. If it is under 70, then the claim is sent to a scrutiny department for further scrutiny. This system will fast-track authentic and genuine claims by a great deal, leading to greater customer satisfaction.
    • Human Resources: AI systems can be incorporated into H.R., where employees of insurance companies can directly address common H.R.-related questions to the AI and get a relevant response to the same. This can lead to a lot of cost savings for the company.
    • Customer Support: AI customer support systems are already in place, and it is likely that the quality of these systems will only improve as they become more robust. A policyholder can ask a variety of questions to the AI chatbot, and the chatbot will attempt to provide resolution for the same.
    • Customer on-boarding: We feel that this is another major disruption in the insurance sector. The entire customer on-boarding process can largely be handled online through AI systems, as these systems can be highly customizable and tailored to answer specific questions. The need to have an actual person behind the chat will be limited.

    Life Insurance Companies Incorporating AI

    AI start-ups synergizing with life insurance

    AI start-ups have taken the insurance sector by storm. A plethora of AI start-ups are now leveraging AI to build effective synergies with insurance companies. Many of these A.I. start-ups also integrate A.I. solutions with existing insurance companies for effective API integration. Some notable AI start-ups include:

    • Lemonade
    • Insurify
    • Bold Penguin
    • Riskcovry
    • Arya.ai
    • Haptik A.I
    • Artivatic.ai
    • Toffee Insurance

    These companies provide services in the areas of AI customer support, sales, customer on-boarding, marketing, risk analysis, underwriting, and more. Looking at the trend, it is inevitable that there will be large-scale adoption of AI and ML systems in the global insurance sector within the next 10–15 years.

    Author Bio

    This article is written by Team InsuranceLiya.com, an independent website that writes about insurance, finance, health, and more. Our writers have a wealth of knowledge, experience, and degrees in the fields of insurance, finance, economics, and beyond.

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    Postal Life Insurance

    What is Rural Postal Life Insurance (RPLI)?

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    What is Rural Postal Life Insurance (RPLI)?

    Rural Postal Life Insurance (RPLI) is effectively the rural life insurance arm of Postal Life Insurance. The plans, features and services are generally the same, the only difference between Postal Life insurance and Rural Postal Life Insurance is that PLI operates in urban areas and RPLI operates in rural areas. RPLI came into existence in 1995 on the back of recommendations made by the noteworthy Malhotra Committee in 1993.

    The Malhotra committee also made a host of other important observations and recommendations in 1993, some of them were; allowing the entry of private companies in the insurance sector, advising towards the formation of the IRDAI, and making other important insurance recommendations. The Department of Posts took the recommendations of the Malhotra committee pertaining to increasing the penetration of insurance in rural areas in India and began operations in 1995. As of 2021, RPLI has been immensely successful, having issued policies worth ₹1.27 Lakh Crores, and selling over 2.18 Crore policies.

    Let us now talk about some of the noteworthy aspects of RPLI, such as:

    • Importance of RPLI
    • Features and benefits of RPLI
    • Schemes under RPLI
    • Eligibility and Documents required

    Importance of RPLI

    • Increasing rural insurance penetration: RPLI has been instrumental in increasing life insurance penetration in India through its extensive efforts to push the life insurance product in rural India. The insurance penetration in rural India was relatively low in the early 90s, now as of 2023 every one out of five rural persons has a life insurance coverage.
    • Low premiums: The premium structure and rates under RPLI are designed to be extremely affordable, with the intention to bring every rural person under the umbrella of life insurance.
    • Increase in employment: As RPLI was pushed to rural areas of the nation, this led to an increase in the requirement for staff, which resulted in many employment opportunities for the rural population.

    Features and benefits of RPLI

    • Loan against policies: RPLI provides policyholders with the ability to mortgage their life insurance policy and get a loan against it. This feature could really assist the policyholder during times of cash crunch.
    • Nomination: A Nomination facility is provided under every RPLI policy. Further, a policyholder can change or modify his nomination by filling up a fresh nomination form.
    • No need for a medical test: Policyholders do not need to undergo a medical test in order to purchase an RPLI policy.
    • Tax benefits under 80C: Up to ₹1.5 Lakhs worth of premiums paid per year is eligible for tax deduction under Section 80C of the I.T Act.
    • Policy switching: Certain RPLI policies have the added benefit and ability to be switched from one RPLI policy to another. This switching is generally eligible for only certain types of policies and after a certain period has passed.
    • Flexible premium payments: Under RPLI, the policyholder has the option to pay his premium as per his convenience, he can either chose a monthly, quarterly, half yearly, or even yearly premium payment terms.

    Schemes under RPLI

    RPLI currently offers 6 policies, they are:

    • Whole Life Assurance (Gram Suraksha)
    • 10 Year RPLI (Gram Priya)
    • Anticipated Endowment Assurance (Gram Sumangal)
    • Children Policy (Bal Jeevan Bima)
    • Endowment Assurance (Gram Santosh)
    • Convertible Whole Life Assurance (Gram Suvidha)

    We will briefly talk about the most important aspects and features of each of the above policies.

    • 1.) Whole Life Assurance (Gram Suraksha): Under this policy, the policyholder or his beneficiary will be paid the sum assured along with the bonus accrued when the policyholder reaches the age of 80. If the policyholder passes away before the age of 80, the policy beneficiary will be eligible to receive the policy benefits. The maximum sum assured under this policy is ₹10 Lakhs.
    • 2.) 10 Year RPLI (Gram Priya): The Gram Priya RPLI policy is an endowment policy where the policyholder is provided with a life cover as well as regular survival bonus payments which are paid to him after 4 years.
    • 3.) Anticipated Endowment Assurance (Gram Sumangal): This is a relatively long term policy where the survival benefits are paid to the policyholder periodically. This policy may seem attractive for someone looking for regular income inflow from their life insurance policy.
    • 4.) Children Policy (Bal Jeevan Bima): Under this policy, up to 2 children of the policyholder are covered against the death of the policyholder. For insurance, if the policyholder dies, PLI will disburse the policy benefits to the children of the policyholder.
    • 5.) Endowment Assurance (Gram Santosh): The Gram Santosh RPLI policy is also a kind of endowment policy where the policyholder will to paid regular policy benefits when he or she attains the following age; 35 years, 40 years, 45 years, 50 years, 55 years, 58 years & 60 years of age. If the policyholder passes away before maturity, the policy beneficiary/nominee will receive the policy benefits along with any accrued bonus.
    • 6.) Convertible Whole Life Assurance (Gram Suvidha): This policy has the flexibility to get converted from a whole life assurance policy to an endowment policy after 5 years. This policy can be surrendered after 3 years, and a loan can be taken on this policy after 4 years.

    You can read more about RPLI and their plans here.

    Eligibility and Documents required

    The eligibility criteria for buying an RPLI policy is rather straight forward. Any person living under what would constitute as a rural area is eligible towards RPLI. Documents required to purchase a Rural Postal Life Insurance policy would be photo ID and address proof, such as:

    • Aadhar Card
    • Passport
    • Driving License
    • Ration Card
    • Voter ID

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    Postal Life Insurance

    How to calculate maturity value of your PLI policy?

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    How to calculate maturity value of your PLI policy? (maturity calculator)

    Do you have a Postal Life Insurance policy? Is it due for maturity? Or are you just wanting to calculate the maturity amount of your PLI policy? Well, this article tells you how you can calculate the maturity value of your PLI policy in simple steps. Let’s begin.

    Further, we would like to point out that there is no official PLI maturity calculator tool by the India Post, you as a policyholder will also have to be cognizant of this. Accurately calculating your PLI maturity value is a manual process that you will need to undergo. We will show you how below.

    Step 1.) Identify your PLI policy

    Postal Life Insurance offers a variety of life insurance plans like Whole Life Assurance (Suraksha), Anticipated Endowment Assurance (Sumangal), Joint Life Assurance (Yugal Suraksha), Endowment Assurance (Santosh), Children Policy (Bal Jeevan Bima), and Convertible Whole Life Assurance (Suvidha). Find out which is your policy.

    Step 2.) Break-up of maturity value

    Now, you will need to get a break-up of all of the aspects of your maturity value. For instance, if you have a Santosh PLI policy (Endowment Assurance), you will have to get the following details:

    • Fixed policy maturity value (This is the fixed maturity value of your policy). If you have taken a Santosh PLI policy for 5 Lakhs, then this would be your fixed maturity value.
    • Next, calculate the bonus amount on your PLI policy. This is the yearly bonus that accrues in your policy. The bonus amount may fluctuate from year to year based on the type of policy taken and the performance of the policy. You will have to take to your agent or officer to get clarity on the bonus rate. The bonus rate is generally announced at the start of the financial year by the Department of Posts.
      In 2023, The Directorate of Postal Life Insurance announced the bonus rate for FY 24 as ₹76/- per thousand of sum assured for the Endowment Assurance policy. You can get the bonus rates for 2023 of other policies here.

    Step 3.) Calculation of your PLI policy maturity value

    Now, let us show you how to calculate the final maturity value of your policy.

    For this use case, we will take the example of a hypothetical PLI policy that a person named Mr. Singh has taken. Let us assume that Mr. Singh has taken his policy in 2013 for 10 years. His policy is nearing maturation in 2023, and he wants to calculate the final maturity figure.

    • First, he will have to check his policy bond and get the fixed maturity value figure. For our example, let us say the fixed maturity value figure was ₹10 Lakhs.
    • Next, Mr. Singh will have to calculate the bonus figures for each year. Here, generally the updated bonus figures will be sent to him via email to the registered email ID. In case these figures are not sent, Mr. Singh will have to trace down the bonus amount announced by Postal Life Insurance for each year from 2013-2023. Remember, that the bonus amount may be different for every year.  For example, let us say PLI announced a bonus of as ₹50/- per thousand of sum assured for the Endowment Assurance policy for 2014. Next, they announced ₹46/- per thousand of sum assured for 2015, so on and so forth.
    • Mr. Singh will have to trace all of his bonus amounts from 2013-23. Now let us assume that the total bonus accrued between 2013-2023 is ₹5 Lakhs. That means, he will then have to add his primary maturity value (₹10 Lakhs) + total accrued bonus amount (₹5 Lakhs) = Final maturity value of ₹15 Lakhs.

    Note that this is just an example maturity amount, the actual maturity amount may be higher or lower based on your actual PLI policy bonus figures. You can calculate the maturity value of your own PLI policy following the above framework.

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    All India National Life Insurance Employees Federation (Explained)

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    All India National Life Insurance Employees Federation (AINLIEF) – Explained

    Are you looking to learn about the All India National Life Insurance Employees Federation (AINLIEF)? Well, we will attempt to make you understand the following important aspects of the AINLIEF, such as:

    • What is AINLIEF?
    • What is the role of AINLIEF?
    • How to login to your AINLIEF account?
    • Historic AINLIEF protest and Supreme Court order

    What is AINLIEF?

    All India National Life Insurance Employees Federation (AINLIEF) is a registered trade union that works to provide solutions and resolutions to terminated as well as temporary workers of Life Insurance Corporation of India (LIC). Their registration code is NGP5422. They have their registered office at Plot No 82, Nimbalkar Bhawan, Hanuman Nagar, Nagpur – 44009.

    What is the role of AINLIEF?

    Let us look at some of the primary roles of AINLIEF:

    • To act as a forum and listen to the grievances of temporary and terminated workers of LIC.
    • Provide resolution to aggrieved temporary and terminated workers of LIC of India.
    • Act as a benevolent agent between the LIC worker and the company. You can read about the LIC and AINLIEF supreme court matter below to get a better understanding of this point.

    How to login to your AINLIEF account?

    To login to your AINLIEF account, you will have to follow these steps:

    Step 1.) Visit the official AINLIEF website

    Step 2.) Navigate to the ‘Login’ page at the top right hand side

    login button
    Login button on the top right hand side

    Step 3.) Register or login to your AINLIEF account

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    Login box

    Historic AINLIEF protest and Supreme Court order

    • In a matter that dates back over 30 years to 1991, AINLIEF demanded that LIC permanently absorb 8000+ temporary employees and make them permanent employees. This petition was filed in the Labour Court. The Labour Court ruled in favor of AINLIEF, but the order by the court was not executed.
    • In 2007, AINLIEF approached the Supreme Court of India for the same matter and the Supreme Court passed an order in 2015, in favor of permanent absorption of temporary LIC workers and make them permanent employees of LIC. Further, pending dues (50 per cent back wages to temporary 3 and 4 grade employees,) of these works must also be paid to them.
    • In 2018, hundreds of LIC workmen protested on the iconic Azad Maidan of Mumbai City, demanding that the Supreme Court order of 2015 be implemented by LIC of India. In an expression of solidarity, the General Secretary of AINLIEF stated “We demand an immediate implementation of the Supreme Court’s order. This is a united effort to express solidarity with our fellow workers and we will ensure that they get their rightful dues and means of livelihood.”

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    Life insurance with Post Office (Schemes and features)

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    Life Insurance with Post Office (Schemes and features)

    Life insurance with post offices started in 1881 as a welfare scheme for the advantage of postal employees. It is the oldest life insurer in this country and the first one in the country to cover female lives. Yet, a lot of people don’t consider the post office for a life insurance policy and remain unaware of the benefits and features of this plan.

    You must also illuminate yourself with the plethora of benefits that a life insurance plan can extend to yourself as well as your family. This article aims to explore life insurance policies from the post office and their features.

    Features of Post Office Life Insurance

    1.) Policy revival scheme

    A policyholder can revive a lapsed policy after 6 successive non-payments of premium if the policy is in effect for less than 3 years. A lapsed policy that is less than 3 years old can be revived even after 12 successive non-payment of premium.

    2.) Provision of a duplicate policy document

    There is a provision to issue a duplicate document if the original document is lost by the policyholder or is damaged in some way.

    3.) Nomination facility

    The policyholder has the option to nominate their beneficiary and can make changes to the nomination.

    4.) Loan facility available

    The policyholder can pledge their policy as collateral to the head of the circle/region on behalf of the president of India if the policy is an endowment assurance plan or a life insurance plan.

    Types of life insurance schemes

    1.) Whole life insurance (Suraksha)

    In this scheme, an assured amount with accrued bonus is paid to the insured on attaining 80 years or to his/her nominee, on the death of the insured, whichever occurs earlier. The minimum age at entry is 19 years, and the maximum age is 55 years, and the sum assured ranges from Rs. 20,000 to Rs. 50 lakh.

    2.) Endowment assurance (Santosh)

    The assured amount and accrued bonus are given to the policyholder when the policy attains the pre-decided maturity. In case of unprecedented death, the amount goes to the nominee or legal heir. The minimum and maximum age at entry are 19-55 years.

    3.) Anticipated endowment assurance (Sumangal)

    This postal life insurance policy is for those who want periodical returns. Survival benefits are given to the insured periodically, which is not taken into consideration in case of unprecedented death of the insured. The maximum sum assured is Rs. 50 lakh.

    4.) Joint Life Assurance (Yugal Suraksha) for married couples

    This policy requires any one of the spouses to be eligible; it gives life cover to both spouses. The loan facility is available after three years. The sum assured ranges from Rs. 20,000 to Rs. 50 lakh.

    5.) Children Policy (Bal Jeevan Bima) to secure your children

    This scheme provides insurance cover to the maximum of two children of age 5-20 years of the policyholder. The policyholder shouldn’t be older than 45 years.

    Postal Life insurance in India is one of the most sought out insurance in our country because of its convenience, flexibility, and benefits. Some guidelines to keep in mind are to note down the policy number, maintaining the policy bond, and regular premium payments. Opt for the scheme suitable for you and live life without any worry.

    You can read more about Postal Life Insurance from their official website.

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    SBI Life Smart Scholar ULIP Child Plan (Features and benefits)

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    SBI Life Smart Scholar ULIP Child Plan(Features and benefits)

    The SBI Life Smart Scholar ULIP is a unit-linked life insurance plan that provides life insurance coverage to a child in the unfortunate event that the parent passes away. This policy works in a rather straight forward way, the policyholder will have to make regular premium payments and the insurance company will invest the same in per-determined stock market funds. These funds will be disbursed to the beneficiary in the event of maturity or death of the life insured.

    The life insured is generally a child that can then use these funds to further his education, marry, or engage in other activities that will benefit him or her. Let us now look at some of the most important factors of this plan, such as:

    • How does the SBI Life Smart Scholar plan work?
    • Features and benefits
    • Inclusions and exclusions
    • Eligibility criteria

    How does the SBI Life Smart Scholar plan work?

    The workings of the plan are as follows:

    • Step 1: The policyholder buys the plan and adds a benefactor to the policy
    • Step 2: The policyholder makes regular premium payments which are then invested in market-linked funds
    • Step 3: The benefactor of the policy (child) will be eligible to receive the fund value upon policy maturity or death of the policyholder.

    Features and benefits

    • Market linked: The Indian markets (NIFTY) have been giving a CAGR return of 11.1% over the course of the last 20 years. This is a reasonably healthy return that a policyholder can expect at maturity. Note that the returns may be variable based on the fund chosen by the policyholder.
    • Death benefit: 105% of the fund value will be disbursed to the benefactor in the event of the policyholder’s death.
    • Income tax benefit: I.T benefits can be claimed under Section 80C and Section 10(10D) of the I.T Act.
    • Accident benefit: This plan also provides accident and disability benefits.
    • Partial withdrawals: Partial withdrawals are permitted within his plan. This can assist in times of uncertain liquidity.

    Inclusions and exclusions

    Inclusions

    Exclusions

    Death benefit

    Death caused due to self-harm

    Maturity benefit

    Disability caused due to self-harm

    1 free partial withdrawal

    Death or disability due to war

    Premium redirection facility

    		 

    2 Fund switches / year

    		 

    Eligibility criteria

    Entry age

    Minimum

    Maximum

    Parent – 18 years

    Child –  0 years

    Parent – 57 years

    Child – 17 years

    Maturity age

    Minimum

    Maximum

    Child – 18 years

    Parent – 65 years

    Child – 25 years

    Learn about complete details about this plan through its policy brochure.

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    Life Insurance

    Top 5 notable impacts of COVID-19 on the life insurance sector in India

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    Top 5 notable impacts of COVID-19 on the life insurance sector in India

    COVID-19 changed the way a lot of us look at our life and health, and this not only changed our outlook but it also changed our behavior towards certain products and services. That being said, the impact of COVID-19 was much more prominent to the life insurance sector in India. Let us learn about the top 5 notable impacts of COVID-19 on the life insurance sector in India.

     

    1.) Reliance on digitization and technology: As masks became mandatory and social distancing became the norm, the insurance industry followed suite. As per an IRDAI regulation, life insurance companies were instructed to limit people to people interactions and focus on incorporating contact less forms of communication. For instance, as per an IRDAI regulation, insurance companies were now instructed to stop sending physical copies of insurance policies to customers. Soft copies through email were encouraged.

    Further, there was an advent of digitization that led to online verification of identity and address proof through online portals and mobile apps. Lastly, even payment of insurance premiums was encouraged to made through online and contact less mediums. This reliance on digitization and technology has led to a more cost efficient insurance product.

     

    2.) Increase in demand in both health and life products: As per the IRDAI, there has been a fantastic growth of 32% in life insurance policy sales from June 2021 (1,606,343 policies sold) to June 2022 (2,132,823 policies sold). This increase in life insurance policy sales was fueled by the increase of fear in the general public due to the COVID-19 pandemic. This trend of growing life insurance sales is likely to continue going into 2023 and beyond.

     

    3.) Reduction in invest-able income: The increase in life and health insurance sales have had an inverse effect on the invest-able income in the short term. This is because as people are dealing with the rising costs of insurance premium, they have lower residual invest-able income.

     

    4.) Alterations in life insurance underwriting: Life insurance companies have generally taken a more cautious approach when it comes to underwriting life insurance policies post the COVID-19 era. This is done by increasing application scrutiny and asking potential policyholders to undergo a battery of health tests before disbursing a life insurance policy in their name.

     

    5.) Increased penetration of insurance products: India’s life insurance penetration was a lowly 2.82% in 2019, this was far lower compared to the life insurance penetration in countries like USA (52%) and UK (32%)
    That being said, the COVID-19 pandemic at least pushed India’s life insurance penetration to the close to 3.2%, which is near to global average.

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    Frequently asked questions

  • What is the life insurance penetration in India (As of 2020)

    3.2%

  • Has penetration in life insurance increased post the COVID-19 era?

    Yes, penetration increased from 2.82% to 3.2%.

  • What are some examples of digitization in the life insurance sector?

    Top 3 Examples of digitization include:

    1. Online premium payments
    2. Incorporation of blockchain technologies
    3. Incorporation of data analytics

     

    • Categories
    Life Insurance

    Is Term Insurance Mandatory for Home Loan?

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    Is Term Insurance Mandatory for Home Loan?

    No, neither term insurance nor home insurance is mandatory while availing a home loan. That being said, it is a wise and prudent choice to buy both term as well as home insurance. We will point out the reasons for the same shortly.

    When a person approaches a bank to get a home loan, the bank will generally advise him to buy a home insurance plan before disbursing the loan to the loan applicant. This is generally done to safeguard the interests of the bank as well as the loanee. It must however be mentioned that there is no government regulation to support this.

    As per Indian Law, a loanee can avail a bank loan without buying home insurance for that home. However, since banks have the prerogative to approve or reject a loan, they use their position of power to persuade the loanee to buy home insurance. In such a position, you can mention this to the bank manager and request him to approve the loan without buying a home insurance policy. It must however be said that buying home insurance is in the interest of both the home buyer and the bank, and should be purchased without hesitation.

    Lastly, a bank will not be concerned if the loanee has a term insurance plan or no before disbursing the home loan as they will collateralize the loan for their protection. Thus it is not mandatory to buy term insurance before buying a home loan. That being said, it is a highly advisable for the loanee to buy a term insurance plan before taking the home loan. Let us investigate the rational for the same below.

    Top 2 Reasons to buy term insurance before taking a home loan

    1. Safety of your family: Imagine someone taking a massive loan to buy a home and then passing away. The entire brunt of that loan will come solely on the family. There will be tremendous plight of the family during such an event. They will have to deal with the death of their loved one and at the same time joist with the pressure of repaying the home loan. Such a situation can easily be avoided if the home buyer takes a term insurance plan. The family can use the sum assured to pay the bank loan amount.
    2. Peace of mind: The policyholder can be at ease, knowing that his family is protected in the event of his unfortunate death. Nothing can eliminate the dread of his family at such a time, but the load will be slightly less to bear for the family, and the policyholder can sleep better at night knowing his family is protected.

    How much coverage should you opt for?

    This is another important question. What is the term insurance coverage that you should opt for if you are looking to take a loan to buy your home? Well, the answer is rather straight forward. The loanee should take a term plan that will at least cover the entire loan amount (interest and principle both.)

    Further, it is advisable that the loanee also factors in the other expenses of the family like education costs, marriage costs, medical costs, daily expenses, etc before deciding on the term insurance coverage.

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    Life Insurance

    Does Life Insurance Cover Medical Bills?

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    Does Life Insurance Cover Medical Bills?

    No, a life insurance policy will not cover medical bills of the policyholder.

    A life insurance policy will only issue a pay-out to the beneficiary of the policy in the event of the policyholder’s demise. If you wish that the medical treatment be covered of a policyholder, the policyholder will need to purchase a health insurance plan. There are also other notable differences between life and health insurance.

    The only way a life or term insurance plan can cover medical expenses is if the policyholder as opted for a disability or critical illness rider, where the insurance company is obligated to disburse the sum assured in the event that the policyholder is suffering from a disability or critical illness. In such a case, the policyholder can utilize the sum assured to pay for his medical bills. 

    Let us look at some of the reasons why a health insurance plan is necessary in today’s day and age, and look at some of the other features and benefits of health insurance apart from it covering the medical bills of the policyholder. 

    Should I Buy life insurance or Health Insurance?

    The correct answer to this is “Buy both.” Health insurance will ensure that you don’t have to worry about the medical costs and quality of treatment. It will ensure that you can afford the best and state of the art treatment if you have a sizeable health insurance policy. At times, this could actually be the difference between life and death. 

    Life insurance ensures that your family is taken care of and looked after you’re gone. All necessary expenses like your children’s education expenses, further studies, daily expenses, and all other expenses can be taken care of from the sum assured.

    Top 5 Benefits of a Health Insurance Plan

    1. It will cover medical bills and expenses: As mentioned before, a health insurance plan will provide coverage towards the medical expenses incurred to the policyholder. This is the fundamental feature and benefit of a health insurance policy. Ensure that you choose the correct cover amount of your health insurance policy so that you don’t need to worry about medical expenses and the quality of medical treatment.
    1. Outpatient coverage: A health insurance policy not only provides coverage if the policyholder is admitted to the hospital, it also provides coverage in the event that the policyholder has to utilize outpatient medical care like OPD appointments and day care treatments. Ensure that your policy has an outpatient coverage clause.
    1. Peace of mind: The policyholder and his/her family feel a peace of mind that they are coverage against medical expenses should such unforeseen difficulties arise. This peace of mind is important for the family’s progression and prosperity.
    1. Pre and post hospitalizations covered: A comprehensive health insurance policy will not only cover hospitalization expenses, but it will also extend its coverage to pre-hospitalization and post-hospitalization coverage. Make sure your plan has these benefits.
    1. Widely available: Good quality comprehensive health insurance plans are widely available in the Indian market. The IRDA ensures that the quality of health insurance plans due to the regulation it extends on the industry.

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    Frequently asked questions

  • Will my life insurance policy cover my medical expenses?

    No, a life insurance plan is only intended to disburse the sum assured to the benefactor of the policy after the death of the policyholder. A health insurance policy will on the other hand take care of medical expenses of the policyholder.

  • Is it a wise choice to buy both life and health insurance?

    Indeed, it is. Both life and health insurance serve different but very important purposes.

  • Who regulates the insurance market in India?

    The IRDA of India regulates the insurance market of India.