Full Form of LIC (Definition, Objectives)

Full Form of LIC – Life Insurance Corporation of India

The full form of LIC stands for Life Insurance Corporation of India. Life Insurance Corporation of India is a government company in the field of insurance and investment that is an outcome of the Life insurance of India Act which brought insurance sector under government’s control through nationalization and thus LIC came into existence in the year 1956

Mission of LIC

As per the website of the LIC, the mission is to provide the people financial security through products and services at a higher return than other investment players in the market and thus help them in maintaining a particular standard of living and providing economic development.

Objectives of LIC

Help in penetration of LIC to rural and backward areas and providing affordable death cover to the maximum number of people
Channelization of savings to investment for economic development and providing attractive growth opportunities
The fund raised through such policies are invested in the best interest of the policyholders and in the sectors of national importance in alignment with the goals of the country
Act as trustee of insured
Cater to the changing needs of the sector along with the evolution of the economy
Bring out the best in the employees in terms of capability in the best interest of the policyholders

History of LIC

In Pre-independent India, the first company to provide life insurance services was Oriental Life Insurance Company, which was focused more on the European population here and charged higher premiums from Indians. Post that, the Hindustan Insurance Society was started by Surendranath Tagore. And till 1956, a lot of other players had sprung up in the industry, however, due to increasing fraud in the sector, in 1956, the Parliament passed the act of nationalization of the sector.

In this period, the Industrial policy resolution of 1956 came into force, which nationalized 17 sectors, one of which was the insurance sector. As an outcome of nationalization, the 254 private players in the insurance sector merged into the Hindustan Insurance Society and formed the LIC of India.

Types of Plans in LIC

Following are the available plans of LIC:

#1 – Aam Aadmi Bima Yojna

Age should be between 18 and 59 years
Head of a family below the poverty line or slightly above the same
Initial premium Rs. 200 p.a. for a policy having a cover of Rs 30000

#2 – Insurance Plans

Endowment Plan

Combination of savings and protection
The minimum death benefit is Rs. 50,000 and there is no maximum limit
Some policies require monthly premium payments
A loan can be secured against the policy
At the time of maturity, the money paid up as premium is returned along with a bonus if the death of the holder or other triggers event doesn’t occur

Whole Life Plan

Combination of income and protection
Annual benefits from the time when premium payments stop until the maturity of the policy
Lump-sum payout at maturity or death
The loan can be taken against the policy

Other Insurance Plans

Money-Back plan
Term Assurance Plan
Rider

Apart from these, LIC also has the following plans

Pension Plan
Unit Plan
Health Plan
Micro-insurance plan

Structure of LIC

The LIC committee consists of 15 members appointed by the Central Government of India. Following is the structure of this committee:

There are 4 managing directors, 4 members and 3 nonofficial directors in the LIC board of directors currently.

Further, the responsibilities are divided into 4 tier offices described as follows:

Central Office: There is only one Central office located in Mumbai. It takes up the following
- Investment responsibility
- Formulation of regulations and their administering
Zonal Offices: There are 8 Zonal offices in different geographies
- These together with divisional offices, carry down the central office policy down to the branch offices
Divisional Offices: There are 113 divisional offices to traction greater penetration into India
Branch Offices:
- These carry out all the front end roles between the policyholders and the LIC
- There are total 2048 such offices
Satellite offices: There are total 1048 such offices

Below is the typical hierarchy of the LIC and all its offices-

International Operations of LIC

LIC has international operations in Fiji, Mauritius, United Kingdom, Bahrain, Nepal, Sri Lanka, Dubai, Abu Dhabi, Oman, Qatar, Saudi Arabia & Kenya

Benefits of LIC

Being part of LIC team has several benefits:

Work Satisfaction: Helping people achieve their financial goals is rewarding in itself and gives the employee a great deal of work satisfaction
Success: LIC is the team of best in the insurance industry and therefore there is a great peer learning opportunities and a successful career path ahead
Lucrative Salary and Perks: Takes care of current and future income and the targets set by the employees as it has the best investment research team at its disposal.
Global Exposure: As LIC is operating at a multinational level, the training provided in the corporation is of a very high standard and at a world-class level.
Wide Range of Products: LIC has a very wide portfolio of products and services it provides and therefore the employee gets exposure to all these products over the period of his career with LIC
Established Brand: LIC is known in every household and therefore there is the lesser effort required in selling the brand. The effort is required in selling the products only while in the case of other players, selling the brand in itself is a task leave alone selling the products.

Conclusion

So in the end, LIC, as a whole, is an institution, not just for insurance but for various different kinds of services such as investments, pensions, health benefits among others. It is a one-stop solution for all kinds of financial services required by any individual or institution and has a team of close to 1 million employees as on 31-3-2018

A career in LIC is a launchpad in the insurance sector in India and abroad and it can bring out the best in the employees through its world-class training and infrastructural support.