What is LIC explain?

• As a Savings Institution. Life insurance mobilizes as well as promotes the savings in the country. ...
• Investment Institution. A large part of an investment by LIC is in government securities. ...
• Stabilizes the Share Market. ...
• Loan finance defects. ...
• Dependency on institutional sources.

What is the importance of life insurance?

Having life insurance will give you peace of mind. Life is uncertain, and life insurance can offer financial assistance to your family when you are no longer around. You can also plan your retirement by taking a retirement plan where you will receive a monthly income.

What are the types of LIC?

How does a LIC policy work?

Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against. » Unfortunate death, if it occurs earlier. Among other things, the contract also provides for the payment of premium periodically to the Corporation by the policyholder.

Is LIC policy useful?

Benefits of purchasing LIC Policy

Government-owned - LIC comes with the sovereign guarantee of the Indian government, which makes its offerings a safe and reliable investment. Tax Benefits - Policyholders can enjoy tax deductions on the premium amount under Section 80C of the Income Tax Act, 1961.

Is LIC safe?

You can also surrender it if you need cash and get a loan against it. However, the internal rate of return for most endowment plans, or traditional life insurance plans is only in the range of 4-5 per cent That is a return that does not even beat the rate of inflation. Hence LIC policies are a bad investment.

What is the return of LIC?

The average return on investment for LIC over a period of ten years between 2005-2006 and 2014-2015 has been 6.7%. The average return on a ten-year bond has been 7.9%.

What is the interest rate for LIC policy?

What is the highest FD rate for LIC? LIC Housing Finance term deposit interest rates range between 5.50% and 5.60% for regular citizens. For senior citizens, the interest rates range between 5.75% and 5.85% for a tenure of 18 months to 1 year.

What is LIC policy maturity?

Maturity amount is the final amount received on the maturity of the plan by the life insured or his nominee/dependent in case of the policyholder's demise in the form of the death benefit.

How does LIC pay maturity amount?

Maturity Claims:

1) In case of Endowment type of Policies, amount is payable at the end of the policy period. The Branch Office which services the policy sends out a letter informing the date on which the policy monies are payable to the policyholder at least two months before the due date of payment.

How is LIC maturity amount calculated?

The basic format is Sum Assured + Bonuses + Final Additional Bonus (if declared). An example for calculation demonstration: Mr Z buys a policy of Sum Assured 15 Lakh with a term of 20 years. The insurance company includes Bonuses and Final Additional Bonus in the maturity value as per their company policy.

What are the 3 main types of insurance?

Then we examine in greater detail the three most important types of insurance: property, liability, and life.

What are the 4 types of insurance?

What are the 3 main types of life insurance?

Whole life insurance, universal life insurance, and term life insurance are three main types of life insurance.

What is life insurance mean?

Life Insurance can be defined as a contract between an insurance policy holder and an insurance company, where the insurer promises to pay a sum of money in exchange for a premium, upon the death of an insured person or after a set period.

What are benefits of insurance?

The obvious and most important benefit of insurance is the payment of losses. An insurance policy is a contract used to indemnify individuals and organizations for covered losses. The second benefit of insurance is managing cash flow uncertainty. Insurance provides payment for covered losses when they occur.

What are features of life insurance?

A life insurance policy is basically an agreement between an individual and an insurance service provider. According to this contract, the insurance provider is obligated to pay a certain predetermined sum of money upon the demise of the individual. This sum is paid to the said individual's nominee.

Which is better FD or LIC?

Fixed deposits are best for both short- and medium-term investments whereas life insurance plans are designed for long term investments. You can invest for a period of as low as 7 days in fixed deposits unlike a life insurance plan wherein you need to invest for at least 10 years.

Can I get my money back from LIC?

The LIC new money back policy can be surrendered only after it accrues cash value after payment of 3 years of premiums. If policyholders stop paying the premium, the policy ceases to exist. Nevertheless, if premiums have been paid for three years, a paid up value is accrued for a reduced sum assured.

Can we take LIC before maturity?

When you opt out of a policy before its maturity, it is called surrendering the policy. The amount that you receive at the time is the LIC policy surrender value. The life cover stops immediately and you won't be able to revive it in the future.