Why is LIC important?

Asked by: Clifton Rath  |  Last update: August 9, 2022
Score: 4.5/5 (24 votes)

The primary objective of LIC of India is to spread the importance of life insurance widely in the rural areas and people belonging to socially and economically backward classes. The company functions with a view of providing such individuals with financial cover against death at a reasonable cost.

What is LIC and its benefits?

LIC envisages your individual insurance needs and renders plans that suit you best. The dual advantage of protection and savings, integrated with financial assistance keep you insured lifelong. It is one of the oldest Life Insurance company in India.

Why is it important to have a life insurance?

Life insurance is important, as it protects your family and lets you leave them a non-taxable amount at the time of death. It is also used to cover your mortgage and your personal loans, such as your car loan. Your individual life insurance follows you when you retire and you are no longer insured by your employer.

What are 5 advantages of insurance?

The following are the advantages of insurance:
  • Providing Security: ADVERTISEMENTS: ...
  • Spreading of Risk: The basic principle of insurance is to spread risk among a large number of people. ...
  • Source for Collecting Funds: ADVERTISEMENTS: ...
  • Encourage Savings: ...
  • Encourage International Trade:

Is LIC really beneficial?

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.

Top 10 Fun Facts about LIC | CA Rachana Ranade

15 related questions found

How does LIC help in economic development?

LIC has invests huge amount of its fund for the development of infrastructure such as roads, railways, housing, water supply, electricity etc. of which housing, water supply and electricity are the important components in which LIC invests a huge amount out of its total investment.

Why is insurance so important for the economy?

Insurance companies assist businesses in reducing risk and protecting their employees: As with consumers, assisting businesses in reducing risk can have a long-term positive impact on the economy. Insurance is like the backbone of the economy.

Why is insurance important to the economy?

Insurance turn accumulated capital into productive investments. Insurance also enables mitigation of losses, financial stability and promotes trade and commerce activities those results into sustainable economic growth and development. Thus, insurance plays a crucial role in the sustainable growth of an economy.

What is the role of LIC in Indian economy?

Role of LIC in Indian Economy

LIC is known as India's largest government-owned life insurance and investment corporation. The main role of LIC is to invest in global financial markets and different government securities after gathering funds from people through their various life insurance policies.

What is LIC in simple words?

Life Insurance Corporation of India - Glossary.

What is the aim of insurance?

Insurance aims at minimisation of losses arising from future risks and uncertainties. It adds certainty of payments to people for happening of uncertain events. Insurance assures the individuals for compensation of losses. It minimises the risk through proper planning and administration.

Why is insurance important for a business?

Businesses need business insurance because it helps cover the costs associated with property damage and liability claims. Without business insurance, business owners may have to pay out-of-pocket for costly damages and legal claims against their company.

Why is insurance so important in society?

Insurance plays a crucial role in alleviating people's fear of sudden misfortune by mitigating loss through services and /or financial compensation. By extension, it contributes to the social protection of citizens by enhancing their financial security and peace of mind.

Is LIC policy a waste?

Basic life insurance policies are designed to provide replacement funds that can approximately match what the policy owner was making or a percentage of it. A life insurance policy on someone with no earnings or someone with no dependent beneficiaries can be a waste of money.

Is LIC better than FD?

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.

Is LIC beneficial Quora?

Definitely, it is a good decision! First thing people need to understand is it's is an insurance agency not a company to invest your money. LIC gives money to your family if something happens to you, even if you survive through the years, LIC will give your money back with some bonus after maturity.

What is insurance simple words?

1 : an agreement by which a person pays a company and the company promises to pay money if the person becomes injured or dies or to pay for the value of property lost or damaged. 2 : the amount for which something is insured. 3 : the business of insuring persons or property.

Is life insurance worth having?

Not everyone needs life insurance, but if your children, partner or other relatives depend on you financially, including parental responsibilities, taking out life insurance could be worth it to help provide for your family in the event of your death.

What is the most important insurance to have?

Health insurance is arguably the most important type of insurance. A 2016 Kaiser Family Foundation/New York Times survey found that one in five people with medical bills filed for bankruptcy. With a stat like this, investing in health insurance can help you prevent a significant financial hardship.

Why life insurance is a waste of money?

The premiums can be expensive. The coverage may not be needed if the policyholder is young and healthy. Life insurance does not cover everything, and it may not be worth the investment. There are other ways to protect your family in the event of your death financially.

Is LIC policy a waste?

Basic life insurance policies are designed to provide replacement funds that can approximately match what the policy owner was making or a percentage of it. A life insurance policy on someone with no earnings or someone with no dependent beneficiaries can be a waste of money.

Is life insurance a poor investment?

Whether or not life insurance is a good investment for you depends on your individual finances as well as the length you'll need coverage. Term life insurance can make sense if you want to be covered for a set time period, while permanent life insurance can cover you for life.

Is saving better than life insurance?

As a matter of fact, you can grow your cash 6-8% on average annually, compared to a measly 0.1% in your savings account. That's many times more growth and much more wealth in your retirement future. Therefore, a permanent life insurance policy covers more bases and still offers the savings benefit.

What are the three most important insurances?

Here are three insurance plans that you should have to protect your future income and savings.
  1. Life insurance. If you have a family and you love them, then life insurance is a must. ...
  2. Long-term care insurance. ...
  3. Long-term disability insurance.

What can insurance protect you from?

It covers you for repairs and replacement of any damage that's covered in your policy. It provides protection against theft, damage from perils like fire and water, and financial responsibility that could result from a visitor or guest being accidentally injured on your property.