Importance of LIC in India

The most important part of the General Awareness section is the Indian Economy for many government exams like LIC, SSC, Banking, Railways, and many others. In this section, many questions are coming from the Insurance sector. We will discuss one of the important topics of the Indian Economy i.e., “Importance of LIC in India”.

Life Insurance Corporation of India :

• LIC is a Government Insurance and Investment Company incorporated under the Indian Life Insurance Act.
  
• It’s a statutory body.
  
• It was founded in 1956.
  
• Its headquarters is in Mumbai
  
• It aims to provide its citizens, through its services and products, with greater economic security than most other investment players in the market, thereby building an exceptional quality of life and enabling economic development.
  
• LIC is 100% owned by the government.
  
• Motto of LIC is ‘Yogakshemam Vahamyaham’, which means ‘Your welfare is our responsibility.
  
• The Chairman of Indian Life Insurance is M. R. Kumar.
  

Role :

• LIC is known as India’s largest national life insurance and investment company. LIC’s main mission is to raise funds from people through various life insurance policies and then invest in the global financial markets and various government securities. At least 75% of these proceeds must be invested in central and state government securities under one of the LIC regulations.
  
• To make investments in the finances of the Corporation in such way because the Corporation might imagine in shape and to take all such steps as can be important or expedient for the safety or realization of any funding; along with the taking up of and administering any belongings supplied as protection for the funding till an appropriate possibility arises for its disposal.
  
• To acquire, preserve and put off any belongings for the motive of its commercial enterprise.
  
• To switch the entire or any a part of the lifestyles coverage commercial enterprise carried on out of doors India to every other individual or persons, if withinside the hobby of the Corporation it’s far expedient so that you could do.
  
• To increase or lend cash upon the safety of any movable or immovable belongings or otherwise.
  
• To keep on both through itself or via any subsidiary every other commercial enterprise anyhow in which such different commercial enterprise changed into being carried on through a subsidiary of an insurer whose managed commercial enterprise has been transferred to and vested withinside the Corporation through this act.
  
• To keep on every other commercial enterprise which can also additionally appear to the Corporation to be able to be simply carried on about its commercial enterprise and calculated at once or in a roundabout way to render worthwhile the commercial enterprise of the Corporation.
  
• To do all things can be incidental or conducive to the right workout of any of the powers of the Corporation.
  In the release of any of its features, the Corporation shall act up to now as can be on commercial enterprise principles.

Goals :

• LIC aims to promote the importance of life insurance to people living in rural areas and those who are socially and economically disadvantaged.
  
• It aims to meet the diverse life insurance needs of residents who face changes in the social and economic environment.
  
• It aims to operate economically while considering that the money belongs to the policyholder.
  
• It aims to maximize the liquidity of people’s savings through attractive insurance-linked savings.
  
• Its purpose is to provide the highest level of job satisfaction to all company representatives and employees and to promote the establishment of a supportive working environment to provide courteous and efficient service to the insured. That’s it.  Its purpose is to use funds in the best interest of investors and the community.

Types of Life Insurances :

LIC offers several programs to its policyholders. Here is the list of some of the Insurance plans offered by LIC

1. LIC’s Bima Jyoti 
2. LIC’s Bima Ratna
3. LIC’s Dhan Sanchay 
4. LIC’s New Endowment Plan
5. LIC’s New Jeevan Anand
6. LIC’s Single Premium Endowment Plan
7. LIC’s Jeevan Lakshya 
8. LIC’s Jeevan Labh 
9. LIC’s Aadhaar Stambh
10. LIC’s Aadhaar Shila
11. LICs Jeevan Umang
12. LIC’s Jeevan Tarun
13. LIC’s Jeevan Shiromani
14. LIC’s Bima Shree
15. LIC’s Jeevan Amar
16. LIC Saral Jeevan Bima

Recent Development :

• Recently, the Union Cabinet passed an amendment to the FDI policy allowing up to 20% foreign direct investment (FDI) through the “automatic route” of the Life Insurance Corporation (LIC) ahead of its planned initial public offering (IPO). 
  
• Currently, the FDI Policy does not impose any specific provisions regarding foreign investment in the LIC.
  
• It allows FDI to insurance companies and insurance industry intermediaries or insurance intermediaries.
  
• The FDI cap for public sector banks is 20% and is in the process of getting government approval.
  
• The government last year raised the FDI cap in the insurance sector from 49% to 74%, but not the LIC, which is subject to a special law. The government allows up to 20% foreign investment in LIC and other entities as LIC does not fall into any of these categories and no restrictions are imposed on foreign investment in LIC under LIC law.
  
• Reforms in FDI policy will facilitate foreign investment in his LIC and other entities that the government may require for divestment purposes.
  
• Amendments to LIC’s FDI policy will ensure that foreign investors do not face obstacles in participating in public offerings.
  
• This reform will also facilitate operations and lead to increased FDI inflows while ensuring consistency with the overall intent or objectives of the FDI policy.
  
• Increased FDI inflows will complement domestic capital, technology transfer, and skills development for accelerated economic growth and cross-industry development to support the implementation of Atmanirbhar Bharat.  Allowing foreign direct investment allows foreign portfolio investors to purchase shares on the secondary market. It also sends a positive signal to investors.