Thursday, March 16, 2017


A crap being attempted to make viral.....
I just received.
Wanted to share with you......
*Term Insurance premium : LIC v/s Pvt insurance Cos.*
Example: 1Cr Term Insurance, premium LIC - 40,000/- Pvt Cos - 20000/-. Presuming 10,000 policies done by each. Amount collected by LIC 40 Cr and Pvt Cos 20 Cr.
Mortality rate in India per 1000 is 3 (same for both LIC and Pvt Cos).
Now as per this rate presuming 30 claims will arise out of 10000.
So claim amt. to be paid will be 30 Cr.
LIC will pay 30 Cr out of collection of 40 Cr less Administration cost.

Image result for lic private insurance companies
How Pvt. Cos. can
pay 30 Cr from collection of 20 Cr less administration cost?
Hence they will have to reject 15 claims (50%) because at least 5 Cr will be their administration cost etc.
Now you understand why LIC's premium rates are higher than Pvt Cos in view of Mortality rate in India and Why LIC is the BEST?
*Friends !.. Gold is never cheap and Cheap things are never a Gold !*


This is very simplistic portrayal of the concept and business of insurance, which,  unfortunately is not completely right. 

Re-Insurance will be used by most of the Insurance Companies including LIC...
with the likes of Societe Generali,Metlife,Newyork Life,Sunlife Inc...etc
Especially when the SA is higher..
That is how the companies reduce their risk...

Company applying for Re-Insurance is called a CEDING Company.

The Risk retained by the Ceding Company is called RETENTION.

The Risk transferred for RE-INSURANCE is called CESSION..

Selling a policy by degrading your competition and without giving the right information is not a good thing to do. 

I would never be a Customer with LIC

 instead,I will be the First to invest,If they get listed...

*Make the right choice and take a wise decision*

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