Insurance Companies

Life Insurance Corporation (LIC)

LIC provides cover of risk of life, retirement, disability etc.

Sources of funds

Paid up capital, premium collections, borrowing from government and the RBI. At now the mobilization of savings by insurance companies accounts for 79% of the financial savings of the household sector.

The proportion of funds to be deployed at their discretion was hardly 25% of the total investible funds, while the rest are earmarked for specified government and semi government securities (50%) ad for lending or socially desirable projects like housing finance loan, mortgage loans, loans to approved bodies for electricity, housing, water etc (25%)

LIC invests in shares/debentures of companies, provide rupee loans to companies, makes initial subscription and underwriting of new issues of shares etc.

It as set up a Mutual Fund for operating various schemes for mobilization of savings from the public, particularly from the rural and urban areas and channel these funds to the stock market and capital market.

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