Is LIC a government enterprise and that our money is backed by a government guarantee?Majority of the capital of Life Insurance Corporation has been subscribed by the government, and the Corporation makes an actuarial surplus of 5 per cent available to the government every year.
The Section 37 of the Life Insurance Corporation Act 1956 reads: The sums assured by all policies issued by the corporation including any bonuses declared in respect thereof... shall be guaranteed as to payment in cash by the Central Government. Therefore, LIC policies enjoy a sovereign guarantee to the extent of covering the basic sum assured and the guaranteed returns. The bonuses are guaranteed only once they are declared.
