The Life Insurance Corporation of India was formed on 1st September, 1956. One of the objection of the nationalisation of the life insurance industry was channelising of its funds for the benefit of the community at large. In pursuance of this objective, LIC, over the years, has been investing a major parts of its funds in the socially oriented sector.

The investment of the Corporation funds is governed by section 27A of the Insurance Act, 1938, and subsequent guidelines/instructions issued thereunder by the Government of India from time to time. These investments are regulated by the Government to benefit the people at large by providing basic amenities like water, drainage, sanitation etc.

The Corporation also provides financial assistance to state Electricity Boards/Power Corporations for power generation projects by way of loans/subscriptions to their bonds. Housing Finance also occupies a prime place in the Corporation’s socio-purposive investments. The Corporation provides finance for housing to individuals, Co-operative Housing Societies and private undertakings under its various mortgage housing schemes. The Corporation has also been assisting development of road transport by providing financial assistance to State Road Transport Corporations for augmenting their fleet of buses. It has also been classified that the Corporation can make Private Sector Investment in addition to Public Sector Investment subject to availability of suitable schemes which satisfy prudential norms.

Again, LIC helps small scale & medium scale industries by granting loans for setting up Co-operative Industrial Estates & Industrial Development Corporations. The Corporation’s assistance to State Level Finance Corporations & All India Finance Corporations like IDBI, IFCI, ICICI etc. by way of subscription to bonds or debentures issued by such institutions, also indirectly helps development of small & medium scale industries. All these make a distinct contribution towards growth in industrialization & generation of skilled & unskilled employment opportunities in the country.

LIC aims at spreading Life Insurance much more widely, in particular to the rural areas & to the socially & economically backward classes with a view to reaching all insurable persons in the country & providing them adequate financial cover against death at a reasonable cost; as well as maximum mobilization of people savings by making insurance-linked savings adequately attractive.