One of the primary things we’re always looking for are comfort and security. And what better way to get that than insurance? Life and health insurance is ideal for financial and health stability for the long run.

But while insurance has always been the safety net for people around the world, in some countries like India insurance is not that popular among the masses.

Luckily, the government has been working proactively since 1956 to erase the stigma around insurance and offer its people the security they need. After a parliamentarian Feorze Gandhi shed light on insurance frauds that led to a chain of events that would change insurance in India altogether.

In response, the Life Insurance Corporation was created by consolidating over 250 private life insurance companies. LIC India is currently the largest financial institution and life insurance corporation with multiple insurance sectors, providing citizens with security for over 6 decades.

Learn how LIC, the guardian of India came to be!

Insurance in Colonial India

While insurance companies have been working around the globe for centuries, they only came to India in the early 1800s. Oriental Life Insurance Company was the first company to offer life insurance, however it was also the first to start the trend with insurance frauds. Targeting Europeans living in India, it left out the majority of the population out of its equations. Oriental Life Insurance Company charged Indians more for their premiums than their European fellow townsmen.

In the following decades, more insurance companies emerged offering life insurance to Indians at a much more reasonable price. However, a chain of events shook the economy for a century later. Starting with the First War of Independence, World War I and World War II, and the adverse effect of the Great Depression, the life insurance companies stood no chance. Many of them were liquidated, unable to pay out the claims, leading to general distrust in the companies and the need for life insurance.

But this would all change as an unlikely catalyst would go on a crusade against financial frauds that would result in a major shift in India’s economy at the time.

The Unlikely Catalyst

Feroze Gandhi was an Indian Politician, journalist, and freedom fighter. He was born in 1912 to a Parsi family in Bombay. After the untimely death of his father, his family moved to Allahabad, where he would finish high school and study at the prestigious British-owned Ewing Christian College.

During his days at the Ewing Christian College, he would meet Kamala and Indira Nehru, who would later become his wife, protesting in front of the college. The very next day, he abandoned his studies to join the Indian independence movement. Inspired by the great Mahatma Gandhi, he also changed the spelling of his surname and became Feroze Gandhi - the freedom fighter.

The subsequent years were threaded with highs and lows. He married Indira Nehru, daughter of Jawaharlal Nehru, a prominent figure in the anti-colonial movement. He vehemently opposed the marriage, to the extent that he even approached Mahatma Gandhi to discourage the couple. The couple was unmoved in their intentions and was subsequently jailed.

But the bad times didn’t last long. Following the independence and his father-in-law’s mandate as the first Prime Minister of India, Feroze too entered politics. He quickly rose in popularity mostly due to his criticism of his father-in-law’s government. He was part of the provincial parliament from 1950 to 1952.

Feroze in his right has been the driving force for many changes in the Indian political sphere, but one of his most prominent is shedding light on the insurance frauds. In 1955, he spoke about the way private insurance companies scammed people which led to a series of investigations and imprisonment of prominent figures.

The way to nationalization of the insurance companies was thus paved, and the Life Insurance Corporation of India was born the following year.

The Birth of the Guardian of India

India, statistically speaking, has one of the lowest insurance policies per citizen. The reasons can be attributed to the expensive prices, but also due to the general distrust due to prior insurance frauds. This had to be fixed and the Government of India made a huge leap forward to make sure that citizens regained their trust in insurance companies.

After Feroze initially raised his concerns about the private insurers, things were slowly put in motion. In one of the many subsequent investigations that took place, Sachin Devkekar, one of India’s wealthiest businessmen and owner of the Times of India newspaper, was arrested. And he was only one of the many prominent businessmen, bank owners, ministers, to take a fall.

The key pieces to make the ‘Guardian of India' also known as LIC were the talents and dedication that were provided by its catalysts. But to create this behemoth in India, 245 were consolidated, of which close to 160 were private life insurers, 16 foreign, and 75 other provident companies. LIC first saw the light of day on September 1st, 1956 when the Parliament of India passed the Life Insurance India Act.

Just a year after the nationalization of LIC, the first major scandal hit the corporation. Haridas Mundhra, a stock broker, made the LIC invest in multiple failing companies where he had shares, in a desperate attempt to boost his company's stocks. The matter was brought to light by none other than Feroze Gandhi, who was still on his anti-corruption crusade. This led to the imprisonment of Haridas, but also the resignation of the Finance Minister of the time.

For long after, the Life Insurance Corporation of India continued to provide their services with the best interest of their citizens in mind.

Recently, LIC India got a proposal to go public from the finance minister Nirmal. The IPO is expected to take place sometime in 2022. LIC India is expected to go public but only 10% would be available for the public purchases while the 90% will be kept by the government. In 2021, the government of India was looking into increasing the capital of LIC to a staggering $3.8 bn to ease the IPO the following year.

LIC Today And Their Future Missions

LIC India is one of the biggest companies in the country. Its headquarters are seated in Mumbai, India, while currently it has more than 114,000 employees. The head of its operations would be the board directors Mukesh Gupta, Smt. Ipe Mini, Siddharth Mohanty, Rajkumar, and M R Kumar as a chairman.

Today LIC India is providing life insurance, health insurance, investment management, and mutual funds as their main services. Now LIC India has 8 zonal and 109 divisional offices. But they don’t plan on stopping there as LIC is thinking about the rural areas and is offering their services through 992 satellite offices. Their intention is to cover more of the rural areas in the future and provide them with the insurance that everyone deserves.

What started as a general rebellion against the present government, turned into a fight against corruption, and ended as a nationalization of insurance companies to make insurance available to all. And it all took an outspoken parliamentarian who truly thought of his people. That’s the story of Feroze Gandhi and the Guardian of India, LIC.