Aka Sh Bang A

8/6/2019 Aka Sh Bang A

1/63

FINAL PROJECT REPORT

CONSUMER BEHAVIOUR TOWARDS VARIOUS

INVESTMENT AND INSURANCE PRODUCTS

. A Survey

A PROJECT REPORT

IN THE PARTIAL FULFILLMENT OF THE DEGREE OFMASTER OF BUSINESS ADMINISTRATION (MBA)

(2005-2007)

SUBMITTED BY: UNDER THE GUIDANCE:

MUKESH KUMAR MS. JASNOOR KAUR MBA-IV

SUBMITTED TO:

SAS

INSTITUTE OF INFORMATION TECHNOLOGY & RESEARCH

MOHALI


2/63

ACKNOWLEDGEMENT

If words are considered as symbol of

approval and taken of appreciation then letthe words play the heralding role of

expressing my sincerest gratitude and

thanks

I am indebted to Mrs. Nisha Kapoor- Agency

Manager, inICICI Prudential Insurance Co., Mohali,

for providing me an opportunity to go through

project report.

I would like to express my sincere gratitude

towards Ms. JasnoorKaur (Coordinator) for having

provided me this golden opportunity to fulfillment of

my final project report for this span of time and also

for letting me work on this project.

(MUKESH KUMAR)


3/63

PREFACE

Risks and uncertainties are part of lifes great adventure- accidents,

illness, theft, natural disaster they are all built into working of the universe

waiting to happen. So far that there is a solution - insurance.

To overcome these risks and uncertainties this project describes about

various policies and schemes of different insurance companies. How these

companies provide different benefits to policyholders. Insurance is acooperative venture where risks and uncertainties are shared by many. Now a

days a lot is being done to create awareness among the insuring public about the

need and importance of the insurance in the field of a human being. In this

direction IRDA has planned to create awareness through electronic and print

media.

A study of life insurance describes the meaning, various policies,

comparison and their analysis market prospective changing customer scenario.


4/63

CONTENTS

1) Preface

2) Acknowledgement

3) Introductions :-

Definition

Need for Life Insurance

Role of Government

Role of Life Insurance

Evaluation of Insurance Industry in India

Future Scenario

4) Opening of Insurance Sector in India

Objectives of Liberalization of Insurance

5) Changing Expectations of Customers

6) Major Players in Life Insurance

ICICI Prudential

Life Insurance of India (LIC)

HDFC Standard Life

7) Comparison of the products of various companies


5/63

8) Research Methodology

Research Methodology

Objectives

Limitations

9) Data Analysis and Findings

10) Conclusion

Findings

Suggestions

11) Appendices

Question

Bibliography


6/63


7/63

INTRODUCTION

Insurance is basically risk management device. The losses to assets resulting

from natural calamities like fire, flood, earthquake, accident etc. are met out of the

common pool contributed by large number of persons who are exposed to similar

risks. This contribution of many is used to pay the looses suffered by unfortunate few.

However the basic principle is that loss should occur as a result of natural calamitiesor unexpected events, which are beyond the human control. Secondly insured person

should not make any gains out of insurance.

It is natural to think of insurance of physical assets such as motor car insurance

or fire insurance but often be forget that creator all these assets is the human being

whose effort have gone along way in building upto assets. In that scene human life is a

unique income generating assets. Unlike physical assets, which decrease with thepassage of time, the individual become more experienced and mature as he advances

in age. This raises his earning capacity and the purpose of life insurance is to protect

the income to individual and provide financial security to his family, which is

dependent on his income in the event of his pre-mature death. The individual also

himself also needs financial security for the old age or on his becoming permanently

disabled when his income will stop. Insurance also has an element of saving in certain

cases.

Insurance is are rupees 400 billion business in India and yet its spread in the

country is relatively thin. Insurance as a concept has not being able to make headway

in India. Presently LIC enjoys a monopoly in Life Insurance business while GIC

enjoys it in general insurance business. There have been very little option before the

customer to decide the insurer. A successful passage of the IRA bill have clear the

way of private sector operators in collaboration with their overseas partners. It is

likely to bring in a more professional and focused approach. More over the foreign


8/63


9/63

periods of time, covering temporary risk situations, such as sea voyages. As life

insurance became more established. It was realized what a useful tool it was in a

number of situations, including :

1. Temporary needs/ threats :

The original purpose of Life Insurance remains an important element, namely

providing for replacement of income on death etc.

2. Regular Saving :

Providing ones family and oneself, as a medium to long-term exercise

(through a series of regular payment of premiums). This has become more relevant in

recent times as people seek financial independence from their family.

3. Investment :

Put simply, the building up of saving while safeguarding it from ravages of

inflation. Unlike regular saving products are traditionally lump sum investments,

where the individual makes are one time payment.

4. Retirement :

Provision for ones on later years has become increasingly necessary,

especially in changing culture and social environment. One can buy a suitable

insurance policy, which will provide periodical payments in ones old age.

BENEFITS :

1. It is superior to traditional saving machine

As well as providing a secure vehicle to build up saving etc. it provides piece

of mind to the policy holder. In the event ultimately death, of say the main earner in

the family, the policy will pay out guaranteed sum assured, which is likely to be

significantly more then the total premiums paid. With more traditional saving

vehicles, such as fixed deposits, the only return would be the amount invested plusany interested accrued.


10/63

2. It encourages saving and forces thrift:

Once an insurance contract has been entered into, the insured has an

publication to continue paying premiums, until the end of the term of policy,

otherwise the policy will lapse. In other words, it becomes compulsory for the insure

to save regularly and spend wisely. In contrast savings held in a deposit account can

be accessed or stop easily.

3. It provides easy settlement and protection against creditors

Once a person appointed for receiving the benefits or a transfer of rights is

made (assignment), a claim under the life insurance contract can be settled easily. In

addition, creditors has no right to any mommies by the insurer, where the policy is

written under trust. Under the married womans act the money available from the

policy forms a kind of trust, which creditors can not claim on.

4. It can be encashed and facilities borrowing:

Sum contracts may allow the policy can be surrendered for a cash amount, if

policy holder is not in a position to pay the premium. A loan, against certain policy,

can be taken for a temporary period to tide over the difficulty. Presence of life

insurance policy facilitates credit for personal or commercial loans as it can be offered

as collateral security.

5. Tax relief :

The policy holder obtains income tax rebates by paying the insurance premium.

The specified form of saving which enjoys a tax rebate u/s 88 of the income tax act.

Include Life Insurance premiums and contribution to a recognized PF etc.

GOVT. ROLE :============

Govt. keen to reduce the dependency on the state via private pension

provisions. They have a choice between using compulsion and incentives. Most of the


11/63

govt. choose the later method. Tax relief is guaranteed in the pension plants and is

extremely generous, reflecting the value that the govt. and the society and large place

on the provision of retirement benefits. Tax treatments of the benefit varies by country

and by benefits.

In India, the proceeds of gratuity and provident fund are tax free in the hand of

the members. In UK, a certain amount of the proceeds can be taken as tax lump sum

and reminder as taxable income. Benefits due on withdrawl from schemes are

generally taxed unless they are transferred to another scheme or approved pension

plan.

ROLE OF LIFE INSURANCE

Role 1 : Life Insurance as investment

Insurance is an attractive option for investment. While most people recognize

the tax hedging and tax saving potential of life insurance, many are not aware of its

advantages as an investment option as well as. Insurance products yield more

compared to regular investment option as this is besides the added incentives (read

bonuses) offered by insurers.

You can not compare an insurance product with other investment schemes for

simple reason that it offers financial protection from risks, something that is the

missing in non- insurance products.

Infact, the premium you pay for a investment against risk. Thus, before

comparing with other scheme, you must accept that a part of total amount invested in

life insurance goes towards providing for the risk cover, while the rest is used for

savings.

In life insurance, unlike non-products, you get maturity benefits on survival at

the end of the term. In other words, if you take a life insurance policy for 20 years and

survive the term the amount investor as premium in the policy will come back to you

with added returns. In the unfortunate event of death within the tenure of the policy,

the family of the deceased will receive the sum assured.


12/63

Now, let us compare insurance as an investment options. If you invest Rs.

10000/- in PPF, year money grows to Rs. 10950 at 9.5% interest over a year. But in

this case, the access to your funds will be limited. One can withdraw 50% of the initial

deposit only after four years.

The sane amount of Rs. 10000/- can give you an insurance cover of upto

approximately Rs. 5 to 12 lacs. (depending upon the plan, age and medical condition

of life insure etc.) and this amount can become immediately available to the nominee

of the policy holder on death. Thus insurance is a unique investment avenue that

delivers sound returns in addition to protection.

Role 2 : Life Insurance as Risk Cover

First and foremost, insurance is about risk cover and protection financial

protection, to be more presize-to help out last once unpredictable losses. Designed to

safe guard against losses suffered on account of an unforeseen events. Insurance

provide you with that uniqueness sense of security that no other form of investment

provides. By buying life insurance, you buy peace of mind and are prepared to face

any financial demand that would hit the family incase of an untimely demise.

To provide such protection, insurance firms collect contributions for many

people who face the same risk. A loss claim is paid out of the total premium collected

by the insurance companies, who act as trustees to the monies.

Insurance also provides a safeguard in the case of accident or a drop in income

after retirement. An accident or disability can be devastating and an insurance policy

can lend timely support to the family in such time. It also comes as a great help when

you retire, in case untoward incident happens during the term in the policy.

With the entry of private sector player in insurance, you have a wide range of

products and services to choose from. Further, many of these can be further

customized to fit individual/group specific needs considering the amount you have to

pay now, its worth buying some extra sleep.


13/63

ROLE 3 : Life Insurance as Tax Planning

Insurance serves as an excellent tax saving mechanism too. The Govt. of India

have offered tax incentives to life insurance products in order to facilitate the flow of

funds into productive assets. U/S 88 of Income Tax Act 1961, an individual is entitled

to rebate 20% on the annual premium payable on his/her life and life of his/her

children or adult children. The rebate is reducible from tax payable by a individual or

Hindu undivided family. This rebate is can be availed upto a maximum of Rs 12000/-

on payment of yearly premium of Rs 60000/- a year, you can buy anything upward of

Rs 100000/- in sum assured. This means that you get Rs 12000/- tax benefit. This

rebate is deductible from the tax payable by an individual or a Hindu undividedfamily.

THE EVALUATION OF INSURANCE INDUSTRY IN INDIA :

Life Insurance in its modern form is a western concept. The Indian insurance

industry is as old as it is in other part of the world. Although life insurance business

has been taking shape for the last 300 years, it came to India with the arrival of

Europeans. First Life Insurance Company was established in 1818 as Oriental

Insurance Company, mainly to provide for widows of Europeans. The companies that

follow mainly catered to Europeans and charged extra premium on Indian Lives. The

first insurance company insuring Indian Lives at standard rates was BOMBAY

MUTUAL LIFE INSURANCE COMPANY, which was formed in 1870. This was

also the year when 1st Insurance act was passed by the British Parliament. The years

subsequent to the Swadeshi movement saw the emergence of several insurance

companies. At the end of the year 1955 there were 245 insurance companies. All the

insurance companies were nationalized in 1956 and brought under one umbrella-

LIFE INSURANCE CORPORATION OF INDIA (LIC) which enjoyed a monopoly

of the Life Insurance business until near the end of 2000. by enacting the IRDA act

1999, the Govt of India effectively ended LICs monopoly and opened the doors for

private Insurance companies.


14/63

Collaboration of Indian Companies with Foreign Companies

Indian Company Foreign Partner

Kotak Mahindra Chubb

Tata Group AIG

Sundram Finance Winterthur

Spic Metlife

ILFC Cigna

Alpic Finance Allianz

20th Century Canada Life

Vysa Bank ING

Cholamandlam Axa

SBI Alliance Capital

HDFC Standard Life

ICICI Prudential

Hindustan Times Commercial Union

IDBI Principal

Max India New York Life

FUTURE SCENARIO :-

Before looking in future prospectus of the insurance industry, we must take a

look into its past history. The independent India started with private sector Insurance

companies. These companies were nationalized by the union govt in 1956 to form a

monopoly known as Life Insurance Corporation of India has being under public sector


15/63

for over four decades till the govt. opened the insurance sector for private companies

in 2000.

When the insurance Industry was nationalized, it was consider a land mark and

a milestone on the way to the socialistic pattern of society that India had chosen afterindependence. Nationalization has lent the industry solidity and growth, which is

unparalleled. Forever, along with these achievements there also grew a feelings of

insensitivity to the needs of the market, traditions in adoption of modern practices to

upgrades technical skills coupled with a scene of lethargy which probably led to a

feeling amongst that the insurance industry was not fully responsive to customers

needs.

The life insurance corporation of India has not succeeded in extending the

insurance cover to all the needy people of the country due to various reasons. LIC

could not insure very fast growth of insurance in India even in a long period extending

over four decades. Hence the penetration of insurance is very low in India. The

following indicates as explained and support this contention :

1. While per capita insurance premium in developed country is high, it is quitelow in India. For instance, per capital insurance premium in India in 1999 was only $8

while it was $4800 for Japan $1000 for Republic of Korea, $887 for Singapore, $823

for Hong-Kong and $144 for Malaysia.

2. Similarly the penetration of insurance is also assessed by the ratio of

Insurance premium to gross domestic products in a country. While insurance premium

as a percentage of GDP was 14 % in Japan, 13% for South-Africa, 12% for Korea,

9% for UK and France. It was only around 2% in India in 1999. hence the penetration

of insurance is low here.

3. The penetration of Insurance is also assessed by a ratio of Insurance

premium to gross domestic savings (GDS). While insurance premium as a percentage

of GDS was 52% for UK, 35 % for other European and American countries, it was

only 9% in India in 1999. Hence even this index indicates low level of penetration of

insurance in India.


16/63

4. The share of India in the world market in terms of gross insurance premium

is again very small. For instance while Japan has 31%, European union 25%, South

Africa 2.3%, Canada 1.7% share of global insurance premium is only 0.3% for India.


17/63

OPENING OF INSURANCE SECTOR IN INDIA


18/63

The union government of India decided to open the insurance sector to make it

more dynamic and customer friendly.

OBJECTIVE OF LIBERALIZATION OF INSURANCE :-

The Main objective for the opening up the Insurance sector to the privateinsures as under :-

To provide better coverage to the India citizens.

To augment the flow of long term financial resources to finance the growth ofinfrastructure.

Indian Insurance industry has ten new entrants in year 2000-2001 in Life Insurance

sector.

S.No Reg No Date of Reg Name of Company

1 101 23.10.2000 HDFC Standard Life Insurance CO. Ltd

2 104 15.11.2000 Max New York Life Insurance CO. Ltd

3 105 24.11.2000 ICICI Prudential Life Insurance CO. Ltd

4 107 10.01.2001 OM Kotak Mahindra Life Insurance CO Ltd

5 109 31.01.2001 Birla Sun Life Insurance CO. Ltd

6 110 12.02.2001 Tata AIG Life Insurance CO. Ltd

7 111 20.03.2001 SBI Life Insurance CO. Ltd

8 114 02.08.2001 ING Vyasya Life Insurance CO. Ltd

9 116 03.08.2001 Allianz Bajaj Life Insurance CO. Ltd

10 117 06.08.2001 Metlife Insia Life Insurance CO. Ltd

Insurance Industry in the year 2000 has one new entrant in Life Insurance

Business name :-

S.No Reg No Date of Reg Name of Company

1 121 03.01.2002 AMPSANMAR Assurance Co. ltd


19/63


20/63

CHANGING CUSTOMER EXPECTATIONS IN INSURANCE SECTOR

PRE TO POST LIBERALISATION

RESEARCH OBJECTIVE AND METHODOLOGY

OBJECTIVE :-

To provide insight into customers experiences prior to recent liberalization,

mapping changes in expectations after liberalization and perceived performance of

insurance players viz a viz expectations.

RESEARCH APPROACH :-

In depth qualitative study to capture indicative trends which can be strictly

validated, if required :

Geographical coverage : Delhi, Mumbai, Kolkata, Hyderabad and Banglore

RESEARCH DESIGN :-

RESPONDENT SEGMENT

Life Policy Holders :-

Old Customers : Taken Insurance prior to liberalization only.

Evolved Customer : Taken insurance both in per and post liberalization.

New customers : Taken Insurance in post liberalization only.

Sources of information on Insurance and Product Awareness

Friend, colleagues, relatives and agent additionally from direct

Low awareness of several Insurance mailers, customer meets products due

to poor communication Internet and media in spite of availability. Rising

level of awareness of new product of both LIC and private Company

CHANGING CUSTOMER EXPECTATIONS LIFE


21/63

EXPECTATIONS FROM THE COMPANY:

Premium notice should be settled regularly.

Premium payment reminder should be sent through SMS and E-Mail.

Cheque payment at bank, imternt and special collection centres ( Om

Kotak in Mumbai )

Payment through credit cards.

Facility of purchasing policy through more channels.

Flexible/wider range of products.

Focus on cutomer education.

Fine/prints devi in detail, correct disclosures. Transparent and fair dealings.

Information on new products/services through call centres, internet,

mailers, new agent customer meets. Set up toll free help line.

Where customer is cancelled is deposited should be entitled to be the

commission thereof.


22/63


23/63


24/63

COMPANY PROFILE

INTRODUCTION

ICICI Prudential Life Insurance Corporation Ltd. was incorporated on

20.7.2002. This company is a joint venture of ICICI(74%) and Prudential PLC

UK(26%).

The company was granted certificate of registration for carrying out Life

Insurance Business, by the Insurance Registry and Development authority on Nov

24.2000. it commenced commercial operations on Dec 19.2000, becoming one of the

few private sector players to enter the liberalized arena.

DETAILS OF ICICI :-

This is Indian participate company of this insurance Co.. ICICI Ltd was

established in 1955 by World Bank, the govt. of India and the Indian Industry, to

promote industrial development of India by providing project and corporate finance to

Indian Industry.

Since inception, ICICI has grown from a development bank to a financial

conglomerate and has become one of the largest public financial institutions in India.

ICICI has thus far financed all the major sectors of the economy, covering 6848

companies and 16851 projects.

DETAILS OF PRUDENTIAL PLC :-

Prudential Plc was founded in 1848. Since then it has grown to become

one of the largest providers of a wide range of savings products for the individuals

including life insurance, pensions, annuities, unit trust and personal banking. It has

presence in 15 countries, and caters to the financial needs of over 10 million

customers.


25/63

Prudential is the largest life insurance company in the United Kingdom. Asia

has always been an region for prudential and it has had a presence in Asia for 75

Years. In fact Prudential first Overseas operation was in India, way back in 1923 to

establish Life and General Branch agencies.

This is the only company who market maximum product with goof feature in

competition with LIC. In my opinion these companys stand seconds in merits. It has

introduced the following Insurance product :-

1. Save n Protect

2. Cash Back

3. Smart Kid

4. ICICI PRU Life Guard

5. Life Time Pension.

1. SAVE N PROTECT :-

It is a fix term policy that combines saving with life cover in this plan, you pay

premium regularly during the term. On death of the life assure upto age 7 years thebasic premium paid will be return without interest. On the death of the life assured

after 7 years, the beneficiary will get the sum assured, guaranteed additions 3.5%

compounded interest annually for the first 4 years and the vested bonuses was the

policy matured at the end of the term, you can get the full sum assure and guaranteed

addition, 3.5% a compounded annually for the 1st 4 years as well as the vested

bonuses.

Minimum Age 0 years

Maximum Age 60 years

Term to Avail the plan :

Minimum term 10 years, maximum term 30 years

The maximum cover ceasing age is 70 years.

2. CASH BANK :-


26/63

A fixed term policy of 15 to 20 years in which premiums are paid through out

the term of the policy. Survival benefit payment at regular intervals are paid to

provide you with the liquidity full sum assured, along with the guaranteed addition

3.5% compounded annually for the 1st

four years at the vested bonuses would bepayable on death, irrespective of the survival benefit paid. On death of the life

assured, the beneficiary will get the full sum assure, the guaranteed bonuses and the

vested bonuses, irrespective of the survival benefit already paid. The survival benefit

payable are as per the table :

Policy Term 15 Years Policy Term 20 Years

At end of year Survival pay. a %

basic

sum assured

At the end of year Survival pay a % bas

sum assured

3 10% 4 10%

6 15% 8 15%

9 20% 12 20%

12 25% 16 25%

15 (Maturity) 50% gur add. bonus 20 (Maturity) 50% gur add. bonus

Minimum Age 16 YearsMaximum Age 55 years

Term to Avail Plan:

Minimum Term 15 yearsMaximum Term 20 Years


27/63

The maximum maturity age is 70 years

3. SMART KID :-

Smart kid is so designed that it provides you the flexibility to structure thebenefit in accordance to your needs. You get the security of assured payments under

your plan depending upon the benefit structure chosen by you. Whats more, you can

decide the term of the plan, so that the benefit are paid when you need it. You can also

choose the policy to mature between 22-25 years of the childs age. In case of

survivals during the term of the policy you can get the payouts after some intervals.

At the end of Childs age Payouts

10 yr of the policy 15 years 20% of the sum assured




+ GA + VB

Minimum Age 0 YearsMaximum Age 12 years

Parents of Minimum age 20 years and Maximum age 60 years

Term to Avail Plan:

Minimum Term 10 years

Maximum Term 25 Years

4. LIFE TIME PLAN :-

ICICI Prudential Life time Pension Plan combine the best of investment and

insurance. The solution gives the power of maintaining your life style needs for as

long as you live. It is a regular premium plan it gives you the freedom to choose the

amount, the premium, and invest your money in the market-linked funds, to generate

potentially higher returns. A part of the premium paid is used to pay for the death

benefit (if any) opted for by you and the rest be invested in the plan of your choice.


28/63

On the retirement date the accumulated value of the units will be used to purchase and

annuity-to provide you with regular income for life.

Minimum Age 18 Years


Term to Avail Plan:



5. LIFE GUARD :-

Under this plan, a sum assure is payable in case of death of the life assure

during the term of contract. One can choose the lump sum that would replace the

income lost to ones family in the unfortunate event of the ones death. Since this non-

participating (without profits) plan is a pure, risk cover plan, no benefits are payable

on survival to the end of the term of the policy.

Minimum Age 18 Years


Term to Avail Plan:



Maximum age that plan covers is 65 years

Minimum premium payable is 2400 per annum


29/63

PROFILE

OBJECTIVES :-


30/63

Spread Life Insurance much more widely and in particular to the rural areas

and to the socially and economically backward classes with a view to reaching all

insurable persons in the country and providing them adequate financial cover against

death at responsible cost.

Maximum mobilization of peoples savings by making insurance-linked

savings adequately attractive.

Bear in mind, in the investment of funds, the primary obligation to its policy

holders, whose money it holds in trust, without losing sight of the interest of the

community as whole, keeping in view national priorities and obligation of attractive

return.

Conduct business with almost and with the full realization that the money

belongs to the policy holders.

Act as trustees of the insured public in their individual and collective

capacities.

Involve all people working in the corporation to the best of their capability in

furthering the interests of the insured public by providing efficient service with

courtesy.

Promote amongst all agents and employees of the corporation a sense of

participation, pride and job satisfaction through discharge of their duties with

dedication towards achievement of corporate objective.

PRODUCTS :-

1. Term Insurance Plan

2. Endowment Plan

3. Money Back Plan

4. Jeevan Mitra Plan

5. Jeevan Sathi Plan

6. Jeevan Surbhi Plan


31/63

7. Children Plan

a. Bal Vidya

b. Jeevan Chhaya

c. Children Money Back

TERM INSURANCE PLAN :-

Availability of Plan :-

Minimum Age of 12 Years

Maximum Age of 60 Years

Term to Avail Plan :-


Maximum Term 55 years

Maximum Age that plan cover 70 years

ENDOWMENT PLAN

Availability of the plan :

Minimum age 12 years.

Maximum age 65 years.

Term to Avail plan :

Minimum term 5 years.

Maximum term 55 years.

Maximum age that the plan cover 75 year.

MONEY BACK PLAN :-

Term to Avail Plan :

20,25 and 30 years for regular premium.


32/63

Maximum age that plan will cover till 70 years.

JIVAN MITRA POLICY :-

Availability of the Plan :-

Minimum Age 18 years


Term to Avail plan :-


Maximum age 30Years

Maximum Age that Plan cover is 70 years.

JIWAN SATHI


Minimum Age 20 years




Maximum age 30Years


CHILDREN PLAN :-1. CHILD AS A POLICY HOLDER

2. PARENTS AS A POLICY HOLDER & CHILD AS BENIFICIARY

Child as a policy Holder :-

Jeewan Sukanya

Jeewan Kishore


33/63

Jeewan Sukanya :-


Minimum Age 1 years




Maximum age 49Years


CHILDREN MONEY BACK POLICY :-


Minimum Age 0 years




Maximum age 26Years


GENERAL BENEFITS :-

PREMIUM WAIVER BENEFITS :-

For a policy taken on the life of a child (children policies-Jeewan Kishore,

Jeewan Sukanya, Jeewan Balya & children money back policy) the premium is paid

by the proposer. Under these policies the proposers life is not covered. It means if

proposer dies before maturity of the policy, no money becomes payable to the family.

On the death of the proposer, the family will loose the income of the propser. Inaddition to this problem, the other family members has to continue the payment of


34/63

premium. To avoid this problem, the premium waiver benefit can be opted for, by the

proposer. Under this benefit, if the propser dies before maturity of the policy, future

premium are waived future premium not be paid by the other family members. The

premium waiver benefit may be obtained by paying some extra premium depending

upon the age of the policy holder. This extra premium is calculated 100 rupee of basic

premium per thousand.

TERM RIDER BENEFIT :-

Under children money back policy, the life risk covered is that of the child. If

the proposer dies pre maturely, no money becomes payable to the family. To avoid

this problem the term rider can be added to the childrens money back policy. Underthis benefit if proposer dies before 18 years of the child a sum equal to 20% of the

sum assure becomes payable to the family. Other benefits to the child

TAX BENEFIT :-

The premiums paid under the plan qualify for rebate U/s 88 of the Income Tax

Act, 1961 and the returns are fully exempted under sec 10(10D).

OPTIONAL BENEFITS :-

Critical Illness, Double Sum Assured Benefits, Accidental Death Benefit etc.


35/63

HOUSING DEVELOPMENT FINANCE CORPORATION LTD. (HDFC):

Founded in 1977, HDFC is today the market leader in housing finance in India

and has extended financial assistance to more than 15 lacs homes. HDFC has more

than 110 offices in India presently. It has also one international office in Dubai and 3


36/63

more services associate in Kuwait, Qatar and sultanate of OMAN. HDFCs assets base

amount to over 15,000 crore. Its financial strength is reflected in highest safety rating

of FAAA and MAAA awarded by CRISIL and ICRA two of Indias leading

credit rating agency respectively, for the last 6 year consecutively. It has a depositor

base of over 11 lacs customer and a deposit agents force of over 46,000 of the total

deposit, 73% are sourced from individual and trust depositors, which demonstrates the

tremendous confidence that retail investors have in the company.

HDFC- promoted companies have emerged to meet the investors and

customers needs. HDFC bank for commercial banking, HDFC Mutual Fund for

mutual fund products, to be followed very shortly by HDFC Standard Life Insurance

Company for the life insurance and pension products.

Being an institution that is strongly committed to the highest standards of

quality and excellence, HDFC has won several accolades in the past few years. One

such award is the Ramakrishnan Bajaj National Quality Award for the year 1999.

This award was instituted to award recognition to Indian companies for business

excellence and quality achievement. HDFC is the only company so far to receive this

award in the service category.

STANDARD LIFE ASSURANCE COMPANY ( SLAC ) :

Founded in 1952, Standard Life has been at the for frontry of the UK Insurance

industry for 176 years by combining sound financial judgement with integrity and

reliability. The kingdom, Ireland, Spain, Germany and some more with representative

office in Hong-Kong and China.

One of the most recent success was the launch of standard Life Bank on 1 st

January 1998. In less than 20 months, the bank collected Rs. 28,000 crore in deposit.

The introduction of its innovative mortgage product in Jan. 1999, had an immediate

impact on the UK market, accounting for 11% of all new lending within the first

operational tear. The current loans outstanding amount to Rs. 43,300 crore.


37/63

Standard Life has total assets of Rs. 55,000 crore and new premium income last

year 33,000 crore. Its UK investment portfolio account for approximately 2% of all

shares listed in the London Stock Exchange. Its one of the new Insurance companies

in the world to receive AAA rating from two of the leading international credit rating

agencies. Moodys and Standards And Poors. The latter described Standard Lifes

ability to meet its claim obligations as overwhelming under a variety of economic

conditions.

Not surprisingly, Standard Life is rated as one of the few strongest companies

in the world, in financial terms. The quality and value standard Life brings to this

venture are immense. The companys reputation in UK market remains unrivalled.

Besides being voted Company of the ears for overall service, for the third

consecutive year. Standard Life was recently voted Company f the decade by

independent brokers.

PRODUCTS

1. TERM ASSURANCE PLAN

2. ENDOWMENT ASSURANCE PLAN

3. MONEY BACK PLAN4. CHILDRENS PLAN


38/63

5. PERSONAL PENSION PLAN

6. SINGLE PREMIUM WHOLE OF LIFE INSURANCE PLAN

7. UNIT LINKED PENSION PLAN

8. UNIT LINKED ENDOWMENT PLAN

Protection against uncertainties of life

TERM ASSURANCE PLAN :-



TERMS TO AVAIL PLAN :

20,25 and 30 years that plan can cover till 65 years.

ENDOWMENT PLAN :-



TERM TO AVAIL LOAN :-

Minimum term 10 years.

Maximum term 30 years.

Maximum age that plan can cover till 75 years.

MONEY BACK PLAN :-

Term

policy term

No. of years from policy date

5 10 15 20 25

10

15

20

40%

30%

25%

30%

25% 25%


39/63

25

30

20%

15%

20%

15%

20%

15%

20%

15% 15%



TERM TO AVAIL PLAN :-

Minimum term 10 tears

Maximum age 30 tears

Maximum age that plan can cover till 75 years.

CHILDEREN PLAN :-

Option On the death of the insured

person during the policy

term

On maturity

Maturity benefit Future premiums waived

and the policy continued

till maturity

Sum assured + bonuses

Accelerated benefit plan Sum assured + bonus paid

and the policy stops

On the survivals of the

insurance. Parent of the

maturity date

Sum assured + bonus paid

Double benefit plan Sum assured paid, future

premium waived and the

continue

Sum assured + bonuses

paid

Minimum age 18 yearsMaximum age 60 years

TERM TO AVAIL PLAN :-

Minimum term 10 years

Maximum term 25 years

Maximum age that plan can cover till 75 years

PERSONAL PENSION PLAN :-


40/63

Minimum age 18 years

Maximum age 60 years

SINGLE PREMIUM WHOLE OF LIFE INSURANCE :-


Maximum age 70 years

You can buy the product on a single life basis

Minimum sum assured 25000

Maximum sum assured 500000

Premium : Rs 950 per thousand of sum assured

GENERAL BENEFITS :-

PREMIUM WAIVER BENEFIT :-

For a policy taken on the life of a child (children policies Jeewan Kishore,

Jeewan sukanya, Jeewan balya and children money back policy) the premium is paid

by the proposer. Under these polices the propsers life is not covered. It means ifproposer dies before maturity of the policy, no money becomes payable to the family.

On death of the proposer, the family will loose the income of the proposer. In addition

to this problem the family has to continue the payment of premium. To avoid this

problem, the premium waiver benefit can be opted for, by the proposer. Under this

benefit, if the proposer dies before maturity of the policy, future premium are waived

future premium not to be paid by the other family members. The premium waiver

benefit may be obtained by paying some extra premium depending upon the age of the

policy holder. This extra premium is calculated per 100 rupee of basic premium per

thousand.


41/63


42/63

As it is difficult to compare all the policies of all the companies because they

vary in their benefits etc. So in this project I am comparing only four policies of three

Companies i.e. HDFC Standard Life, LIC, ICICI Prudential.

Policies are named as :

TERM ASSURANCE PLAN

ENDOWMENT ASSURANCE PLAN

MONEY BACK PLAN

CHILD ADVANTAGE PLAN


43/63

Min to Max Age Premium Base Comparison Min to Max. term

18-60 years Term Plan 10-30 years

Name of the

company

HDFC SLIC LIC ICICI PRO OM KOTAK

Age of the

person

30 years 30 years 30 years 30 years

Term of the

policy


Sum assured 1,00,000 1,00,000 1,00,000 1,00,000

Basic

premium

(without any

premium)

10,300 9,324 11,809 11,237

Returns (on

death)

S.A. + Bonus S.A. +

Bonus

S.A. + Bonus S.A. + Bonus

Returns (on

maturity)

NI2 NI2 NI2 NI2

other benefits (CI),(ADB),(ASA) (WOP),

(ADB)

(ADBR),(ABR) (CI),(ADB)(PDB)

Min to Max Age Premium Base Comparison Min to Max. term

12-60 years Endowment Plan 10-30 yearsName of the

company


Age of the person 30 years 30 years 30 years 30 years

Term of the policy 20 years 20 years 20 years 20 years


44/63

Sum assured 1,00,000 1,00,000 1,00,000 1,00,000

Basic premium

(without any

premium)

5,100 4,895 5,216 5,321

Returns (on death) S.A. + Bonus S.A. +

Accumulate

d Bonus

S.A. + Bonus S.A. + Bonus

Returns (on

maturity)

S.A. + Bonus S.A. +

Bonus

S.A. +

Bonus+ GA

S.A. + Bonus

Other benefits (CI),(ADB),

(DSA),(WOP)

(WOP),

(ADB)

(ADB),

(ABR), (CI),

(MSR)

(CI),(ADB)(DSA),

(2GD), (TB)

Min to Max Age Premium Base Comparison Min to Max.

term

12-60 years Money Back Policy 10-30 yearsName of

the

company

HDFC SLAIC LIC ICICI PRO OM KOTAK

Age of the

person


Term of thepolicy



45/63

Sum assured 1,00,000 1,00,000 1,00,000 1,00,000

Basic

premium

(without any

premium)

7,585 6,380 7,019 6,040

Returns (on

death)

S.A. + Bonus S.A. + Bonus S.A. + Bonus S.A. + Bonus

Returns (on

maturity)

Return after 5-5

years

For 20 Years

Policy 20%-20%

and 20% alte 5-5

years gap+

Bonus

Return after 5-

5 years

For 20 Years

Policy 20%-

20% and 20%

alte 5-5 years

gap+ Bonus

In 20 years

Policy

returns after

4-4 years

gap.

1st year-10%

2nd year-15%

3rd year-20%

4th year-25%

On maturity-

50%+ Bonus

Return after 5-5

years

For 20 Years

Policy 20%-20%

and 20% alte 5-5

years gap+ Bonus

Other

benefits

(CI),(ADB),

(DSA),(WOP)

(WOP),

(ADB)

(ADB),

(DAB), (CI),

(MSR)

(CI),(ADB),

(PDB), (2GD)

Min to Max Age of Child 0-17 Premium Base ComparisonMin to Max. term

Min to Max Age of Policy Holder Children Policy 10-30 years

12-60 years

Name of the

company


Age of the

Child


Term of the

policy


Sum assured 1,00,000 1,00,000 1,00,000 1,00,000


46/63

Basic premium

(without any

premium)

7,500 6,380 7,991 7,620

Returns (on

death)

Future

premiumwaived and

Policy

continue till

maturity

Future

premiumwaived and

Policy

continue till

maturity

Future

premiumwaived and

sum assured

immediately

after the death

Future premium

waived and Policycontinue till maturity

Returns (on

maturity)

Sum assured+

Bonus

Return after 2-

2 years

gap 20 % -20%-30%

-30% and

Bonus

Return after 2-

2 years gap on

maturity S.A.+Bonus

Sum assured+ Bonus

Other benefits (ADB,(WOP) (PWP), (TRB) (ADB),(IBR),

(ABR),(WOP)

(LGB),(ADB),(WOP)

OTHER BENEFITS :-

1. Tax Benefit

2. Loan Facility

3. The policy holder can pay the premium yearly, half yearly and quarterly

4. If policy holder avail any additional, he will paid more premium

5. The best of most popular plan of:

HDFC CHILDREN PLAN

ICICI LIFE TIME

LIC JEEVAN MITRA

OM KOTAK CAPITAL MULTIPLE

6. When the age of the person grow old. The premium also increased

7. Premium rate increased in case of person taking intoxicants in

comparison to healthy person.


47/63


48/63

1) Questionnaire method was used by me, with most of the

questions as the closed ended questions.

2) Sample Size - 200

3) Age Group - above 22


49/63

OBJECTIVES OF THE STUDY :-

1. To know about the requirement habit of the people in the region of

Chandigarh & Mohali.

2. To know about the views of people regarding various Insurance

Companies.

3. Position of the Insurance companies in the mind of the consumer

4. To know about the competition regarding various Insurance Companies.

5. To find out the position of Insurance Companies in the market.


50/63

LIMITATIONS :-

1. Most of the people are not interested to give the right data.

2. Some people dont know about the private Companies.

3. A span of 4 weeks training was too short for survey.


51/63

DATA ANALYSIS AND FINDINGS :-

QUES 1 : Awareness of the Various companies :

S.No. Particulars %age

A ICICI 70%

B HDFC 60%

C OM Kotak Mohindra 5%

D MAX New York Life Insurance 15%

E SBI Life Insurance 10%


52/63

0%

10%

20%

30%

40%

50%

60%

70%

%age

ICICI

HDFC

OM Kotak Mohindra

MAX New York Life Insurance

SBI Life Insurance

Respondent response about the awareness of the insurance Companies

QUES 2 : How the people know about the companies


A Newspaper 75%

B TV Ads 60%

C Banners/Posters 2%D Friends 90%


53/63

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

%age

Newspaper TV Ads

Banners/Posters Friends

QUES 3: What the people think about the Insurance


A Necessity for protection

Security

89%

B Imposition of an extra burden

of expenses

5%

C A compulsory tool for tax

saving

78%


54/63

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

%age

Neccesity for protection Security

Imposition of an extra burden of expenses

A compulsory tool for tax saving

QUES 4: Main considerations that a customer looks at while purchasing an

Insurance Policy.

S.No. Particulars %ageA TAX 90%

B SAVING 75%

C PROTECTION 80%

D PENSION 25%

E INVESTMENT 35%


55/63

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

%age

TAX SAVING PROTECTION

PENSION INVESTMENT

QUES 5 : What a respondents see while purchasing a Insurance from the

Company.


A Standing and Goodwill of the company 90%

B Product Range of the company 10%

C Advertisement being released by thecompany

5%

D Services being given by the company 80%

E Communications and knowledge of theRepresentatives

10%

F Returns of Bonus declared by thecompany

85%


56/63

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

%age

Standing and Goodwill of the company

Product Range of the company

Advertisement being released by the company

Serv ices being give n by the company

Communications and knowledge of the

RepresentativesReturns of Bonus declared by the company

QUES 6 : Excising Policy

S.No. Particulars %ageA Yes 80%

B No 20%


57/63

0%

10%

20%

30%

40%

50%

60%

70%

80%

%age

Yes No

QUES 7 : From where a respondent purchase the previous Insurance Policy

S. No. Particulars %age

A Directly from the company 10%

B Any unknown agent 10%

C Any known agent 75%

D Others 5%


58/63

0%

10%

20%

30%

40%

50%

60%

70%

80%

%age

Directly from the companyAny unknown agent

Any known agent

Others

QUES 8 : Other Investment and Saving Tools where respondent Invest

S. No. Particulars % age

A NSC 90%

B Bank Deposits 40%

C KVP 5%

D Tax Saving Bonds 55%

E PPF and Post Office 92%

F Others 5%


59/63

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

% age

NSC Bank Deposits

KVP Tax Saving Bonds

PPF and Post Office Others

CONCLUSIONS

FINDINGS AND RECOMMENDATIONS :

1. The Monopoly of LIC has been broken because private Insurance

companies came into the market.

2. 90% respondents are aware of privatization of Insurance Industry and 10%

respondents do not know about private companies.


60/63

3. 80% people know about ICICI Insurance Company. 75% people know

about HDFC Insurance Company and 15% people know about other

companies.

4. Some people preferred to the private companies because of their better

services.

5. Some people believe only or preferred only Public Insurance companies

like LIC.

6. As majority of the population of Chandigarh & Mohali City belongs to the

service class so they consider tax saving rather than purchasing a Life

insurance.

7. The Financial growth of Private companies is much more than Life

Insurance companies

8. The private companies always keep in touch with their customers with the

latest information.

9. Most of the respondent said that private companies should not be

trustworthy.

10. Most of the people go for Children benefit because of Triple benefit.

11. Now, a days people preferred to invest the money in Insurance policy rather

than in Banks because of better benefits of Insurance polices growth

money with life cover.

12.The respondents are above 45 they believe in Public Insurance companies

and those respondents who are less than 45 believe in Private Insurance

companies.

13. HDFC has made its presence felt in the market in a short span of time.


61/63

SUGGESTIONS :

1. Advertisement should be done on Television and especially Posters and

Banners. This will greatly help in raising awareness level.

2. Insurance company should show more commitment with the customer.

3. Private companies give better services to the customers comparatively to

Public companies.


62/63

4. The private company should create good relation and communication.

5. Private companies should work together to spread awareness regarding

the benefit given by the Private Companies.

6. Private Insurance Companies give some discount to attract the customer

7. A public relation officer should be appointed in the company who deals

with customers and their needs.

8. Cross training should introduce in Private Companies.

9. Private Companies needs to the market their product better and should

create greater awareness about their product and services. They need

extensive marketing advertising about the additional benefit provided by

them in comparison to the policies offered by LIC.

10. Agents have got maximum influence on a customer. They are the one

who introduce the prospect to different policies. So agents should be

given full-fledged training and the training should be strict.

11. Special emphasizes should be on known cover policies because these

type of policies have more potential in the market.

BIBLIOIGRAPHY

Study Material Of HDFC STANDARD LIFE INSURANCE

Study Material Of LIC

Study Material Of ICICI PRUDENTIAL

WEBSITES


63/63

www.hdfcstandardlife.com http://www.hdfcstandard.com

www.licindia.com http://www.licindia.com

www.icicipufile.com http://www.iciciprulife.com

www.bimaonline.com http://www.bimaonline.com
http://www.hdfcstandardlife.com/http://www.licindia.com/http://www.licindia.com/http://www.bimaonline.com/http://www.hdfcstandardlife.com/http://www.licindia.com/http://www.licindia.com/http://www.bimaonline.com/

Date post:	07-Apr-2018
Category:	Documents
Upload:	akashbanga
View:	214 times
Download:	0 times

Aka Sh Bang A

Documents