Customer Perception of Life Insurance Policies- With Special Reference to Hdfc Standard Life Insu

7/28/2019 Customer Perception of Life Insurance Policies- With Special Reference to Hdfc Standard Life Insu

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CUSTOMER PERCEPTION OF LIFE INSURANCEPOLICIES- WITH SPECIAL REFERENCE TO

HDFC STANDARD LIFE INSURANCE PRODUCTS

SUMMER TRAINING PROJECT REPORTSUBMITTED TOWARDS PARTIAL FULFILLMENT

OFBACHELOR OF BUSINESS ADMINISTRATION

UNDER THE GUIDANCE OF:

(Affiliated to Ch. Charan Singh University, Meerut)

Academic Session[2009-2012]

SUBMITTED BY -

SWADESH RAJPUTBBA-VIth Sem.Roll no. 9353749

UNDER THE GUIDENCE OF:

Mr. VISHAL AGGARWAL Mr. SURYA BHUSAN KUMAR

(Sales & Development Manager) (FACULTY.)

HDFC Standard Life Insurance Ltd. IMS, Ghaziabad

INSTITUTE OF MANAGEMENT STUDIES

C-238, BULANDSHAHR ROAD, LAL QUAN, PB NO 57

GHAZIABAD-201009


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PREFACE

The liberalization of the Indian insurance sector has been the subject of much heated debate for

some years. The policy makers where in the catch 22 situation wherein for one they wanted

competition, development and growth of this insurance sector which is extremely essential for

channeling the investments in to the infrastructure sector. At the other end the policy makers had

the fears that the insurance premium, which are substantial, would seep out of the country; and

wanted to have a cautious approach of opening for foreign participation in the sector.

As one of the rare occurrences the entire debate was put on the back burner and the IRDA

saw the day of the light thanks to the maturing polity emerging consensus among factions of

different political parties. Though some changes and some restrictive clauses as regards to the

foreign participation were included the IRDA has opened the doors for the private entry into

insurance.

Whether the insurer is old or new, private or public, expanding the market will present

multitude of challenges and opportunities. But the key issues, possible trends, opportunities and

challenges that insurance sector will have still remains under the realms of the possibilities and

speculation. What is the likely impact of opening up Indias insurance sector?

The large scale of operations, public sector bureaucracies and cumbersome procedures

hampers nationalized insurers. Therefore, potential private entrants expect to score in the areas of

customer service, speed and flexibility. They point out that their entry will mean better products

and choice for the consumer. The critics counter that the benefit will be slim, because new


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Players will concentrate on affluent, urban customers as foreign banks did until recently. This

seems to be a logical strategy. Start-up costs-such as those of setting up a conventional

distribution network-are large and high-end niches offer better returns. However, the middle-

market segment too has great potential. Since insurance is a volumes game. Therefore, private

insurers would be best served by a middle-market approach, targeting customer segments that are

currently untapped.


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ACKNOWLEDGEMENTA good Dissertation requires sound knowledge of the subject concerned and to make

proper use of the knowledge one has to be assisted under proper guidance.

I am really indebted to my mentorMr. SURYA BHUSAN KUMARwho imparted the

right frame of mind and helped whenever in need.

A large number of individuals have contributed to this project. I am thankful to all of

them for their help and encouragement. It was an unforgettable experience, which provided me

an opportunity to gain various management skills during the period.

Exchange of ideas generates a new object to working a better way. Apart from the ability,work and time devotion, guidance and cooperation are the two pillars for the success of the

project, whenever a person is helped or cooperated by others his heart is bound to pay gratitude

to them.

I am extremely grateful and obliged to the organization, HDFC Standard Life Insurance

Co. Ltd (Raj Nagar, Gzb.) for providing information, thereby making and completion of the

project.

SWADESH RAJPUT

BBA (SEM-VI)


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TABLE OF CONTENT

PARTICULARS PAGE NO.

PREFACE 21. EXECUTIVE SUMMARY 62. INTRODUCTION 7-17

Meaning of insurance Needs of insurance Insurance at various life stages Types of insurance policies Various Pvt. Insurance co. Benefits of insurance

3. OBJECTIVE OF STUDY 18-28Company Profile

HDFC Standard life ICICI Prudential LIC

4. RESEARCH METHODOLOGY 29-305. ANALYSIS AND FINDINGS 31-55

Comparative Analysis

Comparative analysis (by using graphs) Comparative study of LIC & HDFC Life Insurance SWOT AnalysisFindings 56-57

Marketing Strategy Of HDFC Standard Life Recommendations

6. LIMITATIONS 58-597. CONCLUSION & RECOMMENDATIONS 60-658. APPENDIX 66-699. BIBLIOGRAHY 70-71


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EXECUTIVE SUMMARY

In todays corporate and competitive world, I find that insurance sector has the maximum growth

and potential as compared to the other sectors. Insurance has the maximum growth rate of 70-

80% while as FMCG sector has maximum 12-15% of growth rate. This growth potential attracts

me to enter in this sector and HDFCStandard Life Insurance Company Ltd has given me the

opportunity to work and get experience in highly competitive and enhancing sector.

The success story of good market share of different market organizations depends upon

the availability of the product and services near to the customer, which can be distributed

through a distribution channel. In Insurance sector, distribution channel includes only agents or

agency holders of the company. If companies like RELIANCE LIFE INSURANCE, TATA AIG,

MAX, LIC etc have adequate agents in the market they can capture big market as compared to

the other companies. Agents are the only way for a company of Insurance sector through which

policies and benefits of the company can be explained to the customer


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CHAPTER 1

INTRODUCTION


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MEANING OF INSURANCE

Insurance is a tool by which fatalities of a small number are compensated out of funds collected

from plenteous.

Life insurance is a contract providing for the payment of money to the person assured or

failing him to the person entitled to receive the same on the happening of certain event.

Uncertainty of death is inherited in human life. It is this rise, which gives rise to the

necessity for some form of protection against the financial loss arising from the death.

It is basically a safeguard against uncertainties. Insurance essentially is an arrangement

where the losses experienced by a few are extended over several who are exposed to similar

risks.

For example- Suppose 1500 persons in a village aged 60 of which 15 are expected to die,

and the economic value of the loss is Rs. 50,000, then the total loss will be 7, 50,000. If each

contributes Rs. 500 a year the common fund would be 1500 persons share 7, 50,000 that are

enough to pay and the risk in cases of 15 persons.

From the business point of view, Insurance is divided into:

Life Insurance

General Insurance


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According to the U.S. Life Office Association Inc. (LOMA), Life Insurance is defined as

follows: Life Insurance provides a sum of money if the person who is insured dies whilst the

policy is in effect.

Life Insurance Corporation of India is the oldest life insurance company having a market

share of around 74% at present.

But, with the passing of the IRDA Act 1999, the insurance sector is opened up, and

private Life Insurance companies were allowed to enter in the market.

It is relevant to mention that though LIC is the market leader at present but its market

share is increasing with a diminishing rate as compared to private Life Insurance Companies who

have captured around 26% of the market share in just a short span of five years. So, it is

necessary that LIC should look up with the changing scenario of needs of customers and

formulate the policies accordingly.


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NEED FOR LIFE INSURANCE

The need for life insurance comes from the need to safeguard our family. If you care for your

familys needs you will definitely consider insurance. Today insurance has become even more

important due to the disintegration of the prevalent joint family system, a system in which a

number of generations co-existed in harmony, and a system in which a sense of financial security

was always there as there were more earning members. Times have changed and the nuclear

family has emerged. Therefore you need to save a part of income for the future too. This is

where insurance helps us.

Factors such as fewer numbers of earning members, stress, pollution, increased

competition, higher ambitions etc are some of the reasons why insurance has gained importance

and where insurance plays a successful role. Insurance provide a sense of security to the incomeearner as also to the family. Buying insurance frees the individual from unnecessary financial

burden that can otherwise make him spend sleepless nights. The individual has a sense of

consolation that he has something to fall back on.

From the very beginning of your life, to your retirement age insurance can take care of all

your needs. Your child needs good education to mould him into a good citizen. After his

schooling he needs to go for higher studies, to gain a professional edge over the others - a

necessity in this age where cutthroat competition is the rule. His career needs have to be fulfilled.

Insurance is a must also because of the uncertain future adversities of life. Accidents,

illnesses, disability etc are facts of life, which can be extremely devastating. Disability can be

taken care of by insurance. Your family will not have to go through the grind due to your present

inability.

Moreover, retirement, an age when every individual has almost fulfilled his

responsibilities and looks forward to relaxing can be painful if not planned properly. Have we

considered the increasing inflation and taxes? Will our investment offer us attractive returns

under such circumstances? Will it take care of our family after us? An insurance policy will

definitely take care of these and a lot more. Insurance has become a necessity today. It provides

timely financial as also rewards with bonuses. Life Insurance has come a long way from the


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earlier days when it was originally conceived as a risk-covering medium for short periods of

time, covering temporary risk situations, such as sea voyages.

Therefore after going through the discussion let us summarize our points and understand

the need of life insurance:

a) Temporary needs / threats

The original purpose of life insurance remains an important element, namely providing

for replacement of income on death etc.

b) Regular Savings / Family Protection

Providing for one's 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 for their family.

c) Investment

Put simply, the building up of savings while safeguarding it from the ravages of inflation.

Unlike regular saving products, investment products are traditionally lump sum investments,

where the individual makes a one off payment.

d) Old age provision

Provision for later years becomes increasingly necessary, especially in a changing

cultural and social environment. One can buy a suitable insurance policy, which will provide

periodical payments in one's old age.

e) Children benefit

Provision for the education, marriage and start in life for the children.

f) Special needs provision

Protection against loss arising out of accident, disability, sickness, loan repayment on

death.

WHY IS INSURANCE SUPERIOR TO OTHER FORM OF SAVINGS?


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An immediate estate is created in favor of the policyholder. Protection in case of death. Liquidity in case of needeasy loans are available. Tax reliefincome tax, wealth tax etc... Policies can be offered as collateral security. Policies can be taken under M.W.P. Act 1874, to protect against creditors.Let us take an example to understand the need for insurance:

Mr. Atul is 45 and self-employed. His wife Nandini, who is a housewife, looks after their

two children aged 3 and 7 years. They stay in a rented accommodation, where the rent is 15,000

rupees per month. Mr. Atul has taken up a loan of Rs. 2 lakh. His monthly earnings on averageare 40,000 rupees. Mr. Atul passes away in an unfortunate road accident. What are some of the

financial implications of his death on his family?

There may be several financial implications on his family. Some of these are:

a) The monthly income, previously provided by Mr. Atul would stop.

b) His wife and children may have to seek financial assistance from other relatives.

c) His wife may not have enough money to pay back the loan of Rs. 2 lakhs.

d) The family may have to move into a cheaper accommodation.

e) His widow may have to take up work to earn money.

f) The education of his children may suffer.

This simple example illustrates the impact premature death can have on a family, where

the main earner has no life cover.

Had Mr. Atul taken life cover, his family would not have faced such hardships in the

event of his unfortunate death. A simple life insurance policy could have provided Mr. Atul's


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family with a lump sum that could have been invested to provide an income equal to all or part

of his income.

In simple words, insurance protects against untimely losses. Insurance has been found

useful in the lives of persons both in the short term and long term. Short term needs like sudden

medical costs and long-term needs like marriage expenses etc can be met with using life

insurance.

LIFE INSURANCE NEEDS AT VARIOUS LIFE STAGES

The need for life insurance changes as ones life changes. When one is young, one typically has

no need for life insurance, but this changes as one take on more responsibility, and as ones

family grows. Then, as responsibilities once again begin to diminish, one need for life insurance

drops off. Let's look at how life insurance needs change throughout ones lifetime.

School days

Childhood is typically a time of no worries, no cares, and no responsibilities. A child

depends on others to take care of them, not the other way around. Although it would be tragic, a

child's death would likely have little financial impact on the child's family. Thus, there is

generally no need for life insurance at this point in an individual's life.

A child's death does create one short-term financial problem: funeral expenses. But

buying a life insurance policy just for that purpose doesn't really make sense. Instead, think about

saving the money one would spend on insurance premiums and open a savings account, or put

the money in some type of investment vehicle. That way, the money can be used for college

expenses or a first home, but it will also be available in case of a tragedy. Alternatively, a burial

policy provides enough money for funeral expenses, at a much lower cost than a typical life

insurance policy.

For growing family

When one has young children, the life insurance needs reach a climax. In most situations,

life insurance for both parents is appropriate.


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Single-income families are completely dependent on the income of the breadwinner. If he

or she dies without life insurance, the consequences could be disastrous. The death of the stay-at-

home spouse would necessitate costly daycare expenses. Both spouses should carry enough life

insurance to cover the expenses that would result from their death.

Dual-income families need life insurance, too. If one spouse dies, it is unlikely that the surviving

spouse will be able to keep up with the household expenses and pay for childcare with the

remaining income.

Moving up the ladder

For many people, career advancement means starting a new job with a new company. At

some point, one might even decide to be ones own boss and start his own business. It might not

be the top priority, but it is important to review the life insurance coverage any time one leave an

employer.

Keep in mind; one probably won't be able to keep any life insurance that was provided by

ones employer. If one is going to work for a new company, one might receive a comparable life

insurance benefit. But if one is going into business for him, one will need to purchase an

individual life insurance policy.

Make sure the amount of ones coverage is up-to-date, as well. The policy one purchased

right after getting married might not be adequate anymore; especially if one have kids, a

mortgage, and college expenses to consider. Business owners may also have business debt to

consider. If one is not incorporated, ones family would have to pay those bills if one dies.

Single again

Unfortunately, divorce has become a fact of life in our society. One will have to make

many financial decisions during this stressful time, including the decision of what to do about

ones life insurance. Divorce raises both beneficiary issues and coverage issues. And if one has

children, these issues become even more complex.


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If one and his spouse have no children, it may be as simple as changing the beneficiary

on ones policy and adjusting ones coverage to reflect ones newly single status. However, if one

has kids, one will want to make sure that they are provided for in the event of ones death. This

may involve purchasing a new policy and naming them as beneficiaries. The custodial and

noncustodial parent will need to work out the details of this complicated situation. If one can't

come to terms, the court may make the decisions for you.

The golden years

Once the children are grown, the life insurance needs decrease. One will live off his

retirement savings, and hopefully one has accumulated assets that can be passed on to his heirs

when he or she dies. Not only is life insurance expensive at this point, but it's probably

unnecessary.

Life Insurance is a contract for payment of a sum of money to the person assured (or

failing him/her, to the person entitled to receive the same) on the happening of the event insured

against. Usually the contract provides for the payment of an amount on the date of maturity or at

specified dates at periodic intervals or at unfortunate death, if it occurs earlier. Among other

things, the contract also provides for the payment of premium periodically to the Corporation by

the assured. Life insurance is universally acknowledged to be an institution which eliminates

'risk', substituting certainty for uncertainty and comes to the timely aid of the family in the

unfortunate event of death of the breadwinner. By and large, life insurance is civilizations

partial solution to the problems caused by death. Life insurance, in short, is concerned with two

hazards that stand across the life-path of every person: that of dying prematurely leaving a

dependent family to fend for itself and that of living to old age without visible means of support.

TYPES OF INSURANCE POLICIES

Though there are a lot of policies available in the market under different names

and by different companies, the policies can broadly be classified into the following

categories:


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Term Insurance Policy

Whole Life Policy

Money Back Policy

Endowment Policy

Pension Plans Or AnnuitiesVARIOUS PRIVATE LIFE INSURANCE COMPANIES IN INDIA

Presently there are 12 Life Insurance companies operating in the market.

These are following as:-

1) HDFC Standard Life Insurance company2) ICICI Prudential Life Insurance company3) Birla Sun life Insurance company4) TATA AIG Life Insurance Company5) OM Kodak Mahindra Life Insurance company6) MAX New York Life Insurance company7) Allianz Bajaj Life Insurance company8) ING Vysya Life Insurance company9) Met Life India Insurance company Pvt. Ltd10)Aviva Life Insurance company Pvt. Ltd11)AMP Sanmar Assurance Company Ltd12)Sahara India Life Insurance Company


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BENEFITS FROM LIFE INSURANCE

It is superior to a traditional saving vehicles It encourages saving and forces thrift It provides easy settlement and protection against creditors It helps to fulfill the purpose of the life assured It can be encased and facilitates borrowing Tax relief


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OBJECTIVE OF STUDY

The objective of the research is divided into two folds:

To find the awareness of Customers about various life insurance policies available inmarket

A comparative study of HDFC Standard Life Insurance products vis--vis products ofother major players.


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COMPANY PROFILE

HDFC Standard Life Insurance Co.

ABOUT HDFC BACK GROUD

HDFC was incorporated in 1977 with the primary objective of meeting a social need- thatof promoting home ownership by providing long term finance to household needs.HDFC was

promoted with an initial share capital of Rs.100 million.

BUSINESS OBJ ECTIVE

The primary objective of HDFC is to enhance residential housing stock in the countrythrough the provision of housing finance in a systematic and professional manner, and topromote home ownership. Another objective is to increase the flow of resources to the housing

sector by integrating the housing finance sector with the overall domestic financial markets.

ORGANIZATIONAL GOALS

HDFCs main goals are to

a) develop close relationships with individual households,b) maintain its position as the premier housing finance institution in the country,c) transform ideas into viable and creative solutions,d) provide consistently high returns to shareholders, ande) To grow through diversification by leveraging off the existing client base.

THE PARTNERSHIP

HDFC and Standard Life first came together for a possible joint venture, to enter the Life

Insurance market, in January 1995. It was clear from the outset that both companies shared

similar values and beliefs and a strong relationship quickly formed. In October 1995 the

companies signed a 3 year joint venture agreement.

Around this time Standard Life purchased a 5% stake in HDFC, further strengthening the

relationship.

The next three years were filled with uncertainty, due to changes in government and ongoing

delays in getting the IRDA (Insurance Regulatory and Development authority) Act passed in

parliament. Despite this both companies remained firmly committed to the venture.


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In October 1998, the joint venture agreement was renewed and additional resource made

available. Around this time Standard Life purchased 2% of Infrastructure Development Finance

Company Ltd. (IDFC). Standard Life also started to use the services of the HDFC Treasury

department to advise them upon their investments in India.

Towards the end of 1999, the opening of the market looked very promising and both

companies agreed the time was right to move the operation to the next level. Therefore, in

January 2000 an expert team from the UK joined a handpicked team from HDFC to form the

core project team, based in Mumbai.

Around this time Standard Life purchased a further 5% stake in HDFC and a 5% stake in

HDFC Bank.

In a further development Standard Life agreed to participate in the Asset Management

Company promoted by HDFC to enter the mutual fund market. The Mutual Fund was launched

on 20th July 2000.

Incorporation of HDFC Standard Life Insurance Company Limited:

The company was incorporated on 14th August 2000 under the name of HDFC Standard

Life Insurance Company Limited.

Its ambition from as far back as October 1995 was to be the first private company to re-

enter the life insurance market in India. On the 23rd of October 2000, this ambition was realized

when HDFC Standard Life was the only life company to be granted a certificate of registration.

HDFC are the main shareholders in HDFC Standard Life, with 81.4%, while Standard

Life owns 18.6%. Given Standard Life's existing investment in the HDFC Group, this is the

maximum investment allowed under current regulations.

HDFC and Standard Life have a long and close relationship built upon shared values and trust.

The ambition of HDFC Standard Life is to mirror the success of the parent companies and be the

yardstick by which all other insurance company's in India are measured.


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Mission:

It aims to be the top new life insurance company in the market.

This does not just mean being the largest or the most productive company in the market,

rather it is a combination of several things like-

Customer service of the highest order Value for money for customers Professionalism in carrying out business Innovative products to cater to different needs of different customers Use of technology to improve service standards Increasing market share

Values:

SECURITY: Providing long term financial security to its policy holders will be itsconstant Endeavour. It will do this by offering life insurance and pension products.

TRUST: It appreciates the trust placed by its policy holders in them hence; it will aim tomanage their investments very carefully and live up to this trust.

INNOVATION: Recognizing the different needs of the customers, it will be offering arange of innovative products to meet these needs.

Its mission is to be the best new life insurance company in India and these are the values

that will guide in this.

PRODUTCS

Each of us leads a unique life and so has unique needs. HDFC Standard Life Insurance

Offers a range of products and invites you to choose the one that suits you the best.

PLAN BENEFITS

1.SAVING PLAN


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Endowment Assurance Plan Life insurance and saving with choice of

investment funds.

Unit Linked Endowment Plan Life insurance and saving with choice of

investment funds.

Childrens Plan Financial security for your child

Unit Linked Youngster Plan Financial security for your child with choice

of investment funds.

Money Back Plan Life insurance with savings.

2.INVESTMENT PLAN

Single Premium Whole Of Life Investment with life insurance.

3.PROTECTION PLAN

Term Assurance Plan Life insurance at an affordable price

Loan Cover Term Assurance Plan Life insurance customized for home loans.

4.RETIREMENT PLANS

Personal Pension Plan Saving for retirement.

Unit Link Pension Plan Retirement saving with a choice of

investment funds.

ICICI Prudential Life Insurance

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a

premier financial powerhouse and prudential plc, a leading international financial services group

headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector

insurance companies to begin operations in December 2000 after receiving approval fromInsurance Regulatory Development Authority (IRDA).

ICICI Prudential's equity base stands at Rs. 11.85 billion with ICICI Bank and Prudential plc

holding 74% and 26% stake respectively. In the financial year ended March 31, 2005, the

company garnered Rs 1584 crore of new business premium for a total sum assured of Rs 13,780


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crore and wrote nearly 615,000 policies. The company has a network of about 56,000 advisors;

as well as 7 ban assurance and 150 corporate agent tie-ups. For the past four years, ICICI

Prudential has retained its position as the No. 1 private life insurer in the country, with a wide

range of flexible products that meet the needs of the Indian customer at every step in life.

LIFE INSURANCE CORPORATION

The Life Insurance Corporation (LIC) was established about 44 years ago with a view to provide

an insurance cover against various risks in life. A monolith then, the corporation, enjoyed a

monopoly status and became synonymous with life insurance.

Its main asset is its staff strength of 1.24 lakh employees and 2,048 branches and over six

lakh agency force.

LIC has hundred divisional offices and has established extensive training facilities at all

levels. At the apex, are the Management Development Institute, seven Zonal Training Centers

and 35 Sales Training Centers?

At the industry level, along with the Government and the GIC, it has helped establish the

National Insurance Academy. It presently transacts individual life insurance businesses, group

insurance businesses, social security schemes and pensions, grants housing loans through its

subsidiary; and markets savings and investment products through its mutual fund. It pays offabout Rs 6,000 crore annually to 5.6 million policyholders

OBJECTIVES OF LIC

Spread Life Insurance much more widely and in particular to the rural areas and to thesocially and economically backward classes with a view to reaching all insurable persons in the

country and providing them adequate financial cover against death at a reasonable cost.

Maximize mobilization of people's savings by making insurance-linked savingsadequately attractive.

Bear in mind, in the investment of funds, the primary obligation to its policyholders,whose money it holds in trust, without losing sight of the interest of the community as a whole;


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the funds to be deployed to the best advantage of the investors as well as the community as a

whole, keeping in view national priorities and obligations of attractive return.

Conduct business with utmost economy and with the full realization that the moneysbelong to the policyholders.

Act as trustees of the insured public in their individual and collective capacities. Meet the various life insurance needs of the community that would arise in the changingsocial and economic environment.

Involve all people working in the Corporation to the best of their capability in furtheringthe 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

INFORMATION TECHNOLOGY AND LIC

LIC has been one of the pioneering organizations in India who introduced the leverage of

Information Technology in servicing and in their business. Data pertaining to almost 10 crore

policies being held on computers in LIC. We have gone in for relevant and appropriate

technology over the years.

1964 saw the introduction of computers in LIC. Unit Record Machines introduced in late

1950s were phased out in 1980s and replaced by Microprocessors based computers in Branch

and Divisional Offices for Back Office Computerization. Standardization of Hardware and

Software commenced in 1990s. Standard Computer Packages were developed and implemented

for Ordinary and Salary Savings Scheme (SSS) Policies.

FRONT END OPERATIONS

With a view to enhancing customer responsiveness and services, in July 1995, LIC

started a drive of On Line Service to Policyholders and Agents through Computer. This on line

service enabled policyholders to receive immediate policy status report, prompt acceptance of

their premium and get Revival Quotation, Loan Quotation on demand. Incorporating change of

address can be done on line. Quicker completion of proposals and dispatch of policy documents


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have become a reality. All our 2048 branches across the country have been covered under front-

end operations. Thus all our 100 divisional offices have achieved the distinction of 100% branch

computerization. New payment related Modules pertaining to both ordinary & SSS policies have

been added to the Front End Package catering to Loan, Claims and Development Officers

Appraisal. All these modules help to reduce time-lag and ensure accuracy.

METRO AREA NETWORK

A Metropolitan Area Network, connecting 74 branches in Mumbai was commissioned in

November, 1997, enabling policyholders in Mumbai to pay their Premium or get their Status

Report, Surrender Value Quotation, Loan Quotation etc. from ANY Branch in the city. The

System has been working successfully. More than 10,000 transactions are carried out over this

Network on any given working day. Such Networks have been implemented in other cities also.

WIDE AREA NETWORK

All 7 Zonal Offices and all the MAN centers are connected through a Wide Area Network

(WAN). This will enable a customer to view his policy data and pay premium from any branch

of any MAN city. As at May 2002, we have 91 centers in India with more than 1320 branches

networked under WAN.

INTERACTIVE VOICE RESPONSE SYSTEMS (IVRS)

IVRS has already been made functional in 59 centers all over the country. This would enable

customers to ring up LIC and receive information (e.g. next premium due, Status, Loan Amount,

and Maturity payment due, Accumulated Bonus etc.) about their policies on the telephone. This

information could also be faxed on demand to the customer.

LIC ON THE INTERNET

The Internet site is an information provider. It has displayed information about LIC & its

subsidiaries-LIC (International) E.C., LIC (Nepal) Ltd, LIC Mutual Fund, LIC Housing Finance

and their products. Efforts are on to upgrade our web site to make it dynamic and interactive.

The addresses/e-mail Ids of its Zonal Offices, Zonal Training Centers, Management

Development Center, Overseas Branches, Divisional Offices and also all Branch Offices with a

view to speed up the communication process.


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PAYMENT OF PREMIUM AND POLICY STATUS ON INTERNET

LIC has given its policyholders a unique facility to pay premiums through Internet absolutely

free and also view their policy details on Internet premium payments. There are 11 service

providers with whom L I C has signed the agreement to provide this service.

VARIOUS POLICIES OF LIC

(PENSION PLAN)

JEEVAN DHARA

Table No. X.1 (Characteristics of Jeevan Dhara)

Minimum Age at entry: 18 years last birthday.

Maximum age at entry: 65 years last birthday.

Minimum vesting age: 50 years last birthday.

Maximum vesting age: 79 years last birthday.

Minimum deferment period: 2 years.

Minimum Notional Cash option: Rs. 50,000 for regular premium policies.

Minimum Single Premium: Rs. 10,000/-

Minimum amount of Annual Premium: Rs. 2500

Maximum deferment period: 35 years.

Age Proof: Standard Age Proof required.

Source: www.licindia.in

JEEVAN SURAKSHA

:

Minimum Age at entry: 18 years last birthday.Maximum age at entry: 65 years last birthday.

Minimum vesting age: 50 years last birthday.

Maximum vesting age: 79 years last birthday.

Minimum deferment period: 2 years.

Minimum Notional Cash option: Rs. 50,000 for regular premium policies.

Minimum Single Premium: Rs. 10,000/-

Minimum amount of Annual Premium: Rs. 2500

Maximum deferment period: 35 years.

Age Proof: Standard Age Proof required.


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(SPECIAL PLAN)

BIMA NIVESH

Bima Nivesh 2005 is a plan with compound rate of guaranteed additions and loyalty

additions. This is the revised version of our popular Bima Nivesh Plan 2004 and is introduced to

meet the overwhelming demand for a single premium plan from our customers. It is a single

premium, ideal investment plan for those who have no regular income but good periodical

income. Bima Nivesh 2005 is available for terms 5 and 10 years. The guaranteed surrender value

is payable after the policy has run for at least one year. Term Assurance Rider is also available

by payment of a single premium at the option of the proposer.

(DOUBLE COVER ENDOWMENT PLAN)

JEEVAN MITRA

The benefits of this policy are considered normally for standard and substandard lives

Class I and II. It cannot be allowed for people engaged in hazardous occupations. Female lives

under Category I & II allowed. Non-medical special is allowed only if the Sum Assured does not

exceed Rs.1, 00,000/-

Besides the usual benefits offered by any endowment insurance plan; this policy provides

for an additional insurance cover equal to the sum assured in the event of a policy holders death

during the term of the policy. In other words, the death claim in the case of this policy is twice

the basic sum assured.

The survival claim, on the other hand, is the basic sum assured, plus the accrued bonuses.

Bonus is, similarly, calculated only on the basic sum assured at rates applicable to endowment

policies.

For instance, if a person insured for Rs.10, 000 under this policy were to die before its maturity,

the death claim payable would be Rs.20, 000 plus the accrued bonus on Rs.10, 000, the basic

sum assured. If the policy holder survives the full term of the policy, the payment on maturity

would be Rs.10, 000 plus the accumulated bonus.

Suitable For:

Being a high-risk endowment assurance policy, this plan is suitable for people of young

ages who wish to protect their families from a financial setback that may occur owing to their


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premature death. The amount assured if not paid by reason of his death earlier will payable at the

end of the endowment term where it can be invested in an annuity provision for the rest of the

policyholder's life or in any other way he may think most suitable at that time.

JEEVAN SURABHI

Jeevan Surabhi plan is similar to other money back plans. However main differences in

regular money back plans and Jeevan Surabhi are as under Maturity term is more than premium

paying term. Early and higher rate of survival benefit payment.

Risk cover increases every five years.

The actual term and the premium paying term for these plans are as under.

Plan

no.

Policy

Term

Premium Paying

Term

106 15 years 12 years



Full sum assured is paid back as survival benefit by the end of premium paying term.

However, the risk cover and additional risk cover continue and the policy participates in profits

till the end of policy term.

Accident Benefit is restricted to the premium paying period and to the overall limit of Rs.5 lakhs

on a single life.

SuitableFor:

This plan holds special interest to people who besides wishing to provide for their old age and

family feel the need for lump sum benefits at periodical intervals.


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CHAPTER 2

METHODOLOGY


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RESEARCH METHODOLOGY:

The dissertation is based on the data collected through the secondary sources.

The data collected through the secondary sources are books, magazines, newspaper

and Internet.

PRIMARY SOURCES ARE ALSO INCLUDED LIKE INTERVIEW AND QUESTIONER.

The methodology that is being adopted is basically a descriptive research.

ASSUMPTION

Data is collected from secondary sources therefore it is assumed that data being collectedis enough for the completion of dissertation

Some of the information and data may not be current.

Data may or may not be accurate.

So far as Internet Search is concerned, it is based on finding certain key words so there isa possibility that some information will be missed.


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CHAPTER 3

ANALYSIS AND

FINDING


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DATA ANALYSIS

1. According to you, which have played a major role in the field of life-

insurance companies.

Table No. 3.1 Major Player of Life Insurance BusinessInsurance Pvt. Employees Govt. Employees Business Man

LIC 10 13 10

HDFC 5 3 5

ICICI 3 3 4

Others 2 1 1

Source:Authors Compilation

Figure 3.1 Major Player of Life Insurance Business

After analyzing this data it is found that from the given three respective level of Pvt.

Govt. and Business 10 out of 20 (30%), 13 out of 20 (39%) and 10 out of 20 (30%) are in favorsof LIC, while 5 out of 20 (15%), 3 out of 20 (9%) and 5 out of 20 (6%), 1 out of 20 (30%) and 1

out of 20 (30%) are in favors of other Pvt. Companies.


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2. Which insurance companies have been successful to make strong public

base by advertisement?

Insuranc

e

Pvt.

Employees

Govt.

Employees

Business

Man

LIC 12 14 12

HDC 3 2 4

ICICI 4 3 3

Othes 1 1 1


Figure 3.2 public based advertisement


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3. Which insurance company has gained massive public support in the current

fiscal year?

Insurance Pvt.Employees Govt.Employees BusinessMan

LIC 12 14 10

HDFC 3 2 5

ICICI 3 2 4

Others 2 2 1

Source: magazines

Figure: 3.3 Massive support

From the above table, it is found that from the given three sector Private,

Govt. and Business 12 out of 20 (36%), 14 out of 20 (42%), 10 out of 20 (30%),are in the favors of LIC 3 out of 20 (9%), 2 out of 20 (6%) and 4 out of 20 (12%)

are in favors of ICICI, whereas only 2 out of 20 (6%), 2 out of 20 (6%) 1 and out

of 20 (3%) favors others company.


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4. Do you think insurance policy is in the direction of public welfare?

Pvt. Sector Govt. Sector Business Man

Yes 13 16 12

No 7 4 8


Figure : 3.4 Public welfare

The above table shows that from private sector 13 out of 20 (30%) agree and

7 out of 20 (21%) disagree, from govt. sector 16 out of 20 (48%) think it right but

4 out of 20 (12%) dont thinkit so and from business man 12 out of 20 (36%) are

in favors of the above statement but 8 out of 20 (24%) dont favors it.


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5. Is retirement bond or pension policy launched by the number of private

player as well as public sector Company in the direction of secured old age?

Pvt.Sector

Govt.Sector

BusinessMan

Yes 15 18 13

No5 2 7

Source:News papers

Figure : 3.5 Private players in public sector

It is obvious from the above table that 15 out of 20 (45%), 18 out of 20 (54%) and 13 out of20 (39%) from the given three think retirement bend or pension policy a legitimate step in the

direction of secure old age but 5 out 20 (15%), 2 out of 20 (6%) and 7 out 20 (21%) dontagree with the opinion of the majority class.


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6. Do you think that risk coverage factor included in Insurance policy attracts

general public towards the policy?


Figure :3.6 risk coverage factor

From the above table it is found that 12 out of 20 (36%) from Private sector 16 out of 20

(48%). From Govt. sector and 11 out of 20 (33%) thinks risk coverage factor attractive but rest 8

out of 20 (24%), 4 out of 20 (12%) and 9 out 20 (27%) from the above them sector dont think it

so encouraging towards saving trend whereas 3 out of 20 (9%), 2 of 20 (6%) and 4 out of 20(12%) dont think it so.

Pvt.

Sector

Govt.

Sector

Business

Man

Yes 12 16 11

No8 4 9


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7.What according to you, the term plan that only covers risk and doesnt

cover maturity benefit on survival at the end of the term provides security

cover over policy holders or a smart way of accumulative money from policy

holders?

Pvt. Sector Govt. Sector Business Man

Security Cover 11 15 12

Accumulative Money9 5 8


Figure 3.7 maturity benefit

It is obvious from the above data that 11 out of 20 (33%), from the Pvt. Sector, 15 out of

20 (45%) from Govt. sector and 12 out of 20 (36%) think term plan as a security cover but 9 out

of 20 (27%), 5 out of 20 (15%) and 8 out of 20 (24%) from the three respective group think it as

a way of accumulating money insurance company.


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8. Do you think that the arrival of so many private companies in this

insurance sector envisage a lot of choice to policy holder?

Pvt.Sector

Govt.Sector

BusinessMan

Yes 16 18 16

No4 2 4


Figure 3.8 Arrival of companies

From analyzing the above data it is found that 16 out of 20 (48%) from Pvt.

Sector, 18 out of 20 (54%) from Govt. sector and 16 out of 20 (48%) think that the

arrival of private players envisage a lot of choice to policy holder. But 4 out of 20

(12%), 2 out of 20 (6%) and 4 out of 20 (12%) dont think it so.


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9. Do you agree that customer-centricity and transparency are the buzzwords

for success in this evolving industry?

Pvt.Sector

Govt.Sector

BusinessMan

Yes 18 20 19

No2 - 1


Figure 3.9 customer centricity

From thesis above data, it is found the 18 out of 20 (54%) from Pvt. Sector and

20 out of 20 (60%) from Govt. Sector 19 out of 20 (57%) from Business men agree

with this statement whereas only 2 out of 20 (6%) from Pvt. Sector and 1 out of 20

(3%) from Business men do not agree with this statement.


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COMPARATIVE STUDY OF ICICI PRIDENTIAL, LIC AND HDFC

STANDARD LIFE POLICIES

LIC and HDFC Standard Life both provide different policies and plans depending upon

the various requirements of people. Different plans are been categorized under seven major

categories of policies. Then a comparative analysis is done between the plans of both LIC and

HDFC Standard Life. Both the companies provide similar types of plan just with the difference

in the features or premium amounts.

HDFC STANDARD LIFE

INSURANCE

LIC ICICI PRUDENTIAL

WHOLE LIFE PLANS

Policy that meets longterm investment needs.

Premium part isadjusted towards

mortality and

administrative charges

and rest is invested in

it with profits fund

WHOLE OF LIFE PLANS

The most cheapestform of LIC policy

Premiums are payablethroughout the life

Sum assured is payableon the death of the life

assured

LIFE TIME PLAN

Policy that meets yourchanging need over a

lifetime

Premium part isadjusted towards

mortality and

administrative charges

and rest is invested in

plan of your choice.

Bringing the difference in the plan of LIC and HDFC Standard Life Insurance we can find out

that LIC plans are very simple to understand whereas the other provide plans according to your

the changing needs of people.


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ENDOWMENT POLICIES

HDFC STANDARD LIFE

INSURANCE


HDFC STANDARD SAVE N

PROTECT

ENDOWMENT WITH

PROFITS

ICICI PRU SAVE N

PROTECT

This plan ensures thatones family remainsfinancially

independent even if

the insured person isnot around.

It is a fixed termpolicy that combinessaving with life cover.

The premium is paid

regularly during the

term

The plan receivessimple reversionary

bonuses, which are

usually added

annually. At the end ofthe terminal bonus

may be paid depending

on the performance.

These are the policiesof limited duration

payable on maturity or

death of the life

assured.

These plans areavailable with different

option like with orwithout profit or

double or special

endowments

An ICICI ideal planfor those who want to

accumulate funds on a

regular basis with life

cover

It is a fixed termpolicy that combines

saving with life cover.The premium is paid

regularly during the

term

On death up to age7: -basic premium

returned withoutinterest

On death after age 7: -sum assured @3.5%compounded interest

for first 4 yrs .

It can be made out by comparing the plans of both the companies that while HDFC are more

concerned about saving and are categorized for the different section of people. LIC is straight

and simple plan.


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MONEY BACK POLICIES

HDFC STANDARD LIFE

INSURANCE


HDFC STANDARD CASH BACK JEEVAN MITRA ICICI PRU CASH BAK

An ideal plan for everymilestone of life. It

combines life

cover+liquidity+savings.

It provides the optionalbenefit to customize the

policy to suit the needs

through critical illness

(C.I.), Accidental term

benefit (ATB) and

accidental death benefit

(ADB).

Premium payable forperiods ranging from 10

years to 30 years

A high risk low cost planand with profit plan

This plan provide for anadditional insurance cover,

equal to the sun assured in

the event of policy holder

death during the term of

policy.

JEEVAN SURBHI

Premium payable forlimited periods available

with periods of 12,15 and

18 yrs

Money back at intervalof 4 and 5 yrs as per policyterm

JEEVAN SANCAY

Plan having a provision ofguarantee addition at 70p.a.

per thousand and loyalty

addition payable on date of

maturity.

An ideal plan for everymilestone of life. It

combines life

cover+liquidity+savings.

It provides survival benefitafter every 3 or 4 yrs and

add-on benefit for a

nominal extra premium.

The LIC under money back policies provide various plan each having different kinds

of features. On the other hand HDFC Standard life, which combines all the features in

just one single plan? The LIC plans like Jeevan Surabhi are suitable for high income

and tax categories.


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SINGLE PREMIUM POLICIES

HDFC STANDARD LIFE

INSURANCE


HDFC STANDARD SOUNDINVESTMENT

This plan is well suited to

meet long term investment

needs.

A compound reversionarybonus is being added to the

policy every year.

An investment with healthy

returns and added benefit of

insurance.

The eligibility ages are

minimum 18 years and

maximum 70 years.

It gives flexibility of choosinginvestment option between

growths, income or balanced

plan.

BIMA NIVESH

This is a unique, short-term,multiple benefits insurance

plan which provide safety,

liquidity attractive returns andtax benefit.

This plan can be assigned as a

collateral security

It provides loyalty and

guarantee addition too.

A safe and comprehensiveplan for those about to retire

or has retired. It combines best

of insurance and investment

Liquidity with assured andsteady annual returns. Life

cover up to 110% of premium

paid.

ICICI PRU ASSURE

INVEST

An investment with healthyreturns and added benefit of

insurance.

This policy has a fixed term of

7 or10 yrs

ICICI PRU LIFE LINK

An ideal market linked

insurance plan that enables

you to enjoy the upside of

market returns

It gives flexibility of choosing

investment option between

growths, income or balanced

plan.

Under the single premium policies heading LIC just provides one policy as compared

to HDFC Standard life insurance which gives different policies. Moreover HDFC

Standard life gives higher assured returns and various other benefits.


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TERM INSURANCE PLANS

HDFC STANDARD LIFE

INSURANCE


HDFC STANDARD LIFE

ASSURED

A sum assured is payable in

case of death of life assured

during the term of the

contract.

This plan comes at a minimal

cost and is well suited for the

value-conscious customer. It

gives optional benefits to

customize the needs through

critical illness (C.I.),

Accidental term benefit

(ATB) and accidental death

benefit (ADB). Minimum

premium payable per annum

having the age of life assured

being 20 years is 1566.

Minimum premium payable

2400 per annum. It has nomaturity benefits

BIMA KIRAN

A plan with the provision for

return of 90

premium paid on surviving of

the term

Free term cover after maturity

provided the policy is in full

force

Having an added attraction of

loyalty addition

JEEVAN GRIHA

For people desirous of

obtaining a housing loan with

policy acting as collateral

security

It ensure repayment of loan in

the event of premature death

of the borrower

A high risk low cost plan

Available as double and triple

cover plans

An ideal low cost policy that

covers life with uncertainties

It comes with a choice of two

convenient premium payment

modes-one time and regular

It gives the flexibility of

accident and disability cover

for a extra premium

Minimum premium payable

2400 per annum. It has no

maturity benefits


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Comparison between the plans of both the companies shows that while HDFC

Standard life provide more flexible and stable return plans the LIC are safer plan

taking care of family as a whole. Again LIC provides different plan under this

category of life insurance


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CHILDREN POLICIES

HDFC STANDARD LIFE

INSURANCE



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HDFC STANDARD

CHILDS FUTURE

Plan designed tosecure the childs

future by giving the

child (beneficiary) a

guaranteed lump sum

on maturity or in case

of the insured parents

unfortunate demise.

The beneficiary willreceive the benefits as

per the plans options

namely accelerated

benefit plan, maturity

benefit plan or double

benefit plan.

Premiums can be paideither quarterly, half

yearly or annually

depending on the

insured parents

convenience.

Most importantly theChilds will continue

to receive the policybenefits.

JEEVAN BALYA

Plan provides for amonthly income up to

age of 21 in case of

unfortunate death of

parents

Premium waiverbenefit is available

BAL VIDYA

The plan takes care offamily expenses-on

school college, health

or just starting a career

Money in regular

monthly installment

and in lump sum at

specific point of time.

SMART KID

Plan designed forcritical educational

milestone include

specialized course in

the country and abroad

The sum assured ispaid immediately from

100,000 to 300,000

All future paymentsare waived off

Most importantly theChilds will continueto receive the policybenefits.

It can be made out that LIC provide different plans for children as compared to

HDFC Standard life, which gives only one plan for kids. Both aims at providing theparents aid for higher studies of their children. While LIC policies are designed to

meet the different need of family budget HDFC Standard life are more customer

tailored.


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ANNUITY PLANS

HDFC STANDARD LIFE

INSURANCE


HDFC STANDARD POST

RETIREMENT INCOME

An ideal solutiondesigned to provide

a post-retirement

income for life with

the freedom to

choose the

retirement date.

Flexibility to selectany ages one which

to retire at (vesting

age), between 50

years 70 years.

One can choose to paya single premium. For

a single premium

policy, the premium

payable is equal to sum

assured.

The Premium one hasto pay depends on age,

sum assured chosen,

the premium paying

JEEVAN SURAKSHA

This plan is suitablefor every individual

salaried or self

employed or any

professional like C.A.,

Dr.

The plan can beavailed for a lifelong

monthly pension with

an option to commute

25%of the sum

assured.

JEEVAN DHARA

This plan is suitablefor executives; self-

employed, professional

young employed The

plan guarantees

lifelong pension and

are tax deferred,

guarantee return

presently 12.5%

ICICI PRU FOREVER LIFE

An ideal solution forpeople around 30

yrs of age, which

offers retirement

benefit and takes

care of protection

need

Health cover till 65through add on

benefit100% spouse

pension

ICICI FOREVER LIFE LINK

PENSION PLAN

A single premiummarket linked pension

plan. For premium

between

Rs 40000 to 99999itis 2%

Rs 100,000 to 499,999


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frequency and the term

of the policy.

For a regular premiumpolicy, one willcontinue to pay an

annual premium for

each year of the policy.

On retirements theaccumulated value of

is used to provide

pension.

Policy providescompetitive and

attractive annuity rates.

Lump sum payment tothe annuitants here..

it is 1.5%

Rs 500,000 and above it is 1.25 % of the

premium

Insurance coverage isequal to 105% of the

initial premium and the

top ups

Can opt for 0 insurancecover too

ICICI PRU LIFE TIME

PENSION PLAN

A regular premiumlinked pension plan

Both LIC and HDFC Standard life provide various plans for pension. The LIC plans are more

suitable for all age of people whereas the other one are especially for aged people. Moreover

HDFC Standard life plans are made such that each income level can opt depending upon their

potentials.


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SWOT ANALYSIS

SWOT Analysis is mainly used to find out the specific areas in the companys operations, which

need more care and attention, by comparing them with that of the competitor. Here S means

Strengths of the company, W means Weaknesses of the company, and O means Opportunities

and T means Threats to the company. Both Strengths and Weaknesses are inherent with the

company while Opportunities and Threats are usually outside factors, which affect the existence

of the company at large. Let us make the SWOT Analysis for all the players mentioned so far,

i.e. Life Insurance Corporation, ICICI Prudential and HDFC Standard Life Insurance together so

that one gets a comprehensive idea.

STRENGTHS

Life Insurance

Corporation

ICICI Prudential HDFC Standard Life

Insurance

Established agency

network during the last decades

More awareness among

the people

More penetration in the

rural parts of India

The incomparable

supremacy in the number of

agents

The network of ICICI

Banks

The network of HDFC

Banks

The trust they havecreated so far

The name and famecreated by the ICICI Bank

The name and trustpeople have bestowed upon

HDFC Bank

The early bird advantage The professional and The early bird advantage


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aggressive marketing set-up among the private players

WEAKNESSES

Life Insurance

Corporation

ICICI Prudential HDFC Standard

Life Insurance

As a public

company the staff are not

that much sincere and active

The marketing

approach is not that much

professional

The cumbersome

processes to become a

policyholder

Do not have a strong

and efficient agency

network

The sluggishness of

the activities have given, at

times, a bad repute

As a private

company the people do not

have that much belief

As a private

company the people do not

have that much belief

OPPORTUNITIES

Life Insurance

Corporation


Life Insurance

The high growth

rate of Indian Economy

The high growth


The high growth


The people are

becoming more aware ofInsurance and have started

considering it as a

necessity.

The people are


considering it as a

necessity.

The people are


considering it as a

necessity.

The penetration of The penetration of The penetration of


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Insurance in the rural area is

minimal. This has to be

explored.



explored.



explored.

The Government

policies are offering more

and more rebates on the

insured amount and such a

scenario will help more

people getting interested in

it.

The Government






it.

The Government






it.

As people become

more internet savvy, the add

Spend will come down as

the prospective clients can

be approached through the

net.

As people become





net.

As people become





net.

THREATS

Life Insurance

Corporation


Life Insurance

The aggressive style

of marketing by the private

players is a threat to LIC.

As the number of

agents are considerably

huge, efficient management

of all the field force need


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greater strain and effort.

More and more

companies are coming into

the field and the existing

ones have to struggle hard

to keep the customers loyal

and to get more customers

More and more






More and more






Now as India is on

the brim of emerging out as

an economic power centre,

stringent laws can be

expected in the coming

future.

Now as India is on





future.

Now as India is on





future.

The opening up of the insurance sector has changed the whole look of the industry. While

the LIC in order to face the competition is coming with new strategies. New players like ICICI

Prudential and HDFC Standard Life are leading the sector due to their strategic management andtailored made projects.

From the research also it can be concluded that though the awareness and people opting

for LIC plans are more as compare to ICICI Prudential and HDFC Standard Life but the later are

gaining momentum in the market day by day.


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MARKET SHARE OF VARIOUS LIFE

INSURANCE COMPANIES

74%

6%

2%2%

3%

6%

7%

LICICICI

BAJAJ ALLIANZ

HDFC

BIRLA SUN LIFE

TATA AIG

OTHERS


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INTERPRETATION

It is no doubt that LIC is an established and market leader in life insurance industry in

India. But, with him coming up of private Life Insurance companies as a passage of IRDA, its

share is getting reduced.

Now, the private companies have acquired 25.74% of the market share in just a small

span of 5 years.

This is so because of the innovative products of the private Life Insurance companies.

The basic difference between LIC and private players ICICI prudential and HDFCStandard Life is that mainly focuses more on standardized products whereas LIC caters to the

needs of the customers and focuses on customized products.

The interpretation as a result of comparative analysis is as follows:

Whole Life Policies: LIC plans are very simple to understand whereas the private playersprovide plans according to the changing needs of the customers.

Endowment Policies: LIC is quite simple and straight forward whereas ICICI Prudential

and HDFC Standard Life are more concerned about saving and are categorized for the different

section of people.

Money Back Plan: LIC has provided various plans under it having different features. On

the other hand, the private players combine all the features in just one single plan.

Single premium policies: The private players - ICICI Prudential and HDFC Standard

Life gives higher assured returns and various other benefits.


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Term Insurance Plan: The private players provide more flexible and stable return

whereas LIC acts as safer plan taking care of family as a whole. Again, LIC provides different

plan under this category of Life Insurance.

Children policies: LIC provide different plans for children as compared toprivate

Players, which gives only one plan for kids. Both aims at providing the parents

aid for

Higher studies of their children. While LIC policies are designed to meet the

different

Need of family budget ICICI Pruden

tial and HDFC Standard Life is more customer

Tailored.

Annuity Plans:The LIC plans are more suitable for all age of people whereas the other

one is especially for aged people. Moreover ICICI Prudential and HDFC Standard life plans are

made such that each income level can opt depending upon their potentials.

Thus, the private players are making rapid strides with innovative products and

aggressive marketing. Unit Linked policies launched by the private players are having

a rage in the market and occupying a% cent restage despite LICs strong record of

setting traditional; policies.

In a nutshell, it can be said that LIC should formulate its policies according to

the needs and demands of the customers i.e . it should come up with innovative

products .


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CHAPTER 4

LIMITATIONS


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LIMITATION

Some respondents were reluctant to divulge personal information which canaffect the validity of all responses.

A period one of one semester is a very short period to know completelyabout training and development programmes of a big organization likeHDFC SLI CO.

While some data is collected through interviews, it may be possible that theemployees may have reacted over enthusiastically.

Money played s vital role.

In a rapidly changing industry, analysis on one day or in one segment canchange very quickly. The environmental changes are vital to be considered

in order to assimilate the findings.


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CHAPTER 4

CONCLUSION

AND

RECOMMENDATION


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CONCLUSION

The comparative analysis between the plans of these companies shows that they differ in their

projection and outlook while they aim at same targets and provides similar kind of returns.

The LIC business is more about providing social security and financial safety net for the

dependants. It ensures the life of the people providing life insurance product and services of high

quality and providing resources for economic development. The logo of the company also shows

image of corporation that cares. The advantage of LIC over its peers is that the sum assured

comes with sovereign guarantee.

On the other hand ICICI Prudential has little different approach towards its business.

They are more customers centric; provide quality circle, having superior risk management. They

go for investment strategy to offer consistent, stable returns to policyholder. The ICICI Pro had

an entire range of insurance product. Their aggressive strategy and innovative products have

really led them to capture a significant portion of the market share in just a small span of 5 years.

Providing good customers and exploring new distribution channels have really paid them off.

LIC should also look in providing well servicing to the customers because it is a major

area was it is lagging. Thus, coming up with innovative and aggressive marketing will help it to

dominate both urban and rural markets.

HDFC Standard Life Insurance Co. should come up with customized products rather than

standardized products. HDFC Standard Life Insurance Co. with its strong brand equity can

dominate both urban and rural markets. HDFC Standard Life Insurance Co. is reacting to the

competition of the success of ULIPs launched by private sectors

OBESVERTION

PRODUCT PROFILE FOR HDFC

Different companies can choose to position themselves differently and hence the

marketing mix would be different. However, the possible strategy that HDFC Standard Life

Insurance Co. can follow is as under:


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Product: The development of flexible products to suit individual requirements is what

will differentiate the winners from the also-rans. The key to success for HDFC Standard Life

Insurance Co. would be in providing insurance solutions, not standardized insurance products.

The concept of riders/optional benefits has already been a huge innovation brought about by the

new players, which has led to customization of products for individual needs. However, HDFC

Standard Life Insurance Co. may differentiate them on the basis of product segments that they

choose to focus on and excel in.

Distribution: Different companies may however choose different channels and different

geographies to focus on. The channel options are - tied agency force, corporate agents and

brokers and this is an area where different companies will make different choices. HDFC

Standard Life is focusing on all channels whereas companies like Max New York Life are

focusing on the tied agency force only. Customer interface will be a key challenge for LIC and

includes every that interaction that the customer has with the company, such as sales, new

business underwriting, policy servicing, premium payments, claim processing and so on.

Technology can play a crucial role in delivering the highest standards of service set by the

company and it will be imperative for any LIC to excel in all of these.

Price: Price is a relevant differentiator only in two segments - pure term

insurance and in pure annuities. Here too, service delivery and financial strength will

need to be present at a minimum acceptable level for price to be a relevant

differentiator. In case of savings oriented products, long term returns generated will

be more relevant than just the price of the product. A focus on generating good

investment performance and keeping a tight control on costs will help in generating

good long-term maturity value for customers.

Advertising and promotion: The level of demand is latent and will have to be

activated considerably. The market needs to be developed. Greater awareness of

insurance and the need to have it as a protection tool rather than as a tax planning


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measure needs to be appreciated by the Indian people. Various communication tools

including advertising, direct marketing and road shows will contribute to all this.

Focus on customized products: There were times when LIC had a strong

record of selling traditional policies such as endowment and money back policies but

now the customers want not only insurance cover but also a great return. This was the

reason why Unit Linked Insurance Policy brought in the market by the HDFC

Standard Life Insurance Co. Now, HDFC Standard Life Insurance Co. is reacting to

the competition of the success of ULIPs launched by private sectors. So, there is a

great need that HDFC Standard Life Insurance Co. should formulate its policies

according to the needs of the customers.

Servicing of customers: Another area where HDFC Standard Life Insurance

Co. should look in is the servicing of customers. It is one of the major areas where

HDFC Standard Life Insurance Co. is lagging. So, it has become very important to

heavily invest on back-office work. The company can reduce this problem to a great

extent by doing centralization of data.

Exploring new distribution channels : Though HDFC Standard Life Insurance

Co. had an army of agents but it should explore new distribution channels like banks

and corporate agencies. There is a huge potential for selling the policies through bank

assurance. In fact there are some policies that can be sold only through a bank

channel- the policy to cover the home loans, for instance. So the company should look

into these alternate distribution channels.

Strategy for urban and rural market: There is a need for the company to

look into the urban market today where distribution and servicing of policies are quite

easy. So, HDFC Standard Life Insurance Co. should come up with customized

products rather than standardized products .


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It is no doubt, that HDFC Standard Life Insurance Co. has great presence and

huge potential in the rural market. But, the problem that HDFC Standard Life

Insurance Co. is facing in rural market is that the premium per policy tends to be

lower which results in an increase in the cost of servicing.

So, there is great need for HDFC Standard Life Insurance Co. to formulate its

strategy in such a way that the customers in the rural markets pay their premium

annually rather than going for half yearly or quarterly payments. Its agent should be

quite efficient to convince the customers of the rural market to pay their premiums

yearly.

So, HDFC Standard Life Insurance Co. with its strong brand equity can

dominate both urban and rural markets.


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Recommendations

Need to create and effectively deploy differentiated strategies. Right prospects identification and thus segmentation too. Design and manage sales force, which yields high performance. Increase service quality as well as quantity by employing some

MARKETING professional.

MUST FOCUS ON THE STRAREGY:CUT COST; IMPROVE QUALITY, BETTER CUSTOMER

STATISFACTION.


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CHAPTER 6

APPENDICS


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QUESTIONNAIRE.

Awareness of Financial Planning and Consumers Perception about Insurance Industry

Name:________________________

Age:______

Gender: M F

Marital Status: Married Single

Occupation : ___________________

Contact No : __________________

Annual Income (appx. in Rs.)

Upto 1.50 lacs 1.50 lacs-3 lacs

3 lacs-5 lacs Above 5 lacs

Q1) Are you aware about what is financial planning?

YES NO

Q2) Mention the names of Life insurance companies you have heard of:

1) ________________ 4) ________________

2) ________________ 5) ________________3) ________________ 6) ________________

Q3) How much do you save approximately of your annual income?

Q4) Where do you invest/would like to invest your savings?(Rank in order of preference, 1 being most preferable)


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Bank Share Market

Insurance Bonds & Securities

Mutual Funds Real Estate/Property

Q5) Have you taken any life insurance policy on your own life or on life of your family member?

YES NO

(If no, switch to Q 9 )

Q6) Which company(s) policy(s) you have?


BIRLA SUNLIFE ING VYSYA

BAJAJ ALLIANZ SBI LIFE

HDFC STD. LIFE TATA AIG

MAX NEW YORK LIFE AVIVA

RELIANCE KOTAK MAHINDRA

MET LIFE OTHER __ (specify)

Q7) Which type of plan did you buy?

Money Back Plan

Endowment Plan

Pension Plan

ULIP

Q8) What was your purpose/will be your likely purpose of taking insurance?RANK THEM (1 being most ideal)

a) PROTECTIO OF FAMILY


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b) TAX BENEFITc) INVESTMENTd) RETIREMENT PLANNING

Q9) Have you ever been approached for Life insurance by any of the following (Please ), alsoRank according to your preference from whom you are most Likely to buy insurance?

( Here) (Rank)1) Known/Current Advisor

2) Advisors referred by friends/family

3) Telesales and subsequent visit by unknown Advisor

4) Schemes offered by your bank (Bank assurance)

5) Group Insurance Policies offered by your employer

Q10) Do you feel opening up of the sector has created more insurance awarenessamong the public?

YES NO

Q11) How many dependents do you have?

6

Q12) Do you really think insurance cover in todays scenario is notessential?


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BIBLIOGRAPHY

Date post:	03-Apr-2018
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Customer Perception of Life Insurance Policies- With Special Reference to Hdfc Standard Life Insu

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