POLICY HOLDERS’ PREFERENCE FOR LIC PRODUCTS3.11 Golden Jubilee plan of LIC of India (Special...

POLICY HOLDERS’ PREFERENCE FOR LIC

PRODUCTS

Proposal for thesis submission in partial fulfillment for the award of

Degree of Doctor of PHILOSOPHY IN COMMERCE

By

M. DHANASEKARAN, (Reg. No: 0846000001)

Under the Guidance of Dr. G.SUBRAMANIAN, M.Com., M.Phil., Ph.D

Reader in Commerce, (Retd) PG & Research Department of Commerce,

Kandaswami Kandar’s College, Velur – 638 182. Namakkal – (DT)

VINAYAKA MISSIONS UNIVERSITY SALEM, TAMILNADU, INDIA.

NOVEMBER– 2014

VINAYAKA MISSIONS UNIVERSITY

DECLARATION

I, M. DHANASEKARAN, declare that the thesis entitled “POLICY

HOLDERS’ PREFERENCE FOR LIC PRODUCTS” submitted by me for

the Degree of Doctor of Philosophy is the record of work carried out by me

during the period from 2008 to 2014 under the guidance of

Dr. G. SUBRAMANIAN, READER IN COMMERCE (RETD), POST

GRADUATE AND RESEARCH DEPARTMENT OF COMMERCE,

KANDASWAMI KANDAR’S COLLEGE, VELUR – 638 182,

NAMAKKAL DISTRICT and has not formed the basis for the award of any

degree, diploma, associate-ship, fellowship, titles in this or any other University

or other similar institutions of higher learning.

Place: Signature of the Candidate

Date:

VINAYAKA MISSIONS UNIVERSITY

CERTIFICATE

I Dr. G.SUBRAMANIAN certify that the thesis entitled

“POLICY HOLDERS’ PREFERENCE FOR LIC PRODUCTS” submitted

for the Degree of Doctor of Philosophy by Mr. M. DHANASEKARAN,

(Reg. No: O846000001) is the record of research work carried out by him

during the period from 2008 to 2014 under guidance and supervision and that

this work has not formed the basis for the award of any degree, diploma,

associate-ship, fellowship or other titles in this University or any other

University or Institution of higher learning.

Place: Signature of the Supervisor

Date:

ACKNOWLEDGEMENT

I wish to acknowledge my deep sense of gratitude to those who have

helped me in the preparation of this doctoral thesis.

I deem it my pride and privilege to reward my deep sense of gratitude to

my research guide Dr. G.SUBRAMANIAN, M.Com., M.Phil., Ph.D., Reader

in Commerce (Retd), Post Graduate and Research Department of

Commerce, Kandaswami Kandar’s College, Velur, Namakkal District for

his invaluable and meritorious research guidance and supervision. I convey my

sincere thanks adequately to him for all the trouble he has undertaken since the

onset of this research study. I heartily express my thankfulness to him for the

completion of this doctoral thesis in time.

I am thankful to VINAYAKA MISSION UNIVERSITY, SALEM for

enrolling and providing me an opportunity to carryout this research work. I find

no exact word to convey my sincere thanks adequately to

Dr. K. RAJENDRAN, Dean (Research), Vinayaka Mission University,

Salem for his constant encouragement and timely suggestions that helped me a

lot to complete this thesis on time.

I express my sincere thanks to Dr. V. VAIYAPURI, Ph.D. Professor

and Head (Retd), Department of English, Kandaswami Kandar’s College,

P.Velur, Namakkal District for his constant encouragement through out the

course of my research work successfully.

I am thankful to Dr. R. MATHAVAN, M.Com., M.Phil., Ph.D,

Assistant Professor, Post Graduate and Research Department of

Commerce, Kandaswami Kandar’s College, P.Velur, Namakkal District,

for providing me valuable tips and information during the course of this thesis.

I am thankful to Dr. N. KATHIRVEL, Ph.D, Assistant Professor,

Department of Commerce, Govt. Arts College, Udumalpet, Tirupur

District, for his kindness, encouragement and support throughout the

completion of research work successfully.

I express my sincere thanks to Mr. N.Sivakumar, M.Com., M.Phil.,

Mr. M. Thanagamesh, M.Com., M.Phil., and Mr. M. Boopathi, M.Com.,

M.Phil., Assistant Professors, Department of Commerce, Kandaswami

Kandar’s College, P.Velur, Namakkal District for their generosity in

permitting me to utilize the reference materials and books available at their end.

I express my sincere gratitude to MY PARENTS Mr. G. MATHESAN

AND Mrs. M. SUSILAMANI, MY WIFE K.R. VIVEKKA for their constant

support throughout the course of this study.

I am thankful to Mr. N. RAJENDRAN, Assistant Manager in Canara

Bank AND Mrs. R.S. KARPAGAM, Cashier in Indian Overseas bank,

Sulur, Coimbatore District, and MY FRIENDS for their constant support

throughout the course of this study.

Finally, it is my foremost duty to thank all my respondents who helped

me to complete my research work without which this thesis would not have

been possible.

M. DHANASEKARAN

CONTENTS

CHAPTER

NO TITLE

PAGE

NO

LIST OF TABLES

LIST OF CHARTS

I INTRODUCTION AND RESEARCH DESIGN 1

II REVIEW OF LITERATURE 14

III PROFILE OF COMPANIES IN LIFE INSURANCE

BUSINESS AND STUDY AREA 32

IV ANALYSIS AND INTERPRETATION - I 99

V ANALYSIS AND INTERPRETATION – II 155

VI FINDINGS, SUGGESTIONS AND CONCLUSION 229

BIBLIOGRAPHY 245

APPENDIX 248

LIST OF TABLES

Table

No Title

Page

No

3.1 Children plans of LIC of India 55,56

3.2 Plans for handicapped dependents plans of LIC of India 58

3.3 Endowment assurance plans of LIC of India 60

3.4 High worth individuals plans of LIC of India 62

3.5 Money back plans of LIC of India 64

3.6 LIC of India’s special money back plan for women 66

3.7 Whole life plans of LIC of India 68

3.8 Term assurance plans of LIC of India 70

3.9 Joint life plan of LIC of India 72

3.10 Unit plans of LIC of India 75

3.11 Golden Jubilee plan of LIC of India (Special plans) 77

4.1 Classification on the basis of gender, age, no, family members, marital

status and type of family of the respondents of LIC policy holders 100

4.2 Classification on the basis of occupation, qualification, income, and

residential area of the respondents of LIC policy holders 107

4.3 Classification on the basis of their assets acquired, reference to invest,

influence of persons, purpose of taking insurance policy and buying

an insurance policy and buying an insurance of the respondents

113

4.4 Classification on the basis of types of plan, no. of policy, value of total

policy amount of premium of the respondents. 120

4.5 Classification on the basis of premium paid, method of payment of the

respondents. 126

4.6 Independent sample test age Vs Over all rating of satisfaction over the 131

functions of LIC.

4.7 Independent sample T-test on marital status of the respondent Vs

overall rating of satisfaction over the functions of LIC 133

4.8 Independent sample T-Test on family type of the respondent Vs over

all rating of satisfaction over the functions of LIC 135

4.9 Independent sample T-test on nature of the area of the respondent

living Vs overall rating of satisfaction over the functions of LIC 137

4.10 Independent sample T-test on nature of the area the respondent living

Vs overall satisfaction rating of various LIC policy 139

4.11 Independent sample T-test on the family that respondent living Vs

overall satisfaction rating of various LIC policy 141

4.12 Independent sample T-test on marital status of the respondent living

Vs overall satisfaction rating of various LIC policy 143

4.13 Independent sample T-test on gender Vs over all satisfaction rating of

various LIC policy 145

4.14 Independent sample T-test on gender Vs over all satisfaction rating of

services of LIC to customers 147

4.15 Independent sample T-test on marital status Vs over all satisfaction

rating of services of LIC to customers 149

4.16 Independent sample T-test on family type Vs overall satisfaction

rating of services of LIC to customers 151

4.17 Independent sample T-test on AREA of respondent living Vs overall

satisfaction rating of services of LIC to customers 153

5.1 One-way ANOVA- overall rating of LIC by respondents’ age 156

5.2 One-way ANOVA- overall rating of LIC by respondents’ occupation 159

5.3 One-way ANOVA- overall rating of LIC by respondent ‘s

qualifications 162

5.4 One-way ANOVA- overall rating of LIC by respondent premium paid 166

5.5 One-way ANOVA- overall satisfaction rating of LIC by respondents’

age 170

5.6 One-way ANOVA- overall rating of LIC policy by occupation 174

5.7 One-way ANOVA- overall rating of LIC by respondents’

qualifications 178

5.8 One-way ANOVA- overall rating of LIC policy by amount of

premium paid 182

5.9 One-way ANOVA-overall rating of LIC services by respondents’ age 186

5.10 One-way ANOVA-overall rating of LIC services by respondents’

occupation 190

5.11 One-way ANOVA-overall rating of LIC services by respondents’

qualification 194

5.12 One-way ANOVA-overall rating of LIC services by amount of

premium paid 198

5.13 Multiple regression on overall satisfaction rating of the various LIC

products offered by product variables 202

5.14 Multiple regression on overall satisfaction rating of the LIC services to

customers by services variables 208

5.15 Multiple regression on overall satisfaction rating of the LIC functions

to customer by product 214

5.16 Multiple regression on overall satisfaction rating of the LIC functions

by service variables 221

5.17 Reliability of scales and item-construct loadings factors related to

preference of policy holders to the services of the LIC 227

LIST OF CHARTS

CHART

NO TITLE

PAGE

NO

1 Gender of the respondents 102

2 Age group of the respondents 103

3 Marital status of the respondents 104

4 Type of family of the respondents 105

5 No. of family members of the respondents 106

6 Occupation wise classification of the respondents 109

7 Educational qualification of the respondents 110

8 Monthly income of the respondents 111

9 Residential area of the respondents 112

10 Assets of the respondents at present 115

11 Preference to investment of the respondents 116

12 Purpose of taking insurance of the respondents 117

13 Influence of persons to take insurance of the respondents 118

14 Purpose of buying an insurance policy of the respondents 119

15 Type of plan of the respondents 122

16 No. of policy of the respondents 123

17 Value of sum assured of the respondents 124

18 Amount of premium of the respondents 125

19 Premium paid by the respondents 128

20 Method of premium paid by the respondents 129

21 Mode of payment by the respondents 130

22 Histogram dependent variable-overall satisfaction rating of

the various products offered)

206

23 Path diagram shows the overall satisfaction rating of LIC

products by its product variables

207

24 Histogram dependent variables; overall satisfaction rating

of the LIC services to customer

212

25 Path diagram shows overall satisfaction rating of LIC

services by its services variables

213

26 Histogram dependent variables: overall satisfaction rating


219

27 Path diagram shows overall satisfaction rating of LIC

performance by its significant product variables

220

28 Histogram dependent variables; overall satisfaction rating


225

29 Path diagram overall satisfaction rating of LIC

performance by its significant services variables

226

Certificate

Declaration

Acknowledgement

Content

List of Tables

List of Charts

Chapter – I

Chapter – II

Chapter – III

Chapter – IV

Chapter – V

Chapter – VI

Appendix

Bibliography

1

CHAPTER – I

INTRODUCTION AND RESEARCH DESIGN

1.1 INTRODUCTION

The life insurance sector is an important cornerstone to the Indian

economy. It plays a significant role in mitigating life’s uncertainties and

acts as an instrument of security, savings and peace. India holds 18th

position in the global life insurance market and India is still an under-

insurance country. The ratio of life insurance premium to gross domestic

product (GDP) is around four per cent against sixty nine per cent in the

developed countries and it is estimated to touch 6.2 per cent by 2012

given the sheer geographical spread of the country and its immense

population, there is a vast market that remains yet to be tapped and this

provides a plenty of opportunity to different players for growth. Insurance

industry was a government’s monopoly. It is now experiencing cutthroat

competitions because, a number of players have entered into the Indian

market in the form of joint ventures with Indian private sector partners.

Consequently, Indian Insurance industry is closely integrated with world

economy thereby making it imperative for insurance companies to

operate outside national boundaries. During the long monopoly regime,

the government attempted minor changes in the procedures without going

into the root cause. The insurance market in India is currently in the

throes of radical change.

Close to 80 per cent of Indians do not hold an insurance policy,

according to a recent survey. Agricultural and rural areas remain largely

untouched. But changing government policies and an influx of private

and foreign players means the industry is on the brink of a boom. Strong

2

competition and innovative products is what defines India’s still small but

rapidly growing insurance sector today. The insurance sector is a colossal

one and is growing at a speedy rate of 15-20 per cent. Together with

banking services, insurance services add about 7 per cent to the country’s

GDP.A well-developed and evolved insurance sector is a boon for

economic development as it provides long-term funds for infrastructure

development at the same time strengthening the risk taking ability of the

country. The contours of insurance business have been changing across

the globe and the rippling effects of the same can be observed in the

domestic markets also. Insurers are increasingly introducing innovative

products to meet the specific needs of the prospective policy holders.

Innovations have come not only in the form of benefits attached to the

products, but also in delivery mechanisms which have emanated from

various marketing tie-ups both within the realm of financial services and

outside. All these have taken life insurance closer to the customers’s well

as making it more relevant.

Life insurance had its origins in ancient Rome, where citizens

formed burial clubs that would meet the funeral expenses of its members

as well as help survivors by making some payments. As European

civilization progressed, its social institutions and welfare practices also

got more and more refined. With the discovery of new lands, sea routes

and the consequent growth in trade, medieval guilds took it upon

themselves to protect their member traders from loss on account of fire,

shipwrecks and the like. The first stock companies to get into the business

of insurance were chartered in England in 1720. The year 1735 saw the

birth of the first insurance company in the American colonies in

Charleston, SC. In 1759, the Presbyterian Synod of Philadelphia

sponsored the first life insurance corporation in America for the benefit of

3

ministers and their dependents. However, it was after 1840 that life

insurance really took off in a big way. The trigger: reducing opposition

from religious groups.

1.1.1 Insurance

Insurance may be described as a social device to reduce or

eliminate risk of loss to life and property. Insurance is a collective

bearing of risk. Insurance spreads the risks and losses of few people

among a large number of people as people prefer small fixed liability

instead of big uncertain and changing liability. Insurance is a scheme of

economic cooperation by which members of the community share the

unavoidable risks.Insurance can be defined as a legal contract between

two parties whereby one party called Insurer undertakes to pay a fixed

amount of money on the happening of a particular event, which may be

certain or uncertain. The other party called Insure or Insurant pays in

exchange a fixed sum known as premium. The insurer and the insurant

are also known as Assurer or Underwriter and Assurant, respectively. The

document which embodies the contract is called the policy.

1.1.2 Life Insurance

Life is full of risk and uncertainties. Since we are the social human

beings we have certain responsibilities too. Indian consumers have big

influence of emotions and rationality on their buying decisions. They

believe in future rather than the present and desire to have a better and

secured future, in this direction life insurance services have its own value

in terms of minimizing risk and uncertainties. Indian economy is

developing and having huge middle class societal status and salaried

persons. Their money value for current needs and future desires here the

pendulum moves to another side which generate the reasons behind

4

holding a policy. Here the attempt has been made in this research paper to

study the buying behaviour of consumers towards life insurance services.

Life insurance is one of the best known insurance products today. People

buy these products as investment tools and also as protection for

themselves and their families. All the insurance companies the world over

are looking at attracting the eye balls of customers’ and positioning their

solutions innovatively to cater to niche and specific markets. One of the

most critical aspects both from the view point of the customers’ and the

insurer is getting important and relevant leads that can be beneficial for

both.

1.1.3 Insurance in India

Insurance in India can be traced back to the Vedas. For instance,

Yogakshema, the name of Life Insurance Corporation of India's corporate

headquarters, is derived from the Rig Veda. The term suggests that a form

of "community insurance" was prevalent around 1000 BC and practised

by the Aryans. Burial societies of the kind found in ancient Rome were

formed in the Buddhist period to help families build houses, to protect

widows and children. It was during the Swadeshi movement in the early

20th century that insurance witnessed a big boom in India with several

more companies being set up. As a result, the government decided to

nationalize the life assurance business in India. The Life Insurance

Corporation of India was set up in 1956 to take over around 250 life

companies. For years thereafter, insurance remained a monopoly of the

public sector. It was only after seven years of deliberation and debate –

after the RN Malhotra Committee report of 1994 became the first serious

document calling for the re-opening up of the insurance sector to private

players that the sector was finally opened up to private players in 2001.

5

1.1.4 Life Insurance Corporation of India

The LIC is the biggest player in the life insurance market with

approx. 65% market share. The Parliament of India passed the Life

Insurance Corporation Act on the 19th of June 1956, and the Life

Insurance Corporation of India was created on 1st September, 1956, with

the objective of spreading life insurance much more widely and in

particular to the rural areas with a view to reach all insurable persons in

the country, providing them adequate financial cover at a reasonable cost.

LIC continues to be the dominant life insurer even in the liberalized

scenario of Indian insurance and it is moving fast on a new growth

trajectory surpassing its own past records. LIC has issued over one

corepolicies during the current year. LIC has crossed many milestones

and has set unprecedented performance records in various aspects of life

insurance business.

1.1.5 INSURANCE SECTOR REFORMS IN INDIA-1999 THE

INSURANCE REGULATORY AND DEVELOPMENT

AUTHORITY

In the year 1993, Government of India set up a committee under

the chairmanship of Malhotra, on insurance reforms. In the wake of

reform processes the committee strongly felt that it would be desirable to

open up the insurance industry for competition. In view of liberalization

and globalization, Insurance sector in India has been opened up for

private and foreign players (domestic and global) by passing the

Insurance Regulatory and Development Authority (IRDA) act 1999. The

entry of global players has to be in the form of joint ventures and that of

domestic companies as per the act IRDA issued licenses to regulate

business. The IRDA is given the role to protect the consumers’ interests,

to ensure financial soundness of the insurance industry and enable healthy

6

growth of the insurance market, private insurance players have increased

the number of options available to a person who want to invest in an

insurance policy. Innovative products, smart marketing, cost

effectiveness, aggressive distribution and quick response have enabled

fledging private insurance companies to sign up Indian customers’s

faster than any one expected. In India more than 23 players are doing

business in the insurance sector.

The entry of new players not only, pegs up the level of competition

in the industry but also calls for higher investments on distribution and

infrastructure net work by the existing players. Recognition for life

insurance corporation brand continues to grow by leaps and bounds.

Today life insurance means Life Insurance Corporation in the minds of a

majority of people (Hari Govind Mishra, 2006). Today Life Insurance

Corporation of India is a multidimensional organization offering

individual life insurance, grape insurance, pension and gratuity schemes,

housing loans and mutual fund schemes. It also operates in countries like

Fiji, Mauritius, UK, Nepal, Bahrain and Sri Lanka.

Insurance is in service sector. The main focus of insurance is on

the efficient and effective delivery of services to the policy holders. The

most important factor in the insurance industry is the security of amount

insured and customers’ satisfaction.

7

1.2 NEED FOR THE STUDY

India is a country where the average selling of Life insurance

policies is still lower than many Western and Asian countries. Before the

opening of Indian market for Multinational Insurance Companies, Life

Insurance Corporation was the only company which dealt in Life

Insurance and after opening of this sector to other private companies, all

the world leaders of life insurance have started their operation in India.

With their world market experience and network, these companies have

offered many good schemes to pull all type of Indian consumers but

unfortunately failed to get the major share of market. Still the LIC is the

biggest player in the life insurance market with approx 65% market share.

In the competitive insurance market, LIC have to retain their strong hold

in the insurance sector in the heavy competitive field by the way of to

check the customers’ perception and their attitude towards the Life

insurance corporation and its various life policy. Therefore the researcher

has raised the following research questions and attempt to answer. What

are the factors contribute the consumer preference towards LIC product?

How the personal and demographic factors influence the preferences of

LIC and its product? What are the major dimensions of customers’

preferences about the LIC and policies? What are the factors which play

major role in buying behaviour of consumers towards life insurance

policies?

1.3 OBJECTIVES OF THE STUDY

The main objectives of the study are:

1. To find out the policy holders’ preference of LIC products.

2. To study the socio economic conditions of the policy holders in

Namakkal District.

8

3. To study the customers’s awareness regarding the various life

insurance Policies.

4. To study the impact of various demographic factors on the

preferences of LIC Product.

5. To identify the factors influencing customers’ perception

regarding LIC products.

6. To find out the extent of customers’s’ satisfaction.

1.4 HYPOTHESIS

1. There is no significant relationship between age and awareness

regarding the various life insurance policies.

2. There is no significant relationship between occupation and

awareness regarding the various life insurance policies.

3. There is no significant relationship between Educational

qualification and awareness regarding the various life insurance

policies.

4. There is no significant relationship between Monthly income and


5. There is no significant relationship between gender and


6. There is no significant relationship between demographic

variables and policy holder’s perception towards life policy and

services.

7. There is no significant relationship between demographic

variables and impact on policyholder’s satisfaction.

9

1.5 METHODOLOGY

1.5.1 Sampling Techniques

1. Systematic random sampling

Systematic random sampling technique was used in this study. In

this method, the sample is formed by selecting the first unit at random

and then selecting the remaining items at evenly spaced intervals. There

are five Taluks and five LIC Branches in Namakkal District.

In each LIC Branch, a list of 500 LIC Policy holder’s Name and

address was collected. Among 500 Policy holder’s, 100 respondents were

selected in each branch under systematic random sampling Method. So,

the total number of respondents (Policy holders) selected for this study is

500.

NAMAKKAL DISTIRCT

Namakkal Branch

Rasipuram Branch

Tiruchengode Branch

Paramathivelur Branch

Kumarapalayam Branch

Policy Holders 500

Policy Holders 500

Policy Holders 500

Policy Holders 500

Policy Holders 500

Respondents Selected





100 100 100 100 100

10

1.5.2 Area of the Study

This study was limited in the way analyzing policy holder’s

preference only on Life Insurance Corporation (LIC) in Namakkal

District. Even many Private Insurance Corporations are available in

Namakkal District, this study takes LIC only for the study.

1.5.3 Tools Used

1. Descriptive Statistics:

a) Per centage

b) Mean

c) Median

d) Standard deviation

2. T-statistic

3. ANOVA

4. Multiple regression

5. Reliability analysis

Analysis of the data: After the data collection was over, the

researcher analyzed the collected data with the help of statistical packages

such as SPSS 20, (statistical package for social science).The collected

data was analyzed through simple statistical tools like mean, standard

deviation. To measure internal consistency (reliability) of the data

Cronbach Alpha test has been employed. The following statistical tools

were used to analyze the data. Frequency Tables: simple frequency

tables were applied which showed the position of the various personal

demographic information and policy holder’s preference of LIC Products.

Descriptive Statistics: Descriptive statistical tools such as per centage,

Mean, Median and Standard deviation have been used to describe the

profile of consumers, preferred attributes and level of satisfaction. T-

statistic: A t-test was conducted on the results of the survey in order to

compare the means of the ranks for the factors or sources of information

11

to find out the most important factor influencing the policy holder to take

purchasing decision. ANOVA: It is carried to study the variance of the

factors of attributes that influence the most, among the various

demographic groups. Multiple regressions: the multiple regression test

was conducted for the purpose of finding the most preferred factor among

the product variables and service variables. It is also used to find the

impact of personal and demographic information of policy holders on

their overall preference. More over, Reliability analysis with

measurement model of confirmatory factor analysis was utilized to

measure the multidimensional preference of policy holders of LIC

products.

Reliability Analysis The reliability of scales used in this study were

calculated by Cronbach's coefficient alpha. Cronbach’s alpha reliability

coefficient normally ranges between 0 and 1. However, there is actually

no lower limit to the coefficient. The closer Cronbach’s alpha coefficient

is to 1.0 and the greater the internal consistency of the items in the scale.

The coefficient alpha values exceeded the minimum standard of 0.70. It

has provided good estimates of internal consistency reliability.

• The formula is as follows:

• K is the number of items in the scale.

• R is the average correlation pairs of items.

• As the number of items in the scale (k) increase, the value of alpha

becomes larger.

• If the inter-correlation between items is large, the corresponding

alpha will also be larger.

rk

kr

)1(1

12

1.6 LIMLTATIONS OF THE STUDY

It is but natural that any research investigation suffers from certain limitations,

which warrant an attitude of caution and healthy skepticism about its findings. Such

limitations are:

The survey is conducted only in the Namakkal District of Tamil Nadu state.

Due to time constraints, the size has been restricted to 500 but adequate care has been

taken to collect data. Hence, the results arrived at from the study may or may not be

applicable to other districts. Further, the survey method which is adopted for

collecting the data in this study has its own limitations.

The second category is that the reliability of the study depends on the true

response of the life insurance investors.

Another limitation is that the study is confined to individual life insurance

policies due to lack of information and details regarding other types of policies.

1.7 CHAPTER ARRANGEMENT

First Chapter: Introduction of the study

First chapter, describes design and execution of the study: It

includes the evolution of Insurance, importance of Life insurance,

statement of problem, objectives of the study, hypotheses framed, ,

methodology and scope of study are stated.

Second Chapter: Review of Literature and area of the study

Second chapter deals with review of literature and profile of the

study area.

Third Chapter: Profile of Life Insurance Corporation of India

Third chapter explains the profile of Life Insurance Corporation of

India and its branches in different areas in Namakkal District, the range

of products offered by the Life insurance Corporation of India. Life

13

insurance Corporation of India and different poroducts on LIC are

discussed.

Fourth & Fifth Chapter: Analysis and interpretation data

Fourth chapter analysis the primary data. The computerized

analysis was done at different stages. The impacts of personal,

demographic and rational variables are analyzed. The overall policy

holders’ perception of the Life insurance Corporation of India and the

level of satisfaction are evaluated.

Fifth Chapter: Findings, suggestions and conclusion

Fifth and last chapter brings out the findings, suggestions and

conclusion. Based on the previous chapters and analysis of data, the

researcher has given the findings, conclusion and suggestions.

14

CHAPTER – II

REVIEW OF LITERATURE

N.K. Sharma and V.S. Kannan Kamala Nathan (2011)1

Comparative Study of Life Insurance Companies: The Indian insurance

industry was thrown open to competition and private sector in the year

2000. The opening up of the industry has helped insurance customers’ in

general and the private insurers in particular. The private insurers have

been growing on an average of 77% since its inception. People purchased

private sector’s insurance products mainly because of their professional

approach and better service.

Dharmendra Singh (2011)2 Factors Affecting Customers’

Preferences for Life Insurers: An Empirical Study: The study aims to

identify the factors influencing the selection of insurance company for

purchasing the policy. An attempt has been made to study the customers’

buying behaviour with a focus on determining the factors affecting the

consumers’ preference for insurance companies. The variable for the

selection of a company consisted of 7Ps of services marketing, which

services providing companies like insurance companies are assumed to

have given due importance. The respondents were queried about the

factors which strongly influence their choice of a particular company.

The findings were analyzed using ANOVA tests for each of the 7Ps.

Findings reveal that product features, accessibility, low premium amount,

advertising, proper redress of complaints and better claim settlement are

some of the factors that drastically influence the choice of a company.

Frank and Enkawa (2009)3 This article strives to find out how

economic processes influence customers’ satisfaction. The study

15

examines the separate impacts of economic growth and economic

expectations on perceived value, quality expectations and customers’

satisfaction. The analysis reveals that customers’ satisfaction is positively

influenced by economic growth and negatively by current economic

expectations. The results show a strong correlation between economic

expectations and (overall and industry-specific) quality expectations.

Meirovich and Bahnan (2008)4 study the links between quality

and consumers' emotions and eventually with their satisfaction. This

study introduces two components of total quality structure; quality of

design and quality of conformance, for analysis of the link between

quality and customers’ emotions. The results show that there is a

significant relationship between possible combinations of two quality

dimensions and customers’ affective responses in terms of both their

valence and intensity. An interesting finding of this study suggests that

customers’ value quality of conformance higher than quality of design.

Gopalakrishnan (2008)5 in his article entitled, “The Insurance

Customers’ – The Customers’ Protection Act, 1986”, portrays that post

sales services- reminders on the renewal of premium, furnishing of

required data, claim servicing and response to customers’ needs – and the

amount of claim received influence the satisfaction level of the

policyholders.

LIC Survey (2008)6 Reveal that customized services, high quality

contract and high quality dissemination of information influence the

satisfaction of high premium paying customers’s.

16

Sunayna Khurana (2008)7 in his article, “Customers’ Preference

in Life Insurance Industry in India”, perceives that effective information

of products and services, efficient claim settlement and fair grievance

redressal system boost the satisfaction level of policyholders.

Nageswara Rao and madhavi (2007)8 in their study “An over

view of the private Insurance Company” divulge that appropriate

communication, extended customers’ service, human approaches,

immediate attention to the customers’ requests and availability of

products with less formalities highly influence the satisfaction level of the

customers’.

Alok Mittal and Akash kumar (2007)9 in their study entitled,

“An Exploratory study’s of factors Affecting Selection of life insurance

products”. Perceives that offering of innovative schemes and effective

handling of complaints lead to higher customers’ satisfaction

VOICE Survey(2006)10 on “Customers’ satisfaction in Insurance

sector,” reveal that courteous behaviour of employees, concentration to

consumers interest, fair redress system, and efficient claim settlement

gain the customers’ base enhance their level of satisfaction.

Song Hongmei (2006)11 in his article, “Insurers Score Low in

Client Satisfaction”, reveals that availability of products at affordable

price and after sales services – clients settlement, response of employees

and agents on customers’ request and effective complaint redressal –

influence the satisfaction of life insurance policyholders on the services

of their insurer.

17

Amit Kumar Chakravarathy (2006)12 in his article entitled, “The

efficiency of LIC during the post Liberalization and Globalization period.

A case study of West Bengal” reveals that the services of agents timely

information about the premium due, assistance in payment of renewal

premium, response to customers’ problem and guidance to clients’

request influence the satisfaction of customers’ and also in procuring

business.

Jagannath and Santhosh Singh Bais (2006)13 in their article

entitled, “Customers’ Satisfaction in Insurance Sector” depict that timely

response to customers’ needs and efficiency to offer the services at the

lowest price with best quality appraise the satisfaction level of

customers’.

Evangelos Tsoukatos and Rand Graham K (2006)14 in their

study titled, “Path Analysis of Perceived Service Quality, Satisfaction and

Loyalty in Greek Insurance”, reveal that reliability, assurance, empathy,

and responsiveness influence customers’ satisfaction while word of

mouth is an antecedent of repurchasing intentions and satisfaction

indirectly influence the latter.

Gordon, Dougall and Terrence Lepesque (2006)15 in their article

entitled, “Customers’s Satisfaction in Service Quality”, state that core

service quality and perceived value are the most important drivers of

customers’s’ satisfaction with relational service quality, a significant but

less important driver.

18

Pramod Pathak and Saumya Singh (2005)16 in their study “Life

Insurance corporation: The leader on the back foot” pointed out,

Traditionally, insurance has been serving ‘protection’ as well as ‘savings’

needs of customers’ with a variety of products .Riders have facilitated

packaging these two elements to offer more beneficial and

comprehensive solution to customers’. It is a win-win situation when

customers’ appreciate the nuances of product configurability and insurers

ensure preparedness of their service delivery mechanism. (Nalini Prava

Tripathy Prabir Pal (2008) – Insurance theory and practice).

Gayathri, Lakshmisha and vinaya (2005)17 in study entitled, “A

pilot study on the services quality of insurance companies”, reveal that

assurance followed by empathy and reliability are the important

determinants that affect the satisfaction levels of the policy holders in

LIC, ING, VYSYA, TATA and HDFC. In addition, tangibles in LIC and

responsiveness in TATA and HDFC contribute to the satisfaction levels.

Rajesh C Jampala and B H Venkateshwara Rao (2005)18

examined the performance of LIC due to competition; they stated that

LIC had withstood the competitive pressures with ease. LIC has

concentrated on the rural sector having recognized immense insurance

potential. The overall performance in terms of policies marketed, sum

assured and rural new business is quiet commendable. LIC is for ahead

of its competitions and it is no exaggeration to state that it may be a day

dream for new insurers to out perform LIC even in the far future. The

rural new business has registered good growth rate as compared to new

players.

19

Mony (2005)19 in the article entitled, “New Initiatives in the

insurance sector : opportunities and challenges”, Reveals that structural

efficiencies coupled with friendly approach and transparency in claims

handling are the drivers for customers’ satisfaction

Das and Samanta (2005)20 consider customers’ satisfaction as a

business survival requirement. The results identify eight factors which

could reflect the customers’ satisfaction level. These are productivity,

quality of delivery, meeting delivery schedule, technical support,

communication, proactive or promptness in response, skill level and

domain knowledge. The authors propose a customers’ satisfaction index

using principal component analysis.

Raman and Gayathri (2004)21 in their research paper had found

out the awareness about new insurance companies and preference of

investors towards investments in insurance companies in future. The

major findings of the research are that the majority of the respondents

have taken insurance to cover risk and also have taken up policies other

than LIC. It is also observed that majority were aware of the new

insurance companies, more over they opted for new companies due to

reasonable premium.

Ayyar, N. (2004)22 Points out that there are three necessary

preconditions for the creation of successful self-financed health insurance

schemes for large poor, rural and informal sector populations:-

1. A system for the mobilization of the widely dispersed poor

population.

2. Design of an administrative vehicle or system to register

subscribers, collect premiums and Issue industry cards.

20

3. Existence of an adequate healthcare delivery infrastructure.

Designing chart- demand-oriented product is a must for the

successful implementation of any scheme.

Banu, V. (2004)23 Pointed out, A report by the CII and Ernst &

Young in 2008 has seen micro-insurance as a suitable aid to reach the

poor and the socially disadvantaged. Out of Rs. 2 Lakh crore premiums

collected in 2010, only Rs. 300 crores of premiums pertain to micro

insurance. The report has suggested deepening of markets for micro-

insurance by the industry. Rural banks can help in this ‘insurance

Inclusion’ as they have done in financial inclusion in this country for

people living below the poverty line. Micro insurance is a great tool in

India to manage risk. It is a switchover from the classes to the masses.

IRDA’s micro-insurance regulations are the catalysts in this direction.

Sincere implementation of these regulations is the sure key to success. In

the golden words of Prof. Dr.C.K Prahalad,” improving the lives of the

billions of people at the bottom of the pyramid is a noble endeavour. It

can also be lucrative.” To quote Prof. Dr.C.K Prahalad,” the bottom of

the pyramid is large and long; and is currently un-served and under-

served”

Shohit and Sanjay Shukla (2004)24 analyzed the failure of private

insurance players in rural areas. Their study revealed that there are major

differences in the objectives and expectations among rural and urban

policy holders. They found that in rural area private players have still not

achieved much success and have failed to catch the pulse of rural India as

compared to public sector players. In urban area consumers belonging to

middle income group prefer policies of public sector players and only

high income group preferred private sector players. The study also

21

revealed that in urban area, services provided at doorstep and efficient

customers’ services were the two major reasons which helped market

penetration by private players.

Agarwal (2004)25 in his article briefly discusses the various

channels of distribution and new avenues being explored by the new

players in the insurance sectors. He views that a customers’ may have

expectation like value added services development of new products,

technology insurance, solvency financial security, quality trained staff

etc., though customers’ satisfaction may be provided by maintaining high

professional standards and nationalized procedure etc. Yet it requires a

new paradigm.

Mathur, S.B (2003)26 in his study points out that the Insurance

market is characteristiced by competition and insurance companies are

trying their best to exploit all available potential. Therefore, there is need

for imaginative new and services products which are customers’ –friendly

and need- centric. Fuelled by globalization, there is now increasing trend

world- wide to privatize Infrastructure products and tender these project –

financed basis. As per latest reports, companies that build roads, ports,

power projects can now raise credit up to $500 million from market

abroad to finance projects in India. The bulk funds invested in large and

infrastructure projects promote economies of scale, promotes economic

development and growth and other economic developments.

Sathya swaroop Dabasish (2003)27 explains that with the

privatization of insurance in India, the insurance industry is slowly

becoming cluttered with numerous private joint ventures. This study

makes an attempt at identifying the key factors responsible for customers’

22

preference for life insurance products in India. The opinion of 600

customers’ on 20 variable/reasons for preference of life insurance were

measured from 45 designated insurance agents of various life insurance

companies of LIC, ICICI prudential, HDFC standard, ING vysya and

Allianz Bajaj. Using the technique of factor analysis this study identified

five major factors. Risk – return factor, promotional factor, service

quality factor, consumer expectation factor and core product factor in the

order of preference. The study identified that out of 20 variables, 7

variables such as Advertisement, Agent recommendation, safety of the

scheme, Transparency, Performance Guarantee, Regular income and

Assured return are highly preferred by the customers’. 10 variables have

moderate preference level and remaining three variables with slight

preference level. A prudent product design, by adding the feature

expected by investors and spelt out in this research will make the new life

insurance product more attractive for the investors.

Thiripurasundari (2002)28 in her study has analyzed the attitude

of policy holders towards the services of LIC branch office of

Mayiladuthurai town in Tamil Nadu. The level of satisfactions’ of policy

holders relating to the rate of bonus and response of the branch office

with regard to various aspects are satisfactory majority of the respondents

expressed their opinion towards the rate of premium as normal and bonus

as moderate of the expiry of maturity period.

Chandra Mohan (2002)29 has found out in his study that the Life

Insurance Company in India is the market leader in the life Insurance

business in Erode District of Tamil Nadu. According to him, the

development officers of the company are the main selling force for life

policies with their experience in sales, social club connections, personal

23

observation of situations and information gathered through friends and

relatives they are able to sell the policy effectively, socio-economic

factors like community, education, income, occupation and wealth had a

direct influence on the buyers and the buyers’ satisfaction level was

found to be good.

Shika Sharma (2002)30 studied about the changing face of Life

Insurance in India. It was revealed that the private players in the under

insured country had raised awareness levels by introduction of innovative

products and by increasing the penetration level, He found that the

consumer was the biggest beneficiary of the competition by a wide range

of products, customers’ focused services and professional advice. It also

stated the necessity of the heightened awareness and consumer education.

He added that there was a vast improvement in service, attitude and

delivery due to raised service levels and technology. He concluded that

the face of Life Insurance has changed due to the challenges in the

industry and credible player will survive.

Dhurva, Mukesh and Rajan A. Kumar (2002)31 in their study

stated that, “Insurance Companies join hands with those institutions that

are engaged in preventing the losses of the society and also are

themselves engaged in taking various measures of improving the risk

factor and implementing a health-micro-insurance programme for the

rural people. This assists in reducing the premium, which means more

business and protection to the masses, thus contributing to the financial

health of the organization itself and of other organizations

24

Insurance Companies provide capital to the society by investing its

accumulated funds in various productive channels. The industries, the

business and the Individuals are benefited by the investments and loans of

the insurers.

The authors Pradeep Gupta and Sanjoy Bhyna (2002)32

discussed the challenges and strategies in the Insurance Industry in India.

An attempt was made to know the marketing position of different

insurance brands and business practices codes given by IRDA to maintain

some minimum standard. As per study after liberalization in November

1999, awareness of LIC brand shows 100% as against ICICI prudential

awareness 70% next HDFC stands 52% etc.,

Mittal and Anil (2002)33 examined the impact and perspective of

insurance sector before and after privatization in the pre-privatized era,

Life Insurance Corporation dominated the marketing. This period was

witnessed by low penetration of insurance lack of agents, productivity, in

efficient customers’ services and more customers’ complaints, in the

privatized scenario more private companies entered into the fray with

foreign joint ventures’.

These companies offered innovative products, conformed services

and professional back up there by enhancing customers’ satisfaction. The

analysis revealed the awareness of public forwards. In insurance has

increased to even after privatization the public trend to choose Life

Insurance Company in contrast to various private companies, due to its

credibility.

25

Pavesh Paranish (2001)34 in his article briefly discussed the

various channels of distribution in the Life Insurance Industry in India

and new awareness being explored by the new players. Importance is

given to the customers’ not only for meeting for his requirement but also

the impact in times of fulfillment quality of service rendered,

complexities of products and so on, one of the recent experiments worth

explaining in bancassurance in the recent survey carried out by piece

water House Coopers on bancassurance. The following emerged as key

issues to improve effectiveness of the sales, channels of products need to

be tailored to conclude that, industry in transition, presents opportunities

that is also fraught will challenges of an unknown magnitude. Therefore,

only the best will survive in the long term which enables to spot emerging

trends and helps to capitalize the benefits of its customers’.

Vanniarajan and Jayakumaran (2000)35 in their research article

entitled “Discriminant Service Quality” among public and private players

in Life Insurance Marketing identifies distribution network, product and

reliability as key discriminate service quality factors that influence the

customers’ satisfaction among the public and private insurance players.

Malhotra (1996)36 under his Chairmanship, a committee on

reforms in the insurance sector was formed to discuss on the issues to

liberalize India’s insurance sector. According to MARG survey the

awareness level of various policies of both GIC and LIC is quite limited.

Secondly, a fair proportion of people are of the opinion that pearless

companies are offering only general insurance. Under general insurance

awareness of policy holders of the four subsidiaries range between 23%

and 67%. Thirdly, non-policy holders did not hold polices of in-ability to

pay the premium and did not perceive the need to acquire policy.

26

Fourthly, it is assumed that 75% of individual’s claims on LIC and 60%

of the GIC subsidiaries are settled with satisfaction. Fifthly, opinion on

rating the overall services of LIC on a fine – point scale is some what

better than those of GIC subsidiaries. Lastly, 90% of LIC agents 78% of

GIC agents expressed satisfaction of their career with the insurance

companies.

Muffatto and Panizzolo (1995)37 develop a framework for

customers’ satisfaction and provide a detailed description of the

relationship structure between the different elements of the organizational

structure. The authors propose a framework for the analysis of the

organizational processes related to customers’ satisfaction. The

framework has three sections; planning processes, design processes and

monitoring processes. This means using an integrative and holistic

approach, which optimizes the interaction of primary processes and

activities.

Mittal and Anil Chandhok (2001)38 attempted to study the impact

and perspective of insurance sector before and after privatization in the

pre-scenario privatization 75% of the business was generated in the

month of January, February and March for income tax saving while the

remaining 25% of the business was procured in the remaining nine

months. In the post-scenario privatization, private companies are likely to

target villages population which is almost untapped. A performance

survey regarding the number of policies sold for the year 2001 is

analyzed in (Ambala City, Kurukshetra, Karnal Branch 1 and 2) selected

branches of LIC in the state of Harayana. Findings of the study were that

85% of the majority of the business in the Life Insurance Sector is from

27

the male segment of the India population and only 15% of the female

population is insured.

Rajkumar (1985)39 views that advertising is influencing a

customers’, who has a limited spending power and it seems to operate

only through familiarizing, spreading news, over coming inertia and

image building. The prime objective of advertising is one among the

corporate image building improving market share, educating informative

and to have staff support.

28

FOOT NOTES

1. N.K. Sharma* and V.S. Kannan Kamala Nathan** (2011) *Faculty

Member, Department of E.A.F.M., University of Rajasthan, Jaipur

– 302 005. **Head of Department of Commerce & Vice-Principal,

KES Shroff College of Arts & commerce, Mumbai: Indian Journal

of Commerce, Vol. 64 No.1, January-March 2011, Pp. 97-101.

2. Dharmendra Singh (2011) Associate Professor, School of

Management Sciences, PO Kashipur, Biruha Gosaigani, 19th KM

Stone,Lucknow-Sultanpur (NH-56), Lucknow – 227 125, Uttar

Pradesh, India: BUSINESS STANDARD REPORTER (2011)30

Mumbai, 1June, 2011.

3. Frank,B.and Enkawa, T. (2009), "Economic influences on

perceived value, quality expectations and customer satisfaction",

International Journal of Consumer Studies, Vol. 33,No. 1, pp. 72-

82.

4. Meirovich,G.and Bahnan,N. (2008), "Relationship between the

components of product/service quality and the customers' emotions

and satisfaction", Journal of Industrial Engineering and

Management, Vol. 1, No. 2, pp. 186-208.

5. Gopalakrishnan G. (2008), “The Insurance Customer – The

Consumer Protection Act, 1986”, Irda Journal, Vol. VI (3), pp.33-

35.

6. LIC Survey (2008), “LIC to Develop Model for ‘High-end’

claints”, Financial Express, 1 st February, 2008.

7. Sunayna Khurana (2008),”Customers Preference in Life Insurance

Industry in India”, ICFAI Journal of service Marketing, Vol. VI.

(3), pp. 60-68.

29

8. “An overview of the private insurance company” Insurance Theory

and practice, Nalini Prava Tripathy and Prabir Pal, Prentice Hall of

India Private Ltd, New Delhi. PP 104-115.

9. Alok Mittal and Akash kumar (2007) An Exploratory studs of

factors Affecting Selection of life insurance products”. Insurance

theory and practice, Nalini prava Tripathy and prabir pal, prewtice-

hall of India private limited, New Delhi pp 72-81

10. VOICE Survey (2006) on “Customer’s satisfaction in Insurance

sector,” Consumer voice Vol 7(3) May-June.

11. Song Hongmei (2006) “Insurers score Low in Client Satisfaction”,

http://chindaily.com.cn, 22nd October.

12. The efficiency of LIC during the post liberalization and

Globalisation period – A case study of West Bengal, Business

Perspection Vol.8 (2) PP 25-39.

13. “Customer satisfaction in Insurance Sector” usmania Journal of

International Business Studies Vol.1 (2)

14. Evangelos Tsoukatos and Rand Graham k. (2006), “Path Analysis

of Perceived Service Quality, Satisfaction and Loyalty in Greek

Insurance”, Managing Service Quality, Vol.16 (5), PP 501 – 519.

15. Gorden H.G., Dougall M.C. and Terrence Lepesque (2006),

“Customers Satisfaction in Service Quality”, Vikalpa, Vol. V (2).

16. Pramod Pathak and Saumya Singh (2005), “Life Insurance

Corporation: The Leader on the Back Foot,” Chapter included in

Insurance: Theory and Practice, Prentice Hall of India pp. 38-49.

17. Gayathri, Lakshmisha and vinaya (2005) in study entitled “A pilot

study on the service quality of Insurance Companies” Journal of

Services research Vol.5 (2) PP 123-138.

18. Rajesh, C Jampala and BH .V.Rao, “The indomitable and

invincible LIC” Insurance chronicle, Aug 2005 pp 31-36].

30

19. Mony S.V (2005) “New Initiatives in the Insurance sector:

opportunities and challenges” Vikal pa Vol:30(3) pp 102 -105.

20. Das, N. and Samanta, N. (2005), "Evaluation of customer

satisfaction level of different projects", Quality Assurance: Good

Practice and Law, Vol. 11, No. 2, pp. 75-84.

21. Raman & Gayathri “A study on customers Awareness towards

New Insurance Companies”, Indian Journal of marketing Vol

XXXIV, January 2004, PP 6-8

22. Ayyar, N. 2004. A Spicy Bouquet of Benefits –New products and

Features of Life Insurers. IRDA Journal, May: 27-29.

23. Banu, V. (2004),” Quality of Service in Non-Life Insurance’,

Insurance Chronicle, April, pp.20-26.

24. Shohit and Sanjay.Shukla, “ An empirical study and analysis of

failure of private insurance players in rural areas “ Insurance

chronicle May 2004 pp 56-62].

25. Agarwal V.K” Insurance expectation in a liberalized insurance

market" Chartered secretary Aug 2004 –pp 238-240]

26. Mathur, S.B (2003),” Strategies…” IRDA Journal, December,

Vol, 11, No.1, pp. 29-30.

27. PARADIGM vol. VIII No. 2 July – December 2003 pp 91-103

28. Thripurasundari attitude of policy holders towards LIC. Kisan

world May 2002 VOl 29 No 5 pp21].

29. Chandra Mohan, “A study on marketing of Life Insurance Services

in Erode District of Tamil Nadu. “Submitted by Mr. Chandra

Mohan (under the supervision of Dr. L.Manivannan) to

Bharathiyar University in Dec. 2002.)

30. Shika Sharma “Changing face of Life Insurance in India, Insurance

chronicle, Dec.2002 PP 25-27.)

31

31. Dhurva, Mukesh and Rajan A. Kumar (2002),”Liberalization of

Insurance Sector: Social Implications”, Indian Management

Studies Journal, vol.6, pp .109-117.

32. Insurance Sector: Challenges and Strategies JIMS8M October –

December 2002 PP 40-44.

33. Mittal and Anil “Privatization of Life Insurance Sector in India

Impact and perspective” Indian Journal of marketing vol. XXXII

No.11 Nov 2002 PP 5-6, 14.

34. (Pavesh Paranish “Distribution of Life Insurance and Industry in

Transition” chartered Secretary, August 2001, PP 230-234)

35. Discriminant Service Quality among public and private players in

Life Insurance marketing journal of Insurance and risk

management. vol.V PP.(10)13- 26.

36. Malhotra RN Liberalizing India’s Insurance Industry” Chartered

Secretary Jan 1996 PP 1-11.

37. Muffatto, M. and Panizzolo, R. (1995), "A process-based view for

customer satisfaction", International Journal of Quality and

Reliability Management, Vol. 12, No. 9, pp. 15469.

38. Mittal and Anil Chandhok (2001) Privatization of Life Insurance

Section and impact and perceptions India found of marketing Vol.

XXXII No.11 No 2002 PP 5-7.)

39. Rajkumar “The role of insurance advertising” Indian Journal at

Marketing. Vol – XV No -2 July 1985 PP 21-33.

32

CHAPTER III

PROFILE OF COMPANIES IN LIFE INSURANCE

BUSINESS AND STUDY AREA

In this chapter an attempt has been made to briefly state the profile

of the companies which are doing life insurance business in India and

profile of the study area.

3.1 PROFILE OF COMPANIES IN LIFE INSURANCE BUSINESS

Insurance is one of the major segments of financial market. The

insurance business is unique in the sense that it is rewarded for managing

the risk of other parties. In India insurance sector is not only playing a

role within the financial system but also has a significant socio-economic

function of providing risk cover to the poor population. With the opening

up of Indian insurance market, competition has become intense. Every

company is trying to woo customers to have large chunk of the market

share but barring a few companies most of the new insurance companies

are struggling to survive in the market. Inspite of the importance of

insurance, it is still in nascent stage in India. Nearly 80 per cent of Indian

population is without Life insurance cover and the Health insurance, the

penetration rates of health and other non-life insurances in India are also

well below the international level.

3.1.1 CONCEPTUAL FRAMEWORK OF INSURANCE INDUSTRY

Insurance may be described as a social device to reduce or

eliminate risks to loss of life and property. Insurance is defined as a

cooperative device to spread the loss caused by a particular risk over a

number of persons who are exposed to it and who agree to ensure

themselves against that risk. The risk cannot be averted but loss occurring

33

due to certain risk can be distributed amongst the agreed persons. They

share the loss by payment of premium, which is calculated on the

probability of loss. Insurance is a system of protection against financial

loss in which risk is shifted to a professional risk bearer (an insurance

company), in exchange for a certain sum of money (the insurance

premium). The insurer agrees to pay the insured if loss occurs.

The earliest references of insurance have been found in Babylonia.

By the middle of 14th century, as evidenced by the earliest known

insurance contract (Geneva, 1347), marine insurance was practically

universal among the maritime nations of the Europe. In London, Lloyd's

coffee House was a place where merchants, ship owners and underwriters

met to transact business. By the end of the 18th century, Lloyd's had

progressed into one of the first modern insurance companies (Rajesham

and Rajender, 2006). In India, Manusmriti (200 BC) provides Indian

version of primitive marine insurance stipulating that "the trader should

be made to pay (taxes or duties)" to the state for providing Yogakshema

(Risk and safety) taking into consideration the terms of purchase, sale,

and the length of the journey, expenses and incidentals (Bodla et al,

2003). The insurance in its modern form came to India from UK, with the

establishment of the Oriental Life Insurance Corporation in 1818, which

failed in 1834. However, the success of Indian life insurance can be

traced back roughly to the second decade of the nineteenth century when

the Madras Equitable began transacting life insurance business in the

Madras Presidency in 1829. After that, it was a rather dull phase with

regard to the growth in life insurance enterprise. The Indian life insurance

company act 1912 was the first statutory body that started to regulate the

life insurance business in India. By 1956 about 154 Indian, 16 foreign and

75 provident firms were established in India. Then the central

34

government took over these companies and as a result the LIC was

formed.

The history of general Insurance dates back to the Industrial

Revolution in the west and the consequent growth of sea-faring trade and

commerce in the 17th century. It came to India as a legacy of British

occupation. The General insurance business in India, can trace its roots to

the Triton Insurance Company Ltd., the first general insurance company

established in the year 1850 in Calcutta by the British. In 1957 General

Insurance Council, a wing of the Insurance Association of India, framed a

code of conduct for ensuring fair conduct and sound business practices. In

1972 The General Insurance Business (Nationalization) Act, 1972

nationalized the general insurance business in India with effect from

January 1, 1973 and General Insurance Corporation of India (GIC) was

formed in pursuance of the Act. The existing 107 insurers were

amalgamated and grouped into four companies viz. the National

Insurance Company Ltd., the New India Assurance Company Ltd., the

Oriental Insurance Company Ltd. and the United India Insurance

Company Ltd. These companies were formed as the fully owned

subsidiary companies of GIC. In 1999, regulatory body for insurance

sector was formed with the name of Insurance Regulatory and

Development Authority (IRDA) and the market was opened for private

players. With the entry of private insurers, the GIC subsidiaries were

delinked from the holding company in 2000, and a separate body called

General Insurers (Public Sector) Association (GIPSA) was created to

facilitate interaction among the four. The GIC was converted to function

as the National Reinsurer.

35

The first two decades of the twentieth century saw lot of growth in

insurance business. From 44 companies with total business-in-force as

Rs.22.44 crore, it rose to 176 companies with total business-in-force as

Rs.298 crore in 1938. During the mushrooming of insurance companies

many financially unsound concerns were also floated which failed

miserably. The Insurance Act 1938 was the first legislation governing not

only life insurance but also non-life insurance to provide strict state

control over insurance business. The demand for nationalization of life

insurance industry was made repeatedly in the past but it gathered

momentum in 1944 when a bill to amend the Life Insurance Act 1938

was introduced in the Legislative Assembly. However, it was much later

on the 19th of January, 1956, that life insurance in India was nationalized.

Among 154 Indian insurance companies, 16 non-Indian companies and

75 provident were operating in India at the time of nationalization.

Nationalization was accomplished in two stages; initially the management

of the companies was taken over by means of an Ordinance, and later, the

ownership too by means of a comprehensive bill. The Parliament of India

passed the Life Insurance Corporation Act on the 19th of June 1956, and

the Life Insurance Corporation of India was created on 1st September,

1956, with the objective of spreading life insurance much more widely

and in particular to the rural areas with a view to reach all insurable

persons in the country, providing them adequate financial cover at a

reasonable cost.

LIC had 5 zonal offices, 33 divisional offices and 212 branch

offices, apart from its corporate office in the year 1956. Since life

insurance contracts are long term contracts and during the currency of the

policy, it requires a variety of services need was felt in the later years to

expand the operations and place a branch office at each district

36

headquarter. Re-organization of LIC took place and large numbers of new

branch offices were opened. As a result of re-organization servicing

functions were transferred to the branches, and branches were made

accounting units. It worked wonders with the performance of the

corporation. It may be seen that from about 200 crores of New Business

in 1957 the corporation crossed 1000 crores only in the year 1969-70, and

it took another 10 years for LIC to cross 2000 crore mark of new

business. But with re-organization happening in the early eighties, by

1985-86 LIC had already crossed 7000 crore Sum Assured on new

policies.

Today LIC functions with 2048 fully computerized branch offices,

109 divisional offices, 8 zonal offices, 992 satellite offices and the

corporate office. LIC’s Wide Area Network covers 109 divisional offices

and connects all the branches through a Metro Area Network. LIC has

tied up with some Banks and Service providers to offer on-line premium

collection facility in selected cities. LIC’s ECS and ATM premium

payment facility is an addition to customer convenience. Apart from on-

line Kiosks and IVRS, Info Centers have been commissioned at Mumbai,

Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune

and many other cities. With a vision of providing easy access to its

policyholders, LIC has launched its SATELLITE SAMPARK offices.

The satellite offices are smaller, leaner and closer to the customer. The

digitalized records of the satellite offices will facilitate anywhere

servicing and many other conveniences in the future.

LIC continues to be the dominant life insurer even in the

liberalized scenario of Indian insurance and is moving fast on a new

growth trajectory surpassing its own past records. LIC has issued over

37

one crore policies during the current year. It has crossed the milestone of

issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy

growth rate of 16.67% over the corresponding period of the previous

year.

From then to now, LIC has crossed many milestones and has set

unprecedented performance records in various aspects of life insurance

business. The same motives which inspired our forefathers to bring

insurance into existence in this country inspire us at LIC to take this

message of protection to light the lamps of security in as many homes as

possible and to help the people in providing security to their families.

3.1.2 SOME OF THE IMPORTANT MILESTONES IN THE LIFE

INSURANCE BUSINESS IN INDIA ARE

In the year 1818 Oriental Life Insurance Company, the first life

insurance company on Indian soil started functioning.

In the year 1870 Bombay Mutual Life Assurance Society, the first

Indian life insurance company started its business.

In the year 1912 The Indian Life Assurance Companies Act was

enacted as the first statute to regulate the life insurance business.

In the year 1928 The Indian Insurance Companies Act was enacted

to enable the government to collect statistical information about both life

and non-life insurance businesses.

In the year 1938 Earlier legislation was consolidated and amended

to by the Insurance Act with the objective of protecting the interests of

the insuring public.

In the year 1956 245 Indian and foreign insurers and provident

societies were taken over by the central government and nationalized.

LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital

contribution of Rs. 5 crore from the Government of India.

38

The General insurance business in India, on the other hand, can

trace its roots to the Triton Insurance Company Ltd., the first general

insurance company established in the year 1850 in Calcutta by the

British.

3.1.3 DEFINITION OF INSURANCE IN FINANCIAL SENSE

Insurance is a financial arrangement, which redistributes the costs

of unexpected losses among the members of the pool. The pool is a

collection of people facing common risks. All members contribute a fixed

amount towards a pool called premium. In exchange for the premium

payment, the person gets an assurance that a certain sum of money is to

be paid to him on the happening of the event insured against. The

assurance is that his loss will be made good. Thus, insurance involves the

transfer of loss exposures to an insurance pool and the redistribution of

losses among the members of the pool.

3.1.4 DEFINITION OF INSURANCE IN LEGAL SENSE

Insurance can be defined as a contract between two parties by

which one party undertakes to make good or indemnify any financial loss

suffered by other party, in consideration of a sum of money, on the

happening of a specified event e.g. fire, accident or death. We call the

party agreeing to pay for the losses of the insurer. We call the party

whose loss makes the ‘insurer’ Pay the claim the insured. We call the

payment insured pays to the insurer the premium. We call the insurance

contract a policy. In the end we can sum up that insurance is a transfer of

risk from the individual to the group and there is a sharing (pooling) of

losses on some equitable basis such that fortuitous losses can be

indemnified (paid).

39

3.1.5 PURPOSE AND NEED

Let us discuss in detail the purpose and need of insurance. As we

all know life is full of uncertainties and insurance is based on

uncertainties and if there are no uncertainties about the occurrence of a

disaster, the concept of insurance will cease to exist. If we all are able to

predict the future dangers correctly then we can take a safeguard action to

move out of the danger but problem is that we cannot predict death,

disaster and danger. All individuals as well as their tangible and

intangible assets are exposed to all types of unforeseen risks. Thus,

insurance is done against such possible contingencies to save the owner

and his family from all sorts of sufferings by making good the losses of

the unfortunate few, through the help of the fortunate many, who were

exposed to the same risk, but saved from the misfortune. As insurance is

a system of sharing risk that seems to be too great to be borne by one

individual we can list out the benefits derived by individual and society

from the insurance as:

1. Indemnifies loss.

2. Reduces worry and fear.

3. Makes available funds for investment.

4. Provides employment to a large number of people.

5. Educates people about loss prevention.

6. Insurance enhances credit worthiness.

7. Social benefits.

40

3.1.6 FEATURES OF THE PRODUCTS OF LIC OF INDIA

The object of this chapter is to analyze the features of the products

of LIC of India. to bring out the common features to differentiate its

products. For the purpose, the products of LIC of India were grouped

into children plans, plans for Handicapped Dependents, Endowment

Assurance plans, plans for High worth individuals, Money Back plans,

Special Money Back plans for women, Whole Life plans, Term

Assurance plans, joint life plan, Unit Linked Insurance plans and Golden

jubilee plan (Special plan). Certain terms used in this chapter are briefly

described as follows.

3.1.6.1 Auto cover

If two full year premium have been paid, any subsequent premium

be not duly paid, full death cover shall continue for a period of two years

from the date of First unpaid premium.

3.1.6.2 Cooling-off period

If a policyholder is not satisfied with the “Terms and Conditions”

of the policy, he/she may return the policy within 15 days from the date

of receipt of the policy.

3.1.6.3 Maturity benefit

Under maturity of a policy, a policyholder receives Sum Assured

plus bonus and loyalty additions if any.

3.1.6.4 Death Benefit

In case of death of a policyholder during policy term, sum assured

plus bonus will be paid to the nominee.

3.1.6.5 Waiting period

A waiting period of one year will apply from the date of

commencement of risk or revival of the policy to the birth of a

congenitally disabled child with congenital disabilities during a period of

one year from the date of commencement of risk or revival.

41

3.1.6.6 Reversionary bonus

The bonus is allotted as a uniform percentage addition to the sum

assured or sum assured plus existing bonus addition and is payable along

with the sum assured according to the terms of the policy.

3.1.6.7 Disability Benefit

The benefit is granted to all the lives assured excepting a few

policies such as Pure Endowment, the Temporary Assurance, Mortgage

Redemption Assurance, convertible Term Assurance, the deferred

Annuity, Retirement Annuity and Restrictive policies. The benefits are

offered free of cost and no premium is charged for the purpose.

3.1.6.8 Rider benefit

Additional benefits are made available through riders. Usually

riders provide for accident benefit, disability benefits, critical illness

rider, major surgical assistance benefit, hospital cash benefit. Additional

premium will have to be paid for these rider benefits.

3.1.6.9 Key man insurance

Key man insurance is generally a term life insurance policy, with

the length term being the time until that employee retires. The company

pays the premium on the policy receives the death benefits if the

employee unexpectedly dies. If the employee retires, the company may

choose to also surrender the insurance contract, giving the employee the

chance to convert the policy to a permanent one.

3.1.7 The Life Insurance Corporation Act, 1956

An Act to provide for the nationalization of life insurance business

in India by transferring all such business to a corporation established for

Life Insurance. The LIC came into being 1956 after the nationalization

and merger of about 250 independent Life Insurance Societies. It is head

quartered in Bombay (Mumbai). The LIC of India invests a considerable

part of its funds in shares and loans of the Industrial Finance Corporation

42

of India (IFCI), the State Financial Corporations and the shares and

debentures of joint stock companies. The corporation also undertakes to

underwrite the issue of shares of joint stock companies. The process of

nationalization of life insurance is divided into two parts.

i. Termination of personal management and

ii. Termination of ownership management (private)

3.1.7.1 Constitution of the Corporation

The Corporation consists of such number of persons not exceeding

(sixteen)as the Central Government may think fit to appoint thereto and

one of them shall be appointed by the Central Government to be the

Chairman thereof.

3.1.7.2 Capital of the Corporation

The original capital of the Corporation shall be five crores of

rupees provided by the Central Government after due appropriation made

by parliament by law for the purpose, and the terms and conditions

relating to the provision of such capital shall be such as may be

determined by the Central Government.

The Central Government may, on the recommendation of the

Corporation, reduce the capital of the Corporation to such extent and in

such manner as the Central Government may determine.

3.1.7.3 Function of the Corporation

It shall be the general duty of the Corporation to carry on life

insurance business, whether in or outside India, and the Corporation shall

so exercise its powers under this Act as to secure that life insurance

business is developed to the best advantage of the community such as:

i. To carry on capital redemption business, annuity certain business

or reinsurance business in so far as such reinsurance business

appertains to life insurance business.

43

ii. To invest the funds of the Corporation in such manner as the

Corporation may think fit and to take all such steps as may be

necessary or expedient for the protection or realization of any

investment; including the taking over of and administering and

property offered as security for the investment until a suitable

opportunity arises for its disposal;

iii. To acquire, hold and dispose of any property for the purpose of its

business.

iv. To transfer the whole or any part of the life insurance business

carried on outside India to any other person or persons, if in the

interest of the Corporation it is expedient so to do.

v. To advance or lend money upon the security of any movable or

immovable property or otherwise.

vi. To borrow or raise any money in such manner and upon such

security as the Corporation may think fit.

vii. To carry on either by itself or through any subsidiary any other

business in any case where such other business was being carried

on by a subsidiary of any insurer whose controlled business has

been transferred to and vested in the Corporation under Act;

viii. To carry on any other business which may seem to the Corporation

to be capable of being conveniently carried on in connection with

its business and calculated directly or indirectly to render profitable

the business of the Corporation;

ix. To do all such things as may be incidental or conducive to the

proper exercise of any of the powers of the Corporation.

In this discharge of any of its functions the Corporation shall act so far as

may be on business principles.

44

3.1.8 Transfer of Assets and Liabilities of Existing Insurers carrying

on controlled business

On the appointed day there shall be transferred to and vested in the

Corporation

The assets appertaining to the controlled business of an insurer

shall be deemed to include all rights and powers, and all property,

whether movable or immovable, appertaining to his controlled business,

including, in particular, cash balances, reserve funds, investments,

deposits and all other interests and right in or arising out of such property

as may be in the possession of the insurer and all books of account or

document relating to the controlled business of the insurer; and liabilities

shall be deemed to include all debts, liabilities and obligations of

whatever kind then existing and appertaining to the controlled business of

the insurer.

3.1.9 Application of the Insurance Act

The following sections of the Insurance Act shall, so far as may be

applied to the Corporation as they apply to any other insurer, namely

Section 2, 2B, 3, 18, 26, 33, 38, 39, 41, 45, 46, 47A, 50, 51, 52, 110A,

110B, 110C, 119, 121,122, and 123. The Central Government shall as

soon as may be after the commencement of this Act, by notification in the

official Gazette, direct that the following sections of the Insurance Act

shall apply to the Corporation subject to such conditions and modification

as may be specified in the notification, namely Section

2D,10,11,13,14,15,20,21,22,23,25,27A,28A,35,36,37,40,40A,40B,43,44,

102 to 106,107 to 110,111,113,114 and 116A.

(2A)Section 42 of the Insurance Act shall have an effect in relation

to the issue to any individual of a license to act as an agent for the

purpose of soliciting or procuring life insurance business for the

Corporation as if the reference to an officer authorized by the Controller

45

in this behalf in sub-section (1) thereof included a reference to an officer

of the Corporation authorized by the Controller on his behalf.

The Central government may, by notification in the Official

Gazette direct that all or any of the provisions of the Insurance Act other

than those specified in sub-section (1) or sub- Section (2), shall apply to

the Corporation subject to such conditions and modifications as may be

specified in the notification.

Every notification issued under sub-section (2) or sub-section shall

be laid for not less than 30 days before both the houses of Parliament as

soon as possible after it is issued, and shall be subjected to such

modifications as Parliament may make during the session in which it is so

laid or the session immediately following.

Save as provide in this section, nothing contained in the Insurance

Act shall apply to the Corporation.

3.1.10 Deduction of Income-Tax not to be made on Interest or

Dividend

Notwithstanding anything contained in Section 193 or Section 194

of the Income-tax Act, 1961 (43 of 1961), no deduction of income-tax

shall be made on any interest or dividend payable to the Corporation in

respect of any securities or shares owned by it or in which it has full

beneficial interest.

3.1.11 Special provision regarding Transfer of controlled Business of

Certain Composite Insurers

Notwithstanding anything contained in clause (c) of section 44, the

Central Government may, by notification in the Official, direct that on

and with effect from such date as may be specified in the notification the

assets and liabilities appertaining to the controlled business of composite

insurer in respect of the management of whose affairs an Administrator

has been appointed under Section 52 A of the Insurance Act shall be

46

transferred to and vested in the Corporation, and on the issue of such a

notification the provision of this Act shall, so far as may be, apply in

relation to such insurer and to the transfer and vesting of the assets and

liabilities of his controlled business in the Corporation as they apply in

relation to all other insurers and to the transfer and vesting of the assets

and liabilities of their controlled business in the Corporation, subject to

the modification that references in this Act to the appointed day shall be

construed as reference to the day specified in the notification.

3.1.12 Defects in Constitution of Corporation or Committees Not

Invalidate Acts or Proceedings

No Act of preceding the Corporation or of any committee of the

Corporation shall be called in question on the ground merely of the

existence of any vacancy or defect in the constitution of the Corporation

or Committee, as the case may be.

3.1.13 Protection of action taken under Act

No suit, prosecution or other legal proceeding shall lie against any

member or employee of the Corporation for anything which is in good

faith done or intended to be done under this Act.

3.1.14 Exception in the case of Insurance Business in respect of

persons residing outside India.

Notwithstanding anything contained in Section 30 or in the

Insurance Act, the Central Government may, by order, permit any person

who has made an application in that behalf, to carry on life insurance

business in India in respect of the lives of persons ordinarily resident

outside India. Subject to such restrictions and conditions as may be

specified in the order and any such order shall be deemed to have effect

as if it were a certificate or restrictions issued by the Controller to such

person under Section 3 of the Insurance Act in respect of that class of

business. Nothing in sub-section (1) shall authorize any person permitted

47

to carry on insurance business of the nature referred to in that sub-section,

to insure the life of any person ordinarily resident outside India, during

any period of his temporary residence in India.

3.1.15 Power to make rules

The Central Government may, by notification in the Official

Gazette, make rules to carry out the purpose of this Act. In particular, and

without prejudice to the generality of the foregoing power, such rules

may provide for all or any of the following mattes, namely:

i. The term of office and the conditions of service of members;

ii. the manner in which the moneys and other assets belonging

to any such fund as referred to in Section shall be

apportioned between the trustees of the fund and the

Corporation;

iii. The services which the chief agent should have rendered for

the purpose of the proviso to section 12;

iv. The terms and conditions of service of the employees and

agents of the corporation, including those who became

employees and agents of the Corporation on the appointed

day under this Act;

v. The jurisdiction of the Tribunals constituted under Section

17;

vi. The manner in which, and the persons to whom, any

compensation under this Act may be paid;

vii. the time within which any matter which may be referred to a

Tribunal for decision under this Act may be so referred to;

viii. The manner in which and the conditions subject to which

investments may be made by the Corporation;

ix. The manner in which an Employee and Agents Relations

Committee may be constituted for each zonal office;

48

x. The form in which the report giving an account of the

activities of the Corporation shall be prepared;

xi. The conditions subject to which the Corporation may

appoint employees;

xii. The fees payable under this Act and the manner in which

they are to be collected;

xiii. Any other matter which has to be or any prescribed.

The regulations and other provisions as in force immediately

before the commencement of the Life Insurance Corporation

(Amendment) Act, 1981, with respect to the terms and conditions of

service of employees and agents of the Corporation including those who

became employee and agents of the Corporation on the appointed day

under this Act, shall be deemed to be rules made under clause (cc) of sub-

mission (2) and shall, subject to the other provisions of this section, have

effect accordingly.

The power to make rules conferred by clause (cc) of sub-section (2)

shall include

i. The power to be given retrospective effect to such rules; and

ii. the power to amend by way of addition, variation or repeal, the

regulation and other provisions referred to in sub-section (2-A),

with retrospective effect, from a date not earlier than the

twentieth day of June, 1979.

(2-C) The provisions of clause (cc) of sub-section (2) and sub-section (2-

B) and any rules made under the said clause (cc) shall have effect, and

any such ruled made with retrospective effect from any date shall also be

deemed to have an effect from that date, notwithstanding any judgments,

decree or order of any court, tribunal or other authority and

notwithstanding anything contained in the Industrial Disputes Act, 1947

49

(14 of 1947) or any other law or any agreement, settlement, award or

other instrument for the time being in force.

Every rule made by the Central Government under this Act shall be

laid, as soon as may be after it is made, before each House of Parliament

while it is in session, for a total period of thirty days which may be

comprised in one session or in two more successive sessions, and if,

before the expiry of the session immediately following the session or the

successive session aforesaid, both Houses agree in making any

modification in the rule or both Houses agree that the rule should not be

made, the rule shall thereafter have effect only in such modified form or

to be of no effect, as the case may be; so, however, that any such

modification or annulment shall be without prejudice to the validity of

anything previously done under that the rule should not be made, the rule

shall thereafter have an effect only in such modified form or to be of no

effect, as the case may be; so, however, that any such modification or

annulment shall be without prejudice to the validity of anything

previously done under that rule.

3.1.16 ORIGIN AND HISTORY OF LIC OF INDIA

The story of insurance is probably as old as the story of mankind.

The same instinct that prompts modern businessmen to day to secure

themselves against loss and disaster existed in primitive men also.

Through the concept of insurance is largely a development of the recent

past, particularly after the industrial era-past few centuries-yet its

beginnings date back almost 6000 years.

Life insurance in its modern form came to Indian from England in

the year 1818. Oriental Life Insurance Company started by Europeans in

Calcutta was the first Life Insurance Company on Indian soil. All the

insurance companies established during that period were brought up with

50

the purpose of looking after the needs of European community and Indian

natives were not being like Babu Muttylal Seal, the Foreign Life

Insurance Companies started insuring Indian lives. Bombay Mutual Life

Assurance Society heralded the birth of first Indian Life Insurance

Company in the year 1870, and covered Indian lives at normal rates.

Bharat Insurance Company (1986) was also one of such companies

inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise

to more insurance companies. The United India in Madras, National

Indian and National Insurance in Calcutta and the co-operative Assurance

at Lahore were established in 1906. Hindustan co-operative Assurance at

Lahore were established in 1906. Hindustan Co-operative Insurance

Company took its birth in one of the rooms of the Jorasanko, house of the

great poet Rabindranath Tagore, in Calcutta. In the year 1912, the Life

Insurance companies Act, and the Provident Fund Act were passed. The

premium rate tables and periodical valuations of companies should be

certified by an actuary.

3.1.17 Objectives of LIC of India

The Objectives of LIC of India are:

i. Spread life insurance 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 a

reasonable cost.

ii. Maximize mobilization of people’s savings by making

insurance linked savings adequately attractive.

iii. 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; the

51

funds to be developed 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.

iv. Conduct business with utmost economy and with the full

realization that the money belongs to the policyholders.

v. Act as trustees of the insured public in their individual and

collective capacities.

vi. Meet the various Life Insurance needs of the community that

would arise in the changing social and economic environment.

vii. Involve all people working in the corporation to the best of their

capabilities in furthering the interests of the insured public by

providing efficient service with courtesy.

viii. 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 objectives.

The Mission is to

“Explore and enhance the quality of life of people through

financial security by providing products and services of aspired

attributes with competitive returns and by rendering”.

The Vision is

“A trans-nationally competitive financial conglomerate of

significance to societies and price of India”.

3.1.18 LIC OF INDIA OPERATIONS

The LIC transacts business throughout India with a four tier

structure, the central office at Mumbai, seven zonal offices, 100

Divisional offices and about 2048 Branch offices in India. it also transacts

business in the united kingdom (U.K), Mauritius, Fiji through its Branch

52

offices, which report directly to the central office. In Bahrain, Nepal,

Kenya and Sri Lanka, the business is done through joint ventures

incorporated locally. All offices have clearly demarcated geographical

areas of operations, except the Divisional and Branch offices in big cities,

which have common areas.

Almost 90 per cent of the activities relating to policyholders, from

receipt of proposal to settlement of claims, are done at level of the branch

offices. The other offices have supervisory and advisory functions.

Actuarial and Investments functions are usually done at the central office.

The chief Actuary, responsible for certifying new plans of assurance,

studying mortality and other experiences, making periodical valuations

and determining the bonus allocations, will be at the central office. All

contacts and correspondence with the Government will be from the

central office.

3.1.19 INVESTMENT PATTERN OF LIC OF INDIA

Life insurance is a long duration contract which generates

investable surplus which is invested keeping in view the safety and

security of the funds spread over different categories. Industry and region

so as to serve larger economic and social interest while optimizing yield.

The investment of the corporation fund is governed by section 27 A of

the Insurance Act 1938 and subsequent guidelines/ Instructions issued by

the government of India from time to time. The modified section 27 A of

the Indian Insurance Act 1938 prescribes percentage wise ceiling of

maximum limit in different categories of investment. These have been

modified from time to time with a view to preempting and increasing

proportion of its funds in Govt. / Govt. guaranteed / Approved/ Socially

oriented investments. The LIC has been directed to concentrate move on

the financing of socially oriented investments.

53

LIC is one of the largest investors in government securities,

infrastructure and social sector. The corporation helps to boost up the

industrial growth in the country. It help the small and medium scale

industries by granting loans for setting up co-operative industrial estates.

The corporation assists state level financial corporation and all

India financial corporations like, IDBI, IFCI, ICICI, etc. by way of

subscription to bonds debentures issued by such institution. It also makes

investment in the corporate sector in the form of long medium of short

term loans to companies/ corporations.

Based on the recommendation of the Jaganathan committee to

review the investment policies of the LIC, section 27 A was further

amended in 1975. The amended section 27 a stipulated that accretions to

the controlled fund of the LIC could be invested as under.

3.1.19.1 Features of Children plan

This plan is designed in such a way that the parent a legal guardian

or any other near relative of the child to provide for the child’s future by

payment of very low premium. The features of various children plans of

LIC of India have been shown in Table 4.1. As per table 4.1 the children

plans were Jeevan Anurag, Jeevan Kishore, Jeeen Chhaya, Marriage

Endowment/ Education, Koman Jeevan, Child Career Plan and Child

Future plan and Child Dortune plus. The common features in all these

plans were.

i. The premium paid by the parent can be taken as savings for the

purpose of claiming income-tax benefit under sec 80C1 and sec 10

(10D)2 of Income Tax Act, 1961.

ii. The terminal benefits of the products were exempted from income-

tax.

54

iii. Each plan carries death benefit or maturity benefit whichever is

earlier.

iv. The Sum assured shall be in multiples of Rs.5000.

However, each product was distinguished from other product. The

distinctive features among children plans were as follows.

i. Entry age varies for example in case of Jeevan Kishore the entry

age starts from the date of birth and ends upto 20years of age

(Jeevan Anurage). So one can take children plan policy from 0

days of age to 20 years of age.

ii. The maturity age also varies among plans from 26 years of age to

75 years of age. A child can reap the terminal benefit of his / her

life policy even at the age of 75 years.

iii. The policy term varies from 5 years to 35 years. So, it encourages

small savers as well as big savers.

iv. The sum assured also varies from Rs.50, 000 to no maximum limit.

This feature is meant for encouraging all sections of income group.

v. The amount of death benefit also varies from one product to other.

vi. The amount of maturity benefit also varies from one product to

other.

vii. The benefits comprised of sum assured, rider benefit, bonus, GA at

Ra.755 per 1000 of sum assured, premium waiver benefit…… etc.

Thus, The various children’s plan were offered with a view to

cover various section of the society in terms of age, income,

requirement of benefit earlier or later, want to get more benefits,

earlier entry and later entry.

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TABLE-3.1 CHILDREN PLANS OF LIC OF INDIA

FEATURES

Sl No

Kinds of

Child plans

Tax Benefit

Sec 80 C sec 10 (10) D

Entry Age

Min/Max

Maturity Age

Min/Max

Policy Term

Sum Assure

d

Premium payment Option

Death Benefit

Maturity Benefit

Premium

Term Special Features

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)

1 Jeevan Anway

Yes 20 to 60

Yrs 70 Yrs

5,10-25 Yrs

50,000 no limit

Yly, Hly, Qly,

Mthly

S.A.+ TAR

SA+TA ABR

Policy term or

ply term-3

1.Rider Benefit-ADR Term AR CI Rider

2.premium waiver Benefit-SA equal to CIR

3.Surrender value-30% of Total Premium 90% of SP

4. Assured Benefit-20% of SA 40% of SA+ Reversionary bonus

2 Jeevan Kishore

Yes 0-12 Yrs 20-45 Yrs 15-35 Yrs

50,000-40

lakhs

Yly, Hly, Qly,

Mthly

1.Rider Benefir – ADR 2.Max SA if age @ entry

levsthanlogrs-15 lakhs

3 Jeevan Chhaya

Yes 18-45 Yrs 65 Yrs 18-25 Yrs

50,000 no limit

Yly, Hly, Qly,

Mthly

SA 25% of SA last 4 yrs of

term

SA &A B, 25%

balance of SA

1.Rider Benefit –ADR

2.SA in multiples- Rs.5000

4

Marriage Endowment/

Education Annuity


50,000 no limit

Yly, Hly, Qly,

Mthly

SA + Bonus

SA+Bonus 1.Rider Benefit- ADR

2. SA in multiples- Rs.25000

56

TABLE-3.1 (Contund….) CHILDREN PLANS OF LIC OF INDIA

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)

5 Komal Jeevan

Yes 0-10 Yrs 26 Yrs 1 lakh to 25 lakhs

Yly, Hly, Qly,

Mthly

S.A.+ GA @ 75% per 1,000 SA+CA

8-18 Yrs

1.Rider Benefit- Term Rider Benefit 1 lakh 2.premium waiver

Benefit-Propose upto 50 yrs

6 Child

Career Plan Yes 0-12 Yrs

23-27 Yrs

11-27 Yrs1 lakh to 1 crore

Yly, Hly, Qly,

Mthly

CCP Allpram paid +3%

p.a.SA+VB+FAB CFP

CCP 3% of SA+B 15%of SA+B

Gyr or Term 5

Yrs

1.SA in Multiples-Rs.5000

7 Child future

Plan Yes

Allprm paid + 3% p.a

SA+VB+FAB

CFB 25% of the SA 10% of the SA

50% of the SA+Bonus+FA

B

8 Child

Fortune plus

Yes

Child 0-17 Yrs Assured

18-55 Yrs

Child 25 Yrs

Assured 75 Yrs

Assured Age entry

Age which ever is high

Yly, Hly,

Qly, Mthly

SA or full future

premiums paid, fund

value

Fund Values

SP or Same as policy term

1.charges- ply adm, FA,Swft,Bid/offer, Sonice Tax, misch.

Source: Secondary data

57

3.1.19.2 Features of plans for Handicapped Dependents

This plan is designed to make provision for maintenance of Handicapped

Dependent. (H.D). this plan is allowed to all classes of sub-standard lives.

The plan is allowed to group A deformity with loss of one limb (L.A) at

standard rates with AB, PDB & EPDB. Two kinds of products were

available in favour of handicapped dependents viz.., Jeevan Aadhar and

Jeevan Vishwas as per Table 4.2. The common features in these two

plans were.

i. The premium paid by the promoter can be taken as his/her savings

for the purpose of income-tax benefit under 80 C and sec 10(10D)

of Income Tax Act, 1961.

ii. The terminal benefits were exempted from income tax.

iii. Each product carries death benefit or maturity benefit whichever is

earlier.

However, the features which differentiate there the two products were

as follows:

i. Entry age ranges from 20 years of age to 65 years of age.

ii. Policy term varies from 30 years of age to 35 years of age.

iii. Sum assured starts from Rs.50, 000 to no maximum limit.

iv. Premium payment on the basis of monthly, quarterly, half-yearly and

annually.

v. Variation in terminal benefits.

vi. Accident benefit is also available in case of Jeevan Vishwas.

58

TABLE-3.2 PLANS HANDICAPPED DEPENDENTS PLANS OF LIC OF INDIA

FEATURES

Sl No

Kinds of

handicapped

dependents plans

Tax Benefit

Sec 80 C

sec 10 (10) D

Entry Age

Min/Max

Maturity

Age Min/Max

Policy Term

Premium

in multiples

Sum

assured


Maturity Benefit

Death Benefit

Special Features

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)

1 Jeevan Aadhar

Yes 22 to 65

Yrs 75 yrs

10-35 Yrs

5 Yrs Rs.50,000 no

limit Yly, Hly,

Qly, Mthly

SA+ Terminal Benefit

1. Rebate-Rs.50000 & above Rs. 2. Guaranted addition-Rs.100 per 1000 SA

2

Jeevan Vishwas


25 Yrs Rs.50,000 no

limit Yly, Hly,

Qly, Mthly

SA+GA+LA 20%

of Notional

SA

SA+GA+LA 1. accident Benefit-per 1000 SA


59

3.1.19.3 Features of Endowment Assurance plans

This plan is a combination of whole life and end assurance plan.

Even after the premium paying term is over, risk cover continues fill the

death of the policyholder. Endowment plan provides financial assistance

to the family of the life assured in the event of policyholder’s early death

or a lump-sum amount on policyholder’s survival up to the selected term.

Endowment plan is best for every reason, for all long and short term

financial needs. Jeevan Milta (Double cover, Triple cover), Jeevan

Anand, New janaraksha policy. Endowment Assurance policy,

Endowment Assurance policy (Limited pay) and jeevan Amrit were the

Endowment Assurance plans of LIC of India as per Table 4.3. The

common features of these plans were as follows.

i. The premium paid by the promoter can be taken as his/her

savings for the purpose of income-tax benefit under sec 80 C

and sec 10 (10D) of Income Tax Act, 1961.

ii. The terminal benefits were exempted from income-tax.

iii. Each product carried death benefit or maturity benefit whoever

is earlier.

iv. Sum assured is in multiples of Rs.5, 000.

v. Payment of premium may be monthly, quarterly, half-yearly

and annually.

However, the endowment plans were distinguished among themselves by

means of the following features viz…,

i. Entry age from 12 years to 60 years. Even senior citizens can

take an endowment plan.

ii. Maturity age ranges from 65 years of age to 70 years.

iii. Policy term varies from 5 years to 25 years.

iv. Minimum sum assured ranges from Rs.50, 000 to 1, 00,000 but

no maximum limit.

60

TABLE-3.3 ENDOWMENT ASSURANCE PLANS OF LIC OF INDIA FEATURES

Sl No

Kinds of Child

plans

Tax Benefit S 80 C sec 10 (10) D

EntryAge Min/Max

Maturity Age

Min/Max

Policy Term

Sum Assured Min/Max

Sum Assure

d in Multipl

e


Maturity Benefit

Death Benefit

Special Features

1 Jeevan Mitra

(Double cover, Triple cover)


50,000 no limit

Rs.5000

Yly, Hly, Qly, Mthly

Double SA+A.Bonus

Triple SA+A.Bonus

Double 2 times of

SA + Bonus Triple

1.Accident Benefit-per 100 SA

2 Jeevan Anand Yes 18-65 Yrs 65 Yrs 5-57 Yrs

1 lakhs- no limit

Yly, Hly,

Qly, MthlySA+B

SA+Prem paying Term+ Bonus

1.Accident Benefit-per 100 SA

3 New janarakshs

policy Yes 18-50 Yrs 70 Yrs

12-30 Yrs

30,000 no limit

Rs.5000


SA+Bonus SA+Bonus 1.accident Benefit-5 lakhs to 7.5 lakhs

4 Endowment

assurance policy Yes 12-60 Yrs 75 Yrs

5-55Yrs

50,000 no limit

Rs.5000


SA+B+Final additional

Bonus

SA+AB+FAB

1.Accident Benefit-Rs.extra

5 Endowment

assurance policy (Limited pay


50,000 no limit

Rs.5000


SA+B+FAB+VRB+FAB

SA+B_VRB+FAB

1.Accident Benefit-Re.1 extra

6 Jeevan Amrit Yes 12-60 Yrs 70 Yrs 10-30 Yrs

1,00,000 no limit

Yly, Hly

1.Premiumpayingform 3/4/5 Yrs 2.Swoceder value –one full Yr.premium paid


61

v. Terminal benefit/death benefit may be single benefit, double

benefit and triple benefit.

vi. To get accident benefit one rupee extra premium for every

Rs.1000 sum assured need to be paid.

vii. Term assurance rider option.

3.1.19.4 Features of plans for High worth individuals

This plan for high worth individuals that provides good financial

security and the privilege of being able to choose any premium paying

term according to policyholder’s suitability. Since this is a business

related plan, the life insured will be given simple reversionary bonuses

coinciding with the profits made in the market. There were two plans for

High worth Individuals viz., jeevan shree and Jeevan Pramukh as per

Table 4.4. The following were the common features for these two plans.

I. The premium paid by the promoter can be taken as his/her


and sec 10(10D) of Income Tax Act, 1961.

II. The terminal benefits were exempted from income-tax.

III. Each product carries death benefit or maturity benefit

whichever is earlier.

IV. sum assured is in multiples of Rs.5,000

V. Payment of premium may be monthly, quarterly, half-yearly

and annually.

However, these two plans were distinguished with the following

features viz.,

i. Entry age ranges from 18 years to 65 years so as to enable the

senior citizens to join the plan.

ii. Sum assured ranges from Rs.5 lakhs to no limit.

iii. Sum assured is in multiples of Rs.1 lakh.

62

TABLE-3.4 HIGH WORTH INDIVIDUALS PLANS OF LIC OF INDIA

FEATURES

Sl No

Kinds of plans for

high worth

Tax Benefit

Sec 80 C

sec 10 (10) D

Entry Age

Min/Max

Maturity Age

Min/Max

Policy Term

Sum assured

Sum assured in Multiple


Maturity Benefit

Death Benefit

Special Features

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)

1 Jeevan shree

Yes 18-65 Yrs 75 yrs 5-25 Yrs

5 lakhs no limit

Rs. 1 lakh Yly, Hly,

Qly, Mthly

[email protected] per

1000 SA+Reversionary Bonus

SA+VGA@ 50 per 1000 SA

1.Term assurance Rider option Rs.4 per 1000 SA

2

Jeevan Pramukh


10 lakhs no limit

Rs. 1 lakh Yly, Hly,

Qly, Mthly

SA+GA@ 500 per

1000 SA

SA+GA+Reversionary Bonus

1.Prem payment Term-3,4 or 5 yrs

2.Paid up value-GA vested Rev.Bonus

3.Surrender value-1 yr premium have been paid


63

iv. Maturity benefit is SA + [email protected] per 1000

SA+Reversionary bonus.

v. Premium payment term ranges from 3 years to 5 years.

Thus, it is a short period policy, Senior citizens may take this

policy to get the terminal benefits in their life-time.

3.1.19.5 Features of Money-back plans of LIC of India

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. It provides money at regular installments. The

money back plans of LIC of India were Jeevan surabi-15 years, Jeevan

Surabi-20 years, Jeevan Surabi-25 years, Money Back Polucy and Bima

bachat as per Table 4.5. The common features of money back plans were

as follows.





iii. Each product carries death benefit or maturity benefit whoever

is earlier.

iv. Sum assured is in multiples of Rs.5,000


and annually.

However, the Money-Back plans of LIC of India were distinguished

with the following features

i. Entry age ranges from 13 years to 66 years and the maturity age

may go up to 70 years of age so as to enable the senior citizens

to opt money back plans.

ii. Minimum sum assured shall be Rs, 20,000 and no maximum.

64

TABLE-3.5 MONEY BACK PLANS OF LIC OF INDIA FEATURES

Sl No

Kinds of plans for

high worth

Tax Benefit

Sec 80 C

sec 10 (10) D

Entry Age

Min/Max

Maturity Age

Min/Max

Policy Term

Sum assured



Maturity Benefit

Death Benefit

Special Features

1 Jeevan

surabi-15 Yrs

Yes 14-55 Yrs 70 Yrs 12 Yrs 50,000 no limit

Rs.5000 Yly, Hly,

Qly, MthlySA

15 times of SA 2 times

of SA

1.Accident Benefit-Rs.1 extra

2

Jeevan surabi-20

Yrs Yes 14-55 yrs 70 yrs 15 yrs

50,000 no limit

Rs.5000 Yly, Hly,

Qly, MthlySA

1.5 times of SA 2 times of SA 2.5

times of SA

1.Accident Benefit.Rs.1 extra

3 Jeevan

surabi-20 yrs

Yes 14-55 yrs 70 yrs 18 yrs 50,000 no limit

Rs.5000 Yly, Hly,

Qly, MthlySA

1.5 times of SA 2 times of SA 2.5

times of SA 3 times of

SA

1.Accident Benefit Rs.1 extra

4 Money

Back Policy Yes 13-50 yrs 70 yrs

20 to 25 Yrs

50,000 no limit

Rs.5000 Yly, Hly,

Qly, MthlySA SA+Bonus

1.Accident Benefit Rs.1 extra

5 Bimaba

chat Yes 15-66 Yrs 75 yrs

9,12 0r 15 yrs

20,000 no limit

Rs.5000 Single

premium SA

1.Surrender value-GSV is equal to 90% SP


65

iii. Sum assured is the only maturity benefit.

iv. Death benefit will be 1.5 times of SA or 2 times of SA or 3

times of SA. To get accident benefit Rs.1 extra for every

Rs.1000 sum assured shall be paid.

v. Survival benefit starts after the end of 5th year.

3.1.19.6 Features of special Money Back plan for women

This plan has been specially designed for women. It covers the security

for critical illness and congenital disabilities. It is a money-back policy

and has a fixed term of 15 years or 20 years. Only one product by name

Jeevan Bharathi was introduced by the LIC of India as per Table 4.6. It

has the following common features.


for the purpose of income-tax benefit under sec 80 C and sec

10(10D) of Income Tax Act, 1961.



earlier.


v. Payment of premium may be monthly, quarterly, half-yearly and

annually.

The distinguished features of Jeevan Bharati were as follows.

i. Entry age 18years to 55 years.

ii. Sum assured ranges from Rs.50,000 to 25 lakhs

iii. Bonus was given in the form of annuity

iv. Death benefit will be SA + Reversionary bonus + additional

bonus.

v. Waiting period – 1 year.

66

TABLES-3.6 LIC OF INDIA’S SPECIAL MONEY BACK PLAN FOR WOMEN

FEATURES

Sl No

Kinds of special Money

Back plan for women

Tax Benefit

Sec 80 C

sec 10 (10) D

Entry Age

Min/Max

Maturity Age

Min/Max

Terms Allowed

Sum assured


Death Benefit

Maturity Benefit

Special Features

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

1 Jeevan

Bharati-1 Yes 18-55 Yrs 70 yrs

15 & 20 yrs

50,000 –Rs.25 lakhs

Rs.5000

Reversing Bonus+

Additional Bonus

Bonus + 4%

interest per annum

1.Encashment of survival Benefit-Interest @ 4% pa.2.Flexibilities to pay premium- Next yearly prem paid in advance at 5% 3.Auto cover-SA+Vested Bonus+FAB 4.Paid up value-3 full yr.prem have been paid 5.Gfd.Surrender value-3 ply yr.provided the premiums paid 6.Rider Benefit-ABR,CIR,CDB 7.Waiting period-1 yr.


67

vi. If premium is paid in advance of one year a rebate of 5 per cent

will be allowed.

vii. Survival benefit also carries interest at 4 per cent per annum if

retained with LIC of India.

viii. If two years premium have been paid, full death cover was

available for a period of 3 years from the date of first unpaid

premium.

ix. A guaranteed surrender value of 30 per cent of the total amount

of the premiums paid can be availed.

3.1.19.7 Features of Whole Life plans of LIC of India

This plan is a combination of endowment assurance and whole life

plans. It provides financial help against death throughout the life time of

the life assured with the provision of payment of a lump-sum at the end of

the selected term in case of his survival. The whole life plans of LIC of

India were whole Life policy (with profit), Whole life policy (Limited

payment with profit), Jeevan Anand and Jeevan Tarang as per Table 4.7.

These four plans have the following common features.






earlier.



annually.

68

TABLE-3.7 WHOLE LIFE PLANS OF LIC OF INDIA

FEATURES

Sl No

Kinds of plans for

high worth

Tax Benefit

Sec 80 C

sec 10 (10) D

Entry Age

Min/Max

Maturity Age

Min/Max

Sum assured


Maturity Benefit

Death Benefit

Sum Assured

in Multiple

Accident Benefit

Special Features

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)

1 Whole life

policy (with profit)

Sec 80 c

Sec 10 (10D)D

15-60 Yrs 80 Yrs 50,000 no limit

Yly, Hly, Qly,

Mthly

SA+ Bonus

SA.Bonus Rs.5000 Per 1000 SA

Rs.1 extra

2

Whole life policy (ltd payment

with profit)

Yes 12-60 yrs 80 yrs 50,000 no limit

Yly, Hly, Qly,

Mthly

SA+Bonus

SA.Bonus Rs.5000 Per 1000 SA

Rs.1 extra Policy term-5-55 yrs

3 Jeevan Anand

Yes 18-65 Yrs 75 yrs 1 lakh

no limit

Yly, Hly, Qly,

Mthly

SA+B+FAB

SA+B 5 lakhs

1.Premium payment term min/max-5-57 yrs

2.Rebate-yly 3%,Hyly 12%

4 Jeevan Tarang

Yes 0-60 yrs 70 yrs 1 lakh

no limit

Yly, Hly, Qly,

Mthly

SA+Loyalty addition

SA+VB+LA

Rs.5000 Rs.1 extra + RBCR PWB

1.premium payment term min/max-10,15,20 yrs. 2.Life Cover-100 yrs.


69

However, there have been distinguished among themselves with the

following features.

i. Entry age 12 to 60 years.

ii. Maximum maturity age ranges from 70 years (jeevan Tarang) to

80 years (whole life with profit polices) or 40 years from the

date of commencement.

iii. Minimum sun assured Rs.50, 000 for whole life policy and

Rs.1,00,000 for jeevan Anand and Jeevan Tarang.

iv. Maturity benefit will be SA plus bonus or SA plus loyalty

addition.

v. Accident benefit is available

vi. Policy term 5 to 55 years.

vii. Rebate of 3 percent yearly and 15 percent half yearly premiums.

viii. Life covers 100 years.

3.1.19.8 Features of Term Assurance Plans of LIC of India

This is unique plan of assurance, by for the cheapest policy to buy;

cheaper than even a whole life policy. Ammol jeevan-I (without profit)

and Amulya Jeevan-I were the two term assurance plans of LIC of India

meant for physically handicapped insured as per Table.4.8. The following

are the common features of these plans.






earlier.


70

TABLE-3.8 TERM ASSURANCE PLANS OF LIC OF INDIA

FEATURES

Sl No

Kinds of plans for

high worth

Tax Benefit

Sec 80 C

sec 10 (10) D

Entry Age

Min/Max

Maturity Age

Min/Max

Policy term


Sum Assured

in Multiple

Maturity Benefit

Death Benefit

Special Features

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (12)

1

Ammol Jeevan-I (without profit)

Yes 18-55 yrs 65 yrs 5-25 yrs Yly, Hly,

Qly, Mthly

5 lakhs, 24 lakhs

Un maturity amount will be

paid

SA 1.Allowed to physically

Handicapped

2 Amulya jeevan-I

Yes 18-60 yrs 70 yrs 5-35 yrs Yly, Hly,

Qly, Mthly

25 lakhs no limit

Un maturity amount will be

paid

SA 1.Allowed to physically

Handicapped. 2.Grace period-15 days


71


annually.

However, these plans have been distinguished with the following

features.

i. Entry age 18 years of age

ii. Policy term ranges from 5 years to 35 years.

iii. Maturity age ranges from 65 years to 70 years.

iv. Sum assured shall be a minimum of Rs.5 lakhs and no limit.

v. Only to physically handicapped persons with standard extra

rates.

vi. On maturity no amount will be paid to the policyholder.

However, on the death of the policyholder sum assured will be

paid to the nominees.

vii. Proposals are considered on the basis of medical reports.

viii. This is the only plan allowed under key-man insurance.

3.1.19.9 Features of joint Life plan of LIC of India

This plan is specially designed for married couples. it is for

husband and wife who want single policy for joint risk cover. Jeevan

Saathi is the only Joint Life Plan of LIC of India as per Table 4.9. it has

the following common features.






earlier.


72

TABLE-3.9 JOINT LIFE PLAN OF LIC OF INDIA

FEATURES

Sl No

Kinds of joint life

plan

Tax Benefit Sec 80 C

sec 10 (10) D

Entry Age

Min/Max

Maturity Age

Min/Max

Policy term

Sum Assured Min/Max

Premium payment option

Maturity Benefit

Death Benefit

Sum Assured

In multiple

Special Features

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (12)

1 Jeevan saathi

Yes 20-55 yrs 70 Yrs 15-30

yrs 50,000 no

limit Yly, Hly,

Qly, Mthly SA+Bonus

SA& Future prem are waived

Rs.5000 1.Accident Benefit-per 1000 SA Rs.2 Extra.


73


annually.

However, Jeevan Saathi has the following distinctive features.

i. Issued only to working couple or wife should be an income-tax

Assessee. For S.A.of Rs.2 lakh and less, wife need not be an

earning person. Not allowed to Pregnant Ladies.

ii. Wife’s income is also considered to grant insurance cover on

Husband’s life subject to certain restrictions: (1) Wife shoule

belong to Female Category I/II. (2) Wife should be proposer (3)

Husband should have been insured fully based on his own income.

iii. Plan is not allowed for Female lives who have undergone 3 or

more caesarean operations, for female with one/two caesarian is

allowed to take plan with 3 per cent extra premium.

iv. However, Female lives, who have undergone sterilization after 2

caesarean operations, can take this plan without any extra

premium.

v. Similarly, Female Lives with 2 caesarean operation, though not

undergone sterilization, but attained menopause can take this plan

without any extra premium.

vi. Maximum S.A. allowed under the plan to housewives & self-

employed female lives category III, is Rs.2 lakh with standard age

proof and for Female Category II max.S.A.is 50 lakhs.

vii. Housewives: Graduates having medical claim policy or credit card

or driving license or passport – Max.S.A.is 15 lakhs. Proof to be

produced.

Maturity Benefit: if both husband and wife are alive up to maturity,

S.A.+ Bonus is given.

74

Death Benefit

i. On death of either husband/wife, survivor gets S.A.

immediately & future premiums are waived.

ii. If the survicor (husband / wife) survives till maturity, he/she

gets S.A.again with full bonus.

iii. If the survivor also dies before maturity,S.A.+ Bonus till that

time, is paid to the nominee.

3.1.19.10 Features of Unit Plans of LIC of India

Unit plans are investment plans for those who realize the worth of

hard- earned money. These plans helps to choose the level of cover

within the limits, which will depend on whether the policy is a single

premium or regular premium contract and on the level of premium to

pay. The unit plans as per Table 4.10 of LIC of India have the

following common features.





iii. Each product carries death benefit or maturity benefit

whichever is earlier.



and annually.

However, these plans have the following distinctive features.

i. Premium payment term maximum 5 years.

ii. Maturity benefit is the fund value.

iii. Maturity benefit in case of wealth plus plan is the highest net

present value of units during the period of premium payment.

iv. Accident benefit is also available.

75

TABLE-3.10 UNITS PLANS OF LIC OF INDIA FEATURES

Sl No

Kinds of Unit plans

Tax Benefit S. 80 C sec 10 (10) D

Entry Age

Min/Max

Maturity Age

Min/Max

Policy Term


Premium Payment Option

Sum Assured Min/Max

Maturity Benefit

Death Benefit

Special Features

1 Profit plus

Yes 0-65 Yrs 18-70 Yrs 5-20 Yrs 3,4,5 SP Yly, Hly,

Qly, Mthly

Min: SP 1.25 times of SP

RP-5 times of AP or half of policy term X

AP

Unit value of policy

holder fund value

SA & Unit Value

whichever is high

1.Sum assured in multiple-Rs.5000 2.Accident Benefit Rider-0.50 per 1000 CIR 3.Charges-Prem.all ch in or fall. I.M.gt,swt,Bid offer,SP,Surrender, SErvce Tax Charge.

2 Foxtune

plus Yes 12-60 yrs 18-65 Yrs 5-20 Yrs 5 Yrs

Yly, Hly, Qly,

Mthly

5 times of AP or half of

policy term X 1st Yr.A.P

Fund Value

SA /value of Units ,Fund W.E. is high

1.Sum assured in multiple-Rs.5000

3 Money

plus Yes 0-65 Yrs 18-75 Yrs 5-30 Yrs

Yly, Hly, Qly,

Mthly

5 times A.P.to 20, 30 times the Ap upto age 45,60,65

Yrs

Fund values

SA or value of units

1.Sum assured in multiple-Rs.5000 2.Accident Benefit Rider-ABR @ 50 per 1000 AB SA per policy yrs C/R

4 Wealth

plus Yes 10-65 Yrs 8-Yrs

3-yrs, 5 times the

AP

Yly, Hly, Qly,

Mthly

3 yrs premium term

1.Partial withdrawals will be allowed twice in a policy year. 2. S.P-Partial withdrawals will be allowed a minimum balance of 25% of the SP

Source: Secondary data.

76

3.1.19.11 Features of Golden Jubilee plan of LIC of India

Today’s world is very fast paced. it is imperative that each life is

insured to give an individual security as well as those who are dependent

him/her or living with him/her. A long with security and insurance

benefits LIC’s special plans are opportunities that know on your door

once in a life time. These plans are a perfect blend of insurance

investment. A plan by name New Bema Gold as per Table 4.11 was

introduced on the occasion of golden jubilee of LIC of India. it has the

following common features.






earlier.



annually.

However, the distinctive features of Bema Gold were as follows.

i. Entry age 14 years to 57 years.

ii. This is a unique with profit money back type plan.

iii. Policy term may be extended to the extent of 50 per cent of the

policy term.

iv. Death benefit during the policy term is the sum assured.

v. Survival benefits are also available.

vi. Maturity benefit premium paid mines survival benefits plus

loyalty addition.

vii. Accident benefit is also available

77

TABLE 3.11 GOLDEN JUBLIEE PLAN OF LIC OF INDIA (SPECIAL PLANS)

FEATURES

Sl No

Kinds of Golden Jubilee

Plan

Tax Benefit

Sec 80 C sec 10 (10) D

Entry Age

Min/MaxPolicy term

Sum Assured Min/Max

Premium payment option

Accident Benefit

Sum Assured In multiples

(1) (2) (3) (4) (6) (7) (8) (9)

1 New bima

gold Yes 14-57 Yrs

12,1620 Yrs Extended

50,000 no limit Yly, Hly, Qly, Mthly Rs.1 extra Rs.5000


78

viii. Auto cover for at least two years from the date of first unpaid

premium.

ix. Cooling off period i.e., the policy can be returned to the

corporation within 15 days if not satisfied with the terms and

conditions of the policy.

3.1.19.12 Conclusion

There were seven different kinds of plan as children plans. These

plans were differentiated in terms of entry age, policy terms, sum assured,

and death benefit maturity benefit and premium waiver. The object of

different plans was to cover different segments of the society. Two plans

were available for physically handicapped dependents. These two plans

were distinguished so as to bring the insured up to 65 years of age. There

were several endowment assurance plans. However, the endowment plans

were differentiated in terms of entry age, maturity age, policy terms,

minimum sum assured, terminal benefits and term assurance rider option.

The object of endowment plans was to cover insured of at different age

groups. Two kind’s plans were available for High worth Individuals with

the distinctive features of lesser premium payment term with high sum

assured. The policies for High worth Individuals were suitable even for

senior citizens.

There were five different kinds of money back plans and these

money back plans were distinguished in terms of entry age, death benefit

and periodical survival benefits. A special money back plan for women

was there with a differentiation of death cover, 4 per cent interest on the

maturity benefit if retained with LIC and rebate is given if the premium is

paid in advance.

There were four kinds of whole life plans with differentiation in

terms of entry age, policy term, life cover up to 100 years, and minimum

maturity age of 80 years or 40 years from the date of commencement.

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There was also a joint life policy on the life of working husband and wife.

There were also plans linking life insurance with share market. Bema

Gold was commemorative policy on the accession of golden jubilee of

LIC of India. Bema Gold has the distinctive features of cooling period,

auto cover for another two years from the date of first unpaid premium,

survival benefits, extended period of coverage and with profit money

back plan. All the plans have the common features of income-tax

exemption for the premium paid and terminal benefits.

3.1.20 PRIVATE PLAYERS IN THE LIFE INSURANCE INDUSTRY

The opening up of the insurance sector leads to a wide spread and

deepening of insurance in India and has effected in restructuring and

revitalizing of the public sector. Currently, the industry holds 23 private

players tapping the insurable population by delivering innovative

products through smart marketing and customized services.

3.1.20.1 Bajaj Allianz Life Insurance Company Limited.

Bajaj Allianz is the joint venture of Bajaj Finserv -India’s

financial service giant and Allianz SE- Germany’s financial services

provider. Registered on 2nd May, 2001 in India, Bajaj Allianz Life

Insurance Company has become one of the top most life insurance brands

in India. For the financial year 2010-2011, it is one of India's leading and

fastest growing insurance companies. Today, they are connected by

technology and communication with over 200 towns across India. Bajaj

Allianz among other life insurance companies in India has been ranked

#2 in terms of number of issued insurance policies and #4 on basis of new

business premium. The Company has an authorized and paid up capital of

Rs 110 crores. Bajaj Finserv Limited holds 74% and the remaining 26%

is held by Allianz SE. Bajaj Allianz Life Insurance Company aims to

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ensure excellent insurance and investment solutions by offering

customized products, supported by the best technology.

3.1.20.2 Birla Sun Life Insurance Co. Ltd

Birla Sun Life Insurance Co. Ltd. (BSLI) is a joint venture between

Aditya Birla Group, an Indian multinational corporation, and Sun Life

Financial Inc, a leading global insurance company. Established in 2000,

BSLI has contributed to the significant growth and development of the

life insurance industry in India and currently ranks amongst the top 5

private life insurance companies in the country. Birla Sun Life

Insurance Company has a vast distribution network of almost 600

branches across India reaching out to more than 1500 towns. The already

established companies of the Aditya Birla Financial Services Group give

it the expertise and reach to service and add more consumers to the life

insurance business. Birla Sun Life Insurance is distinguished as the first

financial solutions company to introduce 'Business Continuity Plan', the

'Free Look Period' and 'Unit Linked Life Insurance Plans' in the Indian

insurance.

3.1.20.3 HDFC Standard Life Insurance Co. Ltd

HDFC Standard Life Insurance is a joint venture between HDFC

Limited and Standard Life PLC of United Kingdom. It was the first

private life insurance company to set shop in India and started its

operations in late 2000. HDFC Standard Life Insurance alone has 568

branches and reaches out to customers in 700 cities in India. This along

with the partnerships with group companies like HDFC Bank and HDFC

Limited give it an enviable reach among the private life insurance

companies. The company offers a healthy mix of traditional and unit

linked products which cater to protection, savings, pension, investment

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and health requirements of individual and group insurance solutions.

HDFC Life's product portfolio comprises solutions, which meet various

customer needs such as Protection, Pension, Savings, Investment and

Health. Customers have the added advantage of customizing the plans, by

adding optional benefits called riders, at a nominal price. The company

currently has 25 retail and 9 group products in its portfolio, along with 10

optional rider benefits catering to the savings, investment, protection and

retirement needs of customers. The company has 32 retail and 4 group

products along with 5 rider benefits. Customizing plans have also been

added to make lives better.

3.1.20.4 ICICI Prudential Life Insurance Company Co. Ltd

ICICI Prudential Life Insurance Company Co.Ltd is a joint venture

between ICICI Bank and Prudential PLC. of the United Kingdom. ICICI

Prudential was amongst the first private sector insurance companies to

begin operations in December 2000 after receiving approval from

Insurance Regulatory Development Authority (IRDA).ICICI Prudential

Life Insurance has maintained its dominant position (on new business

retail weighted basis) amongst private life insurers in the country. It is

also among the earliest private life insurance companies to start

operations in India. The company has a large distribution network of

2033 branches across the country, with a wide range of flexible products

that meet the needs of the Indian customer at every step in life. Currently

it is among the largest life insurance players in the country and among the

few private life insurance companies which are profitable.

ICICI Prudential Life Insurance Company is the first life insurer in

India that received a National Insurer Financial Strength rating of AAA

(Ind) from Fitch ratings. ICICI Prudential has been voted as India's Most

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Trusted Private Life Insurer for three consecutive years. This company

provides various insurance plans that have been designed for different

individuals, as every individual has different insurance needs.

3.1.20.5 ING Vysya Life Insurance Company Ltd.

ING Vysya Life Insurance Company is a joint venture between

ING Insurance International B.V. (26%), Exide Industries (50%) and

other share holders like Ambuja Cements Limited and Enam Group,

together holding a total of 24%. The company started operations in India

in September 2001.ING Vysya Life Insurance Company Limited is a part

of the ING group, a global financial institution of Dutch origin that offers

banking, insurance and asset management to clients across the world.

ING Life India has over 250 branches present in more than 225 cities

across India. This company also provides special policies, such as

Children's Plans, Retirement Plans, Investment Plans and Savings Plans,

which help people to secure their future financially. It also provides Life

Insurance, Medical Insurance, General Insurance, Long-Term Care

Insurance, Group Insurance, Company Insurance and Financial Services

Insurance Products. ING Vysya Life Insurance recently achieved the

significant milestone of completing 10 years of operations in India.

3.1.20.6 Max New York Life Insurance Co. Ltd

Max New York Life Insurance (MNYL) is a joint venture

between Max India Limited (74%) and New York Life

International (26%). The company started its operations in the April

2001in India. New York Life Insurance Company, is the largest mutual

life insurance company in the United States and one of the largest life

insurers in the world along with being in the business of annuities and

long-term care insurance. The company has a large distribution network

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of 676 branches spanning 389 towns in India. The company has a good

mix of life insurance products – both traditional and unit linked insurance

plans.

Max New York Life offers a variety of flexible products covering

both life and health insurance including 8 riders that can be customized to

over 800 combinations which enable the customers to choose the policy

that suits their needs. Max New York Life also offers 6 products and 7

riders in group insurance business. The company has a plan for every

need, designed as to meet people’s long term financial goals &

aspirations. It is the first life insurance company in India to be awarded

the IS0 9001:2000 certifications. The company has around 133 offices all

over the country.

3.1.20.7 Met Life India Insurance Company Ltd.

PNB MetLife India Insurance Company Limited (PNB MetLife) is

a joint venture where MetLife, Inc. and Punjab National Bank (PNB) are

the majority shareholders. PNB MetLife was previously known as

MetLife India Insurance Company Limited (MetLife India). MetLife

India has been present in India since 2001 and is now ranked 88th on the

"FORTUNE 500 companies" list. This insurance company was awarded

as one of the "100 Best Companies for Working Mothers" by 'Working

Mother' magazine. PNB MetLife is one of the fastest growing life

insurance companies in the country.

MetLife India Insurance Company has a wide range of insurance

products to service its customers. It has more than 50,000 insurance

advisors who help customers choose the right insurance plans in more

than 600 locations across India. The partner institutions also enable them

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to distribute their insurance products to a large number of customers.PNB

MetLife provides a wide range of protection and retirement products

through its Agency sales of over 25,000 financial advisors and bank

partners, and provides access to employee benefit plans for over 800

corporate clients in India. The Company continues to be consistently

profitable and has declared profits for nine consecutive quarters as of Q2

2012-13.

3.1.20.8 Kotak Mahindra Old Mutual Life Insurance Limited

Kotak Mahindra Old Mutual Life Insurance Limited is a joint

venture between Kotak Mahindra Bank (74%) and Old Mutual Plc (26%)

headquartered in London. Kotak Life Insurance is a fast growing life

insurance company in India. The company started operations in 2001, and

strives to offer its customers outstanding value through high customer

empathy, consistent and benchmarked service and a suite of products that

leverage the combined prowess of protection and long term savings. The

Group has a wide distribution network through branches and franchisees

across India. Kotak Mahindra Old Mutual Life Insurance Ltd. offers

various insurance products in India and is considered one of the most

rapidly growing insurance companies in the country. The company has

more than 200 branches in India and along with the distribution reach of

its group companies, is well positioned to reach out to the length and

breadth of the country. It has a large spectrum of life insurance products

catering to protection, savings and retirement solutions.

3.1.20.9 SBI Life Insurance Co. Ltd

SBI Life Insurance Company is a joint venture between the State

Bank of India (74%) and BNP Paribas Assurance (26%) of the capital.

SBI Life Insurance has an authorized capital of 2000 Crore

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(US$370 million) and a paid up capital of 1000 crore (US$180 million).

The company launched its business in the year 2001. SBI Life Insurance

is now among the top life insurance providers in India. It is the largest

private life insurer and was the 1st private life insurance company to

become profitable. The huge customer base and the reach of its banking

channel are the advantages which SBI enjoys over the other insurance

companies. It has a wide array of life insurance products to adequately

cater to the Indian consumer. SBI Life offers a variety of products

designed for various segments of society. These include individual plans,

group plans and health plans. All these products cater to various

requirements of its end users. In 2007-2008, SBI was placed with the

global top 5 life insurance companies with largest number of MDRT

members.

3.1.20.10 Tata AIG Life Insurance Company Limited

Tata AIG Life Insurance Company is a joint venture between

the Tata Group (74%) and American International Group (26%). The

company started its life insurance business in India in April 1,

2001. The life insurance business has a strong distribution network of

branches, agents and bank assurance channels which are present

throughout the length and breadth of India. The company has an excellent

array of protection, savings and up lips which help them serve the

different needs to customers. Tata AIG provides to health Insurance plans

and from child plans to retirement policies, and also provides wealth

plans that offer more liquidity options and help you in achieving all that

is not covered by their other plans.

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3.1.20.11 Reliance Life Insurance Company Limited.

Reliance Life Insurance Company is a part of Reliance - Anil

Dhirubhai Ambani Group (ADAG) Reliance Capital is the holding

company which is a well diversified business with an established

presence in the financial services sector. Reliance Life Insurance is one of

the few private life insurance companies in India which have launched

operations without a foreign partner. Apart from its stand-alone

distribution network the company has access to its large distribution

which already is into the consumer finance business in a big

way. Reliance Life Insurance Company Limited comes under the Anil

Dhirubhai Ambani Group (ADAG) which ranks among the top 3 private

sector financial services and banking companies of India. Reliance

ventured into the life insurance business in October 2005 by acquiring

AMP Sanmar and in 2009-2010, it became the largest private insurer of

India with largest number of policy count.

RLIC has a huge network of around 1145 branches covering a wide

geographical area. It is one of the ISO 9001:2000 certified life insurance

companies of India and has been awarded the "Jamnalal Bajaj Uchit

Vyavahar Puraskar 2007 - Ceritificate of Merit" in the Financial Services

category by Council for Fair Business Practices (CFBP). This company

also won the DL Shah Quality Council of India Commendation award in

February 2008. The Company strives to provide profitable life insurance

solutions catering to requirements in all stages of life – child

plans, pension plans and pure protection solutions. Reliance Life

Insurance offers people products that fulfil their savings and protection

needs.

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3.1.20.12 Aviva Life Insurance Company India Limited

Aviva India Life Insurance Company is a joint venture

between Dabur India and Aviva Plc of UK. Not only largest in the UK,

Aviva is also the fifth largest insurance group in the world and has been

associated with India in various ways since 1834. Partners of the Aviva

group include: The Royal Bank of Scotland since 2002 when the bank

was known as ABN-AMRO, Punjab & Sind Bank since 2004 and DBS,

which is Asia's largest financial service group. Aviva Life Insurance has a

fairly large distribution of network with 195 branches spread across 3000

towns in India. Aviva India also has a large Bank assurance channel with

close to 40 tie-ups with different banks and financial institutions. Aviva

offers various products that are meant to provide customers with

flexibility, transparency and value for money. Given here is a complete

list of products and services offered by Aviva Life Insurance India.

3.1.20.13 Sahara India Life Insurance Co, Ltd.

The Pariwar’s life insurance company – Sahara India Life

Insurance Company Ltd, has been granted licence by the insurance

regulator – the IRDA on 6th February 2004. With this approval Sahara

India Life Insurance Company Ltd. becomes the first wholly and purely

Indian company, without any foreign collaboration to enter the Indian

Life insurance market. The launch is with an initial paid up capital of 157

crores. The operations of the life insurance company are currently

focused North and Central India.

The insurance plans offered by Sahara India Life Insurance

Company Limited are unique in their own terms. The company offers

both individual and group insurance products. Through the different

insurance plans, the company aims to cater to the different needs of the

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Indian society. The Sahara Pariwar, the world's largest 'family' with

diversified business interests, is a recent entrant in the field of life

insurance.

3.1.20.14 Bharti AXA Life Insurance Company Ltd.

Bharti AXA Life Insurance Company is a joint venture between

the Bharti Enterprises (74%) and the Paris based AXA Group (26%) and

started its operations in India December 2006. Today, Bharti AXA Life

has a national footprint of distributors trained to provide quality financial

advice and insurance solutions to the large Indian customer base. Today,

Bharti AXA Life Insurance is making its presence felt across the country

and is catering to the insurance and wealth management needs of the

people.

3.1.20.15 Future Generali India Life Insurance Company Limited

Future Generali India Life Insurance Company is a joint venture

between Future Group of India and Generali Group based in

Italy. The Generali Group is a leading player in the global insurance and

financial markets. It is present in almost 68 countries across the world

with a majority presence in Europe. Established in Trieste in 1831, today

the Group is one of Europe’s largest insurance providers and the

European biggest Life insurer. The Group occupies a leadership position

in Western Europe and an increasingly important place in Eastern Europe

and Asia. This international group functions in 68 countries with

insurance companies, financial companies and real estate sectors.

Generali Group is the largest insurance provider in Europe and is ranked

30th largest company in the Fortune 500 international ranking. Future

Generali Life Insurance Company is well poised to service the Indian

consumer. The group has an established presence in the Indian minds and

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has a large distribution network along with its sister concerns – the

consumer finance arm alone has 150 odd branches across India.

3.1.20.16 IDBI Federal Life Insurance Company Ltd.

IDBI Federal Life Insurance Company is a joint venture

between IDBI Bank Limited (48%), Federal Bank (26%) and Aeges

(26%) The company was earlier called IDBI Fortis Life Insurance

Company. In April 2010, Fortis the foreign partner changed its name

to Aeges which has resulted in the name change in this joint venture too.

Aeges, an international insurance group composed of AG Insurance, is

the overall market leader in life and non-life insurance in Belgium by

distributing its insurance products through the network of BNP Paribas

Aeges Bank and independent insurance brokers, and Aeges Insurance

International with its subsidiaries.

IDBI Federal became one of the fastest growing new insurance

companies to garner Rs 100 Cr in premiums. Through a continuous

process of innovation in product and service delivery IDBI Federal aims

to deliver world-class wealth management, protection and retirement

solutions that provide value and convenience to the Indian customer. The

company offers its services through a vast nationwide network of 2067

partner bank branches of IDBI Bank and Federal Bank in addition to a

sizeable network of advisors and partners. As on 31st January 2013, the

company has issued over 7.70 lakh policies with a sum assured of over

Rs. 25,961 Cr.

IDBI Federal today is recognized as a customer-centric brand, with

an array of awards to their credit. They have been awarded the PMAA

Awards (2009) for best Dealer/Sales force Activity, EFFIE Award (2011)

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for effective advertising, and conferred with the status of ‘Master Brand

2012-13’ by the CMO Council USA and CMO Asia. IDBI Federal Life

Insurance Co. Ltd. was established in March 2008 and became one of the

fastest growing new insurance companies by gathering Rs.100cr worth of

premium in the first five months itself.

3.1.20.17 Canara HSBC Oriental Bank of Commerce Life Insurance

Company Ltd.

The Company was launched on 16 June 2008 and is a Joint

Venture between Canara Bank (holding 51%), HSBC Insurance (Asia

Pacific) Ltd (holding 26%), the Asian insurance arm of one of the world's

largest banking and financial services groups - HSBC and Oriental Bank

of Commerce (holding 23%). The company started operations in India in

2008. HSBC OBC networked all over the country, in order to cater to its

customers.

Though there are many private insurance organization, only LIC of

India covers the cross section of the society such as people living in urban

areas and rural areas, rich people and poor people, people who get high

income and low income, employed people and unemployed people and

persons who belong to different age groups such as children, adolescents,

married couples, pensioners and ole people. Hence, LIC is a symbol of

safety to the common people who cannot predict their future events in

their lives.

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3.2 PROFILE OF THE STUDY AREA

Namakkal District is named as Platinum district. Once it was a part

the Salem District and the historical background of Salem and Namakkal

remains the same. After the struggle between the Cheras, Cholas and

Pandiyas, the Hoysales rose to power and had control till the 14 th

Century followed by Vijayanagar Kings till 1565 A.D. Then the Madurai

Nayakas came to power in 1623 A.D. Two of the polygons of Thriumalai

Nayak namely, Ramachandra Nayaka and Gatti Mudaliars ruled the

Salem area. The Namakkal Fort is reported to have been built by

Ramachandra Nayakas. After about 1625 A.D., the area came

successively under the rule of Muslim Sultans of Bijapur and Golkinda

Mysore kings and then the Marathas, when about the year 1750

A.D.Hyder Ali came to power. During this period, it was a history of

power struggle between Hyder Ali and later Tippu, with the Brtitish.

The Rock Fort in Namakkal is a special feature of the Town. The

Fort covers an area of one and half acres of flat surface and is accessible

from South-West by a flight of narrow steps. Namakkal was in the hands

of Atikula King called Gunasila who married the daughter of Pallava

King. Later the taulk was overrun by the Cholas in the Kongu Mandalam

which has over run by the cholas in the 9th Century and passed on to

Vijayanagar under the Viuroyultry of madra. Namakkal was held by

Killdhar (Caption) on Hyder Ali until it was captured by British in 1768.

3.2.1 LOCATION AND PHYSIOGRAPHY

Namakkal District is situated at 110 00’ and 120 00’ of the North

latitude and 77 0 40’ and 780 05’ of the East longitude. The altitude of the

district is 300 meters above MSL.

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Namakkal District comes under the North Western Agro climatic

zone (Excluding Tiruchengode Taluk) of Tamil Nadu. it is situated in the

dividing portion of two watersheds between Cauvery and the Vellar

system with the Taluks of Attur, Rasipuram and Namakkal on the East

and Salem, Omalur and Mettur on the West. Tiruchengode taluk alone is

placed under Western Agro-climatic zone.

Besides above two zones, Kollihills in Namakkal and few isolated

hills and ridges scattered over Namakkal Rasipuram and Tiruchengode

along with the Valleys and rolling topography contributes to the

characteristic physiography of the district.

Kollihills the Garden of Namakkal district comprising of 14 village

panchayats called ‘Nadu’ is having an area of 371.03 sq.km at an altitude

of 1300 mts. above MSL.

The Northern portions of Namakkal are mountains and the

Southern areas are plains. The plain area of the district can be divided

into 3 elevating stages. The lower elevation (below 150 m) has Namakkal

and Paramathy taluks which are bringing benefitted by Cauvery River.

The mid elevation (150-300 m above M.S.L), occupies the major area in

all Taluks. The high elevation area (between 300-600m) spreads over

mainly in Rasipuram and Namakkal Taluks. The chief rivers run through

in the district are Cauvery Karipottamaru and Thirumanimuthar. The

Cauvery flows South and South west hugging the border.

The famous Cauvery River flows along the Western and Southern

boundaries of the district at an elevation of 150 m. It benefits most of the

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cultivated lands in Paramathy and Mohanur Block. Its tributaries are

Sarabanga and Tirumanimuthar.

3.2.2 COMMUNICATIONS

The district is well served by road transports. NH-7 and NH-47

pass through all the taluk headquarters, other towns and most of the

villages are connected by motorable roads.

3.2.3 NATURAL RESOURCES

3.2.3.1 Climatic

Namakkal District experiences semi-arid tropical climate wherein four

distinct seasons viz., South west monsoon (June- September.) North East

Monsoon (October – December) winter season (January – February.) and

summer season (March – May) are experienced. The maximum

temperature ranges from 28 to 400 C and the minimum from 14 0 to 26 0

C.During January and February lowest temperatures are recorded while

maximum temperature during April – May. The rainfall during this

period will be very minimum when compared to other periods.

The summer period starts from March and ends by May. This is the

period that the temperature is usually high in the district. During this

period rains, isolated thunder showers accompanied by gale winds are

observed. About 19% of the total annual rainfall is received during this

period, which helps to take sowing of rain fed crops well in advance. If

the summer shower fails, the district normally experiences Water scarcity

for drinking.

The hot climate subsidies when the South West monsoon sets in,

usually during June. 40 % of annual rainfall is recorded during this

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period. Farmers are able to raise Paddy nurseries with the help of this

rain. The remaining unsown rain fed areas are also brought under

cultivation during this period. North east monsoon which prevails from

October to December gives 40.5% of annual Rainfall. This helps the

farmer to take up II crop under rain fed condition. The cold weather

generally commences in December after the cessation of North east

monsoon rains. The minimum temperature of 15-160 C recorded during

December to February generally affects the pollination in cereals

particularly Rice.

3.2.3.2 Temperature

The maximum and minimum temperature ranges are as follows:

Month Maximum Minimum

April-May, July, August….. 37.00 C 24.50C

September, October, November ……. 31.80C 22.30C

December and January………. 30.50C 19.00C

3.2.4 Relative humidity

In general, the district records higher relative humidity due to the

surroundings of hill areas. Relative humidity variation between day and

night are higher resulting in higher probability of pest and disease

incidences.

3.2.5 Wind

From October to March, wind blows generally from North

Easternly and Easternly directions. South Westernly and Westernly winds

predominate from May to September. The wind speed is least in October

to February, while it is higher from July to September.

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3.2.6 Sunshine hours

The sunshine hours are generally long during February to May

ranging from 8.4 hours to 9.5 hours per day. During August, September

and October it ranges from 6.3 to 6.8 hours per day.

3.2.7 Rainfall

The average annual rainfall of the district is 776 mm (Table No.3)

Nearly 80 per cent of the total is received during the SWM and NEM

season. Among these two seasons SWM receives 40% of rainfall and

NEM 40.6%. Summer season records 19.1% of the total rainfall. The

winter season receives only 0.3% of the total rainfall. Among the months

September and October receives more rainfall (125.8 and 124. 7 mm

respectively) followed by November (95.0 mm) and August (92.5mm).

Since rainfall distribution is bi-model in nature and the quantity of

rainfall received during the SWM and NEM is sufficient for raising rain

fed crops, two crops are recommended per year.

3.2.8 ADMINISTRATION

There are 5 Taluks, 14 Block Union and 4 Municipalities in

Namakkal District is given below:

3.2.8.1 TALUKS

1. Namakkal

2. Paramathi – Velur

3. Tiruchengode

4. Rasipuram

5. Kumarapalayam

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3.2.8.2 BLOCK UNIONS

1. Namakkal 6. Puduchatram 11. Sendamangalam

2. Erumaipatti 7. Mohanur 12. Kollikills

3. Rasipuram 8. Namagiripet 13. Vennandur

4. Paramathi 9. Kabilarmalai 14. Tiruchencode

5. Mallasamudram 10. Elachipalayam.

3.2.8.3 MUNICIPALITIES

1. Namakkal

2. Rasipuram

3. Tiruchengode

4. Komarapalaya,

5. Pallipalayam

vagaries of rain fall in dry areas, lack of enough water in the rivers,

lack of work for the agricultural labourers ups and downs in lives of

employed people and business people the growth of population, natural

calamities such as drought and flood and uncertainties in lives of

Namakkal district necessitated them to take shelter in the umbrella of life

insurance policy.

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FOOT NOTES

1. Life insurance premium paid by the employee on a policy taken on his

own life, life of the spouse on any child (male of female) dependent or

independent, married or unmarried at a maximum of 20 percent of sum

assured is savings for deductions from taxable income up to Rs.1,

00,000.

2. Benefits of Life policies are exempted from income-tax.

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CHAPTER – IV

ANALYSIS AND INTERPRETATION OF DATA – I

In this chapter, an attempt has been to identify the factors that

influence the policy holders’ preference for LIC products by the policy

holders in the study area. for this purpose systematic random sampling

method was employed to collect first hand information from 500 sample

respondents. The respondents have been chosen randomly from the

different parts of the study area. The data thus collected were arranged

into simple tabular form. the level of satisfaction perceived by the

selected sample respondents in their policy holders’ preference is

considered as the dependent variable, the independent variable selected

for the study are gender, age, marital status, type of family, occupation,

educational qualification, income of the family, residential area and

influence factors.

The data were analyzed by using simple statistical tools,

descriptive statistics like percentage, mean, standard deviation and T-

statistics.

TABLE NO 4.1

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TABLE SHOWS THE CLASSIFICATION ON THE BASIS OF

GENDER, AGE, NO. FAMILY MEMBERS, MARITAL STATUS AND

TYPE OF FAMILY OF THE RESPONDENTS OF LIC POLICY

HOLDERS

Basis of classification Particulars No. of

respondents Percentage

Gender

Male 289 57.80

Female 211 42.20

Total 500 100.00

Age Group

Below 25 years 108 21.60

Between 25 - 35 years 222 44.40

Between 35 - 45 years 91 18.20

Between 45 - 55 years 42 8.40

Above 55 years 37 7.40

Total 500 100.00

Marital Status

Married 436 87.20

Unmarried 64 12.80

Total 500 100.00

Type of Family

Nuclear family 335 67.00

Joint family 165 33.00

Total 500 100.00

No. of Family

Members

2 members 49 9.80

3 members 150 30.00

4 members 147 28.40

5 members 21 4.20

More than 5 133 26.40

Total 500 100.00

Source: Primary data.

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The above table shows the classification of the respondent of 500

LIC policy holders on the basis of personal and demographical

information. 289 respondents belong to male and 211 respondents are

female. The majority of the respondent 57.8% were male.

The age wise classification shows that 222 respondents belong to

the age group between 25 – 35 years and 108 respondents are below 25

years. In the five level of age wise classification 44.4% are in the age

group between 25 – 35 years.

The majority of the respondents are married. The married

population of this study was 436 that is 87.2% of 500 respondent. 67% of

the respondents are in nuclear family type and 33% are in joint family.

Out of 500 respondents of this study, 150 respondents have more

than 3 members in their family, 147 respondents have less than 4

members in their family. 133 respondents have more than 5 members in

their family.

It is clear from that table that out of 500 respondents 57.8% are

male, 44.4% are in the age group between 25 - 35 years, 87.2% were

married and 67% living nuclear family type, 150 respondents have less

than 3 members in their family

102

Male 58%

Female42%

Chart 1 Gender of the respondnets

103

Below 25 25 to 35 35 to 45 45 to 55 Above 55

Series1 108 222 91 42 37

0

50

100

150

200

250

No.of respondents

Chart 2 Age group of the respondents

104

87%

13%

Chart 3 Marital status of the respondents

Married Unmarried

105

67%

33%

Chart 4 Type of family of the respondents

Nuclear Joint

106

0 20 40 60 80 100 120 140 160

2 members

3 members

4 members

5 members

more than 5 members

No. of respondents

No. o

f family m

embers

Chart 5 No. of family members of the respondents

107

TABLE NO 4.2

TABLE SHOWS THE CLASSIFICATION ON THE BASIS OF

OCCUPATION, QUALIFICATION, INCOME, AND RESIDENTIAL

AREA OF THE RESPONDENTS OF LIC POLICY HOLDERS



Occupation

Government employees 55 11.00

Private Employees 48 9.60

Business people 191 38.20

Professionals 116 23.20

Others 90 18.00

Total 500 100.00

Qualification

Primary level 167 33.40

Higher Secondary 225 45.00

Graduates 41 8.20

Post Graduates 8 1.60

Professionals 30 6.00

Technicians 29 5.80

Total 500 100.00

Income

Below Rs.5,000 78 15.60

Rs.5,000 - 10,000 268 53.60

Rs.10.000 - 20,000 93 18.60

Rs.20,000 - 30,000 61 12.20

Total 500 100.00

Residential Area

Urban 419 83.80

Rural 81 16.20

Total 500 100.00

Sources: Primary Data

108

The above table reflects the occupation, qualification, Income and

nature of the area that the respondents belong are explained. Regarding

the occupation of the study respondent of 500, 191 respondents are doing

business and 116 respondents are in Professionals. The majority of the

respondents are doing business.

Regarding the six level of educational status of the respondents are

given in the above table. 225 respondents are educated up to higher

secondary. The 167 respondents are educated up to primary level of

education. 8.2% people in the study sample are up to graduate and 1.6%

respondents acquired post graduate level of education. It is clear from

the table Majority of 45% of the respondent are up to higher secondary

level of education.

The monthly income of the respondent is also classified into four

levels. It reflects that 53.6% of the respondents earn Rs. 5,000 to 10,000

pm. It is 268 out of 500 respondents. 1.22% of respondents incomes are

in between Rs. 20,000 to 30,000.

It is concluded that 83.8% of the respondents are belong to urban

area. 53.6% respondents monthly income is in between Rs. 5,000 to

10,000. 45% of respondents who are included in this study are educated

up to Higher Secondary and 38.2% respondents are doing Business.

Out of 500 respondents 83.8% of the respondents belong to the

urban areas, whereas 16.2% of the respondents are in rural areas.

109

0

50

100

150

200

250

Gvt. Employee Private Employee

Business Professional Others

No. o

f respondents

Occupation

Chart 6 Occupation wise classification of the respondents

110

0

50

100

150

200

250

No. o

f respondents

Chart 7 Educational Qualification of the respondents

111

0

50

100

150

200

250

300

Below Rs. 5,000 Rs. 5,000 to Rs. 10,000

Rs. 10,000 to Rs. 20,000

Rs. 20,000 to Rs. 30,000

No. o

f respondents

Monthly Inome

Chart 8 Monthly income of the respondents

112

Urban84%

Rural16%

Chart 9 Residential area of the respondents

113

TABLE NO 4.3

TABLE SHOWS THE CLASSIFICATION ON THE BASIS OF THEIR

ASSETS ACQUIRED, PREFERENCE TO INVEST, INFLUENCE OF

PERSONS, PURPOSE OF TAKING INSURANCE POLICY AND

BUYING AN INSURANCE OF THE RESPONDENTS

Basis of

classification Particulars

No. of


Assets have you at present

Own individual house 65 13.00Own House 213 42.60Two Wheeler 100 20.00Car 48 9.60Plot 74 14.80 Total 500 100.00

Preference to invest

Insurance Company 226 45.20Bank 172 34.40Both 102 20.40 Total 500 100.00

Purpose of taking insurance

Premium Outflow 50 10.00 Company Reputatin 175 35.00Service Quality 80 16.00 product Quality 107 21.40Return on Investments 88 17.60 Total 500 100.00

Influence of person

Personal interest 45 9.00 Friends 173 34.60 Family 76 15.20Agents 114 22.80Advertisement 92 18.40Total 500 100.00

Purpose of Buying an Insurance

A life risk coverage 254 50.80Family need 159 31.80Purpose of saving 87 17.40

Total 500 100.00

Source: Primary data

114

The above table reflects the assets hold by the respondents. Six

levels assets are classified. Out of 500 respondents, 42.6% of the

respondents are having own house. 20% of the respondents having two

wheeler. The respondents expressed their desire of investment either

Insurance or Bank.

Out of 500 respondents 45.2% respondents prefer investment in the

insurance company and 34.4% of the respondents prefer Bank investment

and remaining 20.4% prefer both Bank and insurance investment. The

respondents are asked to give their opinion why they want invest in LIC.

Their answers are categorized into five level.

Out of 500 respondents, 35% are investing in LIC for the

Reputation of LIC name. 21.4% are investing their money in LIC for a

Product Quality and 10% of respondent concern about premium.

Moreover 34.6% respondents are motivated by their friends to take

Insurance Policy.22.8% of the respondents are motivated by the LIC

advisors. Just only 9% of the respondents taking policy on their own

personal interest. It is concluded that 42.6% respondents have own house.

45.2% of the respondents prefer to invest their money in insurance

company. 35% of the respondents invest their money in LIC for the

reputation of the company. 34.6% of the respondents are motivated by

their friends. 50.8% respondents are taking insurance for a life risk

coverage purpose.

The purposes of taking insurance policy are classified into three

levels. Out of the three levels 50.8% of the total respondents concerned

for their life risk coverage. 31.8% of the respondents are taking insurance

because of Family need. Just 17.4% are taking insurance for saving

purpose.

115

0 50 100 150 200 250

Own individual house

Own house

Two wheeler

Car

Plot

No.of respondents

Have you assets

Chart 10 Assets have you at present of the respondents

116

Insurance Company

45%

Bank35%

Both20%

Chart 11 Preference to investment of the respondents

117

0 50 100 150 200

Premium outflow

Company reputation

Service quality

Product quality

Return on investment

No. of respondents

Influence to take insurance

Chart 12 Purpose of taking insurance of the respondents

118

9%

35%

15%

23%

18%

Chart 13 Person influence to take insurance of the respondents

Personal interest Friends Family Agents Advertisement

119

0 50 100 150 200 250 300

A life risk coverage

Family need

Purpose of saving

Buying an

insurance

Chart 14 Purpose of buying an insurance of the respondents

120

TABLE NO - 4.4 TABLE SHOWS THE CLASSIFICATION ON THE BASIS OF TYPES OF PLAN, NO. OF POLICY, VALUE OF TOTAL POLICY AND AMOUNT OF PREMIUM OF THE

RESPONDENTS OF THE POLICY HOLDERS



Type of plan

ULIP 112 22.40

Term Plan 111 22.20

Health Plan 74 14.80

Traditional Plan 203 40.60

Total 500 100.00

No. of Policy

One 42 8.40

Two 73 14.60

Three 52 10.40

Four 104 20.80

Five 229 45.80

Total 500 100.00

Value of total Policy

Rs. 50,000 49 9.80

Rs. 50,001 to 1,00,000 169 33.80

Rs. 1,00,001 to 2,00,000 108 21.60

Rs. 2,00,001 to 5,00,000 74 14.80

Rs. 5,00,001 and above 100 20.00

Total 500 100.00

Amount of Premium

Below 5000 75 15.00

5001 to 10,000 145 29.00

10,001 to 20,000 80 16.00

20,001 to 30,000 50 10.00

30,001 to 50,000 90 18.00

50,001 and above 60 12.00

Total 500 100.00


121

Regarding the selection of type of insurance policy, 40.6% of

policy holders opt Traditional plan for their investment. 22.4% select

ULIP plan, 22.2% of select Term plan and 14.8% of the respondent opt

Health plan. It is clear from the table that 40.6% choose Traditional plan.

Regarding the selection of the No. of policies, 45.8% of

respondents have more than five policies. 20.8% respondents have four

policies, 14.6% of respondents have two policies, 10.4% of respondents

have three policies and 8.4% of respondents have one policy. It is clear

from the table that 45.8% choose five policies.

Regarding the value of the policy 33.8% of respondents have a

worth of Rs. 50,001 to Rs. 1,00,000, 21.6% of respondents have a worth

of Rs. 1,00,001 to 2,00,000, 20.0% of respondents have a worth of Rs.

5,00,001 and above, 14.8% of respondents have a worth of Rs. 2,00,001

to Rs. 5,00,000 and 9.8% of respondents have a worth of Rs. 50,000.It is

clear from the table that 33.8% of the respondents have a value of worth

Rs. 50,001 to 1,00,000.

Regarding the amount of premium paid by the respondents, 29% of

the respondents are paying Rs. 5,000 to 10,000 as a premium, 18% of the

respondents are paying Rs. 30,001 to Rs. 50,000 as a premium, 16% of

the respondents are paying Rs. 10,0001 to 20,000 as a premium, 15% of

the respondents are paying below Rs.5,000 as a premium, 12% of the

respondents are paying Rs. 50,001 and above as a premium, 10% of the

respondents are paying Rs. 20,001 to 30,000 as a premium. It is clear

from the table that 29% of the respondents are Rs. 5,000 to 10,000 as a

premium paid.

122

0

50

100

150

200

250

ULIP Term Plan Health Plan Traditional Plan

Series1 112 111 74 203

No. o

f responden

tsChart 15 Type of plan of the respondents

123

0

50

100

150

200

250

One Two Three Four Five

No. o

f respondents

No.of Policy

Chart 16 No. of policy of the respondents

124

0

20

40

60

80

100

120

140

160

180

Rs. 50,000 Rs. 50,001 to Rs.

1,00,000

Rs. 1,00,001 to Rs.

2,00,000

Rs. 2,00,001 to Rs.

5,00,000

Rs. 5,00,001 and above

No. o

f respondetns

Sum assured value

Chart 17 Value of sum assured of the respondents

125

0

20

40

60

80

100

120

140

160

Below Rs. 5,000

Rs. 5,001 to Rs. 10,000

Rs. 10,001 to Rs. 20,000

Rs. 20,001 to Rs. 30,000

Rs. 30,001 to Rs. 50,000

Rs. 50,001 and above

No. o

f respondents

Amount of premium

Chart 18 Amount of premium of respondents

126

TABLE NO 4.5

TABLE SHOWS THAT CLASSIFICATION ON THE BASIS OF

PREMIUM PAID, METHOD OF PREMIUM PAID AND MODE OF

PAYMENT OF THE RESPONDENTS



Premium paid

Monthly 72 14.40

Quarterly 109 21.80

Half-yearly 214 42.80

yearly 105 21.00

Total 500 100.00

Method of Premium

paid

Through agent 260 52.00

By self 180 36.00

Through Bank 60 12.00

Total 500 100.00

Mode of payment

By cheque 102 20.40

By cash 338 67.60

By Debit and Credit Card 60 12.00

Total 500 100.00


127

Regarding the selection of premium paid. 42.8% of respondents are

paying their premium in half-yearly payment option, 21.8% of

respondents are paying in Quarterly payment, 21.0% of respondents are

paying their premium in yearly payment option and 14.4% of the

respondents are paying their premium in monthly payment. It is clear

from the table that 42.8% of the respondents are paying premium in half-

yearly payment.

Regarding the selection of method of premium paid. 52% of the

respondent are paying their premium through their LIC Agent, 36% of

respondents are paying their premium by self and remaining 12% of the

respondents are paying their premium through their LIC Agent.

Regarding the selection of mode of payment. 67.60% of the

respondents are paying by cash, 20.4% of the respondents are paying by

cheque and 12% of the respondents are using bank for their payment of

premium. It is clear from the table that 67.6% of the respondents are

paying their premium by cash.

128

Monthly14%

Quarterly22%

Half yearly43%

Yearly21%

Chart 19 Premium paid of the respondents

129

0 50 100 150 200 250 300

Through agent

By self

Through bank

No. of respondents

Premium paid

Chart 20 Method of premium paid by the respondents

130

0

50

100

150

200

250

300

350

400

By cheque By cash By debit and credit card

No. o

f respondents

Mode of payment

Chart 21 Mode of payment by the respondents

131

TABLE NO-4.6

INDEPENDENT SAMPLE T-TEST AGE VS OVERALL RATING OF

SATISFACTION OVER THE FUNCTIONS OF LIC

Group Statistics

Gender No. of respondents Mean Std. Deviation Std. Error Mean

Male 289 2.30 1.355 0.080

Female 211 2.62 1.444 0.099

Independent Samples Test

Overall rating of the LIC

functions

Levene's Test for

Equality of Variances

t-test for

Equality of

Means

F Sig. t

Equal variances assumed 6.594 0.011 -2.563

Equal variances not assumed - - -2.538



functions

t-test for Equality of Means

df Sig. (2-

tailed)

Mean

Difference

Equal variances assumed 498 0.011 -0.323

Equal variances not assumed 435.515 0.012 -0.323

The above table shows the opinion of male and female respondents

regarding overall satisfaction on functions of LIC. To check whether or

not male and female respondents differed significantly in terms of their

mean ratings on this five point scale opinion. On the five point scale,

males gave a mean rating of approximately 2.30, whereas females gave a

mean rating of approximately 2.62.

132

Hypotheses

Null Hypothesis: There is no difference between Mean score of the

overall satisfaction of LIC functions of Male and Female.

Alternative Hypothesis: There is a difference between Mean score

of the overall satisfaction of LIC functions of Male and Female.

The result of test statistics shows the F value 6.594, the p value of

.011 indicates that the null hypothesis of equal variances for the two

groups cannot be rejected at the customary significance level of .05. The

p value implies that the odds are 2 to 3there is no significant relationship

that the mean satisfaction score of joint family respondents and nuclear

family respondents are the same for the two family type. There is no

significant relationship that the mean satisfaction score of joint family

respondents and nuclear family respondents are the same for the two

family type. There is no significant relationship that the mean satisfaction

score of joint family respondent and nuclear family respondents are the

same for the two family types. A difference of magnitude of -0.323 (2.30-

2.62) could be occurred from chance. At the α = 0.05 level of

significance, there is not enough evidence to conclude that the mean

satisfaction score of Male and female are the same for the two areas.

133

TABLE NO – 4.7

INDEPENDENT SAMPLE T-TEST ON MARITAL STATUS OF THE

RESPONDENT VS OVERALL RATING OF SATISFACTION OVER

THE FUNCTIONS OF LIC

Group Statistics

Marital Status No. of respondents Mean Std. Deviation Std. Error Mean

Married 436 2.38 1.385 0.066

Unmarried 64 2.81 1.457 0.182



functions

Levene's Test for


t-test for

Equality of

Means

F Sig. t





functions


df Sig. (2-

tailed)

Mean

Difference



The above table shows the opinion of respondents regarding

overall satisfaction on functions of LIC. The respondents are based on the

marital status. To check whether or not married and unmarried

respondents are differed significantly in terms of their mean ratings on

this five point scale opinion. On the five point scale, Married respondent

134

gave a mean rating of approximately 2.38, whereas Unmarried

respondent gave a mean rating of approximately 2.81.

Hypotheses

Null Hypothesis: There is no differences between Mean score of

the overall satisfaction of LIC functions of married and unmarried

respondents.

Alternative Hypothesis: There is a differences between Mean score

of the overall satisfaction of LIC functions of married and unmarried

respondents.




p value implies that the odds are 2 to 3 that a difference of magnitude of -

0.434 (2.38-2.81) could be occurred from chance. At the α = 0.05 level of


satisfaction score of married and unmarried respondents are the same for

the two areas.

135

TABLE NO – 4.8

INDEPENDENT SAMPLE T TEST ON FAMILY TYPE OF THE

RESPONDENT VS OVERALL RATING OF SATISFACTION OVER

THE FUNCTIONS OF LIC

Group Statistics

Type of Family No. of respondents Mean Std. Deviation Std. Error Mean

Nuclear family 335 2.54 1.409 0.077

Joint family 165 2.22 1.362 0.106

Independents Samples Test


functions

Levene's Test for


t-test for

Equality of

Means

F Sig. t

Equal variances assumed 3.292 0.070 2.430

Equal variances not assumed - - 2.458



functions


df Sig. (2-

tailed)

Mean

Difference

Equal variances assumed 498 0.015 0.322

Equal variances not assumed 336.616 0.014 0.322


overall satisfaction on functions of LIC. The respondents are classified on

their family type of living. There are naturally either nuclear family type

or Joint family type. To check whether or not Nuclear family respondents

and Joint family type of respondents differed significantly in terms of

their mean ratings on this five point scale opinion. On the five point scale,

136

Married respondents gave a mean rating of approximately 2.54, whereas

Unmarried respondents gave a mean rating of approximately 2.22.

Hypotheses


overall satisfaction of LIC functions of Joint family and nuclear family

respondents.


of the overall satisfaction of LIC functions of Joint family and nuclear

family respondents.




p value implies that the odds are 2 to 3 that a difference of magnitude of



satisfaction score of joint family and nuclear family respondents are the

same for the two areas.

137

TABLE NO 4.9

INDEPENDENT SAMPLE T TEST ON NATURE OF THE AREA OF

THE RESPONDENT VS OVERALL RATING OF SATISFACTION

OVER THE FUNCTIONS OF LIC

Group Statistics

Nature of area No. of respondents Mean Std. Deviation Std. Error Mean

Urban 419 2.67 1.401 0.068

Rural 81 1.21 0.410 0.046



functions

Levene's Test for


t-test for

Equality of

Means

F Sig. t





functions


df Sig. (2-

tailed)

Mean

Difference




overall satisfaction on functions of LIC. The respondents are classified on

their nature of geographical area of living. The respondents are living

either Urban area or Rural area. To check whether or not urban

respondents and Rural respondents are differed significantly in terms of


138

urban respondents gave a mean rating of approximately 2.64, whereas

Unmarried respondents gave a mean rating of approximately 1.21.

Hypotheses


overall satisfaction of LIC functions of urban respondents and rural

respondents.


of the overall satisfaction of LIC functions of urban respondents and rural

respondents.

The result of test statistics shows the F value 177.294, the p value

of .000 indicates that the null hypothesis of equal variances for the two




significance, there is no significant relationship that the mean satisfaction

score of urban respondents and rural respondents are the same for the two

areas.

139

TABLE NO 4.10

INDEPENDENT SAMPLE T TEST ON NATURE OF THE AREA THE

RESPONDENT LIVING VS OVERALL SATISFACTION RATING OF

VARIOUS LIC POLICY

Group Statistics

Nature of the area No. of respondents Mean Std. Deviation Std. Error Mean

Urban 419 2.58 1.425 .070

Rural 81 2.88 .399 .044



functions

Levene's Test for


t-test for

Equality of

Means

F Sig. t





functions


d.f Sig. (2-

tailed)

Mean

Difference




overall satisfaction on various LIC Policy. The respondents are classified

on their nature of geographical area living. The respondents living either

Urban area or Rural area. To check whether or not urban respondents and

rural respondents are differed significantly in terms of their mean ratings

on this five point scale opinion. On the five point scale, urban

140

respondents gave a mean rating of approximately 2.58, whereas Rural

respondents gave a mean rating of approximately 2.88.

Hypotheses


overall satisfaction of LIC functions of urban respondents and rural

respondents.


of the overall satisfaction of LIC functions of urban respondents and rural

respondents.

The result of test statistics shows the F value 172.939, the p value

of .000 indicates that the null hypothesis of equal variances for the two





score of urban respondents and rural respondents are the same for the

two areas.

141

TABLE NO 4.11

INDEPENDENT SAMPLE T TEST ON NATURE OF THE FAMILY

THAT RESPONDENT LIVING VS OVERALL SATISFACTION

RATING OF VARIOUS LIC POLICY

Group Statistics

Type of family No. of respondents Mean Std. Deviation Std. Error Mean

Nuclear family 335 2.65 1.372 0.075

Joint family 165 2.58 1.205 0.094



functions

Levene's Test for


t-test for

Equality of

Means

F Sig. t





functions


d.f Sig. (2-

tailed)

Mean

Difference





on their nature of family type. The respondent living either Joint family

or nuclear family type. To check whether or not joint family respondents

and nuclear respondents are differed significantly in terms of their mean

ratings on this five point scale opinion. On the five point scale, Joint

142

family respondents gave a mean rating of approximately 2.65, whereas

nuclear family respondents gave a mean rating of approximately 2.58.

Hypotheses


overall satisfaction of LIC functions of Joint family respondents and

Nuclear family respondents.

Alternative Hypothesis: There is a difference between Mean

score of the overall satisfaction of LIC functions of urban respondents

and rural respondents.





.072 (2.65-2.58) could be occurred from chance. At the α = 0.05 level of


score of joint family respondents and nuclear family respondents are the

same for the two family type.

143

TABLE NO – 4.12

INDEPENDENT SAMPLE T TEST ON MARITAL STATUS OF THE

RESPONDENT LIVING VS OVERALL SATISFACTION RATING OF

VARIOUS LIC POLICY

Group Statistics

Marital status No. of respondents Mean Std. Deviation Std. Error Mean

Married 436 2.62 1.293 0.062

Unmarried 64 2.66 1.493 0.187



functions

Levene's Test for


t-test for

Equality of

Means

F Sig. t





functions


d.f Sig. (2-

tailed)

Mean

Difference





on their marital status of the respondents. The respondents living either

Joint family or nuclear family type. To check whether or not married

respondents and unmarried respondents are differed significantly in terms

of their mean ratings on this five point scale opinion. On the five point

144

scale, Joint family respondents have a mean rating of approximately 2.62,

whereas nuclear family respondents have a mean rating of approximately

2.66.

Hypotheses

Null Hypothesis: There is no difference between Mean score of

the overall satisfaction of Various LIC policy of married respondents and

unmarried respondents.


of the overall satisfaction on various LIC policy of married respondents

and unmarried respondents.






significance, there is significant relationship that the mean satisfaction

score of Married respondents and unmarried respondents are the same for

the two types.

145

TABLE NO - 4.13

INDEPENDENT SAMPLE T TEST ON GENDER VS OVERALL

SATISFACTION RATING OF VARIOUS LIC POLICY

Group Statistics


Male 289 2.47 1.250 0.074

Female 211 2.83 1.382 0.095



functions

Levene's Test for


t-test for

Equality of

Means

F Sig. t




Overall rating of the Various

LIC Products offered


d.f Sig. (2-

tailed)

Mean

Difference

Equal variances assumed 498 .002 -0.364

Equal variances not assumed 425.139 .003 -0.364



on their gender. To check whether or not Male respondents and female

respondents are differed significantly in terms of their mean ratings on

this five point scale opinion. On the five point scale, male respondents

have a mean rating of approximately 2.47, whereas female respondents

have a mean rating of approximately 2.83.

146

Hypotheses


the overall satisfaction of Various LIC policy of Male respondents and

female respondents.


of the overall satisfaction on various LIC policy of Male respondents and

female respondents.

The result of test statistics shows the F value .907, the p value of






score of Male respondents and female respondents are the same for the

two types.

147

TABLE NO 4.14

INDEPENDENT SAMPLE T TEST ON GENDER VS OVERALL

SATISFACTION RATING OF SERVICES OF LIC TO CUSTOMERS

Group Statistics


Male 289 2.30 .944 .056

Female 211 2.40 .912 .063



services to customers

Levene's Test for


t-test for Equality

of Means

F Sig. t





LIC services to customers


d.f Sig. (2-

tailed)

Mean

Difference




overall satisfaction on various LIC services. The respondents are

classified on their gender. To check whether or not Male respondents and

female respondents are differed significantly in terms of their mean

ratings on this five point scale opinion. On the five point scale, male

respondents gave a mean rating of approximately 2.30, whereas female


148

Hypotheses


overall satisfaction of Various LIC services of Male respondents and

female respondents.


of the overall satisfaction on various LIC services of Male respondents

and female respondents.


0.424 indicates that the null hypothesis of equal variances for the two





score of Male respondents and female respondents are the same for the

two types.

149

TABLE NO 4.15

INDEPENDENT SAMPLE T TEST ON MARITAL STATUS VS

OVERALL SATISFACTION RATING OF SERVICES OF LIC TO

CUSTOMER

Group Statistics

Marital Status No. of respondents Mean Std. Deviation Std. Error Mean

Married 436 2.35 0.923 0.044

Unmarried 64 2.30 .987 0.123




Levene's Test for


t-test for

Equality of

Means

F Sig. t







d.f Sig. (2-

tailed)

Mean

Difference





classified on the basis of marital status. To check whether or not married

respondents and unmarred respondents are differed significantly in terms

of their mean ratings on this five point scale opinion. On the five point

150

scale, married respondents gave a mean rating of approximately 2.35,

whereas unmarried respondents gave a mean rating of approximately

2.30.

Hypotheses


the overall satisfaction of Various LIC services of married respondents



of the overall satisfaction on various LIC services of married respondents








score of married respondents and unmarried respondents are the same

for the two types.

151

TABLE NO 4.16

INDEPENDENT SAMPLE T TEST ON FAMILY TYPE VS OVERALL

SATISFACTION RATING OF SERVICES OF LIC TO CUSTOMERS

Group Statistics

Type of Family No. of respondents Mean Std. Deviation Std. Error Mean

Nuclear family 335 2.37 0.909 0.050

Joint family 165 2.28 0.973 0.076




Levene's Test for


t-test for

Equality of

Means

F Sig. t


Equal variances not assumed – - 1.009





d.f Sig. (2-

tailed)

Mean

Difference





classified on the basis of their family type. To check whether or not

nuclear type of family respondents and Joint family respondents are

differed significantly in terms of their mean ratings on this five point

scale opinion. On the five point scale, nuclear type of respondents gave a

152

mean rating of approximately 2.37, whereas Joint family type of


Hypotheses


overall satisfaction of Various LIC services of Nuclear family

respondents and Joint family respondents.

Alternative Hypothesis: There is a difference between Mean score of

the overall satisfaction on various LIC services of Nuclear family

respondents and Joint family respondents.

The result of test statistics shows the F value .391, the p value of .532

indicates that the null hypothesis of equal variances for the two groups

cannot be rejected at the customary significance level of .05. The p value

implies that the odds are 2 to 3 that a difference of magnitude .091 (2.37-

2.28) could be occurred from chance. At the α = 0.05 level of


score of nuclear family respondents and joint family respondents are the

same for the two types.

153

TABLE NO 4.17

INDEPENDENT SAMPLE T TEST ON AREA OF RESPONDENT

LIVING VS OVERALL SATISFACTION RATING OF SERVICES OF

LIC TO CUSTOMERS

Group Statistics

Nature of area No. of respondents Mean Std. Deviation Std. Error Mean

Urban 419 2.37 0.947 0.046

Rural 81 2.21 0.832 0.092




Levene's Test for


t-test for

Equality of

Means

F Sig. t







d.f Sig. (2-

tailed)

Mean

Difference





classified on the basis of locality. To check whether or not urban

respondents and rural respondents are differed significantly in terms of


154

male respondents gave a mean rating of approximately 2.37, whereas

female respondents gave a mean rating of approximately 2.21.

Hypotheses


the overall satisfaction of Various LIC services of Urban respondents and

rural respondents.


of the overall satisfaction on various LIC services of Urban respondents

and rural respondents.


..947 indicates that the null hypothesis of equal variances for the two


p value implies that the odds are 2 to 3 that a difference of magnitude



score of urban respondents and rural respondents are the same for the

two types.

155

CHAPTER – V

ANALYSIS AND INTERPRETATION OF DATA – II

In this chapter, an attempt has been to identify the factors that

influence the policy holders’ preference for LIC products by the policy

holders in the study area. for this purpose systematic random sampling

method was employed to collect first hand information from 500 sample

respondents. The respondents have been chosen randomly from the

different parts of the study area. The data thus collected were arranged

into simple tabular form. the level of satisfaction perceived by the

selected sample respondents in their policy holders’ preference is

considered as the dependent variable, the independent variable selected

for the study are gender, age, marital status, type of family, occupation,

educational qualification, income of the family, residential area and

overall ratings.

The data were analyzed by using simple statistical tools,

descriptive statistics like ANOVA, multiple regression analysis and

reliability analysis.

156

TABLE NO - 5.1

One-Way ANOVA –Overall Rating of LIC by Respondents’ Age

(Dependent variable: Rating LIC, Factor: Occupation)

This procedure performs a one-way analysis of variance for overall

Rating of LIC. It constructs various tests and graphs to compare the

mean values of Overall Rating of LIC by Respondents’ Age for the 5

different levels of Age. The F-test in the ANOVA table will test whether

there are any significant differences amongst the means. The Multiple

Range Tests will show that which means are significantly different from

which others.

ANOVA Table for Overall Rating of LIC by Respondent Age

Source Sum of Squares D.f Mean Square F-Ratio P-Value

Between groups 36.0957 4 9.02392 4.74 0.0009

Within groups 942.726 495 1.9045

Total (Corr.) 978.822 499

Above 55 yearsBelow 25 yearsBetween 25 - 35 yearsBetween 35 - 45 yearsBetween 45 - 55 yearsoriginal data.Age

Analysis of Means Plot for B_original data.RatingLICWith 95% Decision Limits

1.5

1.8

2.1

2.4

2.7

3

Mea

n

UDL=2.75CL=2.43LDL=2.12

157

The ANOVA table decomposes the variance of Overall Rating of

LIC by Respondents’ Age into two components: between-group

component and within-group component. The F-ratio, which in this case

equals 4.73821, is a ratio of the between-group estimate to the within-

group estimate. Since the P-value of the F-test is less than 0.05, there is a

statistically significant difference between the mean Overall Rating of

LIC from one level of by Respondent Age to another at the 95.0%

confidence level.

Multiple Range Tests for Overall Rating of LIC by Respondents’ Age

Method: 95.0 percent LSD

Level of Age Count Mean Homogeneous

Groups

Between 45 - 55 years 42 1.59524 X

Between 35 - 45 years 91 2.38462 X

Between 25 - 35 years 222 2.48649 X

Below 25 years 108 2.60185 X

Above 55 years 37 2.7027 X

158

Contrast Sig. Difference +/- Limits

Above 55 years - Below 25 years 0.100851 0.516504

Above 55 years - Between 25 - 35 years 0.216216 0.481476


Above 55 years - Between 45 - 55 years * 1.10746 0.611351

Below 25 years - Between 25 - 35 years 0.115365 0.318105


Below 25 years - Between 45 - 55 years * 1.00661 0.493073

Between 25 - 35 years - Between 35 - 45 years 0.101871 0.337503

Between 25 - 35 years - Between 45 - 55 years * 0.891248 0.45625


* denotes a statistically significant difference.

The table no: 5.1 apply a multiple comparison procedure to

determine which means are significantly different from others. The

bottom half of the output shows the estimated difference between each

pair of means. An asterisk has been placed next to 4 pairs, indicating that

these pairs show statistically significant differences at the 95.0%

confidence level. The second table indicates that 2 homogenous groups

are identified using columns of X's. Within each column, the levels

containing X's form a group of means within which there are no

statistically significant differences. The method currently being used to

discriminate among the means is Fisher's least significant difference

(LSD) procedure. With this method, there is a 5.0% risk of calling each

pair of means significantly different when the actual difference equals 0.

159

TABLE NO – 5.2

One-Way ANOVA –Overall Rating of LIC by Respondents’

Occupation

(Dependent variable: Rating LIC, Factor: Occupation)

This procedure performs a one-way analysis of variance for Rating

of LIC. It constructs various tests and graphs to compare the mean values

of Overall Rating of LIC for the 5 different levels of Respondents’

Occupation. The F-test in the ANOVA table will test whether there are

any significant differences amongst the means.

ANOVA Table for Overall Rating of LIC by Respondent Occupation

Source Sum of Squares Df Mean Square F-Ratio P-Value

Between groups 55.6428 4 13.9107 7.46 0.0000

Within groups 923.179 495 1.86501

Total (Corr.) 978.822 499

BusinessGovernment employeeOthersPrivate EmployeeProesssionalsoriginal data.Occupation


1.9

2.1

2.3

2.5

2.7

2.9

Mea

n

UDL=2.75CL=2.43LDL=2.12

160


LIC by Respondents’ Occupation into two components: a between-group

component and a within-group component. The F-ratio, which in this

case equals 7.45879, is a ratio of the between-group estimate to the

within-group estimate. Since the P-value of the F-test is less than 0.05,

there is a statistically significant difference between the mean Overall

Rating of LIC from one level of by Respondents’ Occupation to another

at the 95.0% confidence level.

Multiple Range Tests for Overall Rating of LIC by Respondents’

Occupation Method: 95.0 percent LSD

Level of Occupation Count Mean Homogeneous Groups

Others 90 1.92222 X

Government employee 55 1.96364 X

Professionals 116 2.49138 X

Business 191 2.66492 X

Private Employee 48 2.875 X


Business - Government employee * 0.701285 0.410603

Business - Others * 0.742699 0.343058

Business - Private Employee -0.210079 0.433226

Business - Professionals 0.173542 0.315846

Government employee - Others 0.0414141 0.459234

Government employee - Private Employee * -0.911364 0.529992

Government employee - Professionals * -0.527743 0.439279

Others - Private Employee * -0.952778 0.479568

Others - Professionals * -0.569157 0.376908

Private Employee - Professionals 0.383621 0.460495


161

The table no 5.2 applies a multiple comparison procedure to

determine which means are significantly different from which others.

The bottom half of the output shows the estimated difference between

each pair of means. An asterisk has been placed next to 6 pairs,

indicating that these pairs show statistically significant differences at the

95.0% confidence level. At the top of the page, 2 homogenous groups are

identified using columns of X's. Within each column, the levels






162

TABLE NO – 5.3

ONE-WAY ANOVA –OVERALL RATING OF LIC BY

RESPONDENTS’ QUALIFICATIONS

(Dependent variable: Rating LIC Factor : Qualification)

This procedure performs a one-way analysis of variance for

Overall Rating of LIC by Respondents’ Qualifications. It constructs

various tests and graphs to compare the mean values of Overall Rating of

LIC for the 6 different levels of Respondents Qualifications. The F-test

in the ANOVA table will test whether there are any significant

differences amongst the means. If there are, the Multiple Range Tests

will tell you which means are significantly different from which others.

ANOVA Table for Overall Rating of LIC by Respondent

Qualification


Between groups 30.8676 5 6.17352 3.22 0.0072

Within groups 947.954 494 1.91894

Total (Corr.) 978.822 499

GraduateHigher SecondaryPost GraduatePrimary levelProfessional Technicaloriginal data.Qualification


1.2

1.7

2.2

2.7

3.2

3.7

Mea

n

UDL=2.80CL=2.43LDL=2.07

163

The ANOVA table decomposes the variance of overall satisfaction

rating of LIC by respondents qualifications into two components: a

between-group component and a within-group component. The F-ratio,

which in this case equals 3.21716, is a ratio of the between-group

estimate to the within-group estimate. Since the P-value of the F-test is

less than 0.05, there is a statistically significant difference between the

mean overall satisfaction rating of LIC from one level of by respondent

qualification to another at the 95.0% confidence level.

164

Multiple Range Tests for overall Rating of LIC by Respondents’

Qualifications Method: 95.0 percent LSD

Level Count Mean Homogeneous

Groups

Post Graduate 8 1.375 X

Graduate 41 2.09756 XX

Primary level 167 2.26347 XX

Professional 30 2.3 XXX

Higher Secondary 225 2.64444 X

Technical 29 2.68966 XX


Graduate - Higher Secondary * -0.546883 0.46217

Graduate - Post Graduate 0.722561 1.05198

Graduate - Primary level -0.165912 0.47438

Graduate - Professional -0.202439 0.653915

Graduate - Technical -0.592094 0.660393

Higher Secondary - Post Graduate * 1.26944 0.979233

Higher Secondary - Primary level * 0.380971 0.277996

Higher Secondary - Professional 0.344444 0.529009

Higher Secondary - Technical -0.0452107 0.536996

Post Graduate - Primary level -0.888473 0.985055

Post Graduate - Professional -0.925 1.08301

Post Graduate - Technical * -1.31466 1.08693

Primary level - Professional -0.0365269 0.539708

Primary level - Technical -0.426182 0.547539

Professional - Technical -0.389655 0.708779


165













166

TABLE NO 5.4

ONE-WAY ANOVA – OVERALL RATING OF LIC BY PREMIUM

PAID

Dependent variable: B_original data. Rating LIC Factor: original data.

premium


Overall Rating of LIC by premium paid. It constructs various tests and

graphs to compare the mean values of Overall Rating of LIC for the 6

different levels of by premium paid. The F-test in the ANOVA table will

test whether there are any significant differences amongst the means.

ANOVA Table for Overall Rating of LIC by premium paid

Source Sum of Squares Df Mean

Square F-Ratio P-Value

Between groups 2.61584 5 0.523168 0.26 0.9322

Within groups 976.206 494 1.97613

Total (Corr.) 978.822 499

10 001 to 20 00020 001 to 30 00030 001 to 50 00050 001 and above5000 to 10 000Below 5000original data.premiun


1.9

2.1

2.3

2.5

2.7

2.9

3.1

Mea

n

UDL=2.80CL=2.43LDL=2.07

167


LIC by premium paid into two components: a between-group component

and a within-group component. The F-ratio, which in this case equals

0.264744, is a ratio of the between-group estimate to the within-group

estimate. Since the P-value of the F-test is greater than or equal to 0.05,

there is not a statistically significant difference between the mean overall

satisfaction rating of LIC performance from one level of original data.

premium to another at the 95.0% confidence level.

168

Multiple Range Tests for Overall satisfaction rate of LIC by amount

of premium paid by the respondent Method: 95.0 percent LSD

Level of Premium Paid Count Mean Homogeneo

us Groups

10 001 to 20 000 80 2.3625 X

20 001 to 30 000 50 2.4 X

5000 to 10 000 145 2.4069 X

30 001 to 50 000 90 2.42222 X

Below 5000 75 2.45333 X

50 001 and above 60 2.61667 X


10 001 to 20 000 - 20 001 to 30 000 -0.0375 0.497924

10 001 to 20 000 - 30 001 to 50 000 -0.0597222 0.424404

10 001 to 20 000 - 50 001 and above -0.254167 0.471699

10 001 to 20 000 - 5000 to 10 000 -0.0443966 0.384666

10 001 to 20 000 - Below 5000 -0.0908333 0.443927

20 001 to 30 000 - 30 001 to 50 000 -0.0222222 0.487169

20 001 to 30 000 - 50 001 and above -0.216667 0.52888

20 001 to 30 000 - 5000 to 10 000 -0.00689655 0.45297

20 001 to 30 000 - Below 5000 -0.0533333 0.504267

30 001 to 50 000 - 50 001 and above -0.194444 0.460331

30 001 to 50 000 - 5000 to 10 000 0.0153257 0.370638

30 001 to 50 000 - Below 5000 -0.0311111 0.431829

50 001 and above - 5000 to 10 000 0.20977 0.423974

50 001 and above - Below 5000 0.163333 0.47839

5000 to 10 000 - Below 5000 -0.0464368 0.392842


169




each pair of means. There are no statistically significant differences

between any pair of means at the 95.0% confidence level. At the top of

the page, one homogenous group is identified by a column of X's. Within

each column, the levels containing X's form a group of means within

which there are no statistically significant differences. The method

currently being used to discriminate among the means is Fisher's least

significant difference (LSD) procedure. With this method, there is a

5.0% risk of calling each pair of means significantly different when the

actual difference equals 0.

170

TABLE NO – 5.5

ONE-WAY ANOVA – OVERALL SATISFACTION RATING OF

LIC POLICY BY RESPONDENTS’ AGE

(Dependent variable: Rating of LIC Policy, Factor: Age)


Overall satisfaction Rating of LIC Policy by Respondents’ Age. It

constructs various tests and graphs to compare the mean values of Overall

satisfaction Rating of LIC Policy for the 5 different levels of Respondent

Age. The F-test in the ANOVA table will test whether there are any

significant differences amongst the means.

ANOVA Table for Overall Rating of LIC Policy by Respondents’

Age


Between groups 28.6916 4 7.17291 4.23 0.0022

Within groups 838.62 495 1.69418

Total (Corr.) 867.312 499


Analysis of Means Plot for B_original data.RatingPWith 95% Decision Limits

2.1

2.3

2.5

2.7

2.9

3.1

3.3

Mea

n

UDL=2.92CL=2.62LDL=2.33

171

The ANOVA table decomposes the variance of Overall satisfaction

Rating of LIC Policy by Respondents’ Age into two components: a




less than 0.05, there is a statistically significant difference between the

mean Overall satisfaction Rating of LIC Policy from one level of

Respondents’ Age to another at the 95.0% confidence level.

172

Multiple Range Tests for Overall satisfaction Rating of LIC Policy by

respondents’ Age Method: 95.0 percent LSD

Level Age of the Respondent Count Mean Homogeneo

us Groups

Between 35 - 45 years 91 2.32967 X


Below 25 years 108 2.4537 X

Between 45 - 55 years 42 2.47619 XX

Between 25 - 35 years 222 2.88739 X


Above 55 years - Below 25 years -0.0212713 0.487151

Above 55 years - Between 25 - 35 years * -0.454955 0.454114


Above 55 years - Between 45 - 55 years -0.043758 0.576607

Below 25 years - Between 25 - 35 years * -0.433684 0.300027


Below 25 years - Between 45 - 55 years -0.0224868 0.465052


Between 25 - 35 years - Between 45 - 55 years 0.411197 0.430321

Between 35 - 45 years - Between 45 - 55 years -0.14652 0.47706


173













174

TABLE NO 5.6

ONE-WAY ANOVA - OVERALL RATING OF LIC POLICY BY

OCCUPATION

Dependent variable: Overall Rating of LIC Policy Factor: original data.

Occupation


Overall satisfaction rating of LIC Policy. It constructs various tests and

graphs to compare the mean values of Overall satisfaction rating of LIC

policy for the 5 different levels of Respondent Occupation. The F-test in

the ANOVA table will test whether there are any significant differences

amongst the means.

ANOVA Table for Overall satisfaction rating of LIC policy by

Respondents’ Occupation


Between groups 17.6075 4 4.40187 2.56 0.0376

Within groups 849.705 495 1.71657

Total (Corr.) 867.312 499



2.1

2.3

2.5

2.7

2.9

3.1

Mea

n

UDL=2.92CL=2.62LDL=2.32

175

The ANOVA table exposes the variance of overall satisfaction

rating of LIC Policy into two components: a between-group component

and a within-group component. The F-ratio, which in this case equals

2.56433, is a ratio of the between-group estimate to the within-group

estimate. Since the P-value of the F-test is less than 0.05, there is a

statistically significant difference between the mean overall satisfaction

rating of LIC Policy from one level of Respondents’ Occupation to

another at the 95.0% confidence level. To determine which means are

significantly different from which others, select Multiple Range Tests

from the list of Tabular Options.

176

Multiple Range Tests for overall satisfaction rating of LIC Policy by

Respondents’ Occupation Method: 95.0 percent LSD

Level of Respondent Occupation Count Mean Homogene

ous Groups

Government employee 55 2.2 X

Private Employee 48 2.33333 XX


Processionals 116 2.7069 X

Others 90 2.75556 X


Business - Government employee * 0.506806 0.393925

Business - Others -0.0487493 0.329123

Business - Private Employee 0.373473 0.415628

Business - Professionals -0.000090269 0.303017

Government employee - Others * -0.555556 0.44058

Government employee - Private Employee -0.133333 0.508464

Government employee - Professionals * -0.506897 0.421436

Others - Private Employee 0.422222 0.460088

Others - Professionals 0.048659 0.361599

Private Employee - Professionals -0.373563 0.44179


177













178

TABLE NO - 5.7

ONE-WAY ANOVA OVERALL RATING OF LIC POLICY BY

RESPONDENTS’ QUALIFICATIONS

Dependent variable: B_original data. Rating P Factor: original data.

Qualification


Overall satisfaction Rating of LIC Policy by Respondents’

qualifications’. It constructs various tests and graphs to compare the

mean values of Overall satisfaction Rating of LIC Policy for the 6

different levels of original respondents’ Qualifications. The F-test in the

ANOVA table will test whether there are any significant differences

amongst the means

ANOVA Table for Overall Rating of LIC Policy by respondents’

Qualifications

Source Sum of

Squares Df

Mean


Between groups 16.8527 5 3.37054 1.96 0.0835

Within groups 850.459 494 1.72158

Total (Corr.) 867.312 499

GraduateHigher SecondaryPost GraduatePrimary levelProfessionalTechnicaloriginal data.Qualification


1.5

1.9

2.3

2.7

3.1

3.5

3.9

Mea

n

UDL=2.97CL=2.62LDL=2.28

179


LIC Policy into two components: a between-group component and a

within-group component. The F-ratio, which in this case equals 1.95782,

is a ratio of the between-group estimate to the within-group estimate.

Since the P-value of the F-test is greater than or equal to 0.05, there is not

a statistically significant difference between the mean B_original data.

Rating P from one level of Respondents’ Qualifications to another at the

95.0% confidence level.

180

Multiple Range Tests for Overall Rating of LIC Policy by

respondents’ Qualification Method: 95.0 percent LSD


Groups

Professional 30 2.26667 X

Higher Secondary 225 2.56889 X

Primary level 167 2.61677 X

Technical 29 2.62069 XX

Graduate 41 3.09756 X

Post Graduate 8 3.25 XX


Graduate - Higher Secondary * 0.528672 0.437759

Graduate - Post Graduate -0.152439 0.996411

Graduate - Primary level * 0.480795 0.449323

Graduate - Professional * 0.830894 0.619376

Graduate - Technical 0.476871 0.625512

Higher Secondary - Post Graduate -0.681111 0.927511

Higher Secondary - Primary level -0.0478776 0.263312

Higher Secondary - Professional 0.302222 0.501067


Post Graduate - Primary level 0.633234 0.933025

Post Graduate - Professional 0.983333 1.0258

Post Graduate - Technical 0.62931 1.02952

Primary level - Professional 0.3501 0.511201




181













182

TABLE NO 5.8

ONE-WAY ANOVA – OVERALL RATING OF LIC POLICY BY

AMOUNT OF .PREMIUM PAID

Dependent variable: Overall Rating of LIC policy, Factor: Amount of

premium


Overall Rating of LIC Policy by amount of premium paid. It constructs

various tests and graphs to compare the mean values of overall

satisfaction rating of LIC policy for the 6 different levels of amount of

premium paid. The F-test in the ANOVA table will test whether there are


ANOVA Table forOverall Rating of LIC Policy by amount of

.premium paid

Source Sum of

Squares Df

Mean


Between groups 4.73012 5 0.946025 0.54 0.7446

Within groups 862.582 494 1.74612

Total (Corr.) 867.312 499



2.1

2.3

2.5

2.7

2.9

3.1

Mea

n

UDL=2.97CL=2.62LDL=2.28

183


LIC Policy by amount of .premium paid into two components: a between-

group component and a within-group component. The F-ratio, which in

this case equals 0.541788, is a ratio of the between-group estimate to the

within-group estimate. Since the P-value of the F-test is greater than or

equal to 0.05, there is not a statistically significant difference between the

mean Overall Rating of LIC Policy by amount of .premium paidfrom one

level of amount of premium to another at the 95.0% confidence level.

184

Multiple Range Tests for Overall Rating of LIC Policy by amount of

premium paid Method: 95.0 percent LSD


Groups Below 5000 75 2.53333 X

20 001 to 30 000 50 2.54 X

50 001 and above 60 2.55 X

30 001 to 50 000 90 2.57778 X

10 001 to 20 000 80 2.6 X

5000 to 10 000 145 2.77241 X


10 001 to 20 000 - 20 001 to 30 000 NS 0.06 0.46805

10 001 to 20 000 - 30 001 to 50 000 NS 0.0222222 0.398941

10 001 to 20 000 - 50 001 and above NS 0.05 0.443399

10 001 to 20 000 - 5000 to 10 000 NS -0.172414 0.361587

10 001 to 20 000 - Below 5000 NS 0.0666667 0.417293

20 001 to 30 000 - 30 001 to 50 000 NS -0.0377778 0.45794

20 001 to 30 000 - 50 001 and above NS -0.01 0.497149

20 001 to 30 000 - 5000 to 10 000 NS -0.232414 0.425794

20 001 to 30 000 - Below 5000 NS 0.00666667 0.474013

30 001 to 50 000 - 50 001 and above NS 0.0277778 0.432713

30 001 to 50 000 - 5000 to 10 000 NS -0.194636 0.348401

30 001 to 50 000 - Below 5000 NS 0.0444444 0.405921

50 001 and above - 5000 to 10 000 NS -0.222414 0.398537

50 001 and above - Below 5000 NS 0.0166667 0.449688

5000 to 10 000 - Below 5000 NS 0.23908 0.369273



185











186

TABLE NO – 5.9

ONE-WAY ANOVA – OVERALL RATING OF LIC SERVICES BY

RESPONDENTS’ AGE

Dependent variable Overall satisfaction Rating of LIC Services Factor:

Respondent Age


Overall satisfaction Rating of LIC Services by Respondent Age. It


satisfaction Rating of LIC Services for the 5 different levels of original

data of Age. The F-test in the ANOVA table will test whether there are


ANOVA Table for Overall Rating of LIC Services by Respondents’

Age


Between groups 2.53093 4 0.632733 0.73 0.5725

Within groups 429.669 495 0.868018

Total (Corr.) 432.2 499


Analysis of Means Plot for B_original data.RatingSWith 95% Decision Limits

1.9

2.1

2.3

2.5

2.7

Mea

n

UDL=2.55CL=2.34LDL=2.13

187


LIC Services by Respondent Ageinto two components: a between-group

component and a within-group component. The F-ratio, which in this

case equals 0.72894, is a ratio of the between-group estimate to the



mean B_ original data. Ratings from one level of original data. Age to

another at the 95.0% confidence level.

188

Multiple Range Tests for Overall Rating of LIC Services by

Respondents Age

Method: 95.0 per cent LSD

Level of Respondent Age Count Mean Homogeneo

us Groups

Between 35 - 45 years 91 2.21978 X


Below 25 years 108 2.30556 X

Between 45 - 55 years 42 2.38095 X

Between 25 - 35 years 222 2.40541 X


Above 55 years - Below 25 years NS -0.00825826 0.348697

Above 55 years - Between 25 - 35 years NS -0.108108 0.325049

Above 55 years - Between 35 - 45 years NS 0.0775171 0.356911

Above 55 years - Between 45 - 55 years NS -0.0836551 0.412729

Below 25 years - Between 25 - 35 years NS -0.0998498 0.214756

Below 25 years - Between 35 - 45 years NS 0.0857753 0.260478

Below 25 years - Between 45 - 55 years NS -0.0753968 0.332878

Between 25 - 35 years - Between 35 - 45 years NS 0.185625 0.227851

Between 25 - 35 years - Between 45 - 55 years NS 0.024453 0.308019

Between 35 - 45 years - Between 45 - 55 years NS -0.161172 0.341474

189













190

TABLE NO 5.10

ONE-WAY ANOVA OVERALL RATING OF LIC SERVICES

RESPONDENTS’ OCCUPATION

Dependent variable: Overall Rating of LIC Services Factor: Respondent

Occupation


Overall Rating of LIC Services by Respondents’ Occupation. It


Rating of LIC Services by Respondents’ Occupation for the 5 different

levels of original data of Occupation. The F-test in the ANOVA table

will test whether there are any significant differences amongst the means.

ANOVA Table for Overall Rating of LIC Services Respondents’

Occupation


Between groups 4.60649 4 1.15162 1.33 0.2565

Within groups 427.594 495 0.863825

Total (Corr.) 432.2 499



2

2.2

2.4

2.6

2.8

Mea

n

UDL=2.55CL=2.34LDL=2.13

191


LIC Services by Respondent Occupation into two components: a




greater than or equal to 0.05, there is not a statistically significant

difference between the mean B_ original data. Ratings from one level of

original data. Occupation to another at the 95.0% confidence level.

192

Multiple Range Tests for Overall Rating of LIC Services by

Respondents’ Occupation. Method: 95.0 percent LSD

Level Count Mean Homogeneo

us Groups


Private Employee 48 2.27083 XX

Government employee 55 2.34545 XX

Professionals 116 2.36207 XX

Others 90 2.52222 X


Business - Government employee -0.08891 0.279444

Business - Others * -0.265678 0.233475

Business - Private Employee -0.0142888 0.29484

Business - Professionals -0.105524 0.214956

Government employee - Others -0.176768 0.312541

Government employee - Private

Employee 0.0746212 0.360696

Government employee - Professionals -0.0166144 0.29896

Others - Private Employee 0.251389 0.326379

Others - Professionals 0.160153 0.256512

Private Employee - Professionals -0.0912356 0.313399


193




each pair of means. An asterisk has been placed next to 1 pair, indicating

that this pair shows a statistically significant difference at the 95.0%

confidence level. At the top of the page, 2 homogenous groups are







194

TABLE NO – 5.11

ONE-WAY ANOVA - OVERALL RATING OF LIC SERVICES BY

RESPONDENTS’ QUALIFICATION

Dependent variable: Overall Rating of LIC Services, Factor:

Respondents’ Qualification


Overall Rating of LIC Services by Qualifications. It constructs various

tests and graphs to compare the mean values of Overall Rating of LIC

Services by Qualification for the 6 different levels of Qualifications. The

F-test in the ANOVA table will test whether there are any significant

differences amongst the means

ANOVA Table for Overall Rating of LIC Services by Respondent

Qualification

Source Sum of

Squares Df

Mean


Between groups 1.77072 5 0.354144 0.41 0.8444

Within groups 430.429 494 0.871314

Total (Corr.) 432.2 499

GraduateHigher SecondaryPost GraduatePrimary levelProfessionalTechnicaloriginal data.Qualification


1.5

1.8

2.1

2.4

2.7

3

3.3

Mea

n

UDL=2.58CL=2.34LDL=2.10

195

The ANOVA table exposes the variance of Overall Rating of LIC

Services by Respondent Qualification into two components: a between-





mean Overall Rating of LIC Services from one level of by Respondents’

Qualification to another at the 95.0% confidence level.

196

Multiple Range Tests for Overall Rating of LIC Services by original

data. Qualification Method: 95.0 percent LSD


Groups Higher Secondary 225 2.29333 X

Graduate 41 2.34146 X

Primary level 167 2.35329 X

Professional 30 2.43333 X

Technical 29 2.44828 X

Post Graduate 8 2.625 X


Graduate - Higher Secondary 0.0481301 0.311429

Graduate - Post Graduate -0.283537 0.708864

Graduate - Primary level -0.01183 0.319656

Graduate - Professional -0.0918699 0.440634

Graduate - Technical -0.106812 0.445

Higher Secondary - Post Graduate -0.331667 0.659847

Higher Secondary - Primary level -0.0599601 0.187325

Higher Secondary - Professional -0.14 0.356467


Post Graduate - Primary level 0.271707 0.66377

Post Graduate - Professional 0.191667 0.729773

Post Graduate - Technical 0.176724 0.732417

Primary level - Professional -0.0800399 0.363677



197













198

TABLE NO – 5.12

ONE-WAY ANOVA - OVERALL RATING OF LIC

SERVICES BY AMOUNT OF PREMIUM PAID

Dependent variable: Overall Rating of LIC Services

Factor: amount of premium paid


Overall Rating of LIC Services by amount of premium paid. It constructs

various tests and graphs to compare the mean values of Overall Rating of

LIC Services by amount of premium paid for the 6 different levels of

amount of premium paid per annum. The F-test in the ANOVA table will

test whether there are any significant differences amongst the means.

ANOVA Table for Overall Rating of LIC Servicesby

amount of premium paid


Between

groups 4.71062 5 0.942125 1.09 0.3657

Within groups 427.489 494 0.865363

Total (Corr.) 432.2 499



2

2.2

2.4

2.6

2.8

Mea

n

UDL=2.58CL=2.34LDL=2.10

199

The ANOVA table exposes the variance of Overall Rating of LIC

Services by amount of premium paid into two components: a between-





mean Overall Rating of LIC Services by amount of premium paid from

one level of original data. Premium to another at the 95.0% confidence

level.

200

Multiple Range Tests for Overall Rating of LIC Services by amount

of premium paid Method: 95.0 percent LSD

Level Count Mean Homogeneo

us Groups

10 001 to 20 000 80 2.2125 X

30 001 to 50 000 90 2.24444 XX

20 001 to 30 000 50 2.34 XX

50 001 and above 60 2.35 XX

5000 to 10 000 145 2.37241 XX

Below 5000 75 2.52 X


10 001 to 20 000 - 20 001 to 30 000 -0.1275 0.3295

10 001 to 20 000 - 30 001 to 50 000 -0.0319444 0.280848

10 001 to 20 000 - 50 001 and above -0.1375 0.312145

10 001 to 20 000 - 5000 to 10 000s -0.159914 0.254552

10 001 to 20 000 - Below 5000 * -0.3075 0.293767

20 001 to 30 000 - 30 001 to 50 000 0.0955556 0.322382

20 001 to 30 000 - 50 001 and above -0.01 0.349985

20 001 to 30 000 - 5000 to 10 000 -0.0324138 0.299752

20 001 to 30 000 - Below 5000 -0.18 0.333697

30 001 to 50 000 - 50 001 and above -0.105556 0.304623

30 001 to 50 000 - 5000 to 10 000 -0.127969 0.245269

30 001 to 50 000 - Below 5000 -0.275556 0.285761

50 001 and above - 5000 to 10 000 -0.0224138 0.280563

50 001 and above - Below 5000 -0.17 0.316573

5000 to 10 000 - Below 5000 -0.147586 0.259962


201


determine which means are significantly different from others. The

bottom half of the output shows the estimated difference between each

pair of means. An asterisk has been placed next to 1 pair, indicating that

this pair shows a statistically significant difference at the 95.0%

confidence level. At the top of the page, 2 homogenous groups are







202

TABLE NO – 5.13

MULTIPLE REGRESSIONS ON OVERALL SATISFACTION

RATING OF THE VARIOUS LIC PRODUCTS OFFERED BY

PRODUCT VARIABLES

Result of Multiple Regression - Model Summaryb

Model R R Square Adjusted R

Square

Std. Error of the

Estimate

1 .366a .134 .116 1.239

Predictors: (Constant), LIC Polices give positive image, High rate of

return, Suitable for the needs, Convenient method to pay premium,

Acceptable penalty charges, Financial security for the family, Policies are

superior to others, Fullest satisfaction of the requirement, one knows all

the features of the policy, Gives one confidence about one’s future

Dependent Variable: Overall Satisfaction rating of the Various LIC

Product offered

ANOVAa

Model Sum of

Squares df

Mean

Square F Sig.

1

Regression 116.262 10 11.626 7.570 .000b

Residual 751.050 489 1.536 - -

Total 867.312 499 - - -

Predictors: (Constant), LIC Polices give positive image, High rate of

return, Suitable for the needs, Convenient method to pay premium,

Acceptable penalty charges, Financial security for one’s family, Policies

203

are superior to other, Fullest satisfaction of one’s requirement, one knows

all the features of the policy, Gives one confidence about one’s future


Product offered.

The ANOVA table, as displayed in table shows F ratio for the

regression model that indicates that the chosen ten product variables

significantly contribute for the dependent Overall Satisfaction rating of

the Various LIC Product offered The variance independent variable that

is associated with dependent variable is referred to as explained variance.

204

Coefficients

Product Variables

Unstandardized

Coefficients

Standardized

Coefficients t Sig.

B Std.

Error Beta

(Constant) 2.276 .212 10.755 .000

Policies are superior to other (P1) .059 .041 .064 1.415 .158

Suitable for my needs (P2) .076 .044 .077 1.741 .082

Financial security for my family (P3) .087 .042 .096 2.096 .037

Fullest satisfaction of my requirement (P4) .067 .056 .059 1.191 .234

I know all the features of the policy (P5) .198 .059 .189 3.385 .001

Gives me confidence about my future (P6) .027 .058 .027 .461 .645

High rate of return (P7) .009 .045 .009 .206 .837

Convenient method to pay premium (P8) .258 .060 .191 4.317 .000

Acceptable penalty charges (P9) -.158 .054 -.164 -2.943 .003

LIC Polices gives positive image (P10) -.509 .078 -.354 -6.524 .000

205


Product offered

The output shows the results of fitting a multiple linear regression

model to describe the relationship between Overall Satisfaction rating of

the Various LIC Product offered and 10 independent variables. The

equation of the fitted model is Overall Satisfaction rating of the Various

LIC Product = 2.27597 + 0.0585407*P1 + 0.0759576*P2 +

0.0871784*P3 + 0.066932*P4 + 0.198373*P5 + 0.0268555*P6 +

0.0091829*P7 + 0.258408*P8 - 0.157586*P9 - 0.508603*P10

Since the P-value in the ANOVA table is less than 0.05, there is a

statistically significant relationship between the variables at the 95.0%

confidence level. The R-Squared statistic indicates that the model as

fitted explains 13.4049% of the variability in Overall Satisfaction rating

of the Various LIC Product. The adjusted R-squared statistic, which is

more suitable for comparing models with different numbers of

independent variables, is 11.634%. The standard error of the estimate

shows the standard deviation of the residuals to be 1.23931. This value

can be used to construct prediction limits for new observations by

selecting the Reports option from the text menu. The mean absolute error

(MAE) of 1.01111 is the average value of the residuals. Since the P-

value is less than 0.05, there is an indication of possible serial correlation

at the 95.0% confidence level. In determining whether the model can be

simplified, notice that the highest P-value on the independent variables is

0.8367, belonging to P7. Since the P-value is greater or equal to 0.05,

that term is not statistically significant at the 95.0% or higher confidence

level. Consequently, you should consider removing C.P7 from the

model. Age group of the respondents, occupational status of the

respondents and their family size were not a significant predictor in this

model.

206

Chart 22

Financial security for one’s family (P3), one knows all the features

of the policy (P5), Convenient method to pay premium (P8), Acceptable

penalty charges (P9) and LIC Polices gives positive image (P10) are

significant predictor of this model. However the variables namely

Policies are superior to other policies (P1), Suitable for one’s needs (P2),

Fullest satisfaction of one’s requirement (P4), Gives one confidence

about one’s future (P6), High rate of return (P7) are not significant

predictor of this model.

207

Chart 23

Path diagram shows the Overall Satisfaction Rating of LIC Product

by its Product Variables

208

TABLE NO – 5.14

MULTIPLE REGRESSION ON OVERALL SATISFACTION

RATING OF THE LIC SERVICES TO CUSTOMERS BY

SERVICES VARIABLES

Model Summaryb


Square

Std. Error of the

Estimate

1 .393a .155 .137 .864

Predictors: (Constant), Speedy documentation and settlement of claims,

Give truthful advice on investments/tax benefits, Customers feel safe and

secure in their transactions, Sufficient number of LIC branches is

available, Agents/employees competence to answer specific queries,

Problems are solved by the LIC employees as quick as possible, Like to

communicate the LIC services/products to others, Regular intimation

about the due date for premium, Regular intimation about the new

policies and its services, Agents / employees understand the needs of the

customer.

Dependent Variable: Overall Satisfaction rating of the LIC Services to

customer

ANOVAa

Model Sum of

Squares df

Mean

Square F Sig.

1

Regression 66.780 10 6.678 8.936 .000b

Residual 365.420 489 .747

Total 432.200 499

209

Predictors: (Constant), Speedy documentation and settlement of claims,

Give truthful advice on investments/tax benefits, Customers feel safe and

secure in their transactions, Sufficient number of LIC branches are

available, Agents/employees competence to answer specific queries,

Problems are solved by the LIC employees as quick as possible, Like to

communicate the LIC services/products to others, Regular intimation

about the due date for premium, Regular intimation about the new

policies and its services, Agents/employees understand the needs of the

customers.


customers


regression model that indicates that the chosen ten services variables

significantly contribute for the dependent Overall Satisfaction rating of

the Various LIC services offered. The variance independent variable that

is associated with dependent variable is referred to as explained variance.

210

Coefficients

Models

Unstandardized

Coefficients

Standardized

Coefficients t Sig.

B Std. Error Beta

(Constant) 1.274 .195 6.547 .000

Regular intimation about the due date for premium (S1) -.060 .039 -.077 -1.542 .124

Regular intimation about the new policies and its services(S2) -.048 .033 -.073 -1.480 .139

Agents/employees competence to answer specific queries(S3) .220 .040 .252 5.493 .000

Agents/employees understand the needs of the customer(S4) .050 .037 .075 1.359 .175

Give truthful advice on investments/tax benefits(S5) .052 .038 .060 1.373 .170

Sufficient number of LIC branches is available(S6) .179 .045 .183 4.007 .000

Problems are solved by the LIC employees as quick as possible

(S7) .003 .031 .005 .109 .913

Like to communicate the LIC services/products to others(S8) .132 .042 .163 3.154 .002

Customers feel safe and secure in their transactions(S9) .068 .032 .089 2.102 .036

Speedy documentation and settlement of claims(S10) -.058 .035 -.074 -1.663 .097

211


customer



the LIC Services to customer and 10 independent variables. The equation

of the fitted model is Overall Satisfaction rating of the LIC Services to

customer = 1.2735 - 0.0604512*S1 - 0.0482675*S2 + 0.220369*S3 +

0.049829*S4 + 0.0522458*S5 + 0.179291*S6 + 0.00335607*S7 +

0.132492*S8 + 0.0680429*S9 - 0.0578546*S10



confidence level. The R-Squared statistic indicates that the model as

fitted explains 15.4513% of the variability in Overall Satisfaction rating

of the LIC Services to customers. The adjusted R-squared statistic, which

is more suitable for comparing models with different numbers of

independent variables, is 13.7223%. The standard error of the estimate

shows the standard deviation of the residuals to be 0.864453. This value

can be used to construct prediction limits for new observations by

selecting the Reports option from the text menu. The mean absolute error

(MAE) of 0.665487 is the average value of the residuals. In determining

whether the model can be simplified, notice that the highest P-value on

the independent variables is 0.9131, belonging to S7. Since the P-value is

greater or equal to 0.05, that term is not statistically significant at the

95.0% or higher confidence level. Consequently, it should consider

removing S7 from the model.

212

Chart 24

Agents/employees competence to answer specific queries (S3),

Sufficient number of LIC branches is available(S6), Like to communicate

the LIC services/products to others(S8), Customers feel safe and secure in

their transactions(S9) are significant predictors of overall satisfaction of

LIC services. The following services variables namely Regular intimation

about the due date for premium (S1), Regular intimation about the new

policies and its services (S2), Agents/employees understand the needs of

the customers (S4), Give truthful advice on investments/tax benefits (S5),

Problems are solved by the LIC employees as quick as possible (S7),

Speedy documentation and settlement of claims (S10) are not significant

predictor of this model.

213

Chart 25

Path diagram shows Overall Satisfaction Rating of LIC services by

its services Variables

214

TABLE NO – 5.15


RATING OF THE LIC FUNCTIONS TO CUSTOMER BY

PRODUCT

Model Summaryb


Square

Std. Error of the

Estimate

1 .373a .406 .400 .834

Predictors: (Constant), LIC Polices give positive image, Convenient

method to pay premium, Financial security for one’s family, Acceptable

penalty charges, one knows all the features of the policy.


customer

ANOVAa

Model Sum of

Squares df

Mean

Square F Sig.

1

Regression 398.084 5 79.6167 67.73 .000b

Residual 580.738 494 1.17558

Total 978.822 499

Predictors: (Constant), LIC Polices give positive image, convenient

method to pay premium, financial security for one’s family, Acceptable

penalty charges, one knows all the features of the policy.


customers.

215


regression model that indicates that the chosen five significant product

variables significantly contribute for the dependent Overall Satisfaction

rating of the Various LIC functions. The variance independent variable

that is associated with dependent variable is referred to as explained

variance.

216

Coefficients

Models

Unstandardized

Coefficients

Standardized

Coefficients t Sig.

B Std. Error Beta

(Constant) 0.671 .128 13.178 .000

Financial security for my family (P3) -0.039 .029 .102 2.263 .024

I know all the features of the policy (P5) 0.457 .042 -.024 -.428 .000

Convenient method to pay premium (P8) 0.038 .043 .017 .371 .455

Acceptable penalty charges (P9) 0.342 .035 .186 3.584 .000

LIC Polices gives positive image (P10) -0.042 .050 .113 2.271 .489

217


customers.



the LIC Services to customers and 5 independent variables. The equation

of the fitted model is Overall Satisfaction rating of the LIC Services to

customers = 0.671023 - 0.0399416*P3 + 0.457439*P5 + 0.0382507*P8 +

0.342127*P9 - 0.0420733*P10. Since the P-value in the ANOVA table is

less than 0.05, there is a statistically significant relationship between the

variables at the 95.0% confidence level. The R-Squared statistic indicates

that the model as fitted explains 40.6697% of the variability in Overall

Satisfaction rating of the LIC Services to customers. The adjusted R-

squared statistic, which is more suitable for comparing models with

different numbers of independent variables, is 40.0692%. The standard

error of the estimate shows the standard deviation of the residuals to be

1.08424. This value can be used to construct prediction limits for new

observations by selecting the Reports option from the text menu. The

mean absolute error (MAE) of 0.834949 is the average value of the

residuals. Since the P-value is less than 0.05, there is an indication of

possible serial correlation at the 95.0% confidence level. In determining

whether the model can be simplified, notice that the highest P-value on

the independent variables is 0.4894, belonging to B.P10. Since the P-

value is greater or equal to 0.05, that term is not statistically significant at

the 95.0% or higher confidence level. Consequently, one should consider

removing P10 from the model.

Among the five significant influential product variables, the

variables namely, Financial security for my family (P3), I know all the

features of the policy (P5), Acceptable penalty charges (P9) are

218

significantly influence the overall satisfaction of LIC performance.

However, the remaining variables like Convenient method to pay

premium (P8), LIC Polices give positive image (P10) are not significant

in this model.

219

Chart 26

220

Chart 27

Overall Satisfaction Rating of LIC performance by its significant

Product variables

221

TABLE NO – 5.16


RATING OF LIC FUNCTIONS BY SERVICE VARIABLES

Model Summary


Square

Std. Error of the

Estimate

1 .193a ..253 .247 .868

Predictors: (Constant), Customers feel safe and secure in their

transactions and they, Like to communicate the LIC services/products to

others, Agents/employees competence to answer specific queries,

sufficient number of LIC branches is available


customers.

ANOVAa

Model Sum of

Squares df

Mean

Square F Sig.

1

Regression 247.939 4 61.98 41.98 .000b

Residual 730.883 495 1.47

Total 978.882 499


customers.

222

Predictors: (Constant), Customers feel safe and secure in their

transactions, Like to communicate the LIC services/products to others,

Agents/employees competence to answer specific queries, sufficient

number of LIC branches is available.


regression model that indicates that the chosen five significant services

variables significantly contribute for the dependent Overall Satisfaction

rating of the Various LIC functions. The variance independent variable

that is associated with dependent variable is referred to as explained

variance.

223

Coefficients

Significant Service variables

Unstandardized

Coefficients

Standardized

Coefficients t Sig.

B Std. Error Beta

1

(Constant) 1.2747 .149 7.982 .000

Agents/employees competence to answer specific queries (S3) -0.2649 .037 .242 5.750 .000

Sufficient number of LIC branches is available (S6) 0.0650 .041 .172 4.072 .262

Like to communicate the LIC services/products to others (S8) 0.5728 .034 .174 4.108 .000

Customers feel safe and secure in their transactions (S9) 0.1100 .032 .090 2.149 .014

224


customers.


model to describe the relationship between C. Rating LIC and 4

independent variables. The equation of the fitted model is Overall

Satisfaction rating of the LIC Services to customer = 1.27487 -

0.264948*S3 + 0.0650455*S6 + 0.5728*S8 + 0.110092*S9



confidence level.

The R-Squared statistic indicates that the model as fitted explains

25.3304% of the variability in Overall Satisfaction rating of the LIC

Services to customers. The adjusted R-squared statistic, which is more

suitable for comparing models with different numbers of independent

variables, is 24.727%. The standard error of the estimate shows the

standard deviation of the residuals to be 1.21513. This value can be used

to construct prediction limits for new observations by selecting the

Reports option from the text menu. The mean absolute error (MAE) of

0.959859 is the average value of the residuals. Since the P-value is less

than 0.05, there is an indication of possible serial correlation at the 95.0%

confidence level. Plot the residuals versus row order it is clear if there is

any pattern that can be perceived. In determining whether the model can

be simplified, notice that the highest P-value on the independent variables

is 0.2622, belonging to C.S6. Since the P-value is greater or equal to

0.05, that term is not statistically significant at the 95.0% or higher

confidence level. Consequently, one should consider removing C.S6

from the model.

225

Chart 28

Among the most influential service variables the following

variables highly influence the overall satisfaction of LIC performance.

Agents/employees competence to answer specific queries (S3), Like to

communicate the LIC services/products to others (S8), Customers feel

safe and secure in their transactions (S9). The remaining variable namely

Sufficient number of LIC branches is available (S6) are not significant in

this model.

226

Chart 29

Path Diagram Overall Satisfaction Rating of LIC performance by its

significant services variables

227

TABLE NO- 5.17

RELIABILITY OF SCALES AND ITEM-CONSTRUCT LOADINGS-

FACTORS RELATED TO PREFERENCE OF POLICY HOLDERS TO

THE SERVICES OF THE LIC

Sl.No. Items Scale Mean

if item deleted

Cronbach'sAlpha if item deleted

1 Remittance is easy. 28.96 0.698

2 Certificates are quickly sent by the LIC 28.96 0.667

3 Capital appreciation is good 27.76 0.681

4 Bonus rates are high 26.90 0.741

5 There are possibilities for reinvestment. 27.50 0.692

6 Borrowing loan from the LIC is easy. 28.93 0.714

7 Documents are easily transferred in the LIC

officers 28.80 0.714

8 Tax Rebates are sufficient. 28.89 0.662

9 LIC agents are sincere and helpful. 28.59 0.753

10 I feel happy to know that my funds through

the LIC are used in Nation are used 27.73 0.658

MEAN 31.45

VARIANCE 45.761

STD. DEVIATION 6.765

CRONBACH'S ALPHA 0.722

NO. OF ITEMS 10

228

The reliability of scales used in this study were calculated by

Cronbach's coefficient alpha. Cronbach’s alpha reliability coefficient

normally ranges between 0 and 1. However, there is actually no lower

limit to the coefficient. The closer Cronbach’s alpha coefficient is to 1.0

and the greater the internal consistency of the items in the scale. Based

upon the formula _ = rk / [1 + (k -1) r] where k is the number of items

considered and r is the mean of the inter-item correlations, the size of

alpha is determined by both the number of items in the scale and the

mean inter-item correlations. The coefficient alpha values exceeded the

minimum standard of .70. It has provided good estimates of internal

consistency reliability. As shown in Table 1, coefficient alpha values

ranged from 0.658 to 0.753 for all the Statements of preference of policy

holders. All statements obtained an acceptable level of a coefficient

alpha above .70, indicating that the scales used in this study were reliable.

It provides the following rules of thumb: “_ > .9 – Excellent, _ > .8 –

Good, _ > .7 – Acceptable, _ > .6 – Questionable, _ > .5 – Poor and _ <

.5 – Unacceptable”. While increasing the value of alpha is partially

dependent upon the number of items in the scale, it should be noted that

this has diminishing returns. It should also be noted that an alpha of 0.753

is probably a reasonable goal. It should also be noted that while a high

value for Cronbach’s alpha indicates good internal consistency of the

items in the scale, it does not mean that the scale is one-dimensional.

Factor Analysis is a method to determine the dimensionality of a scale.

229

CHAPTER – VI

FINDINGS, SUGGESTION AND CONCLUSION

6.1 FINDINGS

1. Out of 500 respondents, 289 respondents belong to male and 211

respondents are female. The majority of the respondent 57.8%

were male.

2. In the five level of age wise classification 44.4% are in the age

group between 25 – 35 years.

3. The majority of the respondents are married. The married

population of this study was 436 that is 87.2% of 500 respondent.

4. 150 respondents have more than 3 members in their family, 147

respondents have less than 4 members in their family.

5. Out of 500 respondents 83.8% of the respondents belong to the

Urban, whereas 16.2% of the respondents are in Rural.

6. 191 respondents are doing business and 116 respondents are

Professionals. The majority of the respondents are doing business.

7. Regarding the six levels of educational status of the respondent are

given in the table no 4.2, 225 respondents are educated up to higher

secondary. The 167 respondents are educated up to primary level.

8. Majority (45%) of the respondent are up to higher secondary level

of education.

9. The monthly incomes of the respondents are also classified in to

four levels. It reflects that 53.6% of the respondents earn Rs. 5,000

to 10,000 P.M. It is 268 out of 500 respondents.

10. Out of 500 respondents, 42.6% of the respondents are having own

house. 20% of the respondents are having two wheeler.

11. Out of 500 respondents 45.2% respondents prefer investment in the

insurance company and 34.4% of the respondents prefer Bank

230

investment and remaining 20.4% prefer both Bank and insurance

investments.

12. Out of 500 respondents, 35% are investing in LIC for the

Reputation of LIC name. 21.4% are investing their money in LIC

for a Product Quality and 10% of respondents concern about

premium.

13. The purposes of taking insurance policy are classified into three

levels. Out of the three levels 50.8% of the total respondents

concern their life risk coverage. 31.8% of the respondents are

taking insurance because of Family need.

14. 34.6% respondents are motivated by their friends to take Insurance

Policy.22.8% of the respondents are motivated by the LIC

advisors. Just only 9% of the respondents taking policy on their

own personal interest.

15. 50.8% respondents are taking insurance for life risk coverage

purpose. 35% of the respondents invest their money in LIC for a

reputation of company.

16. 22.4% select ULIP plan. 14.8% of the respondent opt Health plan.

It is clear from the table that 40.6% choose term plan.

17. 45.8% of respondents have more than five policies. 20.8%

respondents have four policies.

18. Regarding the value of the policy 33.8% of respondents have a

worth of Rs. 50,001 to 1,00,000 policy. 21.6% of respondents have

a worth of Rs. 1,00,001 to 2,00,000 of Policy.

19. 29% of the respondents are paying Rs. 5,000 to 10,000 as premium

per annum. 16% of the respondents are paying Rs. 10,0001 to

20,000 as premium per annum.

231

20. 42.8% of the respondents are paying their premium in half-yearly

mode of payment and 21.8% of the respondents are paying in

Quarterly mode of payment.

21. 52% of the respondents are paying their premium through their

LIC Advisors. 36% of the respondents are paying their premium by

themselves directly.

22. 12% of the respondents are using bank for their payment of

premium. 67.6% of the respondents are paying their premium by

cash.

23. The male and female respondents have overall opinion of

satisfaction regarding the function of LIC. On the five point scale,

males gave a mean rating of approximately 2.30, whereas females

gave a mean rating of approximately 2.63.

24. The result of test statistics shows the F value 6.594, the p value of

.011 indicates that there is not enough evidence to conclude that

the mean satisfaction score of Male and female are the same for the

two areas.

25. The opinion of respondents regarding overall satisfaction on

functions of LIC: On the five point scale, Married respondents




.139 indicates that there is not enough evidence to conclude that

the mean satisfaction score of married and unmarried respondents

are the same for the two areas.


functions of LIC. Married respondent gave a mean rating of

approximately 2.54, whereas Unmarried respondent gave a mean

rating of approximately 2.22.

232

28. The result of “t” test statistics shows the F value 3.292, the p value

of .070 indicates that that the mean satisfaction score of joint

family and nuclear family respondents are the same for the two

areas.


functions of LIC: On the five point scale, Urban respondents gave

a mean rating of approximately 2.64, whereas Unmarried


30. The result of test statistics shows the F value 177.294, the p value

of .000 indicates that there is no significant relationship that the

mean satisfaction score of urban respondent and rural respondents



various LIC Policy: On the five point scale, urban respondents

gave a mean rating of approximately 2.58, whereas rural


32. The result of test statistics shows the F value 172.939, the p value

of .000 indicates that there is no significant relationship that the

mean satisfaction score of urban respondent and rural respondents


33. The opinion of respondent regarding overall satisfaction on various

LIC Policy. On the five point scale, Joint family respondents gave

a mean rating of approximately 2.65, whereas nuclear family



.028 indicates that there is no significant relationship that the mean

satisfaction score of joint family respondent and nuclear family

respondents are the same for the two family type

233

35. The opinion of respondent regarding overall satisfaction on

functions of LIC: On the five point scale, Married respondents



36. The opinion of respondent regarding overall satisfaction on various

LIC services. On the five point scale, male respondents gave a

mean rating of approximately 2.37, whereas female respondents

gave a mean rating of approximately 2.21.

37. The result of test statistics shows the F value .004, the p value of,

947 indicates that there is no significant relationship that the mean

satisfaction score of urban respondents and rural respondents are

the same for the two types.


various LIC services: On the five point scale, nuclear type of

respondents gave a mean rating of approximately 2.37, whereas

Joint family type of respondents gave a mean rating of

approximately 2.28.

39. The result of test statistics shows the F value .391, the p value of

.532 indicates that there is no significant relationship that the mean

satisfaction score of nuclear family respondent and joint family

respondents are the same for the two types.

40. The F-ratio is ANOVA, which in this case equals 4.73821, is a

ratio of the between-group estimate to the within-group estimate.

Since the P-value of the F-test is less than 0.05, there is a

statistically significant difference between the mean Overall Rating

of LIC from one level of by Respondents Age to another at the


234

41. An asterisk has been placed next to 4 pairs among the five level of

age group, indicating that these pairs show statistically significant

differences at the 95.0% confidence level.

42. The F-ratio IN ANOVA, which in this case equals 7.45879, is a

ratio of the between-group estimate to the within-group estimate.

Since the P-value of the F-test is less than 0.05, there is a


of LIC from one level of by Respondents Occupation to another at

the 95.0% confidence level

43. An asterisk has been placed next to 6 pairs amount the six level of

respondents occupation, indicating that these pairs show

statistically significant differences at the 95.0% confidence level.

44. The F-ratio, which in this case equals 3.21716, is a ratio of the

between-group estimate to the within-group estimate. Since the P-

value of the F-test is less than 0.05, there is a statistically

significant difference between the mean overall satisfaction rating

of LIC from one level of by respondents qualification to another at

the 95.0% confidence level.

45. An asterisk has been placed next to 4 pairs among the six level of

education indicating that these pairs show statistically significant

differences at the 95.0% confidence level.



value of the F-test is greater than or equal to 0.05, there is not a

statistically significant difference between the mean overall

satisfaction ratings of LIC performance from one level of original

data of premium to another at the 95.0% confidence level.

235

47. There are no statistically significant differences between any pair

of means between the education statuses of the respondents at the





significant difference between the mean Overall satisfaction Rating

of LIC Policy from one level of Respondents’ Age to another at the


49. An asterisk has been placed next to 3 pairs, indicating that these

pairs show statistically significant differences at the 95.0%

confidence level.




significant difference between the mean overall satisfaction ratings

of LIC Policy from one level of Respondents’ Occupation to




confidence level.




statistically significant difference between the mean B_ original

data. Rating from one level of Respondents Qualification to


236



confidence level.





of LIC Policy by amount of .premium paid from one level of

amount of premium to another at the 95.0% confidence level.


of means at the 95.0% confidence level.





data. Ratings from one level of original data. Age to another at the








data. ratings from one level of original data. Occupation to another

at the 95.0% confidence level.

59. An asterisk has been placed next to 1 pair, indicating that this pair

shows a statistically significant difference at the 95.0% confidence

level.

237





of LIC Services from one level of by Respondents’ Qualification to








of LIC Services by amount of premium paid from one level of

original data. Premium to another at the 95.0% confidence level.

63. An asterisk has been placed next to 1 pair, indicating that this pair

shows a statistically significant difference at the 95.0% confidence

level.

64. The results of fitting a multiple linear regression model to describe

the relationship between Overall Satisfaction rating of the Various

LIC Product offered and 10 independent variables.

65. Financial security for the family (P3), knowing all the features of

the policy (P5), convenient method to pay premium (P8),

Acceptable penalty charges (P9) and LIC Polices gives positive

image (P10) are significant predictor of this model.

66. The variables namely Policies are superior to other policies (P1),

Suitable for my needs (P2), fullest satisfaction of my requirement

(P4), Gives me confidence about my future (P6), High rate of

return (P7) are not significant predictor of this model.

238

67. F ratio for the regression model that indicates that the chosen ten

services variables significantly contribute for the dependent

Overall Satisfaction rating of the Various LIC services offered

68. Agents/employees competence to answer specific queries (S3),

Sufficient number of LIC branches is available (S6), Like to

communicate the LIC services/products to others (S8), Customers

feel safe and secure in their transactions (S9) are significant

predictors of overall satisfaction of LIC services.

69. Services variables namely Regular intimation about the due date

for premium (S1), Regular intimation about the new policies and

its services (S2), Agents/employees understand the needs of the

customers (S4), Give truthful advice on investments/tax benefits

(S5), Problems are solved by the LIC employees as quick as

possible(S7), Speedy documentation and settlement of claims(S10)

are not significant predictor of this model.

70. F ratio for the regression model that indicates that the chosen five

significant product variables significantly contribute for the

dependent Overall Satisfaction rating of the Various LIC functions.

71. Among the five significant influential product variables, the

variables namely, Financial security for my family (P3), I know all

the features of the policy (P5), Acceptable penalty charges (P9) are

significantly influence the overall satisfaction of LIC performance.

72. Convenient method to pay premium (P8), LIC Polices gives

positive image (P10) are not significant in this model.

73. F ratio for the regression model that indicates that the chosen five

significant services variables significantly contribute for the

dependent Overall Satisfaction rating of the Various LIC functions.

74. The most influential service variables the following variables

highly influence the overall satisfaction of LIC performance.

239

Agents/employees competence to answer specific queries (S3), like

to communicate the LIC services/products to others (S8),

Customers feel safe and secure in their transactions (S9).

75. The remaining variable namely sufficient number of LIC branches

are available (S6) are not significant in this model.

76. It reveals that all the seven measurement scale items are reliable as

the Cronbach Alpha coefficient is 0.770. It is greater than the

threshold level of 0.70. It has provided good estimates of internal

consistency reliability. It indicates that the scales used in this study

were reliable. It clearly indicates that the above scale items are

consistent with each other and they are reliable measure of opinion

on Factors related to the policy holders to the services of the LIC.

240

6.2 SUGGESTIONS

This study analyzes the Investors satisfaction on LIC functions

including its policies and its services. Based on the above said findings,

the following suggestions are made in order to give highest satisfaction to

its customers. There by the value of LIC has increased in the competitive

market environment. The Preferences of policy holders regarding the LIC

Policies and services are analyzed in the way of its product and service

satisfaction. The suggestions are made on the basis of product and service

satisfaction of the Policy holders of LIC.

Product Variables: out of ten important product variables which

decide the satisfaction of the policy holders, the following variables are

mostly influence the customers’ satisfaction: Financial security for the

family, knowing all the features of the policy, Convenient method to pay

premium, Acceptable penalty charges and LIC Polices give positive

image are significantly influence the satisfaction of Product offered by

the LIC. However the LIC has concentrated the following product

variables in order to improve their value of the firm in the market. The

LIC has to inform the public how the Policies are superior to other

product of competitors. It is also suggested that the LIC have to satisfy

the Policy holders in the way of explaining the importance of the policy

and how it is Suitable for family needs.

Service Variables: The service rendered by the LIC to its

customers is important to get continuous support from the existing

customers and it attracts the new people to its business. The service

variables namely Agents/employees competence to answer specific

queries, sufficient number of LIC branches is available, Like to

communicate the LIC services/products to others, Customers feel safe

241

and secure in their transactions are significant predictors of overall

satisfaction of LIC services. The above said variables are important to

increase the level of the customer satisfaction in the service it’s offered.

The following services variables are lacking in getting the

customers satisfaction. Therefore it is important to get fullest satisfaction

of its customers. Therefore the following suggestions are made to give

more effective of service satisfaction. It is important to give Regular

intimation about the due date for premium. Many customers felt that due

date of premium is not informed well in advance. They received the

intimation either a day before the due date or expiry of the due date. So, it

is import to inform the policy holder well in advance by using a modern

mode of communication devises.

It also important to retain their customers by Regular intimation

about the new policies and its services. It is also suggested that the

Agents/employees are well trained in order to understand the needs of the

customers and supply the right policy to its customers. It is also suggested

that to give truthful advice on investments and tax benefits to its

customers. It is also suggested to solve the service Problems by the LIC

employees as quickly as possible. It is also suggested to reduce or

simplify the procedure of settlement of matured policy and speedy

documentation and settlement of claims

Overall satisfaction of LIC functions: even though many private

insurance operators are entered into the market, still Life Insurance

corporation role is inevitable in the society. LIC is playing important role

give risk coverage and other benefits at lowest cost to the rich or Poor.

Regarding the overall functional satisfaction, the LIC has to concentrate

242

on the area like arranging convenient method of premium payment. This

area is lacking behind in the satisfaction level. The management should

make proper and convenient method of premium payment according to

the satisfaction of the customers. Another variable namely, limited

number of branches, which is lacking behind to get higher satisfaction of

the customers. It is suggested that the management to establish braches

where is it necessary. Opening new branches involve cost, however the

benefit to the policy holders is huge and it helps to attract new customer.

Close to 80 percent of Indians do not hold an insurance policy.

According to a recent survey agricultural and rural areas remain largely

untouched. It is evident that all the private sector life insurance

companies have branches only in cities and urban areas. No private sector

has branches in villages or taluk levels. Almost majority of the LIC

agents are marketing the LIC products targeting rural and semi urban

peoples. Therefore LIC may grow their business if it concentrates more in

rural areas.

The study shows that 45.2% of the respondents paying their premium

through the life insurance advisor’s called agents. This types of practice

should be avoided by the respondents because, all the agents are not

honest to pay the customers premium in due date. Some agents using the

money given for payment of premium by the customers are used for his

personal purpose. Therefore some policies of the customers are under

lapsed conditions. Some of the agents absconding with the policyholder’s

money and some of them are committing suicide also. Therefore it is

suggested that the policy holders’ should be educated to pay the premium

directly to the LIC branch or by cheque or draft or ECS method.

243

Each LIC branch in Namakkal District is servicing to an extent of

more than 30 kms radious from the place of existence. Therefore the

policy holders; and the agents feel very difficult to pay the premium.

Therefore the LIC authorities should open more number of sub-offices in

a village having population of more than 5000 or more. More number of

licenses should be given to the reputed agents or club members’ agents to

collect premium in important areas of the district. It will enable the policy

holders to pay their premium in time.

At present the LIC is intimating the due date of premium by post only.

Due to the development of information technology, it may be informed

by SMS through mobile phone and E-mail.

Before purchasing a policy the investor should take care to understand

each and every policy offered by the LIC agents. He must have full

knowledge about the salient futures of each and every policy. It is

advisable to invest under low premium with high risk and more maturity

value. The agents are more concerned with commission. They do not

offer any good policies with low commission. Therefore it is the duty of

policy holders’ to select the best policy from among the varieties of

policies offered by the LIC agent of the corporation.

244

6.3 CONCLUSION

This study shows that the customers called policy holders when

they comes to buy a policy, they give first preference to Endowment

policy, second preference for money back policy and third preference for

whole life policy because they want to get back something against the

premium paid during lifetime.

This study shows that the majority of the respondents belong to

male category. The age groups between 25 – 35 years of age are more

interested to invest their money in LIC policies. The majority of the

policy holders are married. They wanted to protect their family after his

death and to receive the maturity amount during his lifetime.

The investors are mainly belong to nuclear family and majority of

them are living with 3 – 5 members. The policy holders belong to

business is more than professionals and government employees. Majority

of the LIC policy holder’s educational level is higher secondary level.

Middle income group people invest more in LIC product than higher

income and majority of them belong to urban areas.

Company reputation is set to be an important reason for preference

to invest in LIC products. In case of investment, friends influence is set to

be major reason to take insurance policies. It is evident from the study

that risk coverage is the major purpose of taking insurance.

245

BIBLIOGRAPHY

BOOKS

1. Mishra, M.N. (1979), Insurance - Principles and Practices. New

Delhi : S.Chand & Company Ltd.

2. Motihar, M. (2004), Insurance Principles, Practices, Management

and Salesmanship. Allahabad: Sharda Pustak Bhawan.

3. Periyasamy, P.(2005), Principles and Practice of Insurance.

Mumbai: Himalaya Publishing House.

4. Motihar, M.(2004), Insurance Principles, Practices, Management

and Salesmanship. Allahabad: Sharda Pustak Bhawan.

5. Sushil Chandra Pal (2007). Insurance Industry in New Millennium (A

Case of LIC : Challenges and Response). New Delhi : Rajat Publications.

6. Ray, R.M. (1941). Quoted in Insurance Industry in New Millennium

(A Case of LIC : Challenges and Response) by Sushil Chandra Pal,

(2007). New Delhi: Rajat Publications.

7. Jha, S.M., (2003). Services Marketing, Mumbai : Himalaya Publishing

House.

8. Stanton, (1994), Fundamentals of Marketing. New York: Mc Graw

Hill Road, Company.

9. Philip Kotler (2005). Marketing Management, Analysis, Planning and

control. New Delhi: Prentice-Hall of India. p.59.

10. Bodla, B.S., Garg, M.C. and Singh, K.P. (2003), Insurance -

Fundamentals, Environment and Procedures, New Delhi : Deep & Deep

Publications Pvt.

11. Gupta, P.K. (2004), Pricing of insurance products- actuarial to

managerial. The Management Accountany.

246

JOURNALS

Balasubramanian, M.V., A Little extra customer service that loads

to ECstacy, Southern Splender, September 1994.

Case for making LIC, GIC Liable to punitive damages, the Times

of India, New Delhi, 21st December, 1990.

Chandrasekarn R, An agent is an entrepreneur, Southern Splender,

December 1995.

Chronica, M.P., Reforms in the insurance sector, Patriot, July

1993.

Customers our life blood, Yogakshema, May 1987.

Das S.K., Insurance scene in U.K – it’s past, present, Yogakshema,

October/November 1995.

Indian insurance industry needs a user – friendly – life, the

insurance Times, December 1995.

Innovative schemes help LIC attract new business, The Hindu,

Madras, 15th September 1988.

Inquiry panel on LIC fraud, Business standard, August, 1995.

Insurance salesmanship, federation of insurance institutions 1986.

LIC security schemes launched, the Economic Times, 2nd October,

1994.

LIC step angers policyholder, the time of India, New Delhi, and

12th August, 1993.

Life Insurance is the Monopoly justified? The Hindu, January,

1991.

Loopholes in LIC System to be probed, National herald, New

Delhi, 27th August, 1995.

247

REPORTS

Report of the committee to review the working of LIC, Govt.of India,

Report of the committee on reforms in the insurance sector, Govt, of

India, Ministry of Finance.

LIC Annual Report 2008-2009.

MAGAZINES

Insurance Times, December, 2009.

Insurance Times, March.2009

Insurance Times, October.2008

Insurance Times, January.2008

Insurance Times, February.2008

Monthly Commentary, April, 2008.

WEBSITES

WWW.licinternational.com

WWW.licindia.com

WWW.mylicindia.com

WWW.balallianzlife.co.in

WWW.birlasunlife.com

WWW.hdfcinsurance.com

WWW.icicipraife.com

WWW.ingvysyalife.com

WWW.maxnewyorklife.com

WWW.kotaklifeinsurance.com

WWW.sbilife.co.in

WWW.reliancelife.co.in

WWW.avivaindia.com

WWW.sriramlife.com

WWW.idbifortis.com

WWW.canarashsbclife.in

248

POLICY HOLDERS’ PREFERENCE FOR LIC PRODUCTS

QUESTIONNAIRE

Name of the policy holder :

1.Gender a. Male [ ] b. Female [ ]

2.Age

a. Below 25 years [ ] b. 25 years – 35 years [ ]

c. 35years – 45 years [ ] d.45years -55years [ ]

e. Above 55 years [ ]

3. Educational Qualification :

a. Primary level [ ] b. Higher Secondary [ ]

c. Graduate [ ] d. Post Graduate [ ]

e. Professional [ ] f. Technical [ ]

4.Occupational Status :

a. Government Employee [ ] b. Private Employee [ ]

c. Business [ ] d. Professionals [ ]

e. Others [ ]

5.Monthly Income :

a. Below Rs 5000 [ ] b. Rs5000-10000 [ ]

c. 10001 to Rs.20000 [ ] d. Rs 20001 to 30000 [ ]

e. Rs.30001 to 40000 [ ] f. Rs.40001 to 50000 [ ]

g. Rs.50,001 and above [ ]

6. Marital Status:

a. Married [ ] b. Unmarried [ ]

7. Type of family

a. Joint family [ ] b. Nuclear family [ ]

8. Number of members in your family

a. 2 [ ] b. 3 [ ] c. 4 [ ]

d. 5 [ ] e. 6 and above [ ]

249

9. Name of the assets which you at present

a. Own individual House [ ]

b. Two Wheeler [ ] c. Car [ ] d. Plot [ ]

10.Residential area :

a. Urban [ ] b. Rural [ ]

11. Give your preferences to invest your money.

a. Insurance Company [ ]

b. Bank [ ] c. Both [ ]

12. What factors do you consider while selecting a life insurance

company?

a. Premium Outflow [ ] b. Company Reputation [ ]

c. Service Quality [ ] d. Product Quality [ ]

e. Return on Investment [ ]

13. Who influence you to select a Life Insurance company?

a. Personal interest [ ] b. Friends [ ]

c. Family [ ] d. Agents [ ]

e. Advertisements [ ]

14. What purpose for buying an insurance policy?

a. For a purpose of saving [ ]

b. For a Life risk coverage [ ]

c. For my family need [ ]

15. What factor motivates to you choose particular life insurance policy?

a. Self interest [ ] b. Friends/relatives [ ]

c. Insurance advisor [ ] d. Brand and Advertisement [ ]

16. Which type of insurance place would you prefer?

a. ULIP [ ] b. Traditional Plan [ ]

c. Health Plan [ ] d. Term Plan [ ]

250

17. How many policies have you bought (Number of policy)?

a. One [ ] b. Two [ ]

c. Three [ ] d. Four [ ]

e. Five [ ]

If More than five give number of policy --------

18. What is the value of all your life insurance policy?

a. Up to Rs. 50,000 [ ]

b. 50001 to 1,00,000 [ ]

c. 1,00,001 to 2,00,000 [ ]

d. Rs, 200,00,000 to 5,00,000 [ ]

e. Rs.5,00,000 and above [ ]

19. Amount that you paid for a insurance premium per year

a. Below Rs 5,000 [ ]

b. 5000 to 10,000 [ ]

c. Rs. 10,000 to 20,000 [ ]

d. Rs 20,001 to 30,000 [ ]

e. Rs. 30,001 to 50,000 [ ]

f. Rs.50,001 and above [ ]

20. Which mode of premium would you like to prefer

a. Monthly [ ] b. Quarterly [ ]

c. Half early [ ] d. Yearly [ ]

21. How do you pay your insurance premium

a. Through agent [ ] b. By self [ ]

c. Through bank [ ]

22. By what mode you pay insurance premium

a. By cheque [ ] b. By cash [ ]

c. By Debit and Credit card [ ]

251

23. Would you like to continue with the same Life Insurance Company?

a. Strongly disagree [ ] b. Disagree [ ]

c. Neither agree nor disagree [ ]

d. Agree [ ] e. Strongly agree [ ]

Product perception

1. LIC Policies and plans are superior to or more attractive than the

private insurance companies




2. LIC policy that I take was more suitable for my need




3. The policy has given financial security for my family




4. The policy has got the fullest satisfaction of my requirement




5. As a policy holder i agree that I know all the features of the policy




252

6. LIC policy gives me confidence about my future




7. High rate of return on insurance products as compared to the other

saving instruments




8. Convenient to pay premium on due date




9. Reasonable penalty charged for late premium payment




10. Whatever the product I take / gives me a positive image




Service perception

11. I got intimation about the due of my premium payment regularly




253

12. Frequently the LIC has informed me about the new policies




13. Agents and employees who have the proper knowledge and

competence to answer customers‟ specific queries and requests




14. Agents and employees who understand the specific needs of their

customers




15. Ability of agents to give truthful advice on investments /tax benefits

etc.




16. There is a sufficient number of LIC branches available




17. All the products related problems are solved by the LIC staff as quick

as possible




254

18. I would like to communicate the service offered by LIC to others




19. Making customers feel safe and secure in their transactions




20. Speedy documentation and processes from the time of issue of

policies up to the settlement of claims (e.g. premium and default notices

etc.)




Overall Satisfaction

21. How do you rate the service offered by your Life Insurance

Company?

Low Rating 10 – 20 – 30 – 40 – 50 – 60 – 70 – 80 – 90 – 100 High

Rating

22. Give your rate of satisfaction over the policy that hold with you at

present

Low Rating 10 – 20 – 30 – 40 – 50 – 60 – 70 – 80 – 90 – 100 High

Rating

23. Give your overall rate of satisfaction over the services provided by

the LIC

Low Rating 10 – 20 – 30 – 40 – 50 – 60 – 70 – 80 – 90 – 100 High

Rating

Thanking you

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