A

PROJECT REPORT
ON
A STUDY OF CONSUMER PREFERENCE TOWARDS
LIFE INSURANCE CORPORATION OF INDIA

Submitted for the partial fulfillment of the requirement for the

DEGREE OF BACHELOR’S OF BUSINESS ADMINISTRATION
(2019-2022)

SHRI GURU RAM RAI UNIVERSITY

INTERNAL GUIDE SUBMITTED BY

DR.MONIKA BANGARI ARYAN GUPTA

ASSISTANT PROFESSOR BBA V SEM
En No: R190425027

i
 Forwarding Certificate
This is to certify that the project work done on “A STUDY OF CONSUMER
PREFERENCE TOWARDS LIFE INSURANCE CORPORATION OF INDIA is a
bonfire work carried out by \Aryan Gupta under my supervision and guidance. The
project report is submitted towards the partial fulfillment of 3 years, full time Bachelors
of Business Administration.

Dr.Deepak Sahini Dr.MONIKA BANGARI

Dean –School of Management Internal Guide
&Commerce

ii
 DECLARATION
I hereby declare that the work for the project Report entitled “A
STUDY OF CONSUMER PREFERENCE TOWARDS LIFE INSURANCE
CORPORATION OF INDIA is completely done by me, based on my own

work conducted in the company for the partial fulfillment of my

Bachelors of Business Administration.
Admittedly I have received suggestions and guidance from my guides.

ARYAN GUPTA

iii
 ACKNOWLEDGEMENT

I would like to express my deep gratitude to Dr. MONIKA BANGARI for

guiding me through the completion of this training report. His expert

guidance, timely advice, invaluable suggestion and encouragement helped

me a lot to complete my thesis.

I would also like to express my gratitude to my teachers for their

cooperation during the making of thesis. My increased spectrum of
knowledge in this field is the result of their constant supervision and
direction that has helped me to absorb relevant and for their high quality
information guidance and enriching my thoughts in this field from different
perspectives.

(ARYAN GUPTA)

iv
 TABLE OF CONTENTS

Sr.No. PARTICULARS PAGE

NO
1. Chapter 1: Introduction 1
2. Chapter 2: Industry overview 6
2.1 Past, present and future trends
2.2 Major Players and their respective market share
3. Chapter-3: Company profile 25
3.1 History
3.2 Vision, Mission and objectives of the company
3.3 Organizational structure/Management hierarchy
3.4 Products and services offered
4. Chapter 4: Research Methodology 60
5. Chapter 5: Data Analysis and Interpretations 64
6. Chapter 6: Findings, Suggestion and Limitations 75
7. Chapter 7: Conclusion 80
8. Bibliography 83

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 CHAPTER 1

INTRODUCTION

The basic aim of the study is to examine the customer preference towards life insurance

products. The project gives an opportunity to understand the psyche of people towards

life insurance and understand their expectations towards insurance as a product. Through

this study, I have been able to garner information that will help the roots, the main drivers

of the life insurance sector to enhance their performance while attracting new customers.

The sample size of 100 people (from Delhi and NCR region) has furnished a brief

overview of the current scenario and the standing of the players in the market. However,

the study is not conclusive due to constraints mentioned in the project report. The

research being exploratory in nature, gives ample opportunity to explore newer

dimensions which will provide more conclusive study in this area.

The study has been conducted using certain demographic indicators namely, age,

location, income group and profession. For every demographic factor the comparative

analysis has been conducted among the existing players in the market. Also, certain

factors like safety, brand image, brand awareness and competitive analysis of products

has been conducted to get a better understanding of the topic. Lastly, image of Insurance

companies say private or public organizations individually has been assessed with the

help of graphical analysis, as in the earlier cases.

The conclusions drawn have brought out interesting observations It shows poor

performance in terms of perception of its safety and brand image but exhibits basic

1
problems related to lack of knowledge about insurance product and inherited perception

as an burden of paying The recommendations are drawn from the conclusions and the

find from this study, however subject to constraints, will help advisors to create a better

image and focus on the areas vital for their growth.

The domestic life insurance industry registered 10.99 per cent y-o-y growth for new

business premium in 2017-18, generating a revenue of Rs 1.94 trillion (US$ 30.1 billion).

In Q1 FY19, premium from new life insurance business increased 10.78 per cent year-on-

year to Rs 367.30 billion (US$ 5.48 billion).

Gross direct premiums of non-life insurers in India reached Rs 1.51 trillion (US$ 23.38

billion) in FY18. Over FY12-18, non-life insurance premiums (in Rs) increased at a

CAGR of 16.65 per cent. In April-May 2018, the gross direct premiums of non-life

insurers reached Rs 24,397.09 crore (US$ 3.79 billion), showing a year-on-year growth

rate of 11.96 per cent.

There are 24 life insurance and 33 non-life insurance companies in the Indian market who

compete on price and services to attract customers. There are two reinsurance companies.

The industry has been spurred by product innovation, vibrant distribution channels,

coupled with targeted publicity and promotional campaigns by the insurers. Private sector

companies hold 48.01 per cent market share in the general insurance segment and 28.93

per cent market share in the life insurance segment.

Government has approved the ordinance to increase Foreign Direct Investment (FDI)

limit in Insurance sector from 26 per cent to 49 per cent which would further help attract

investments in the sector.

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In 2017, insurance sector in India saw 10 merger and acquisition (M&A) deals worth

US$ 903 million. Enrolments under the Pradhan Mantri Suraksha Bima Yojana

(PMSBY) reached 130.41 million in 2017-18. National National Health Protection

Scheme was announced under Budget 2018-19 as a part of Ayushman Bharat. The

scheme will provide insurance cover of up to Rs 500,000 (US$ 7,723) to more than 100

million vulnerable families in India.

Going forward, increasing life expectancy, favourable savings and greater employment in

the private sector is expected to fuel demand for pension plans. Likewise, strong growth

in the automotive industry over the next decade would be a key driver for the motor

insurance market.

The Indian life insurance industry has begun to recover and is likely to report 12-15%

growth in financial year (FY) 2016-17, according to an ICRA paper analysing the

performance of nine life insurance companies in India, one in the public sector and eight

in the private sector. Together, they represent over 87% of the total annualised premium

equivalent (APE) of the life insurance industry during first nine months (April-

December) of FY16.

The companies analysed are: Life Insurance Corporation of India (LIC), ICICI Prudential

Life Insurance Corp. Ltd, Bajaj Allianz Life Insurance Co. Ltd, SBI Life Insurance Co.

Ltd, Birla Sunlife Insurance Co. Ltd, Max Life Insurance Co. Ltd, Reliance Life

Insurance Co. Ltd, Kotak Mahindra Old Mutual Life Insurance Ltd, and HDFC Standard

Life Insurance Co. Ltd.

During the period, the industry APE grew 6% year-on-year (y-o-y), as against a

contraction of 9% y-o-y in FY15 to stand at Rs.37,300 crore (it was Rs.35,000 crore in

3
the first nine months of FY15). The growth for private companies was 13% y-o-y during

the period. LIC witnessed an improvement to 1% y-o-y during April-December FY16

from a contraction of 24% in FY15.

LIC’s regular premium segment contracted 4% y-o-y during the reported period, while

that for the private companies analysed grew by 12% y-o-y during this period. Industry

APE drew adequate support from declining LIC contraction rates and marginal

improvement in the regular premium growth rate for private companies (29% y-o-y in

first nine months of FY16, as against 25% in FY15).

In line with the trend witnessed during the past few years, especially since the regulatory

changes of September 2011, the proportion of single premium in the total new business

premia generated by the industry continued to rise in the first nine months of FY16. It

rose to 63% during the stated period from 58% both in FY15 and April-December FY15.

But contrary to the trend of maintaining the single-premium proportion stable at around

30% during the past few years, private companies reported an increase in the proportion

to 34% in the said period of FY16, as against 31% in the year-ago period. The increase

followed the sharper focus that they brought to the single-premium segment. LIC, on the

other hand, continues with its historical trend of growing its new business mix in favour

of single-premium products. As of December 2015, single premium accounted for 75%

of LIC’s total new business, versus 70% in December 2014.

Private insurers, who till last year had not paid much attention to the single-premium

segment, have turned more aggressive. Single-premium collections for them grew at a

faster pace (29% y-o-y), compared with LIC (24% y-o-y), enabling industry collections

4
in the segment to rise 25% y-o-y in this period. The regular-premium segment has

remained on a marginally lower growth trajectory. For private insurers, this segment

grew 12% y-o-y during the period, while for LIC it contracted 4% y-o-y (contraction of

27% in FY15). Consequently, for the overall industry, the growth rate in the regular

premium remained at the sub-5% levels in 9M FY16 (as against a contraction of 10% y-

o-y in FY15).

Among the key challenges in reaching potential insurance clients in small towns in India,

the foremost is building knowledgeable and competent distribution channels. Given the

established role played by the individual agency force in selling insurance products, and

its particular relevance in small towns, it is essential to fortify this channel with a set of

new inputs.

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 CHAPTER 2

INDUSTRY OVERVIEW

2.1 Past, present and future trends

The Opportunities For Insurance In India

1. Only 25% of the insurable population has been extended cover. Market

penetration is low and potential to exploit is high.

2. Insurance premium per capita is very low ($4)

3. Lack of a comprehensive social security system/state benefit and welfare means

that demand for pension products should be high.

4. Huge middle class of approximately 300 million.

5. Existing insurance companies score low on the customer service front.

With steadily increasing corporate asset values, need for insurance is on the rise.

Competition can help ensure the best products with better services.

Current Trends in Financial Services Sector in India

A few decades ago, before the market forces have been unleashed in India by

privatisation and liberalisation, stingent norms, regulations and rules made it impossible

for any private financial services firm to operate in the Indian soil. Banking and

insurance sectors are the major financial institutions in any economy. In India, both of

them were mainly or fully controlled by public enterprises. At that time it was

considered necessary to ensure solvency of the firms and to protect the interests of the

consumers. But during the second half of 1990's and in the early years of 2000's the

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financial sector witnessed a complete change of business practices and the business

environment due to the deregulation in the sector. Many private banks and many private

insurance companies are now operating in India.

An overhaul of the business practices and processes before deregulation reveals certain

interesting factors.

i) Even though the assumption was that public enterprises always stood for

keeping the interests of consumers generally, the real situation at that time

proved it wrong. Most of the public enterprises at that time, mainly, in the

insurance sector considered consumers as second or third rate people who were

interrupting their heavy and tiresome duty of doing things 'inefficiently'. In this

aspect, nationalised banks were just fair enough to offer a gentle service

atmosphere to their consumers. But this was not the case with the insurance

companies. Their services were utter 'praiseworthy' in the sense that the

consumer was to visit their office for getting a query clarified, or getting a

claim settled many times at his own expense. For the insurance companies, till

they got a policy from a particular consumer, "customer was the king" but after

that, not.

ii) In addition to this, in the pre-liberalisation period most of the staff could have

been considered epitome of inefficiency and irresponsibility. But, certainly there

might have been exceptions to this generalisation.

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iii) These financial institutions were not having any properly designed, feasible

marketing strategies. There was not any co-ordinated efforts to implement a

strategic framework for all their functions.

iv) Even if the public enterprises were having full control over the life insurance

sector since 1956 and the general insurance sector since 1973, their penetration

into the rural areas of India is negligibly small, comparing to that of even the

other developing countries. And, moreover in India, insurance was being sold

as a tax saving and investment product.

The above sited points, even though very few in number are much more than enough to

understand the extent to which these public enterprises had sincerity and dedication

towards the customers and hence towards the development of the nation.

Market Size of Indian Insurance Industry

During April 2015 to February 2016 period, the life insurance industry recorded a new

premium income of Rs 1.072 trillion (US$ 15.75 billion), indicating a growth rate of 18.3

per cent. The general insurance industry recorded a 14.1 per cent growth in Gross Direct

Premium underwritten in FY2016 up to the month of February 2016 at Rs 864.2 billion

(US$ 12.7 billion).

India's life insurance sector is the biggest in the world with about 360 million policies

which are expected to increase at a Compound Annual Growth Rate (CAGR) of 12-15

per cent over the next five years. The insurance industry plans to hike penetration levels

to five per cent by 2020.

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The country’s insurance market is expected to quadruple in size over the next 10 years

from its current size of US$ 60 billion. During this period, the life insurance market is

slated to cross US$ 160 billion.

The general insurance business in India is currently at Rs 78,000 crore (US$ 11.44

billion) premium per annum industry and is growing at a healthy rate of 17 per cent.

The Indian insurance market is a huge business opportunity waiting to be harnessed.

India currently accounts for less than 1.5 per cent of the world’s total insurance premiums

and about 2 per cent of the world’s life insurance premiums despite being the second

most populous nation. The country is the fifteenth largest insurance market in the world

in terms of premium volume, and has the potential to grow exponentially in the coming

years.

2.2 Major Players and their respective market share

Indian Life Insurance Market

The insurance industry of India consists of 57 insurance companies of which 24 are in

life insurance business and 33 are non-life insurers. Among the life insurers, Life

Insurance Corporation (LIC) is the sole public sector company. Apart from that, among

the non-life insurers there are six public sector insurers. In addition to these, there is sole

national re-insurer, namely, General Insurance Corporation of India (GIC Re). Other

stakeholders in Indian Insurance market include agents (individual and corporate),

brokers, surveyors and third party administrators servicing health insurance claims.

Out of 33 non-life insurance companies, five private sector insurers are registered to

underwrite policies exclusively in health, personal accident and travel insurance

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segments. They are Star Health and Allied Insurance Company Ltd, Apollo Munich

Health Insurance Company Ltd, Max Bupa Health Insurance Company Ltd, Religare

Health Insurance Company Ltd and Cigna TTK Health Insurance Company Ltd. There

are two more specialised insurers belonging to public sector, namely, Export Credit

Guarantee Corporation of India for Credit Insurance and Agriculture Insurance Company

Ltd for crop insurance.

Market Size

Government's policy of insuring the uninsured has gradually pushed insurance

penetration in the country and proliferation of insurance schemes.

The domestic life insurance industry registered 10.99 per cent y-o-y growth for new

business premium in 2017-18, generating a revenue of Rs 1.94 trillion (US$ 30.1 billion).

Gross direct premiums for non-life insurance industry increased by 17.54 per cent y-o-y

in FY18.

Investments

The following are some of the major investments and developments in the Indian

insurance sector.

1. Insurance sector companies in India raised around Rs 434.3 billion (US$ 6.7

billion) through public issues in 2017.

2. In 2017, insurance sector in India saw 10 merger and acquisition (M&A) deals

worth US$ 903 million.

3. India's leading bourse Bombay Stock Exchange (BSE) will set up a joint venture

with Ebix Inc to build a robust insurance distribution network in the country

through a new distribution exchange platform.

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Government Initiatives

The Government of India has taken a number of initiatives to boost the insurance

industry. Some of them are as follows:

1. National Health Protection Scheme will be launched under Ayushman Bharat to

provide coverage of up to Rs 500,000 (US$ 7,723) to more than 100 million

vulnerable families.

2. Over 47.9 million famers were benefitted under Pradhan Mantri Fasal Bima

Yojana (PMFBY) in 2017-18.

3. The Insurance Regulatory and Development Authority of India (IRDAI) plans to

issue redesigned initial public offering (IPO) guidelines for insurance companies

in India, which are to looking to divest equity through the IPO route.

4. IRDAI has allowed insurers to invest up to 10 per cent in additional tier 1 (AT1)

bonds that are issued by banks to augment their tier 1 capital, in order to expand

the pool of eligible investors for the banks.

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 Here are some performance highlights of the Indian Life insurance industry.

2014-15 2013-14
 Life Insurance Business
Performance: Public Private Public Private
Sector Sector Sector Sector

Premium Underwritten (Rs in

239667.65 88433.49 236942.30 77340.90
Crores)  

New Policies Issued (in Lakhs)   201.71 57.37 345.12 63.60

Number of Offices   4877 6156 4839 6193

Benefits Paid (Rs in Crores)   144125 67054 158081 58380

Individual Death Claims (Number

755901 121927 760334 125027
of Policies)  

Individual Death Claims Amount

9055.18 2733.49 8475.26 2385.33
Paid (Rs in Crores)

Group Death Claims (Number of

273794 192989 267296 158682
lives)  

Group Death Claims Amount Paid

2037.27 1483.55 1882.83 1222.25
(Rs in Crores) 

Individual Death Claims (Figures

98.19 89.40 98.14 88.31
in per cent of policies)

Group Death Claims (Figures in

99.64 91.20 99.65 90.45
per cent of lives covered)  

No. of Grievances reported during

80944 198048 85284 289336
the year  

Grievances resolved during the

80944 193119 85828 288836
year  

Grievance Resolved (in percent) 100.00 97.51 100.64 99.83

 
Non-Life Insurance Business 2014-15 2013-14

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 Public Private Public Private
Performance:
Sector Sector Sector Sector

Premium Underwritten (Rs in

42549.48 35090.09 38599.71 32010.30
Crores)

New Policies Issued (in Lakhs)   677.82 504.97 600.06 424.47

Number of Offices   8207 2200 7869 2003

Net Incurred Claims  (Rs in Crores)   31567.75 19430.46 27817.96 17874.11

Number of Grievances reported

15860 44828 17658 45677
during the year  

Grievances Resolved During the

16105 43318 18083 45653
Year  

Grievance Resolved (in percent) 101.54 96.63 102.40 99.95

 
The Insurance Regulatory and Development Authority of India (Irdai) will make it

mandatory for large life insurance companies to list within a specific period. So far, none

of them, barring one, has shown interest in going to public, even after completing 10

years of operations. Private-sector life insurance companies with assets under

management (AUMs) of more than Rs 60,000 crore will be the first ones that will have to

list. The three largest insurance companies at present are SBI Life Insurance, ICICI

Prudential Life Insurance and HDFC Life. Only HDFC Life has so far shown any

inclination to list.

As on March 31, 2015, SBI Life had a total AUM of Rs 71,339 crore, HDFC Life had Rs

67,000 crore, and ICICI Prudential Life had Rs 1,00,183 crore. According to Irdai norms,

a company has to be in the insurance business for 10 years to be eligible to list on the

equity market. The regulator considers the financial performance, capital structure after

13
offer and solvency margin, among other factors, to give its approval. This was an

enabling provision and they would use it if required. For life insurers with huge

operations, we do not want one or two partners to share the risks and returns. It should be

listed so that the capital could be shared with shareholders. In an exposure draft 'Issuance

of Capital by Indian Insurance Companies transacting Life Insurance Business', Irdai said

it would do so if needed. Such a company has to, within a period of one year from the

date of such direction, comply with the direction issued.

The authority might direct an Indian insurance company transacting in the life insurance

business to go for a public issue if the circumstance so warrants in the exposure draft.

Irdai to make listing a must for large insurers It is not clear if Life Insurance Corporation

(LIC) will come under the purview of this direction. Being a state-owned entity, LIC's

initial public offering (IPO) decisions will be taken by the government.

However, Irdai does have the power to direct with respect to its public issue. Though it

was earlier anticipated that life insurers would bring out IPOs soon after completing 10

14
years in the industry, none of them did so. That was due to stress in business, low foreign

direct investment cap (it has now been raised to 49 per cent) and poor market conditions,

among other things.

Insurance officials said this was a step by the regulator to increase transparency. "It was

implicit that each life insurer would bring out an IPO after completing 10 years.

However, even after 10-12 years, only one-two companies have shown intent. The

regulator wants to nudge large players to list, so that others follow suit," said the chief

executive of a private life insurer. Earlier, HDFC had shown intent to bring out an IPO

for its life insurance company, HDFC Life, though HDFC Chairman Deepak Parekh said

in the company's annual general meeting in July that an issue was at least a year away.

SBI Life has said it is not looking to list immediately, though its parent State Bank of

India (SBI) is divesting a stake of up to 10 per cent in SBI Life Insurance.

COMPETITION AMONG PRIVATE PLAYERS

The ICICI Prudential topped among the private players in terms of premium collection. It

recorded a premium of Rs. 364.9 crore and a market share of 25 per cent, followed by

Birla SunLife with a premium under- written Rs.170 crore and a market share of 15

percent, HDFC Standard with 132.7 crore and Max New York Life with Rs.76.8 crore

with a market share of approximately 15 per cent each. Unlike their counterpart in the life

insurance business, private non-life insurance companies have not yet started addressing

the retail market. All is set to change in the coming years. Like in the banking sector,

non-life insurance companies will soon have no choice but to focus on individual buyers.

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In case of private non-life insurance players, that their market share rose to 14.13 per

cent, recording a growth of 70.75 per cent on an annual basis, while the market share of

public sector stood at 85.87 per cent, registering a marginal growth of 6.34 per cent. The

overall market has recorded a growth of 12.32 per cent by the end of January 2004.

Among the private non-life insurance players, ICICI Lombard topped the list with a

premium collection of Rs.403.62 crore in one year period with a market share of 3.05 per

cent and with an annual 131.6 per cent, followed by Bajaj Allianz with a premium of

Rs.385.02 crore and 2.91 per cent market share and Tata AIG with 300.49 crore premium

and 2.27 per cent market share with an annual growth rate of 62.60 per cent.

Among the public sector players, New India garnered a market share of 24.38 per cent,

Rs.3,229.49 crore premium and an annual growth rate of 0.38 per cent, followed by

National with a market share of 21.43 per cent, Rs.2,839.11 crore premium and an annual

growth rate of 19.88 per cent, United India with a market share of 19.47 per cent

(Rs.2,578.83 crore premium) and Oriental with a market share of 18.25 per cent,

Rs.2,417.17 crore premium and an annual growth rate of 1.86 per cent. It is significant to

note that HDFC Chubb and Cholamandalam have registered annual growth rates of

4030.26 per cent and 1101.20 per cent respectively, whereas New India has registered it

as 0.38 per cent. If this trend continues, private insurer would dominate the public sector

like New India Insurance Corporation. It is obviously reflect the insurance sector has

facing the challenges with foreign counter parties as well as private counter parties and

lot more opportunities are prevailing to penetrate the insurance business among the

uncovered people and area of India. Further, it leads to economic development of the

16
country. In this regard, it assumes greater significance to conduct debate among the inter-

disciplinary persons.

WHY IS IT SUPERIOR TO OTHER FORMS OF SAVINGS?

Protection: Savings through life insurance guarantee full protection against risk of death

of the saver. In life insurance, on death, the full sum assured is payable (with bonuses

wherever applicable) whereas in other savings schemes, only the amount saved (with

interest) is payable.

Aid to thrift: Life insurance encourages 'thrift'. Long term saving can be made in a

relatively 'painless' manner because of the 'easy installment' facility built into the scheme

(method of paying premium either monthly, quarterly, half yearly or yearly). Take, for

example, our Salary Saving Scheme popularly known as SSS. This scheme provides a

convenient method of paying premium each month by deduction from one's salary. The

deducted premium is remitted by the employer to the LIC. The Salary Saving Scheme

can be introduced in an institution or establishment subject to specified terms and

conditions.

Liquidity: Loans can be raised on the sole security of a policy which has acquired loan

value. Besides, a life insurance policy is also generally accepted as security for even a

commercial loan.

Tax Relief: Tax relief in Income Tax and Wealth Tax is available for amounts paid by

way of premium for life insurance subject to Income Tax rates in force. Assessees can

17
avail themselves of provisions in the law for tax relief. In such cases the assured in effect

pays a lower premium for his insurance than he would have to pay otherwise.

Money when you need it: A suitable insurance plan or a combination of different plans

can be taken out to meet specific needs that are likely to arise in future, such as children's

education, start-in-life or marriage provision or even periodical needs for cash over a

stretch of time. Alternatively, policy moneys can be so arranged to be made available at

the time of one's retirement from service to be used for any specific purpose, such as for

the purchase of a house or for other investments. Subject to certain conditions, loans are

granted to policyholders for house building or for purchase of flats.

Insurance on Women

Prior to nationalization (1956), many of the private insurance companies used to offer

insurance to female lives with some extra premium or on restrictive conditions. After

nationalization of life insurance, the terms under which life insurance is granted to female

lives have been reviewed from time to time. At present, women with earned income are

treated on par with male lives. In other cases, a restrictive clause is imposed and that too

only if age of the female is up to 30 years and if she does not have an income attracting

Income Tax.

Medical and Non-Medical Schemes

Life insurance is normally offered after a medical examination of the life to be assured.

However, to facilitate greater spread of insurance and also as a measure of relaxation,

18
LIC has been extending insurance cover without any medical examination, subject to

certain conditions.

With Profit and Without Profit Plans

An insurance policy can be 'with' or 'without' profit. In the former, bonuses disclosed, if

any, after periodical valuations are allotted to the policy and are payable alongwith the

contracted amount. In 'without' profit plan the contracted amount is paid without any

addition. The premium rate charged for a 'with' profit policy is therefore higher than for a

'without' profit policy.

Keyman Insurance

Keyman Insurance is taken by a business firm on the life of key employee(s) to project

the firm against the finance loss which may occur due to the premature demise of the

Keyman.

With the entry of the private players the rules of the game have changed. The private

insurers have grabbed nearly 9 percent of the market in terms of premium income. The

new business premiums of the private players has tripled to Rs. 1000 crore in 2003-04.

The names of the private players are:

Life Insurance

1. HDFC Standard Life Insurance Company Ltd.

2. Max New York Life Insurance Co. Ltd.

3. ICICI Prudential Life Insurance Co. Ltd.

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 4. Om Kotak Mahindra Life Insurance Co. Ltd.

5. Birla Sun Life Insurance Co. Ltd.

6. Tata Aig Life Insurance Co. Ltd.

7. SBI Life Insurance Co. Ltd.

8. ING Vysya Life Insurance Co. Pvt. Ltd.

9. Allianz Bajaj Life Insurance Co. Ltd.

10. Metlife India Insurance Co. Pvt. Ltd.

11. Aviva Life Insurance Company Ltd.

12. General Insurance

13. Royal Sundaram Alliance Insurance Co. Ltd.

14. Reliance General Insurance Co. Ltd.

15. IFFCO Tokio General Insurance Co. Ltd.

16. TATA AIG General Insurance Co. Ltd.

17. Bajaj Allianz General Insurance Co. Ltd.

18. ICICI Lombard General Insurance Co. Ltd.

c) Health-Insurance

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Health Insurance is defined as the purchase in advance of, health coverage by paying a

fee called premium, by an individual or a group. In India, this is a new concept, except

for the organised sector employees. Both General Insurance Company and Life

Insurance Company offer various health insurance schemes. Mediclaim and Employee

State Insurance Scheme are two examples. As far as India is considered, it is estimated

that only 10% of health insurance market has been tapped till today.

d) Agriculture Insurance

This insurance sector can play a very important role in meeting the risks and to inject

financial strength and stability to the farming community during widespread disasters.

Agriculture insurance is wider in scope and content and includes insurance of seed,

cattle, horticulture, plantations, forestery, sericulture, aquaculture, poultry, viniculture

and all such activities which are allied to agriculture. In India, as most of the insurers

are interested in the urban areas only and most of the agriculture related activities are

taking place in the rural areas the penetration of the agriculture insurance is

considerably minimal.

MARKET SEGMENTS

The life insurance and pension business has two distinct customers segments - individuals

and corporates. In case of the retail business for individuals, the 4 sub-segments are -

protection, investment, savings and pension. Apart from the existing leader LIC, new

companies such as HDFC Standard Life, TATA AIG, ICICI Prudential and more will

seek to be present across all the segments of the market.

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Among the retail products for individuals, pure risk protection products have been

introduced by some of the new life insurance companies in the market. As these products

have no savings component to it, the premiums are very low compared to other products.

Investment products provide long term investment growth and insurance cover. This

segment is growing rapidly. Savings products like Endowments and Money-Backs

provide a combination of protection and investment benefits. The last segment of pension

includes products that are aimed at offering customers an income during their retirement

years.

In case of the group business, there are three sub-segments - protection, statutory savings

and pension. Group insurance products are taken to provide low cost life insurance cover

to a group of people. Group insurance can be taken to provide low cost life insurance

cover as part of employee benefit packages to motivate employees or to cover the

housing or vehicle loan given by employer to employee. It can also be used as a

substitute for the statutory EDLI subject to approval by the Regional Provident Fund

Commissioner. The statutory savings segment essentially comprises of the gratuity

products for companies. The pension segment will include products like group

superannuation, which will enable a company to benefit from the actuarial, investment

and operational expertise of a specialist company to manage its superannuation funds.

MARKETING MIX POLICIES

Different companies can choose to position themselves differently and hence the

marketing mix would be different. However, there are certain common characteristics

that one can cull out from the possible strategies that companies can adopt. Product: The

development of flexible products to suit individual requirements is what will differentiate

22
the winners from the also-rans. The key to success is in providing insurance solutions, not

standardised insurance products. The concept of riders/optional benefits has already been

a huge innovation brought about by the new players, which has led to customisation of

products for individual needs. However, companies may differentiate themselves on the

basis of product segments that they choose to focus on and excel in.

Distribution: Different companies may however choose different channels and different

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

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

Many companies like HDFC Standard Life are focussing on all channels whereas

companies like Max New York Life are focussing on the tied agency force only.

Customer interface will be a key challenge for life insurance companies and includes

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

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

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

the company and it will be imperative for any serious player to excel in all of these.

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

pure annuities. Here too, service delivery and financial strength will need to be present at

a minimum acceptable level for price to be a relevant differentiator. In case of savings

oriented products, long term returns generated will be more relevant than just the price of

the product. A focus on generating good investment performance and keeping a tight

control on costs will help in generating good long-term maturity value for customers.

Norms have been laid down on all of these by IRDA and adhering to these while

delivering good returns will be a challenge.

23
Advertising and promotion: The level of demand is latent and will have to be activated

considerably. The market needs to be developed. Greater awareness of insurance and the

need to have it as a protection tool rather than as a tax planning measure needs to be

appreciated by the Indian people. Various communication tools including advertising,

direct marketing and road shows will contribute to all this and different companies will

take different approaches on these.

SUMMARY

Overall, the life insurance and pension sector is set for rapid changes and growth in the

years ahead. Delivering service, building trust and being innovative are key areas in

which any company will have to excel in order to do well in the long road ahead.

Different companies will take different approaches and it would be myriad of solutions

that will be found to delight the Indian customer.

24
 CHAPTER 3

COMPANY PROFILE

3.1 History

Life Insurance Corporation of India

Life Insurance Corporation (India) (LIC) is an Indian state-owned insurance group and

investment company headquartered in Mumbai. It is the largest insurance company in

India with an estimated asset value of 1560482 crore (US$230 billion). As of 2013 it had

total life fund of Rs. 1433103.14 crore with total value of policies sold of 367.82 lakh

that year

The Life Insurance Corporation of India was founded in 1956 when the Parliament of

India passed the Life Insurance of India Act that nationalised the private insurance

industry in India. Over 245 insurance companies and provident societies were merged to

create the state owned Life Insurance Corporation.[citation needed]

Growth as a monoply

From its creation, the Life Insurance Corporation of India, which commanded a

monopoly of soliciting and selling life insurance in India, created huge surpluses, and by

2006 was contributing around 7% of India's GDP.[citation needed]

The Corporation, which started its business with around 300 offices, 5.7 million policies

and a corpus of INR 45.9 crores (US$92 million as per the 1959 exchange rate of roughly

₹5 for US$1),[5] had grown to 25,000 servicing around 350 million policies and a corpus

of over ₹800000 crore (US$120 billion) by the end of the 20th century.

25
Liberalisation post 2000s

In August 2000, the Indian Government embarked on a program to liberalise the

Insurance Sector and opened it up for the private sector. Ironically, LIC emerged as a

beneficiary from this process with robust performance, albeit on a base substantially

higher than the private sector.

In 2013 the First Year Premium compound annual growth rate (CAGR) was 24.53%

while Total Life Premium CAGR was 19.28% matching the growth of the life insurance

industry and also outperforming general economic growth.

Operations

Today,the LIC has 8 zonal offices, around 113 divisional offices, 2,048 branches and

1381 satellite offices and corporate offices;[1] it also has 54 customer zones and 25

metro-area service hubs located in different cities and towns of India. It also has a

network of 1,337,064 individual agents, 242 Corporate Agents, 89 Referral Agents, 98

Brokers and 42 Banks for soliciting life insurance business from the public.

3.2 Vision, Mission and objectives of the company

Vision

A trans-nationally competitive financial conglomerate of significance to societies and

Pride of India.

Mission

Ensure 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

resources for economic development.

26
3.3 Organizational structure/Management hierarchy

27
3.4 Products and services offered

LIC is the most trusted brand when it comes to life insurance. LIC has a huge range of

products to offer and it often becomes difficult to choose the right fit.  So, we thought of

easing this for you and bring the best 5 LIC policies that are sure to trend this year and

will be the popular choice. You can pick your cues from here:

1. LIC Jeevan Akshay VI

LIC Jeevan Akshay VI Plan is a Single Premium Immediate Annuity Plan which can be

purchased by paying a lumpsum amount. It is a non unit-linked pension plan. This plan

provides for annuity payment of a fixed amount extending for a life time.

Salient Features

1. Immediate Annuity Plan – Annuity starts as early as the next month

2. Single Premium Plan – “Pay Once, Enjoy Forever”

3. Minimum purchase price is Rs.1, 00,000 for offline and Rs.1, 50,000 for online

purchase. There is no maximum limit on purchase or annuity.

4. More Annuity Options – 7 Options of Annuities to choose from

5. Annuity payable for life at a uniform rate till the life assured is alive.

6. Annuity payable for 5, 10, 15 or 20 years no matter if the insured person is alive or

not, and thereafter as long as the annuitant is alive.

7. Annuity for life with return of purchase price on death of the annuitant.

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8. Increasing Annuityin which the pension is paid till the life assured is alive at an

increasing rate of 3% p.a.

9. Annuity for life with a provision of 50% of the annuity payable to spouse during

his/her lifetime on death of the annuitant.

10. Annuity for life with a provision of 100% of the annuity payable to spouse during

his/her life time on death of annuitant. The purchase price will be returned on the

death of last survivor.

11. Annuity for life with a provision for 100% of the annuity payable to the spouse of

the annuitant for life on death of the annuitant, with return of purchase price on the

death of last survivor

12. Covers broad range of age group – From 30 years to 85 years

13. Maturity Benefit – No maturity benefits are available in this policy.

14. No medical examination is required.

15. Income Tax Benefit – Although, premiums paid under this policy are exempted

from tax under section 80C, but the pension received will be taxable.

16. No surrender value shall be payable under this policy.

17. No loan available under this plan.

18. Incentive for online – Rebate of 1% by way of increase in the basic annuity rate

will be available.

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2. LIC e-Term Plan

LIC's e-Term policy is a pure life cover policy that provides financial protection to the

insured's family in case of any unfortunate event. In other words, you can say that it is a

regular premium non-participating (without bonus), “on-line term assurance policy”. This

plan will be available through on-line application process only and no agents are

required.

Under the LIC’s e-Term policy, the insurer agrees to pay an agreed sum assured in the

event of his/her premature death during the policy term. Nevertheless, if the insured

survives till the end of the policy term, nothing is payable.

Salient Features

1. Available on the official website of the LIC

2. Differential premium rates for Smoker/Non-Smoker lives

3. Application of own life ONLY will be considered

4. Minimum Basic Sum Assured should be Rs. 25, 00,000 for Aggregate category and

for Non-smoker category it should be Rs. 50, 00,000. There is no upper limit

for Maximum Basic Sum Assured.

5. Covers broad range of age group – Form 18 years to 60 years

6. Loan is not available in this plan; Premiums have to be paid yearly.

7. Minimum Policy Term for this plan is 10 years and Maximum Policy Term is 35

years.  

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Death and Maturity Benefits

Death Benefit: During the policy term if the unfortunate death of the life assured happens

then the sum assured will be payable.

Maturity Benefit: If the individual survives the policy term, nothing shall be payable.

3. LIC New Children’s Money Back Plan

Launched on 4th March, 2015, New Children’s Money BackPlanis a non-linked, with-

profit regular premium payment policy particularly intended to meet educational,

marriage and other needs of a growing children. Moreover, this plan also provides risk

cover to the insured child during the policy term. That's why, it can be considered as a

saving cum protection plan.

Salient Features

1. Minimum Basic Sum Assured should be Rs. 100,000 and Maximum Basic Sum

Assured has No Limit. It should be noted that the Basic Sum Assured shall be in

multiples of Rs. 10,000/-.

2. Premiums can be paid regularly at monthly, quarterly, half-yearly or yearly mode

(through ECS only) or through SSS mode over the term of policy.

3. Loan facility is available under this plan after the payment of premiums for at least

three full years.

4. Age limit at entry for Life Assured: 0-12 years. The maturity age for the life

assured is 25 years i.e. policy term or premium paying term can be calculated by

31
 subtracting the age at entry by 25. For example, if the child’s age is 7 at the time of

entry then the policy term will be 25-7= 18 years.

5. Surrender Value: If the premium has been paid for full three years then the policy

can be surrendered at any time during the policy term.

Death & Survival Benefits

Death Benefit:

1. If death of insured occurs before the commencement of risk, an amount

equivalent to the premium payments will be paid.

2. If death of the insured occurs after the commencement of risk, death benefit

amount including “Sum Assured on death + Final Additional Bonus + Accrued

Bonuses” will be paid.

Survival Benefits (Money-Back payments):

1. 20% of Sum Assured is paid after the child completes 18 years.

2. 20% of Sum Assured is paid after the child completes 20 years.

3. 20% of Sum Assured is paid after the child completes 22 years.

4. After the child completes 25 years, the policy gets matured and the maturity

amount which includes 40% of sum assured + Accrued Bonuses + Final Additional

Bonus (FAB – if any) will be paid.

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4. LIC Jeevan Sangam

Launched on 4th March, 2015, along with Children’s money back plan, LIC’s Jeevan

Sangam is a single premium, non-linked, guaranteed-return plan and it participates in the

profits of LIC. The single premium payable shall depend on two factors:

1. Chosen amount of Maturity Sum Assured

2. Age of the life assured

Salient Features

1. Entry Age of the Policy Holder – 6 to 50 years

2. Minimum Maturity Sum Assured (MSA) with this plan is Rs. 75,000 and there is

no upper limit for MSA.

3. Basic Sum Assured will be 10 times the tabular single premium.

4. Premium Payment Mode – Single Premium Mode

5. Policy or Plan term – 12 years

6. Loyalty Addition shall be payable on surrender of the policy or on the death of the

policy holder. However, the insured will get the loyalty addition only if the policy

has completed its 5 year tenure, or if the policyholder survives till maturity of the

policy.

7. Loan can be availed under this plan only if the policy completes its 3 months.

Maturity and Death Benefits

Maturity Benefit

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On maturity of the policy, the Maturity Sum Assured (MSA) along with loyalty addition,

if any, shall be payable.

Death Benefit

1. Death of insured during the first five policy years:

Before the date of commencement of risk: Refund of single premium excluding service

tax and extra premium, if any, without interest.

After the date of commencement of risk: Basic Sum assured i.e. 10 times the tabular

single premium shall be payable.

1. Death of the insured after completion of five policy years but before the

stipulated Date of Maturity:

2. Basic Sum assured i.e. 10 times the tabular single premium along with Loyalty

Addition, if any, shall be payable.

5. LIC Jeevan Saral

Categorized under Special Plans, LIC Jeevan Saral is, in fact, an endowment policy with

a lot of flexibilities that is usually available only with unit linked insurance plans

(ULIPs). With excellent features of the traditional plans and the flexibility of ULIP plans,

Jeevan Saral insurance plan gives double death benefit of um assured plus return of

premium.

Salient Features

1. Flexible Monthly Premium payments and the Sum Assured is 250 times the

Monthly Premium amount.

34
2. Minimum Sum Assured in this plan is Rs. 62,500 and has no upper limits.

3. Policy Term – Minimum: 10 Years and Maximum: 35 Years

4. Entry Age of Policy Holder – 12 to 60 Years

5. Payment Mode can be monthly, quarterly, half yearly and yearly.

6. Optional higher cover through Term Rider, Accidental Death and Disability

Benefit.

7. Loyalty Additions are provided after the policy completes 10 years.

8. Partial surrender of the policy can be done after the 3rd policy year.   

9. Loan on this plan is available.

10. Income Tax Benefit – Available under Section 80 C for premiums paid and Section

10 (10D) for Maturity returns.

Death and Maturity Benefits

Death Benefit – In case of death of the Life Insured, the nominee receives

1. Sum Assured (i.e. 250 times the Monthly Premium)

2. Return of premiums excluding extra/rider premium and first year premium

3. Loyalty Addition, if any

Maturity Benefit – At the maturity of the policy, the insured will get

1. Maturity Sum Assured (Depends on age of entry and policy term)

2. Loyalty Additions, if any

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Comparative study

ICICI PRUDENTIAL

About Prudential

Established in 1848, prudential is a leading international financial services company in

the UK, with some US$276 billion funds under-management and more than 13 million

customers worldwide. Prudential has brought to market an integrated range of financial

services products that now includes life assurance, pensions, mutual funds, banking,

investment management and general insurance. In Asia, prudential is UK’s largest life

insurance company with a vast network of 22 life and manual fund operations in twelve

countries – China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines,

Singapore, Taiwan, Thailand and Vietnam. Since 1923, Prudential has championed

customer centric products and services supported by over 60,000 staff and agents across

the region.

ICICI Prudential Life Insurance Company (ICICI Prudential Life) is a joint venture

between ICICI Bank Ltd., India's largest private sector bank, and Prudential plc, a leading

international financial services group headquartered in the United Kingdom. ICICI

Prudential Life was amongst the first private sector life insurance companies to begin

operations in December 2000 after receiving approval from Insurance Regulatory

Development Authority of India (IRDAI).

ICICI Prudential Life's capital infused stands at Rs. 48.16 billion (as of March 31, 2015)

with ICICI Bank Ltd. and Prudential plc holding 74% and 26% stake respectively. For

36

i.e xe
the financial year 2015, the company garnered a total premium of Rs. 153.07 billion. The

company has assets under management of Rs. 1001.83 billion as on March 31, 2015.

For over a decade, ICICI Prudential Life has maintained its dominant position (on new

business retail weighted basis) amongst private life insurers in the country, with an array

of products to match the different life stage requirements of customer and enable them to

achieve their long term financial goals.

PRODUCT OFFERED BY ICICI PRUDENTIAL

At ICICI prudential customer delight is their guiding principles. Ensuring world class

solution by offering customized product with transparent benefits supported by the best

technology is their business philosophy benefits supported by the best technology is their

business philosophy. According to Mrs. Chetna Bansal, unit manager, ICICI PRU. The

company has used innovative marketing as well as pricing strategies and their premium

chart would be much lower than the other player in the market. Company has launched

various products in the market with most competitive premium among all players.

Protection plans

These are very good plan for those who want protection (especially) for their family

because happiness and security for our family is all that we want. However, the

uncertainties of life often worry you. Unfortunate events can make you are no longer

around. Life insurance can help ease many of those worries. It ensures that your loved

ones are adequately provided for and that their future is secure, no matter what the

uncertainty.

37
ICICI PRU offers you a choice of 3 level term products with insurance protection:

1. Life Guard Level Term Assurance

2. Life Guard Level Term Assurance with Return of Premium

3. Life Guard Single premium

How these plans work

Life Guard Level Term Assurance

1. What is Life Guard level term assurance policy? This plan provides financial

protection to your family in case of the unfortunate event of death.

2. How does the Life Guard Level Term Assurance policy work? You will have to

pay a regular annual premium for the term chosen and will be provided the

insurance cover on your life equal to the sum assured.

3. What benefit does this plan offer you?

4. In case of death of the life assured during their term, the sum assured under the

plan will be paid to the beneficiary. There are no maturity benefits. Hence, on

survival till maturity, the policy will terminate without any returns.

5. How much you have to pay for this plan?

The following table gives you indicative premiums for various age term combinations for a sum

assured of Rs. 10 Lakhs.

38
Age Term of the policy

5 years 10 years 15 years 20 years

30 years 2455 2504 2553 2680

35 years 2876 2925 3072 3582

40 years 3386 3601 4287 5110

6. What tax benefits are available for this plan? The plan offers tax benefits u/s 88.

7.What additional feature does this plan offer you? You can avail of the Accident and

Disability Benefit under this plan.

8.What are your entry conditions for Life Guard Level Term Assurance? Your age at

entry should be between 18 years and 50 years. The minimum term is 5 years and the

maximum term is 25 years, which is subject to a maximum of 65 years of age. The

minimum premium for the product is Rs. 2400 per annum.

Life Guard Level Term Assurance with Return of Premium

1. How does the Life Guard Level Term Assurance with return of premium policy

work?

2. You will have to pay a regular premium for the term chosen and will be provided

the insurance cover on your life equal to the sum assured.

3. What benefit does this plan offer you?

39
In case of death of the life assured during the term, the sum assured under the plan will be

paid to the beneficiary. On survival till maturity, all the premiums paid, will be returned

without interest.

Life Guard Single Premium

1. What is Life Guard Single Premium policy? This is a single premium variant of

the Level Term Assurance Plan.

2. How does the Life Guard Single Premium policy work? You have to make a one-

time premium payment, depending upon the term and the sum assured chose by

you.

3. What benefit does this plan offer you? In case of the death of the life assured

during the term, the sum assured under the plan will be paid to beneficiary. There

are no maturity benefits at the end of the term.

4. What tax benefits are available for this plan? The plan offers tax benefits u/s 88.

5. What are your entry conditions for Life Guard Single Premium? Your age at entry

should be between 18 years and 50 years. The minimum term is 5 year and the

maximum term is 15 years, which is subject to a maximum of 65 years of age.

The minimum sum assured for the product is Rs. 2 lakhs.

Saving Plans

Most endowment policies are a good way of saving for the future. A policy can be

designed to make your savings grow and have them available to you at the end of a fixed

40
 number of years. Or, a policy could provide you with an income every three or four

years.

ICICI provides you three savings plans with insurance protection:-

I. Save ‘n’ Protect

II. Smart Kid

III. Cashbak

How these plans work

Smart Kid

 What is Smartkid?

A plan which gives child the freedom to pursue their dreams, the strength to face

challenges, the guarantee to live life to its fullest whatever be the uncertainty. As parents,

your biggest concern is that of securing the future of your child. In today’s world, with

ever increasing competition, escalating cost of education and uncertain financial markets,

it is very important to plan for your child’s future. It is a plan that provides guaranteed

benefits to your child along with the life insurance cover. Smartkid is so designed that it

provides money at all the critical milestones in his/her life, whatever be the uncertainties.

 Who can purchase this policy?

Parents (between 20-60 years) with children in the age group of 0-12 years can purchase

this policy

 What should you buy smart kid?

41
Because smartkid ensures that you have total peace of mind as far as your child’s future

is concerned.

In the event of death of the Life assured

 Sum assured of the plan is paid immediately – assists the family in meeting the

unforeseen expenses incurred because of the unfortunate loss.

 Waiver of premium – no future premia are payable, thereby ensuring that your family

is not burdened financially.

Cash Bak

As an individual you have to be financially prepared for various milestones in your life. If

you are newly married, you need to plan for a baby a few years from now. If you have

teenage children you need to plan for their university education. What you need is a plan

to meet your periodic financial, requirement with the added benefit of insurance

protection.

 What exactly does the CashBak do?

Sit is a three in one plan that combines savings, liquidity and protection through the

following:

 Fixed term of 15 or 20 years

 Survival benefit payments at regular intervals

 Premiums are payable throughout the term of the policy

On the death of the life assured, the beneficiary will get the sum assured, the guaranteed

additions and the vested bonuses.

42
 Who can apply?

You can apply if you are 16 years old and no older than 55 years. The minimum sum

assured you should apply for Rs. 75,000. The minimum premium amount is Rs. 4,800

p.a.

 Can I take a loan against my policy?

No loans are available under this policy.

 Can I discontinue my policy?

Yes, you can discontinue your policy after premiums are paid for three years. A

guaranteed surrender value is payable to you, if you decide to terminate the policy after 3

years premiums are paid. However, the insurance protection provided under this policy

will also cease.

 What are the add-on cover?

Accident & Disability Benefit

Critical Illness Benefit

Major Surgical Assistance

Retirement Plans

At present ICICI Prudential offers four types of retirement plans for the public. This

plans gives a safety and security o those people who aged and not involving in any of

financial activities and complete depends on any monetary to sustain their living.

Forever Life

43
 It is a comprehensive retirement solution that is developed keeping in mind a persons’

various capabilities and needs, with respect to one’s retirement planning. This is a

plan that ensures you to maintain your lifestyle for a lifetime. So, whether you are 30

or 60 this is a just the right retirement plan for a person.

 Ideally, this plan is suitable for those peoples who are between 30-35 years of age to

take the maximum benefit of this plan. This gives a person a longer period for your

retirement plan.

 It is a deferred annuity plan and it provides regular incomes for life after a stipulated

date. The amount you receive depends on the premium you pay till the stipulated date

and the annuity option you choose. It also offers life cover during the deferment

phase.

 The plan has two phases – The Deferment Period (Policy Term) and the Annuity

Period. Premiums are paid in the deferment period till the time of vesting. From the

vesting date annuity is paid for the lifetime of the annuitant.

The premium depend upon the age of the person and also the term of the product, which

the deferment period. The policy attains a value at the end of deferment period, which is

the total of the sum assured under the policy guaranteed additions (@3.5% compounded

for the first 4 years of the policy) + vested bonuses (depending on the company’s

performance and are not guaranteed) this value is applied to purchase annuity at the time

of vesting.

 This plan has two main benefits they are

Spouse Benefits

44
In case of the unfortunate event of death, the annuity starts for the spouse. The annuity

payable is determined on the basis of your sum assured plus guaranteed additions plus the

vested bonuses if any at the time of the death. Your spouse would have the option to

either take the accumulated value of the Sum Assured + Guaranteed Additions + Vested

Bonuses (if any) or opt for an annuity using a desired portion of the accumulated value

and take the rest as lump sum.

Annuity Benefit

On the date of vesting (retirement), you start receiving a regular income for life. This

amount would depend upon the annuity option chosen by you and the accumulated value

as on the vesting date. The annuity would also depend upon the annuity rates offered by

the company as on that date and are not guaranteed.

At vesting, you will have the option of taking up to 25% of the aggregate of the sum

assured, guaranteed additions and vested bonuses (if any) as lump-sum. The remaining

will be used to provide with a regular stream of income for life.

1. How this plan can give the customer the tax benefit?

Tax benefit u/s 80CCC(1): upto Rs. 10,000 deducted from your taxable income.

2. Is this plan is flexible? If yes then in what way?

Yes this plan is quite flexible and it is in the following way:-

Choice of Retirement Date: You have the flexibility to postpone the vesting from the

originally chosen vesting date up to a maximum of 70 year of your age. During the

postponed period your accumulated amount will earn interest as determined by the

45
company from time to time. There will be no life cover or premium paid during this

period.

Open market option: This option gives you the flexibility to buy a pension from any other

insurer of your choice, at the time of vesting. So you have three freedom to take the best

from the market.

1. Annuity Options: You have the Life Annuity : Annuity for Life

2. Life annuity with return of purchase price: Life annuity for the annuitant with the

return of the purchase price to the beneficiary.

3. Life annuity guaranteed for 5, 10, 15 years: Guaranteed annuity is paid for the chosen

term (5/10/15) and after that the annuity continues if at that time annuitant is alive.

flexibility to choose from four different annuity options.

Retirement Plans

1. Joint Life, Last Survivor with Return of Purchase Price: In this case the annuity is

first paid to the annuitant, after the death of the annuitant the spouse starts getting a

pension which is equal in amount of the annuity paid to the annuitant. After the dearth

of the last survivor the purchase price is returned back to the beneficiary.

2. Choice of Retirement Date: You have the flexibility to postpone your vesting age

upto a maximum of 70 years of age.

Open Market Option: This option gives you the flexibility to buy a pension from any

other insurer of your choice, at the time of vesting. So you have the freedom to take the

best from the market.

46
What tax benefits are available with Life Link Pension? Tax benefit u/s 80CCC(1): Upto

Rs. 10,000 deducted from your taxable income.

Riders

Riders are the additional benefit that you can add on to your policy. You can opt for

riders when taking the basic policy at a marginally incremental cost. No bonuses are paid

on the riders.

1. Critical Illness Benefit Rider

A rider added to a life insurance policy to protect the insured in the event of a critical

illness. 9 medical conditions are covered by this benefit. This ensures living benefits

payable to the insured for medical expenses prior to death. This rider is available with

Save’n’ Protect, Cash Bak, Forever Life (Regular Premium Deferred Pension), Life Time

and Life Time pension. If the life Assured is diagnosed to be suffering from a specified

Critical Illness after six months from the date of policy, the Sum assured under this policy

shall be paid together with guaranteed additions and vestdonu.

Premium

The premium for this benefit is guaranteed for five years only from the date of

commencement of policy. The company reserves the right to carry out a general review

of the experience from time to time and change the premium as a result of such review.

The company will give notice in writing about the change and the Life Assured will have

the option not to pay any increased premium. In such a case the benefit will be

appropriately reduced from the effective date of the change in premium and the company

will advise the Life Assured accordingly 80D. This rider is available with Save’n protect,

47
Cash Bak, Forever Life (Regular Premium Deferred Pension), Life Time and Life Time

pension. The maximum sum assured under Major Surgical Assistance Benefit granted by

the Company under all the policies of the Life Assured shall not exceed Rs. 10,00,000.

Benefits

Under this the life assured is paid

1. 50% of sum assured in respect of major procedures

2. 30% of sum assured in respect of intermediate procedures

3. 20% of sum assured in respect of minor procedures

This benefit is payable on more than one occasion when the life assured undergoes

surgery. However the total benefit payable in case of all the procedures is restricted to a

maximum of 50% of the sum assured.

Conditions

The benefit would be available only for medically necessary surgical procedures

performed at a hospital as in pateint

1. When the policy is in force for the full sum Assured

2. Anytime before the expiry of the policy or before the age of 65 (whichever is earlier)

Premium

The premium for this benefit is guaranteed for five years only from the date of

commencement of policy. The company reserves the right to carry out a general review

of the experience from time to time and change the premium as a result of such review.

The company will give notice in writing about the change and the life assured will have

48
the option not to pay any increased premium. In such a case the benefit will be

appropriately reduced from the effective date of the change in premium and the company

will advise the Life assured accordingly.

3. Accident and Disability Benefit Rider

This rider is available with Save ‘n’ protect, CashBak, Life Guard (Regular Premium

Level Term Assurance), Forever Life (Regular Premium Deferred Pension), Life Time,

Life Time Pension, Assure Invest and Re Assure. The rider is eligible for the same tax

benefits as the basic policy to which it will be attached. The policy terminates once the

benefit of the claim is paid.

Accident Benefit

This benefit is payable in case of death that occurs as a result of an accident. The death

must occur:

When the policy is in force for the full sum assured

Any time before the expiry of the policy

Before the age of 65 (whichever is earlier)

HDFC LIFE

Standard Life has a joint venture company, HDFC Standard Life Insurance, launched in

2000 with our partners, HDFC Ltd (previously known as Housing Development Finance

Corporation Limited).

49
The company, which was one of the first to be awarded a licence in the recently

deregulated Indian insurance market and one of the first to open its doors for business

and issue policies, is the result of a long-term relationship with our partners.

HDFC Standard Life insurance sells a range of individual savings, pension and group life

assurance products and has branch offices in 39 locations throughout India. It was

recently rated as the "Best New Insurer - 2003" by Outlook Money magazine.

Standard Life, UK, founded in 1825, has been at the forefront of the UK insurance

industry for 175 years by combining sound financial judgement with integrity and

reliability. It is the Largest Mutual Life company in Europe and has total assets of Rs.

5,50,000 crore.

It is one of the very few insurance companies in the world to have received 'AAA' rating

from two of the leading international credit rating agencies, Moody's and Standard &

Poor's. Standard Life was recently voted 'Company of the Decade' in U.K. by the

Independent Brokers called IFAs.

INDIVIDUAL PRODUCTS

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

range of products.

With Profits Endowment Assurance

This policy provides a combination of saving and life insurance.The sum assured plus

anybonuses will be payable at the end of the term or on death if earlier.Your commitment

is to pay a level premium regularly throughout the life of the policy.The Endowment

50
Assurance can be customised to meet your needs by adding any combination of up to 4

rider benefits.

With Profits Money Back

This policy provides a combination of savings, regular cash payments and life insurance.

Over the course of the contract, a proportion of the sum assured will be paid at regular

intervals. The sum assured plus any bonuses will be payable on death before the end of

the contract. On survival to maturity, you will get the sum assured plus any bonuses less

the regular payments already made. Your commitment is to pay a level premium

regularly throughout the life of the policy.The Money Back can also be customised to

meet your needs by adding any combination of up to 4 rider benefits.

BAJAJ ALLIANZ LIFE INSURANCE

BAJAJ Allianz Life Insurance Company is a joint venture between two leading

conglomerates, Bajaj Auto Limited, one of largest manufactures of motorcycles and

scooters in the world, and Allianz AG of Germany one of the largest insurance

companies. Bajaj Allianz Life Insurance Co. Ltd. was incorporated on 12th March 2001.

The company received the Insurance Regulatory and Development Authority (IRDA)

certificate of Registration (R3) No 116 on 3rd August 2001 to conduct Life Insurance

business in India.

Bajaj Allianz Shareholder Capital Base stands at Rs. 500 crore with Bajaj Auto Limited

and Allianz AG of Germany holding 74% and 26% stake respectively. It is the largest

private player in the Insurance Industry in India with a market share of around 34%

51
amongst the private companies and second to LIC. The total market share of Bajaj

Allianz as of 31st March 2006 is at 12%.

Founded in 1890 in Berlin, Allianz is now present in over 70 countries with almost

174,000 employees. At the top of the international group is the holding company, Allianz

AG, with its head office in Munich.

Allianz AG is in the business of General (Property & Casualty) Insurance; Life & Health

Insurance and Asset Management and has been in operation for over 110 years. Allianz is

one of the largest global composite insurers with operations in over 70 countries. Further,

the Group provides Risk Management and Loss Prevention Services. Allianz has insured

most of the world's largest infrastructure projects (including Hongkong Airport and

Channel Tunnel between UK and France), further Allianz insures the majority of the

fortune 500 companies, besides being a large industrial insurer, Allianz has a substantial

portfolio in the commercial and personal lines sector, using a wide variety of innovative

distribution channels.

COMPARATIVE STUDY OF LIC AND ICICI PRUDENTIAL POLICIES

LIC and ICICI Pru both provide different policies and plans depending upon the various
requirements of people. Different plans are been categorised under seven major
categories of policies. Then a comparative analysis is done between the plans of both LIC
and ICICI Prudential. Both the company provide similar types of plan just with the
difference in the features or premium amounts.

52
 WHOLE LIFE POLICIES

LIC ICICI Prudential

WHOLE OF LIFE PLANS LIFE TIME PLAN

The most cheapest form of LIC policy Policy that meets your changing need
over a lifetime

Premium part is adjusted towards

Premiums are payable through out the life
morality and administrative charges and

Sum assured is payable on the death of rest is invested in plan of your choice.
the life assured

Bringing the difference in the plan of LIC and ICICI Pru we can find out that LIC plans
are very simple to understand whereas the other provide plans according to your the
changing needs of people.

Endowment policies

LIC ICICI Prudential

ENDOWMENT WITH PROFITS ICICI PRU SAVE N PROTECT

These are the policies of limited duration An ICICI ideal plan for those who want
payable on maturity or death of the life to accumulate funds on a regular basis
assured. with life cover

These plans are available with different It is a fixed term policy that combines
option like with or without profit or saving with life cover. The premia is paid
double or special endowments regularly during the term

On death up to age: - basic premium

returned without interest

53
 On death after age 7: - sum assured
@3.5% compounded interest for first 4
yrs and then vested bonus.

We can make out comparing the plans of both the companies that while ICICI are more
concerned about saving and are categorised for the different section of people. LIC is
straight and simple plan.

Money backs policies

LIC ICICI PRUDENTIAL

JEEVAN MITRA ICICI PRU CASH BAK

A high risk low cost plan and with profit An ideal plan for every milestone of
plan life. It combines life cover + liquidity
+ savings.

This plan provide for an additional

insurance cover, equal to the sun assured in It provides survival benefit after every
the event of policy holder death during the 3 or 4 yrs and add-on benefit for a
term of policy. nominal extra premium.

JEEVAN SURBHI

Premium payable for limited periods

available with periods of 12,15 and 18 yrs

Money back at interval of 4 and 5 yrs as per

policy term

JEEVAN SANCAY

54
Plan having a provision of guarantee
addition at 70p.a. per thousand and loyalty
addition payable on date of maturity.

The LIC under money back policies provide various plans each having different kinds of
features. On the other hand ICICI Pru, which combines all the features in just one single
plan. The LIC plans like jeevan surbhi are suitable for high income and tax categories.

Single premium policies

LIC ICICI PRUDENTIAL

BIMA NIVESH ICICI PRU REASSURE

This is a unique, short-term, multiple A safe and comprehensive plan for those
benefits insurance plan which provide about to retire or has retired. It combines
safety, liquidity attractive returns and tax best of insurance and investment
benefit.
Liquidity with assured and steady annual
This plan can be assigned as a collateral returns. Life cover up to 110% of
security premium paid.

ICICI PRU ASSURE INVEST

It provides loyalty and guarantee addition An investment with healthy returns and
too. added benefit of insurance.

This policy has a fixed term of 7 or10 yrs

ICICI PRU LIFE LINK

An ideal market linked insurance plan

that enables you to enjoy the upside of
market returns

It gives you flexibility of choosing your

55
 investment option between growth,
income or balanced plan.

Under the single premium policies heading LIC just provides one policy as compared to
ICICI Pru, which gives different policies. Moreover ICICI Pru gives higher assured
returns and various other benefits.

Term insurance plans

LIC ICICI PRUDENTIAL

BIMA KIRAN ICICI PRU LIFE GUARD

A plan with the provision for return of 90 An ideal low cost policy that covers your
premium paid on surviving of the term life with uncertainties

Free term cover after maturity provided It comes with a choice of two convenient
the policy is in full force premium payment modes-one time and
regular
Having an added attraction of loyalty
addition It gives the flexibility of accident and
disability cover for a extra premium
JEEVAN GRIHA
Minimum premium payable 2400 per
For people desirous of obtaining a
annum. It has no maturity benefits
housing loan with policy acting as
collateral security

It ensure repayment of loan in the event

of premature death of the borrower

A high risk low cost plan

Available as double and triple cover plans

56
Comparison between the plans of both the companies’ shows that while ICICI Pru
provide more flexible and stable return plans the LIC are safer plan taking care of family
as a whole. Again LIC provides different plan under this category of life insurance.

Children policIes

LIC ICICI PRUDENTIAL

JEEVAN BALYA SMART KID

Plan provides for a monthly income up to Plan designed for critical educational
age of 21 in case of unfortunate death of milestone include specialised course in
parents the country and abroad

Premium waiver benefit is available The sum assured is paid immediately

from 100,000 to 300,000
BAL VIDYA
All future payments are waived off
The plan takes care of family expenses-
on school college, health or just starting a Most importantly the Child’s will
career continue to receive the policy benefits.

Money in regular monthly instalment and

in lump sum at specific point of time.

We can make out that LIC provide different plans for children as compared to ICICI Pru,
which gives only one plan for kids. Both aims at providing the parents aid for higher
studies of their children. While LIC policies are designed to meet the different need of
family budget ICICI Pru are more customer tailored.

Annuity plans

57
LIC ICICI PRUDENTIAL

JEEVAN SURAKSHA ICICI PRU FOREVER LIFE

This plan is suitable for every individual An ideal solution for people around 30
salaried or self employed or any yrs of age, which offers retirement benefit
professional like C.A., Dr. and takes care of your protection need

The plan can be availed for a life long Health cover till 65 through add on
monthly pension with an option to benefit
commute 25%of the sum assured.
100% spouse pension
JEEVAN DHARA
ICICI FOREVER LIFE LINK PENSION
This plan is suitable for executives; self- PLAN
employed, professional young employed
A single premium market linked pension
or people working wit 15 yrs experience.
plan. For premium between

Rs 40000 to 99999 – it is 2%
The plan guarantees life long pension and
Rs 100,000 to 499,999 – it is 1.5%
are tax deferred, guarantee return
presently 12.5% Rs 500,000 and above – it is 1.25 % of
the premium
Policy provides competitive and
attractive annuity rates.

Lump sum payment to the annuitants Insurance coverage is equal to 105% of

here. the initial premium and the top ups

Can opt for 0 insurance cover too

ICICI PRU LIFE TIME PENSION

PLAN

58
 A regular premium linked pension plan

On retirements the accumulated value of

your investment is used to provide
pension

For less than 50000- it is 20%

For premiums equal to or more than

50000- it is 18%

In case of zero death benefit it is 18% and

15% of the premium.

Both LIC and ICICI Pru provide various plans for pension. The LIC plans are more
suitable for all age of people whereas the other one are especially for aged people.
Moreover ICICI Pru plans are made such that each income level can opt depending upon
their potentials.

59
 CHAPTER 4

RESEARCH METHODOLOGY

4.1 Objectives

1. To identify the players and their products in the Indian Life Insurance market

2. To study the types of benefits provided by Life Insurance Services

3. To find out the solution of covering the untapped market in respect to life

insurance

4. To know General perception about Life Insurance among public

5. To find out the consumer preference to life insurance companies

6. To provide suggestions on removing the hurdles faced by private player.

This study will give a brief background of the sector and proceeds to highlight the

shortcomings of the existing set up and players. The benefits of a liberalized sector are

enumerated. The report will also try to identify the market potential for insurance

products and the strategies that can be employed to exploit the same.

The survey will be limited to a sample of 100 respondents in Delhi & NCR region

4.2 METHODOLOGY

Data Collection Method:-

60
A) Primary Data collection: Primary data has been collected through questionnaire of

customers and structured interview with managers of selected insurance companies and

insurance agents/corporate broking firms.

Secondary Data sources

I. Journals/Brochure Of I.R.D.A

II. Books related to insurance industry

III. Journals and magazines

IV. Internet

Sampling Plan:-

The random sampling is done because any probability sampling procedure would require

detailed information about the universe, which is not easily available further, as it is

being an exploratory research.

Sampling Unit- Executive and professionals

Sampling Size- 100 respondents

Sampling Area – Delhi and NCR region

Sampling Procedure-Non Probability Judgment Sampling

4.3 Week To Week On Job Experience

61
Working for six weeks in the organization I come to know about the structure of the

organization that how to perform different activities how to adjust yourself in the office

environment

While there was a wide range of tasks assigned, there were also some routine tasks to be

completed every week. I also handled different administrative tasks, such as answering

the phone, making copies, printing, delivering mail, and other office responsibilities. I

have learned many fundamental techniques that have made me a better communicator.

First, my writing skills have advanced and I feel confident in doing tasks expected of me.

Next, I am now more eager to attempt things that intimidate me. Additionally, I have

learned that my verbal communication skills, which I have always thought were above

average, have room for improvement. I have learned and grown from the respect given

to me by all the people whom I have encountered in LIC. This, in turn, has prompted me

to espouse that respect to others. In closing, this internship has been much more than

learning about a job, it has been learning about life and my abilities. I was placed in the

Life Insurance Department all the employees along with the supervisor were very

cooperative and instructive. The knowledge and guidance that I have received from them

is priceless and cannot be quantified.

a. Learned all the important aspects of Life insurance offered by LIC .

b. Studied in detail the insurance policy of LIC and discussed different aspects

with Manager

c. Discussed and compared various policies offered by other companies in order

to improve Life insurance policy of LIC.

62
d. Learned the market trends prevailing with respect to the Life insurance.

e. Went to meet many insurance agents and the owner’s of their agencies as to

get the view of both and the gap between them, because agents gives us sale

but we deal with agency, so there was a gap which was removed by bringing

both the agent and owner on the same page.

f. Collected sales reports from agents.

g. Punched the data into the system so that it can be underwritten.

h. Managed the files of the department.(by giving them a serial number).

i. Made calls to the agents all over the country to improve the database.

j. Learned the complete process of issuance of a policy.

k. Issued policy when direct sales occurred.

63
 CHAPTER 5

DATA ANALYSIS

Awareness of life insurance in consumer.

No
0%

Yes
100%
Fig.1

No. of respondents Percentage of respondents

Yes 100 100%
No 0 0%

Source: www.licindia.com

Interpretation:
According to the data maximum no. of people are aware with life insurance policy (here
100% people are aware with it). Today Indians are aware with this investment because it
covers risk of the life as well as gives better return on maturity.

64
What is your purpose for buying an insurance policy?

No. of respondents Percentage of respondents

For old age saving 51 51%

Family needs 14 14%

Time to time needs 21 21%

Opposite circumstances 14 14%

Source: www.licindia.com

Interpretation:
Most of the people buy insurance policy for their old age saving because they want to
save money or back up for old age and only 21% people buy insurance for time to time
needs.

65
How much money you want to invest in insurance?

Premium amount No. of respondents

Rs. 10,000 to 15,000 15
Rs. 15,001 to 20,000 29
Rs. 20,001 to 25,000 31
Rs. 25,001 to 30,000 21
Rs. 30,001 to 35,000 4

Source: www.licindia.com

Interpretation:

Mostly people invest in insurance on the basis of their saving and according to their
saving they purchase insurance policies. Here most of the people invest 20001 Rs. to
25000 Rs. and very less number of people invest huge amount in insurance.

66
Data gives preference of respondents of life insurance company

No. of respondents
L.I.C. 78
SBI LIFE INSURANCE 7
ICICI PRUDENTIAL 10
OM KOTAK MAHENDRA 3
HDFC 2
TOTAL 100

80

60
L.I.C .

40 S B I LIF E
IN S UR A N C E
IC IC I
P R UD E N TIA L
20 O M KO TA K
M A H EN D R A
HD F C

Source: www.licindia.com

Interpretation

78% of the people have LIC policy and is ranked number one by that percent of
respondent.

67
When you are buying an insurance policy, your decision is influenced by?

Source: www.licindia.com

No. of respondents
Family 37
Friends 30
Professional and trade union group 15
Brand and advertisement 18

Interpretation:
Insurance is now basic investment for consumers. But this is tradition of India that we do
not believe on unknown people so when any one buy insurance policy then his or her
decision is depend on family, friends and on other factors. In the study i found that 37%
of respondents believe on their family to buy insurance policy but only 18% respondent’s
decision depend on brand and advertisement of the company. So, a/c to study, we see that
family and friends play a big role to buy an insurance policy.

68
In which company you believe most?

Source: www.licindia.com

Company No. of respondents

Private company 38
Public company 62

Interpretation 5:
Most of the people want to invest their money in public insurance company. In private
insurance company only 38 respondents want to invest their money. Most of the people
buy insurance from LIC and there are more than 20 private insurance companies in India.

69
How do you want to pay your premium?

Source: www.licindia.com

Mode No. of respondents

Cash 35
Cheque & Credit card 39
Demand draft 26

Interpretation 6:
Most of the respondents (i.e. 39) pay their premium through cheque & credit card
because of easiness and convenience. 35 respondents pay their premium through cash and
26 of them pay their premium through demand draft.

70
In what mode you want to give premium?

Mode No. of respondents Percentage of respondents

Monthly 26 26%
Half-yearly 39 39%
Yearly 35 35%

Source: www.licindia.com

Interpretation:

Insurance companies give a lot of facility to their loyal customers for payment of
premium. Costumer also pays the premium in three modes monthly, half yearly and
yearly. Here 39 % respondents pay in half yearly mode and 35% respondents pay yearly
mode premium.

71
Which feature of your policy attracted you to buy it?

No of Respondents

Money back guarantee 15

Larger risk coverage 37

Easy access to agents 7

Low premium 30

Reputation of company 11

Total 100

Source: www.licindia.com

FEATURES OF INSURANCE POLICY MONEY BACK

GUAARENTEE
LARGER RISK
COVERANCE
EASY ACCESS TO
AGENTS
LOW PREMIUM

REPUTATION OF
COMPANY

Interpretation

Majority of the respondent found larger risk coverance as the most attracted feature of
their policy.

72
Are you satisfied with the return on investment which you getting from policy?

Source: www.licindia.com

Satisfaction level No. of respondents Percentage of respondents

Very Satisfied 21 21%
Satisfied 60 60%
Can’t say 4 4%
Not much satisfied 4 4%
Dissatisfied 11 11%

Interpretation:
A/c to data, 60% of respondent are satisfied with the return. About 21% are very satisfied
on their investment’s return and 11% are dissatisfied with return on investment.

73
If you are not taking any insurance policy then please tell us the reason, why?

Source: www.licindia.com

Reasons No. of respondents

We could not afford. 26
We don’t see any benefit .with it. 24
We don’t want insurance. 15
I don’t understand that how it works? 35

Interpretation:
As the evident shows that as most as 35 of the total respondents don’t understand the
working of the insurance system and nearly 24 of the respondents don’t see any benefit
with the system, 15 and 26 of the respondents don’t want insurance and could not afford
respectively.

CHAPTER 6

74
 FINDINGS, SUGGESTIONS AND LIMITATIONS

FINDINGS

The comparative analysis between the plans of both the companies shows that both differ

in their projection and outlook while they aim at same targets and provides similar kind

of returns.

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

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

of high quality and providing resources for economic development. The logo of the

company also shows image of corporation that cares. The advantage of LIC over its peers

is that the sum assured comes wit sovereign guarantee

On the other hand ICICI Pru has little different approach towards its business. They are

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

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

Pru had an entire range of insurance product. Their aggressive strategy will certainly pay

off one step ahead of competitors.

The project study reports has the following conclusions:

1. Almost 80% of respondents have an insurance policy.

2. People have more number of life nsurance policies as compared to non life insurance.

3. Majority of the respondent preferred/have L.I.C. policy since it was the only option

due to complete government control in insurance sector. (though now privatised)

75
4. Majority of the respondents believe that covering future uncertainty is the most

important benefit of an insurance policy.

5. Majority of the respondent believed that larger risk coverage of their policy was the

main feature of their policy that attracted them buy that policy though low

premium was the next important feature.

6. Due to the increasing concern of people towards their health/life the life insurance

business has good prospects.

7. Due to increased in consumerism new product is launched everyday. thus non-

life/general insurance business is also going to have boom period.

DIFFICULTIES FACED

Selling insurance is important but challenging work. In a competitive industry that’s

changing rapidly, the obstacles are many. But knowledge is power, as they say, so in

Retirement Advisor’s recent Advisor Survey we asked your peers to name these obstacles

directly. The answers ran the gamut from specific product concerns to looming

legislation worries to straightforward sales hurdles that would resonate equally with those

who sell houses or medical equipment or tax planning advice.

Selling insurance products comes with its own unique set of lead gen challenges, not least

among them the fact that prospects are either a) reluctant to admit they need what you’re

selling, as is often the case with life insurance products or b) afraid to plan for one of

their own looming obstacles, namely, how they will fund their retirement.

76
All of this is why, year after year, advisors name lead generation as the No. 1 issue that

can make or break a practice. It takes creativity to overcome this barrier, especially with

the threat of competition emerging from non-traditional channels. How to do it? The

savviest advisors are finding solutions that work naturally for their practice, whether it’s

cornering an underserved niche market, finding ready referrals through networking

organizations or investing in technologies that will deliver more qualified leads in less

time.

SUGGESTIONS

There are certain flaws existing in this working of the insurance industry. There are some

of the recommendation we ad come up with while doing this project. It will help to make

insurance more important sector in today’s economy.

1) The need of the hour is to devise a comprehensive strategy that will help the firms

face the challenges of the future. The financial services industry around the world

over is undergoing a major transformation. It is very important that trained

marketing professionals who are able to communicate specific features of the

policy should sell the policy.

2) From our research we could find out that people are not aware about the policies

and features of insurance. Therefore LIC and ICICI are recommended to shed

light on policies and explain the benefits, thus increasing the awareness.

77
3) The penetration of insurance in India is around 22%. This indicates that a vast

majority of rural population is not covered. The market player needs to explore

this untapped potential through their marketing and sales network.

4) The returns of the policies are not properly managed and never given in time. So,

these must be looked at.

5) Pricing of insurance products, as empirically available in India, shows that pricing

is not in consonance with market realities. Life Insurance premium is generally

perceived, as being too high while general insurance (especially motor insurance)

is priced too low.

6) Some insurance products, which are not available in India, should, be introduced

in market. There are areas for new product development:         Industry all risk

policies, Large projects risk cover, Risk beyond a floor level, Extended public and

product liability cover

7) Insurance companies will also had to get savvy in distribution. Enhanced

marketing thus will be crucial. Already many companies have full operation

capabilities over a 12-hour period. Facilities such as customer service center are

already into 24-hour mode. These will provide services such as motor vehicle

recovery. Technology will also play an important role on the market.

78
The lines of distinction between banks insurance companies and brokerages are getting

blurred. The future seems to belong to financial supermarkets that will offer a host of

services and products to the consumer. In the next millennium all these activities would

play a crucial role in the overall development and maturity of the insurance industry

LIMITATIONS

For every research there are restrictions and limitations. The following are some

limitations which I have been face in the making of this research.

I. Time will be the biggest construction. I have been difficult to get the

questionnaires filled personally from the consumers

II. There may be some people who different views on insurance sector and so they

might give false information in the questionnaire

79
 CHAPTER 7

CONCLUSION

There has been tremendous change in the insurance history. And with it there has been

continuous growth in this sector both in Indian as well as world context.

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

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

ICICI Pru are leading the sector due to their strategic management and tailored made

projects.

From our research also we conclude that though the awareness and people opting for LIC

plans are more as compare to ICICI Pru but the later are gaining momentum in the market

day by day.

The primary reasons for buying an insurance policy, whether life or non-life is to protect

us from vagaries of life. We do not invest in insurance for returns; rather we invest in it

for regrettable necessities. Though a large proportion of policies available in the country

provide for returns, but nobody is looking for returns to the inflation rate. So what does

insurance offer, perhaps peace of mind, but even that takes time, due to poor claim

performance

The demand for insurance is likely to increase with rising per-capita incomes, rising

literacy rates and increase of the service sector, as has been seen from the example of

80
several other developing countries. In fact, opening up of the insurance sector is an

integral part of the liberalization process being pursued by many developing countries

The current state of insurance distribution in India is still in flux. On one hand, insurers

are awaiting regulations to be approved for brokerages and bancassurance to be truly

launched. On the other hand they are trying the corporate model of intermediaries in

addition to the traditional models in the market.

There is no right and wrong in all this. The success of marketing insurance depends on

understanding the social and cultural needs of the target population, and matching the

market segment with the suitable intermediary segment.

In addition a major segment of the Indian population has low disposable income,

meaning that every penny won will be obtained after a lot of persuasion and the expected

value for money is high.

All intermediaries can't sell all lines of business profitably in all markets. There should be

clear demarcation in the marketing strategies of the company from this perspective.

Clients should also receive price differentials for using different channels. This is not a

new concept, as the Public sector Property&Casualty companies are giving discounts in

lieu of agency commission. The channel composition should not be homogeneous but

should reflect the larger society.

These intermediaries need to be empowered with the right learning, training and sales

tools and technology enablers. Coupled with the right product mix, this will help the

insurers to survive and flourish in this competitive market.

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The scenario in Indian insurance sector is ready for a change with public sector players

likely to lose market share. But some industry analysts believe that they would continue

to hold a strong market position on account of their well-established brand equity and

distribution network. However at the same time, it must be noted that major public sector

banks such as SBI, Bank of Baroda, Punjab National Bank and other large public-sector

banks also have established brand equity and distribution strength. Bancassurance is

likely to catch on in India, the same way it has done globally.

Consumers will begin to taste the benefits of competition in the insurance field. Insurance

penetration is a matter of pricing, access and affordability. In all these fronts, the Indian

insurance industry is at the threshold of witnessing a major revolution that would benefit

consumers immensely, thereby taking the insurance penetration level to newer heights.

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 BIBLIOGRAPHY

Bishnoi Ashutosh, Indian Institute of Banking & Finance (IIBF) Indian Institute of
Banking & Finance, Taxmann Publications, , Taxmann Publications, 2013

Iyer V Sesha - Insurance - Origin & Development, Insurance Chronicle, February, 2015.

Tripathy N.P. & Pal, Prabir, Insurance: Theory and Practice, Prentice Hall of India, 2012

Business Standard, Private players upbeat on rural insurance, by Falaknaaz Syed, October
10, 2015

http://myinvestmentideas.com/2015/07/lic-plans-launched-in-2015-which-is-the-best-
one-among-them/

http://www.livemint.com/Money/3kvSmCikYTKlK4e9ZW8MWL/Life-insurance-
industry-set-to-grow-1215-in-FY17-report.html

www.iciciprulife.com

www.hdfcinsurance.com

www.licindia.com

www.thehindubusinessline.com

www.domain-b.com

www.economictimes.indiatimes.com

www.sify.com

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