Professional Documents
Culture Documents
ON
BY
AJAY KUSHWAHA
(08BS0000184)
1
PROJECT REPORT
ON
PRICE SENSITIVITY OF LIFE INSURANCE PRODUCTS
BY
AJAY KUSHWAHA
(08BS0000184)
2
3
4
DECLARATION
I hereby declare that this report on ‘‘Price sensitivity of life
insurance products’’ has been written and prepared by me
during the academic year 2009-10. This project was done under
the guidance and supervision of company guide, Ms. Swapna
Nair, branch manager, Geojit BNP Paribhas Financial Services
Limited and faculty guide Prof. T.N Ramakumar, ICFAI Business
School, kochi, in partial fulfillment of the requirement for the
Master of Business Administration course of the ICFAI Business
School.
I also declare that this project is the result of my own efforts and
has not been submitted to any other institution for the award of
any degree or diploma.
Date: (08BS0000184)
5
ACKNOWLEDGEMENT
I express my gratitude to Ms. Swapna Nair, Branch Manager,
Geojit BNP Paribas Financial Services Limited, infopark branch
for giving me the opportunity to work and learn and to be the
part of Geojit BNP Paribas Financial Services Limited and for
being my company guide.
I would like to thank my faculty guide Prof. T.N. Ramakumar for
helping and providing regular guidance for the completion of the
project.
I would like to show my gratitude towards Ms. Swapna Nair for
her direction and assistance at each and every step of the project
and for giving valuable time out of her busy schedules to me and
rendered assistance in terms of information and guidance. I
would like to thank the branch manager of Geojit BNP Paribas
Financial Services Limited, Ms Swapna Nair for providing me the
opportunity to learn more about the share market also.
I would like to thank all the staffs of the Geojit BNP Paribas
Financial Services Limited for sparing their time with me and
providing their support for the completion of the project.
I would like to thank the nature for giving the favorable
conditions and I would also thank my flat mates for helping and
encouraging me for the completion of the project.
Finally, I would like to thank Micro-soft Corporation for their best
user friendly MS office software package. With this software only
I am able to complete my project.
AJAY KUSHWAHA
6
EXECUTIVE SUMMARY
The Summer Internship Program in Geojit BNP Paribas Financial Services
Ltd. started from 23rdof February, 09. The objective of the project is to
know that the impact of premium charged by Insurance companies on
their life products have any impact on life insurance investment pattern in
Ernakulam. As we know that there are various factors which affect the
consumption and investment behavior of individuals. Factors include:
Price of the product
Income of the consumers
Type of goods available in the market
Tastes and preferences of individuals, etc
So our work was that to know about the perception of individuals with
respect to price i.e. premium charged by life insurance companies on their
life insurance products. Our work was also to find out various reasons
which are considered by people to choose one company from other.
For our study we have chosen infopark area because likely respondents of
this area could be sharing certain demographic, age, income and other
similarities. The steps or the points that we have covered in our study as
follows:
INITIAL STAGE:
At the outset we have started our research with studying the basic tenets
and features of insurance business in India. Various types of insurance
policies in use are studied for this purpose
7
The objective of the study is to find out the various insurance policies now
available in the market. By administering the suitable questionnaire, the
preferences of customers in terms of choice for a particular policy, from
the particular company and the reasons thereof are sought to be elicited.
While doing this special importance is given on the price sensitivity of life
insurance products at infopark area.
The respondent base for this exercise is chosen from infopark area,
kakkanad. The assumption here is that the respondent base is more or less
uniform in terms of geography, income levels, age and other parameters.
We have planned to cover around 100 respondents.
SECOND STAGE:
In the second stage we are using two techniques for analyzing the Indian
insurance industry. Techniques are:
1. PEST analysis
2. Michael porter’s five factor analysis.
FINAL STAGE:
In the final stage we have prepared the questionnaire (see annexure A)
consisting of 20 questions to collect the information from individuals at
infopark area. We have met with 100 individuals and collected data from
them. We have also conducted personal interview to collect the
information regarding the perception of investors on several factors while
investing in life insurance products. We have given more focus on
premium as a factor of deciding investment in life insurance products.
CONCLUSION:
Yes premium charged by life insurance companies on their life
insurance products have impact on investment pattern of
individuals. The reason is the percentage of income spent on life
insurance products is high. So if high percentage of income is spent
on life insurance products, then the particular individual will not be
able to do other things. But premium is not only the important
variable. It is concluded that if investors will sure that they will get
8
the return then they will definitely take any type of policy which
their income level permits.
Research shows that there is correlation between income of the
people and their investment behavior.
More than 50% of the respondents who have income level of below
Rs. 2lakhs (both who have taken life insurance products and who
haven’t taken life insurance products) considered price i.e. premium
payable on life insurance products as the most important factor
while investing in life insurance products. The reason given by them
is the affordability. It means if the premium is affordable then only
they shall able to buy the policy.
Respondents who have income level of more than Rs. 2lakhs (those
who have already taken life insurance policy) considered both
premium and reputation of the insurance company as the first most
important factor while investing in life insurance policies. Our
research clearly shows that around 32% of the respondents have
ranked both premium and reputation as first most important factor
and again 23% have ranked it as second most important factor. For
them premium is not that much important if the reputation of the
company is good because they can get the return on their
investment. It means they are ready to pay higher premium for
reputed companies in the market.
There are various factors which are considered by respondents
while investing in life insurance products. They are:
Premium charged by life insurance companies on their life
insurance products.
Reputation of the company in the market
Their total income
Their total savings
Variety of life insurance products
Location of the company
Familiarity with the agent
People prefer one company over another because of various
reasons. Premium charged by life insurance companies and their
9
past services and the reputation in the market are the important
reasons.
Respondents are aware about various types of life insurance
products. And the demand for money back policy is higher than any
type policy by the respondents.
The reason for higher investment in money back policy is because of
the higher expected return on investment on the periodic intervals.
Most of the people have taken and wants to take policy with rider.
They are ready to pay higher premium on additional benefits.
It is clear that people still have great confidence on government
entity.
It is clear that people used to invest by the recommendation and
suggestions of their friends and relatives. This corroborates in
marketing notion that word of mouth is the best vehicle of
advertisement.
The preference for ULIPs is also considerable lower than money
back. It shows that people have awareness about the innovations of
new products in the market.
Preference for term insurance is very less instead of their low price
i.e. premium. Because it is uncertain that whether investor will get
benefit or not.
RECOMMENDATIONS:
Geojit can give some incentive or bonus points to their clients who
have already taken policy from them if they recommend their
friends and relatives to buy the policies from Geojit BNP Paribas
financial services limited.
Agent can give information about life insurance products and the
company better than anyone else. So Geojit may have to focus on
their agent base.
Our research shows that ICICI Prudential and SBI life other than LIC
also have good potential for growth. So they have to focus more on
ICICI Prudential and SBI life and not on LIC to sell life insurance
products (because customers already have preference for LIC).
10
TABLE OF CONTENTS
Declaration…………………………………………………………………………………………….05
Acknowledgement…………………………………………………………………………………06
Executive summary………..………………………………………………………………………07
Chapter.1-Introduction ………………..………………………………………………….13-20
Chapter.2-Insurance ………………………………………….……………………….…21-26
Chapter.3-Company profile……………………………………………………………27-33
Chapter.5-Life insurance……………………………………………………………….50-58
Chapter.6-Survey Analysis……………………………………………………..……..59-87
References …………………………………………………………………………….…………..88
Annexure………………………………………………………………………………………….…89
A Questionnaire……………………………………………………………………………89
12
Chapter- 1
Introduction
13
INTRODUCTION
Growth in the Indian economy has steadily increased since 1979. Indian
economy is on boom at this time and it shows the overall growth of
Republic of India. Today Indian people are becoming more and more
aware of investing money in market and this is the biggest reason behind
this boom. People are investing through various investment schemes like:
There are three main factors that determine the demand for any product
in the market. They are:
So for our research we have taken price i.e. the premium charged on life
insurance to determine its demand.
15
1.1. OBJECTIVE OF THE PROJECT
This project basically aims to know that the impact of premium charged by
Insurance companies on their life products have any impact on life
insurance investment pattern in Ernakulam. The purpose of the study is to
find out if the demand for the life insurance product is affected by the
change in price i.e. premium charged on life insurance products or not.
The main objective is to know the perception and knowledge of customers
on the premium charged by the insurance companies on their life
insurance products. The objective of the study is also to find out the
reasons why customers prefer one company over the other and one
product over the other and determine whether price is an important
variable in the choice of these decisions.
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1.2. SCOPE OF THE RESEARCH
i. Helps to know that the customers who are investing on life
insurance products.
ii. Helps to know about the investment pattern of different class
of investors.
iii. Helps to know about the different types of life insurance
products.
iv. Helps to find out the better market opportunities for
insurance companies for their life insurance products in terms
of size of the market, quality of services and number of
clients.
v. Helps to know the awareness and knowledge of life insurance
products and the company at infopark area in Ernakulam.
17
1.3. METHODOLOGY
This methodology is based on Primary research which was carried out at
Ernakulam in infopark area. The research involves:
1.4. METHODS
2. Primary Data: the information and the perception of the individuals
will be collected by meeting personally with the help of structured
questionnaire.
3. Secondary Data: data regarding the insurance companies and their
life insurance products will be collected with the help of company
websites, newspapers and their advertising tools.
4. Data analysis with the help of MS-Excel and SPSS: the collected
data of individuals will be analyzed with the help of MS-Excel and
SPSS software.
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1.6. SAMPLING TECHNIQUE
Sampling has been done by using judgment sampling technique.
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1.9. LIMITATION OF THE STUDY
i. The main important limitation of our project is the time
constraint. The time period for the project is limited.
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Chapter- 2
Insurance
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INSURANCE
2.1. MEANING OF INSURANCE:
Insurance is a contract under which one party agrees in return for a
consideration to pay an agreed amount of money to another party to
make good a loss, damage, or injury to something of value in which the
insured has a pecuniary interest as a result of some uncertain event.
In a very simple words insurance is a contract between two parties i.e.
insurer (the company) and the insured (the customer), where insurer
promise to compensate the loss, damage, or injury of something value
of insured in consideration of price (the premium paid by insured) after
the happening of uncertain events.
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2.3. GENERAL PRINCIPLES OF INSURANCE:
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iv. Contribution: it applies to any insurance, which is a contract of
indemnity. The insured is not prevented from taking out two policies
on the same property. But in case there is a loss, when there is more
than one policy on the same property, the insured will have no right
to recover more than the full amount of his actual loss. In such a
case the principle of contribution will be applied according to which
all the insurers will contribute to the loss of insured in the
proportion of the amount of policy taken by the concerned person.
vi. Causa proxima: the principle of causa proxima means that in case
of loss arising out of any mishap the most proximate cause, i.e. the
nearest cause of the mishap should be taken into consideration.
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2.4. TYPES OF INSURANCE
In India, insurance business is classified primarily as life and non-life or
general.
1. Life insurance: includes all the risks related to the lives of the
human beings.
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d) Miscellaneous: it deals with all others like liability, motor,
crop, engineering, construction, aviation, personal
accident, etc.
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Chapter-3
Company Profile
27
GEOJIT BNP PARIBAS FINANCIAL SERVICES LIMITED
Geojit was founded by Mr. C.J. George and Mr. Ranajit Kanjilal as a
partnership firm in the year 1987. After the retirement of Mr. Ranajit
Kanjilal from the firm in 1993, Geojit became a proprietary concern of Mr.
C .J. George. In 1994, it became a Public Limited Company by the name
Geojit Securities Ltd. The Kerala State Industrial Development Corporation
Ltd. (KSIDC), in 1995, became a co-promoter of Geojit by acquiring 24%
stake in the company, the only instance in India of a government entity
participating in the equity of a stock broking company. Geojit listed at The
Stock Exchange, Mumbai (BSE) in the year 2000. In 2003, the Company
was renamed as Geojit Financial Services Ltd. (GFSL). The board of the
company consists of professional directors; including a Kerala government
nominee with 2/3rd of the board members being Independent Directors.
With effect from July 2005, the company is also listed at The National
Stock Exchange (NSE). Geojit is a charter member of the Financial Planning
Standards Board of India and is one of the largest DP brokers in the
country.
On March 13, 2007 the formation of Geojit BNP Paribas Financial Services
Ltd., was announced in Mumbai and Paris. Through a preferential
allotment, BNP Paribas had taken 27% stake in Geojit, which will
eventually increase to 34.35%. With this final step, the French banking
major has become the largest shareholder in Geojit Financial Services
Limited. BNP Paribas has one of the largest international banking
networks with significant presence in Asia and the United States. With this
take over Geojit has become Geojit BNP Paribas Financial Services LTD in
April 2009. Currently Geojit BNP Paribas has more than 500 branches, 4.7
lakhs clients and offers services in equities, futures and options, mutual
funds, life and general insurance, portfolio management services, loan
against shares.
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3.2. MILESTONES OF COMPANY:-
The company crossed the following milestones to reach its present
position as a leading retail broking house in India.
1986
Geojit becomes a member of the Cochin Stock Exchange.
1994
The Kerala State Industrial Development Corporation (KSIDC), an
arm of the Government of Kerala, becomes a co-promoter of the
company by acquiring 24% equity stake in Geojit Financial Services
Ltd. This is the only venture in India where a state owned
development institution is participating in the equity of a stock
broking company.
Geojit becomes a corporate broking house.
1995
Geojit becomes a member of the National Stock Exchange (NSE) and
installs its first trading terminal in Cochin, Kerala.
1996
The company launches Portfolio Management Services after
obtaining required registration (Portfolio Management) from
Securities Exchange Board of India (SEBI).
1997
Geojit becomes a Depository Participant under National Securities
Depository Limited (NSDL) and begins providing Depository Services
through its branches.
1999
Geojit becomes a member of The Bombay Stock Exchange, Mumbai
(BSE) and activates Bombay Online Terminals (BOLT) in different
branches.
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2000
Geojit becomes the first broking firm in the country to offer online
trading facility. The then SEBI Chairman, Mr. D.R.Mehta
inaugurates the facility on 1st February, 2000.
Commences Derivative Trading after obtaining registration as a
Clearing and Trading Member in NSE.
Establishes the first Bank Gateway in the country for Internet
Trading.
2001
Becomes India's first DP to launch depository transactions through
Internet.
Establishes Joint Ventures in the UAE for serving NRI clients.
The company issues bonus shares in the ratio of 1:1.
2002
Geojit ties up with MetLife for the marketing and distribution of
insurance products across the country.
The company becomes the first online brokerage house to launch
integrated internet trading system for both cash and derivatives
segments.
2003
30
2005
Customer base of Geojit crosses 250,000.
Geojit's reach spreads through a network of more than 300
branches.
Geojit Credits, a subsidiary of Geojit Financial Services Ltd. registers
with Reserve Bank of India as a Non-Banking Financial Company
(NBFC).
The company implements Employees Stock Option Scheme.
The company opens a first of its kind - all women's branch in Cochin.
2006
Geojit relaunches Internet trading on Reuters TIB Mercury Platform.
2007
On March 13, 2007 the formation of Geojit BNP Paribas Financial
Services Ltd., was announced in Mumbai and Paris. Through a
preferential allotment, BNP Paribas had taken 27% stake in Geojit,
which will eventually increase to 34.35%. With this final step, the
French banking major has become the largest shareholder in Geojit
Financial Services Limited.
2008
BNP Paribas Securities India (P) Ltd. – a Joint Venture between BNP
Paribas and Geojit Financial Services for Institutional Broking.
First brokerage to offer full Direct Market Access (DMA) execution in
India for institutional clients.
2009
Launch of online Currency Derivatives trading.
Renaming of Geojit into Geojit BNP Paribas in April 2009.
31
3.3. BOARD OF DIRECTORS OF THE COMPANY:
Name Designation
Mr. A. P. Kurian Non - Executive & Independent Chairman
Mr. C. J. George Managing Director & Chief Promoter
Mr. Manoj Joshi Non - Executive & Independent Director
Mr. Mahesh Vyas Non - Executive & Independent Director
Mr. Rakesh Jhunjhunwala Non - Executive Director)
Mr. Ramanathan Bupathy Non - Executive & Independent Director
Mr. Punnoose George Non - Executive Director
Mr. Olivier Le Grand Non - Executive Director
Mr. Pierre Rousseau Non - Executive Director
3.4. MANAGEMENT:
Name Designation
Mr. C. J. George Managing Director
Mr. Satish Menon Director (Operations)
Mr. A. Balakrishnan Chief Technology Officer
Mr. K. Venkitesh National Head - Distribution
Mr. Stefan Groening Director (Planning and Control)
Mr. Jean-Christophe G Director (Marketing)
Mr. Binoy .V.Samuel Chief Financial Officer
Mrs. Jaya Jacob Alexander Chief of Human Resources
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3.5. SUBSIDIARY COMPANIES AND OVERSEAS JOINT VENTURE:-
SUBSIDIARY COMPANIES:-
Geojit Technologies (P) Limited
Geojit Financial Distribution (P) Limited
Geojit Financial Management Services (P) Limited
Geojit Credits (P) Limited
Barjeel Geojit Securities L.L.C.
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Chapter- 4
Insurance Industry Analysis
34
INSURANCE INDUSTRY ANALYSIS
Further, the country’s insurance sector is likely to grow 17% in the current
financial year if the economy continues to expand at the pace as it did in
the September quarter of 2008. India’s economy grew at 7.6% in July-
September period.
35
Insurance business has been traditionally classified into:
Life insurance has been viewed as a tax saving option for a long time in
India; but this perception is slowly changing and insurance is being taken
irrespective of tax benefits. The insurance market now offers insurance
products that suit people’s specific requirement and various demographic
characteristics.
Among the various products offered by life insurers, the most common
are:
Endowment assurance,
Money back policy,
Whole life policy,
Term assurance and
Unit linked insurance plans (ULIPs).
Out of these, endowment assurance and ULIPs are the most widely used.
ULIP is one of the biggest innovations of the market and ones popularized
by private players give various options to investors. In a ULIP, a part of the
premium paid goes towards life cover and the remaining is invested in
units like mutual funds. Lately, these products have been gaining
popularity owing to sustained bullish trend in the Indian capital market.
IRDA ha issued guideline for ULIP products that specify the minimum level
of sum assured, minimum period of premium payment and several other
requirements, including NAV computation methodology.
36
and pension are some opportunities that life insurers are waiting to
capitalize on.
The Indian life insurance market has been traditionally dominated by LIC,
which controlled about 99% of the total life insurance premium in FY02. As
per the latest data, it controlled around 48.1% of market share in 2008.
However, liberalization has increased private players’ presence in the life
insurance market. Private players have adopted aggressive growth
strategies. They have introduced many innovative products that were
customized to customer requirement and developed alternative
distribution channels. As a result the premium of private players grew at a
CAGR of 153% during FY02-07, while that of LIC grew by 21%.
The share of life funds in the total investments made by life insurers
has fallen from 85% in FY05 to 77% in FY07. However, it still remains
the largest fund for life insurers and during FY05 to FY07. It grew at a
CAGR of 13% to reach Rs 4,655.55 billion. Unit linked funds have also
done remarkably well during the same period; its share in the total
investments made by life insurers went up from 2% in FY05 (Rs 75.28
billion) to 11% in FY07 (Rs 670.5 billion), registered a CAGR of 198%.
37
Pension and general annuity fund registered a CAGR of 76% and its
share in the total investments doubled from 3% in FY05 (Rs 120.24
billion) to 6% in FY07 (Rs 370.63 billion) during the same period. Group
funds’ (excluding group pension and annuity fund) reported a decline
of CAGR 10%, reducing its market share from 10% in FY05 (Rs 426.8
billion) to 6% in FY07 (Rs 345.11 billion).
One of the main reasons for private players’ remarkable growth was
popularity of unit linked products. LIC also rolled out many unit linked
products to gain its lost market share; its share in the total unit link
fund increased from 37% in FY05 to 54% in FY07.
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4.5. ROAD AHEAD
In FY08, the insurance penetration in India was as low as 4.7% as
compared to other developed and developing countries including the
US (8.9%), the UK (15.7%), Taiwan (15.7), South Korea (11.8%), and
Hong Kong (11.8%). Similarly, insurance density in India is estimated to
be at a low level of USD 46.6 as compared to the Asian average of USD
210.7. Within the insurance density, life insurance density is at USD
40.4 and non-life density is at USD 6.2.
39
semi-urban and rural areas. During March 2007-August 2008, eight
new players entered the market.
40
4.9. DE-TARIFFING IN GENERAL INSURANCE:
The first phase came into effect in January 2007, when pricing
deregulation was applied to three products including fire, engineering,
and auto own damage. A maximum discount of 50% was set on old
regulated rates and around 20% on auto damage rates. During the
second phase, which came into existence from January 2008,
detariffication of non-life insurance was completed in India and
insurers were given freedom to set up their own price for insurance
products.
41
4.10. PEST ANALYSIS:
1. POLITICAL FACTORS:
a. Increased service tax on premium: with the finance bill 2004
coming into effect from September 10, life insurance
premiums now come under the service tax net. The life
insurance policy holders will have to pay 10.2% of service tax
when they pay their next round of premium. Existing policy
holders are also liable to pay up the 10% service tax plus 2%
education cess.
b. 5% discount on corporate premium: at present there is a 5%
discount on corporate premium.
c. Hike in FDI limit: the policy of the government regarding
foreign direct investment has an important role in any
industry. Indian government has approved hike in FDI limit to
49% from existing 26%.
2. ECONOMIC FACTORS:
Increase in gross domestic savings: there is an increase in gross
domestic savings over the last five years. In the financial year
2007-08 the gross domestic savings rate was 36%.
3. SOCIAL FACTORS:
a. Low insurance coverage: the Insurance coverage in India is
very low. As per industry estimates, out of 78% Indian
households that are aware about life insurance, only 24%
own a policy. Especially in rural India the insurance coverage
is very low.
b. Rice in elderly population: the life expectancy, which was 29
years in 1947, is now closer to 65 years. The same is expected
to increase to 71 years by 2026. Hence the number of older
population is expected to increase by more than double from
76millions in 2006 to 173 millions in 2026. By the year 2016 it
is projected that 51% of the elderly population would be
women.
c. Changing Indian perception: the perception of Indian
population has totally changed. By the improvement in the
educational system, the literacy rate continuously goes on
increasing. The awareness level of Indian consumers is also
42
increasing day by day. Every individual wants to secure his
family from unwanted future.
d. Increase in life style diseases: lifestyle-related diseases, such
as cardiovascular disease, diabetes and hyper tension are on
the rise in India. These diseases have already become the
number one killer in India. India leads the world in diabetes. A
government study estimated the number of diabetics to be
about 38 million in2004, and it is projected to rise to 57
million in 2025.
4. TECHNOLOGICAL FACTORS:
a. Automation of process: the replacement of a manual
business process with an automated one, usually through the
use of advanced technologies is known as business process
automation. Today each and every insurance firm is using
latest information technology to minimize cost and to provide
best services to customers
b. Increase in CRM solutions: today every insurance firm is
using customer relationship management solutions to deal
with tough competition and to satisfy the customers. A good
CRM solution provider in insurance industry has the tools that
enable the organization to enhance customer experience.
c. Internet driven information era: today everything is
connected with internet. Each and every individual can easily
get information about various life insurance products and
associated premium and the service providers.
43
have the choice to purchase the insurance products from
banks also hence they again have the power.
d. Multiple distribution channels: insurance companies are
using different types of channels i.e. an individual agent,
broker, stock trading firms and banks, etc for selling their
insurance products to the customers.
2. SUPPLIERS POWER:
a. Limited actuaries in the market: the number of actuaries (the
person who uses statistics to calculate insurance premiums) is
limited. Hence they have enough power over insurance
companies.
b. Reinsurance concentration: today most of the insurance
companies are trying to reduce the risk of insurance by again
reinsuring the concerned risk with other insurance
companies. Hence the reinsurers are enjoying the extreme
power.
c. Dependence on IT providers: latest technology is one of the
important resources of any type of company to deal with
competition and to provide customer services. Insurance
companies are highly dependent information technology
providers for their effective business.
44
Another interesting point is the low penetration of other tax-
saving products, with traditional products (insurance, NSC
and PPF) dominating the preference.
Only 5% of the respondents said that had chosen to invest in
equity linked saving schemes (ELSS) of mutual funds. The
interesting fact is that 30% of the respondents continue to
depend on the provident fund for which they contribute,
along with employers.
About 62% of the respondents said they had no investment in
ELSS while 22% had made these investments. The low
penetration of ELSS among respondents clearly indicates that
the mindset has not changed, with traditional products
continuing to dominate investor preference.
4. BARRIERS TO ENTRY:
a. FDI celling: the government has the power to fix the
maximum amount of foreign direct investment in insurance
industry. So with low celling the international firms cannot
enter in the Indian insurance industry.
b. Capital requirement: capital is one of the most important
resources for doing any business activity. In insurance
industry the amount of capital requirement is very high.
Hence the capital is the barrier to entry.
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4.13.LIST OF GENERAL INSURANCE COMPANIES
IN INDIA
Reinsurer
General Insurance Corporation of India
47
4.14. MARKET SHARE OF VARIOUS INSURANCE
COMPANIES IN INDIAN INSURANCE MARKET
48
4.15. Pie-chart for analysis
LIC
ICICI Prudential
Allianz Bajaj
SBI Life
HDFC Standard
Birla Sunlife
Reliance Life
OM Kotak
AVIVA
Tata AIG
Met Life
ING Vysya
Shriram Life
Others
49
Chapter- 5
Life Insurance
50
LIFE INSURANCE
5.1. Meaning of life insurance:
Life insurance is a contract under which one person, in consideration of
a premium paid either in lump sum or by monthly, quarterly, half-
yearly or yearly payments, undertakes to pay to the person for whose
benefit the insurance is made, certain sum of money either on the
death of a person whose life is insured or on the expiry of a specified
period of time. The important points in insurance:
51
April, 2000 the government of India effectively ended LIC’s monopoly
and opened the doors for private insurance companies.
i. Death cover: in this case the benefit being paid on the death of the
insured person within a specified period of time.
ii. Survival benefit: in this case the benefit being paid on the survival
of a specified period of time.
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5.4. TRADITIONAL LIFE INSURANCE PLANS:
All traditional life insurance plans are the combination of term
assurance and pure endowment plans.
i. Whole life policy: under this form of policy the insured sum
becomes payable to the beneficiary only on the death of the
assured. It means that the whole life policy is to run for the whole
life of the assured. The premiums on such policies may be
payable for fixed period (20 or 30 years) after which the payment
of premium ceases but the policy runs on till the death of the
assured.
ii. Endowment assurance plan: a term assurance plan along with a
pure endowment plan, when offered as a single product is called
53
endowment assurance plan, under which the sum assured is paid
on survival of the specified period or on earlier death. It means
the insurer undertakes to pay the assured a specified sum on the
attainment of a particular age or on his death, whichever is
earlier. Thus the endowment policy matures after a limited
number of years.
iii. Double endowment assurance plan: a term assurance plan with
a pure endowment plan of double the value is known as double
endowment assurance plan, under which the amount payable on
survival is double the amount on death.
iv. Money back or anticipated endowment: it is a policy under
which say 20% of sum assured is paid on survival every 5 years
and 40% on survival for 20 years and full sum assured on death
at any time within the 20 years. It is effectively a combination of
a term assurance plan for 20 years for full sum assured and
different pure endowment plans (20% SA for 5 years, 20% of SA
for 10 years, 20% of SA for 15 years and 40% of SA for 20 years).
v. Limited payment policies: in this type of policies the premium
can be made payable for a short period. If the limited period is
only 1 year, a single premium would be payable at the beginning
of the policy.
vi. Annuities: in annuity contracts, a person agrees to pay to the
insurer a specified capital sum in return for a promise from the
insurer to make a series of payments to him so long as he lives,
while in insurance , the insured pays a series of payments in
return for a promise of a lump sum on his death. Types of annuity
are:
a. Immediate annuity: the annuity may commence immediately
after the contract is concluded. The purchaser of an
immediate annuity pays the purchase price in a lump sum.
b. Deferred annuity: the annuity payment will start after the
lapse of a specified period, called deferment period. The
purchase price can be paid as a single premium at the
commencement or may be paid in installments during the
deferment period.
54
5.5. UNIT LINKED LIFE INSURANCE POLICY (ULIP):
A ULIP is a life insurance policy which provides a combination of life
insurance protection and investment (in capital market). In case of a
ULIP, the proposer offers to pay a certain sum towards premium.
Insurers insist that this amount should be in multiples of say Rs.500 or
Rs.1000 with a minimum of say, Rs.5000 or Rs.10000. The term of the
policy is also specified. It should not be less than 5 years or age 70 for
Whole life plans. The premium may be paid as a single premium at the
start or periodically over the term or less, as in the case of limited
payment policies in yearly, half-yearly, quarterly or monthly
installments. The SA or death cover, payable in the event of death
during the term, is related to this premium, usually as a multiple like 5
times the annual premium or 1.5 times the single premium. The
minimum SA, according to IRDA guidelines, has to be 1.25 times single
premium or 5 times, annual premium.
Out of the premium, annual or otherwise as the case may be, a certain
amount is adjusted towards the cost of the insurance (death) cover.
Some portion may be adjusted towards charges. The balance, called
the allocated premium is invested in a fund that proposer chooses,
from among a set of options (equity fund, debt fund, money market
fund and balanced funds). The allocated premium is used to buy a
certain number of units in the chosen fund at the price at which the
units are being offered on that day. This price is called net asset value
(NAV), which varies every day.
55
5.6. PREMIUM:
The consideration paid to insurer by insured is known as premium. In a
contract of insurance, the insurer promises to pay to the policy holder a
specified sum of money, in the event of a specified happening. The
policy holder has to pay a specified amount to the insurer, in
consideration of the promise. Premium is the name given to this
consideration that the policy holder has to pay in order to secure the
benefits offered by the insurance contract.
Risk premium: the cost to meet the risk of death for one year at a
particular age is called risk premium. The risk premium is
calculated on the basis of an expectation as to how many persons
are likely to die within a year in an age group. This expectation,
regarding the number of persons likely to die within a year, at
each age is calculated by actuaries on the basis of past
experiences and made available as mortality tables. The risk
premium would be adequate to pay the claims that would arise, if
all the policies provided benefits only in the event of death within
one year.
Net premium or pure premium: the premiums collected by
insurers every year are not utilized for payment of claims. This is
so far many reasons. One is that the real experience may be
different from the probabilities indicated by the mortality tables.
Secondly, the portion of the premium is meant to meet survival
benefits and must be kept aside. The balance premium kept aside,
after outgoes of various kinds, will be invested and will earn some
interest. To the extent of these interest earnings, the premium
charged can be reduced. The premium worked out after taking
into account the interest likely to be earned, is called the net
premium or pure premium.
Loadings: the net or pure premium has to be increased for
various reasons. Such increases are called loadings. One of the
loadings is because of expenses. The expenses of the insurer, to
procure and to administer the business, have to be met out of the
premiums paid by the policy holders.
56
Level premium: the premium charged by the insurer is constant
throughout the term of the policy to protect the interest of the
policy holder is known as level premium.
Office premium: the premium figures arrived at after loading the
net premium or pure premium is called office premium.
Extra premiums: it may be charged on any particular policy. This
may happen because of the grant of some benefit in addition to
the basic benefits under the plan, like accident benefit or
premium waiver benefit. Extra premium may become chargeable
because of decisions relating to the extent of risk in any particular
case.
The age would be only in complete years not months and date.
Example: If a person is born on 20th February 1970 and the policy has
commenced on 10 th March 1996. Then
57
5.8. Premium calculation:
Steps in premium calculation:
58
Chapter- 6
Survey Analysis
59
6.1. ANALYSIS OF THE PRIMARY RESEARCH
This project basically aims to know that the impact of premium charged by
insurance companies on their life products have any impact on life
insurance investment pattern at infopark area in Ernakulam city. The
purpose of the study was to find out if the demand for the life insurance
product is affected by the change in price i.e. premium charged on life
insurance products or not. The main objective was to know the perception
and knowledge of customers on the premium charged by the insurance
companies on their life insurance products. The objective of the study was
also to find out the reasons why customers prefer one company over the
other and one product over the other and determine whether price is an
important variable in the choice of these decisions.
So my work is to know that the demand for life insurance products is price
sensitive or not. Generally all the life insurance companies quote the price
i.e. premium according to the age of the proposer and sum assured. And
the premium also increases because of the riders i.e. additional benefits
taken by proposer. Hence our work is to know whether the premium is the
important factor while choosing any life insurance products.
60
6.3. QUESTIONNAIRE ANALYSIS:
The questionnaire is prepared to collect the response of people working
in the Infopark, Kochi. It also includes the investors of Geojit BNP
Paribas Financial Services Ltd. The questionnaire is having both open
ended as well as close ended questions. The open ended questions are
mainly aimed to collect response of respondent in his own words. It is
provided to probe for unstructured responses We have prepared a
questionnaire consisting of 20 questions for conducting our research.
We have taken those questions which are directly or indirectly
supporting our research. We have taken questions like:
61
viii. Investor’s opinion about the life insurance product: It helps
to know whether the investment is meant for protection or
investment or for other purpose.
ix. Preference of investors over life insurance product: It helps
to know the objective of investing in life insurance products.
x. In thinking about life insurance which company in your mind
comes first: it helps to know that after giving any clue which
is the company considered by investors i.e. by saying life
insurance which company comes first in mind of investors.
xi. Source of information: it helps to know about the various
sources from which investors are getting information about
life insurance products and the life insurance companies.
xii. Ranking of factors that limits the choice of life insurance
policy: It helps to know about the most important factor
while choosing any life insurance policy.
xiii. Why premium is the strongest preference: It helps to know
about why investors are considering premium while taking
life insurance products.
xiv. Why premium is not the strongest preferences: It gives us
idea about why investors are not taking premium as a
important factor and how change in premiums on life
insurance products does not affect the investment pattern of
investors in life insurance products.
62
6.4. FINDINGS AND ANALYSIS
Gender:
Gender
Cumulative
Frequency Percent Valid Percent Percent
Valid male 92 92.0 92.0 92.0
female 8 8.0 8.0 100.0
Total 100 100.0 100.0
female
8%
male
92%
The ratio of male in comparison to female is 92:8. This shows that 92% of
the respondents are male and only 8% are female. This research shows the
behavior of males because majority of respondents are male.
63
Age:
120
100
80
60
100
40
54
20
21 27.21
0 4.774289307
N Minimum Maximum Mean Std. Deviation
Age
In this analysis the minimum age of the respondent was 21 years and
maximum age was 54 years. The average age of all 100 respondents was
27.21 years. So this research shows that we have majority of the
responses of 100 individuals are from younger generation.
64
Marital status:
Cumulative
Frequency Percent Valid Percent Percent
Valid married 33 33.0 33.0 33.0
unmarried 67 67.0 67.0 100.0
Total 100 100.0 100.0
Marital_status Frequency
married unmarried
33%
67%
65
Occupation:
Occupation
Cumulative
Frequency Percent Valid Percent Percent
Valid business 4 4.0 4.0 4.0
profession 49 49.0 49.0 53.0
government service 1 1.0 1.0 54.0
private service 43 43.0 43.0 97.0
student 3 3.0 3.0 100.0
Total 100 100.0 100.0
3% 4%
business
profession
43% government service
1%
66
Policies taken by those 81 respondents who have already taken
life insurance products from the following companies are:
no.of respondents
70
60
Axis Title
50
40
30
20
10
0
LIC Reli Ne ICIC Baj ICIC Me HD Tat Ma
anc w I aj I tlife FC a x
e Indi Pru Alli Lo Sta AIG Ne
life a den anz mb nda w
Ins tial ard rd yor
ur… life k
no.of respondents 63 3 2 5 1 1 2 2 1 1
Research shows that 78% of the respondents (63 respondents who have
already taken life insurance products) have taken policies from the state
controlled Life insurance Corporation of India. The reason for the
maximum number of policies taken from LIC is the faith on the
government company. Everyone has confidence on the government that
they will definiely get the return and future benefits from the company.
And rest 22% of the respondents (18 respondents who have already taken
policy) have taken policies from Reliance life, New India insurance
company, ICICI Prudential, Bajaj allianz, ICICI lombard and Met life, etc.
Around 8% of the respondents have taken life insurance products from
ICICI Prudential
67
Ranking of life insurance companies as per their order of
preference (from 1 to 6) 1 being the first choice by the 19
respondents who have not taken life insurance products:
2nd 3rd 4th 5th 6th
1st rank rank rank rank rank rank
LIC 16 2 1 0 0 0
Met life 1 1 7 6 4 0
SBI life 1 8 3 2 5 0
ICICI
Prudential 1 7 5 4 1 1
Tata AIG 0 1 3 6 9 0
Others 0 0 0 1 0 18
20
LIC
18
no. of
respon 16
Met life
dents 14
12
10 SBI life
8
6 ICICI
4 Prudentia
l
2
Tata AIG
0
1st rank 2nd rank 3rd rank 4th rank 5th rank 6th rank
Others
ranks
Those who have not taken life insurance products (19 respondents),
around 84% of them have ranked Life Insurance Corporation of India as
their first choice of preference for purchasing life insurance products. The
reason for the above is the faith and confidence on government entity.
After the post liberalization period many private insurers came but still
people have preference for LIC. The reason for the above is the faith on the
government.
68
42% of the respondents have ranked SBI life as their second most
strongest choice after LIC, again the government entity for the preference
for purchasing life insurance products.
36% of the respondents have ranked ICICI Prudential as their second most
strongest choice for the preference of purchasing life insurance products.
The reason is the changing perception and the awareness of the people.
69
Source of getting information:
friends relatives newspaper magazine internet agent
no. of
respondents 61 26 29 21 29 38
204 multiple responses given by 100 respondents
People are getting information about life insurance products and the
company from various sources like friends, relatives, newspaper,
magazine, internet and agent, etc. As we know that customer’s
consumption and buying behavior changes because of their society in
which they live. Friends and relatives are very important part of our
society. Hence customers have great faith and confidence on their friends
and relatives. They don’t have that much faith and confidence on the
advertisement shown by the company.
70
Preference of Life Insurance Company by giving any clue i.e. life
insurance:
HDFC
Tata ICICI Reliance standard
LIC AIG Met life Prudential SBI life life life
83 2 1 6 6 1 1
1%
1%
2% 1% 6% LIC
6%
Tata AIG
Met life
ICICI Prudential
83% SBI life
Reliance life
HDFC standard life
83% of the respondents have replied that in thinking about life insurance
Company, Life insurance Corporation of India comes first. 6% of the
respondents said both ICICI Prudential and SBI life, 2% said Tata AIG and
1% of the respondents said Reliance life and HDFC Standard life.
This shows that people still have faith on government company not
private company.
71
At first we have divided the total respondents into two
parts i.e. the respondents who have taken life insurance
products and the respondents who haven’t taken life
insurance products:
life_insurance_policy
Cumulative
Frequency Percent Valid Percent Percent
Valid yes 81 81.0 81.0 81.0
no 19 19.0 19.0 100.0
Total 100 100.0 100.0
19%
81%
The reason for the above division is to know about the perception of both
types of respondents. This division suggests the perception and the
knowledge of both type of respondents i.e. respondents who have taken
life insurance policy and who haven’t taken. In our analysis 81% of the
respondents are having life insurance products and 19% of the
respondents are not having any life insurance products.
53% of the respondents who have not taken life insurance products
have income level of more than Rs.2lakhs and 47% are there who
have income level of less than 2lakhs.
73
BELOW 2LAKHS INCOME LEVEL (9 RESPONDENTS):
Eight are unmarried and only one is married
Four have chosen money back policy, three have ULIPs, two
have endowment policy and two have annuity.
89% of the respondents want to take policy with rider. It
means they are ready to pay higher premiums.
Eight respondents have chosen life insurance products as
protection and only two have chosen as investment. It means
they are very conscious about their future security.
Reason for preference in investment in life insurance
products:
flexibility in
life guaranteed return on future tax paying
coverage return investment benefits benefits premium
no. of
respondents (9) 6 5 4 2 8 0
25 multiple responses from 9 respondents:
People choose to prefer investment in life insurance products because of
several reasons like life coverage, guaranteed return, return on
investment, future benefits, tax benefits and flexibility in paying
premiums. Maximum responses for life coverage and tax benefits.
74
Familiarity with the agent
7 premium
no. of 6
respo total income
5
ndent
4 total savings
s
3 reputation of the
2 company
location of the
1 company
0 variety of life
insurance products
1st rank 2nd 3rd rank 4th rank 5th rank 6th rank 7th rank
familarity with the
rank
agent
ranks
55% of the respondents who have income level below 2lakhs ranked price
i.e. the premium charged by insurance companies on life insurance
products as the first most strongest factor while buying life insurance
products. But 33.33% of the respondents replied reputation and the brand
value of the company as the most important factor while investment in life
insurance products. And 44% responded reputation of the company as the
second most important factor after premium.
75
MORE THAN 2LAKHS INCOME LEVEL (10 RESPONDENTS):
Six are unmarried and four are married.
Out of ten responses there is a demand of one each i.e.
annuity (pension plan) and term insurance and two
endowment policy and six money back policy.
All of them want to take policy with the rider.
Out of 11 responses eight respondents have chosen
protection and three have chosen investment as their opinion
about life insurance products.
Reason for preference in life insurance products:
flexibility
life guaranteed return on future tax in paying
coverage return investment benefits benefits premium
no. of
respondents
(10) 6 1 4 4 10 0
25 multiple responses from 10 respondents
100% of the respondents have chosen tax benefits as the important the
reason for preference in life insurance products. No one has given any
preference for flexibility in paying premiums. Life coverage also have good
preference.
40% of the respondents who have income level of more than Rs. 2lakhs
ranked price i.e. premium charged by insurance companies on life
insurance products as the first most strongest factor while buying life
insurance products. 30% are replied that their total savings are the first
most important factors that affect their buying behavior for life insurance
products.
50% of the respondents ranked their total income as the second most
important factor while investing in life insurance products.
77
THOSE WHO HAVE TAKEN LIFE INSURANCE POLICY
(81 RESPONDENTS):
0%
annuity
5%
22% money back policy
term insurance
11% ULIPs
endowment policy
The investment in money back policy is very high i.e. 56% of the
respondents have taken this policy. The premium payable on money back
policy is high in comparison to other type of policies available in the
market. But people have invested in this policy. The reason for the above is
high expected rate of return on investment.
78
Out of 15 respondents 11 have taken rider with policy and 4
haven’t taken. It shows that more than 73% of the resondents
have taken policy at higher premium.
68.42% responded life insurance products as for protection
and 31.58% for investment. It shows that they are really
concerned about their unwanted future.
Reason for preference in life insurance products:
flexibility
life guaranteed return on future tax in paying
coverage return investment benefits benefits premium
no. of
respondents
(15) 10 5 1 6 15 0
37 multiple responses by 15 respondents
100% of the respondents have chosen tax benefits as the important the
reason for preference in life insurance products. No one has given any
preference for flexibility in paying premiums. Life coverage also have good
preference (10 respondents have given preference).
79
9 premium
8
no. of 7 total income
respon
6
dents total savings
5
4
reputation of the
3 company
2 location of the
1 company
0 variety of life
1st rank 2nd 3rd rank 4th rank 5th rank 6th rank 7th rank insurance products
rank Familiarity with the
ranks agent
Around 53% of the respondents who have income level of below 2lakhs
(who have taken life insurance products) have ranked premium as the first
most important factor while investing in life insurance products. They have
given reason for the above is the affordability i.e. if the premium on
particular policy is affordable for them they will definitely go for that
product.
Around 47% of the respondents have ranked their total income as the first
most important factor while investing in life insurance products. If they
have income then only they can go for the particular policy is the reason
given by respondents.
27% of the respondents have ranked that their total savings and the
reputation of the insurance company as the third most important factor
which is to be considered while investment in life insurance products. The
reason for the above is if the company has not good market reputation
then there may be chance that they will not get the insurance benefits.
80
MORE THAN 2LAKHS INCOME LEVEL (66 RESPONDENTS):
Thirty nine respondents are unmarried and twenty seven are
married.
Type of life insurance policy taken:
money whole
back term life endowment
annuity policy insurance ULIPs policy policy
12 38 9 20 7 3
3%
8% 14% annuity
The investment in money back policy is very high i.e. around 43% of the
respondents have taken this policy. The premium payable on money back
policy is high in comparison to other type of policies available in the
market. But people have preferred to invest in this policy. The reason for
the above is high expected rate of return on investment.
Investment in ULIPs is also considerable i.e. around 23%. This shows that
there is proper awareness of new type of policies available in the market.
With the investment in ULIPs investor can get both the option of
investment in capital market and protection of his/her life.
81
33.33% have taken immediate annuity and 66.67% have
taken deffered annuity. It shows that 33.33% of the
respondents have paid very higher amount of premium on
immediate annuity plan.
93% of the respondents have taken rider with policy and 7%
haven’t taken. This shows that investors are ready to pay
higher premiums.
Around 54% responded life insurance products as for
protection ,45% for investment and only 1% said for others.
Reason for preference in life insurance products:
flexibility
life guaranteed return on future tax in paying
coverage return investment benefits benefits premium
no. of
respondents
(66) 34 27 19 18 66 4
168 multiple responses by 66 respondents
100% of the respondents have chosen tax benefits as the important the
reason for preference in life insurance products. Only 4 respondents have
given preference for flexibility in paying premiums. Life coverage also have
good preference (34 respondents have given preference).
82
45 premium
40
no. of 35
total income
responde 30
nts 25
20 total savings
15
10 reputation of the
5 company
0 location of the
1st rank 2nd 3rd rank 4th rank 5th rank 6th rank 7th rank company
rank
variety of life
insurance products
Familiarity with the
ranks agent
Around 32% of the respondents have ranked premium as the first most
important factor which is to be taken into consideration while investing in
life insurance products and 23% ranked premium as second most
important factor while investing in life insurance products.
26% of the respondents ranked their total income as the second most
important factor while investing in life insurance products. This shows that
people consider not only the premium charged by life insurance
companies but also their total income and the reputation of the company
in the market while investing in this company.
Around 67% of the respondents have ranked location of the life insurance
company as the least important factor while investing in life insurance
products. This shows that with the invention of internet the location of the
company doesn’t have that much impact.
83
ONE HYPOTHETICAL EXAMPLE:
An individual whose date of birth is 22/02/1988 and he/she is planning to
buy some life insurance policies from Life Insurance Corporation of India
for 20 years for the sum assured Rs.100000.
85
There are various factors which are considered by respondents
while investing in life insurance products. They are:
Premium charged by life insurance companies on their life
insurance products.
Reputation of the company in the market
Their total income
Their total savings
Variety of life insurance products
Location of the company
Familiarity with the agent
People prefer one company over another because of various
reasons. Premium charged by life insurance companies and their
past services and the reputation in the market are the important
reasons.
Respondents are aware about various types of life insurance
products. And the demand for money back policy is higher than any
type policy by the respondents.
The reason for higher investment in money back policy is because of
the higher expected return on investment on the periodic intervals.
Most of the people have taken and wants to take policy with rider.
They are ready to higher premium on additional benefits.
It is clear that people still have great confidence on government
entity.
It is clear that people used to invest by the recommendation and
suggestions of their friends and relatives. This corroborates in
marketing notion that word of mouth is the best vehicle of
advertisement.
The preference for ULIPs is also considerable lower than money
back. It shows that people have awareness about the innovations of
new products in the market.
Preference for term insurance is very less instead of their low
premium. Because it is uncertain that whether investor will get
benefit or not.
86
6.6. RECOMMENDATIONS
Geojit can give some gifts in kind to their clients who have already
taken policy from them if they recommend their friends and
relatives to buy the policies from Geojit BNP Paribas financial
services limited.
Agent can give information about life insurance products and the
company better than anyone else. So Geojit may have to focus on
their agent base.
Our research shows that ICICI Prudential and SBI life other than LIC
also have good potential for growth. So they have to focus more on
ICICI Prudential and SBI life and not on LIC to sell life insurance
products (because customers already have preference for LIC).
87
REFERENCES
Books:
i. Pearson Education, Inc. 2003. Principles of risk management and
insurance: Published by Pearson Education (Singapore)Pte.Ltd.,
Indian branch, 482 F.I.E. patparganj Delhi
Websites:
i. http://www.licindia.com/download_forms.htm (accessed on
February 27,2009)
ii. http://www.thehindubusinessline.com/businessline/iw/2001/07
/15/stories/0715g051.htm (accessed on March 2, 2009)
iii. http://www.metlife.com/individual/insurance/life-
insurance/index.html#overview (accessed on March 3, 2009)
iv. http://www.bharatbook.com/Market-Research-Reports/India-
The-Next-Insurance-Giant.html (accessed on March 3, 2009)
v. http://www.directories-today.com/insurance.html (accessed on
April 8, 2009)
vi. http://india.dalalstreet.biz/earningsnews/2008/05/market-
share-of-life-insurance.html (accessed on April 10, 2009)
vii. http://www.economywatch.com/indianeconomy/indian-
insurance-companies.html (accessed on April 13, 2009)
viii. www.geojit.com (accessed on May 3, 2009)
ix. www.google.com
88
ANNEXURE-A
QUESTIONNAIRE
The following questionnaire is for the purpose of my research project as a part of my MBA
(IBS kochi) curriculum on ‘Price sensitivity of life insurance products’. It is assured from us
that any information given by the respondent will not be disclosed by any means. With this
assurance I expect accurate data from respondents to help me for my project.
1. Name:
2. Gender: a. Male b. Female
3. Age:
4. Marital status:
a. Married b. Unmarried
5. Contact no. :
6. Address:
7. Occupation (please tick )
a. Business b. Profession
c. Government service d. Private service e. Student
8. Annual Income in Rs. (please tick):
a. Below2lakhs b. 2lakhs to 4lakhs
c. 4lakhs to 6lakhs d. 6lakhs to 10lakhs e. more than 10lakhs
9. Do you have any present investments? a. Yes b. No
10. If yes, in which financial instrument have you invested?
a. Equity shares b. Bank deposit c. Insurance
d. Real estate e. Government securities f. Debt instruments
11. What makes you to invest in these instruments?
a. High return b. Flexibility
c. Low risk d. Others
12. Have you taken life insurance policy? a. Yes b. No
If your answer is yes, then
I. What type of policy you have taken?
a. Annuity (pension plan) b. Money back policy c. Term insurance
d. Unit linked insurance products e. Whole life policy
f. Endowment policy
II. If annuity (pension plan), then which type of plan have you taken?
a. Immediate annuity b. Deferred annuity
III. Name of the policy……………………………………………………………………………………...
IV. Have you taken a policy with rider? a. Yes b. No
V. Term of the policy…………………………………………………………………………………………………………
VI. Name of the company…………………………………………………………………………………………………..
VII. Sum assured………………………………………………………………………………………………………………….
VIII. Amount of premium……………………………………………………………………………………………………..
89
If your answer is no, then
I. What type of policy you wish to take in future?
a. Annuity (pension plan) b. Money back policy c. Term insurance
d. Unit linked insurance products e. Whole life policy
f. Endowment policy
II. Rank the following companies as per your order of preference(from 1 to 6, 1 being the
first choice):
a.LIC b. Met life c.SBI life
d. ICICI prudential e. Tata AIG f. Others (specify)
III. Will you take a policy with rider? a. Yes b. No
IV. Term of policy…………………………………………………………………………………………….
V. Sum assured……………………………………………………………………………………………….
13. Reason for your choice of type of policy………………………………………………………………………..
………………………………………………………………………………………….………………………………………….
14. As an investor what is your opinion about life insurance products? It is for
a. Protection b. Investment c. Others
15. Why do you prefer investment in life insurance products?
a. Life coverage b. Guaranteed return c. Return on investment
d. Future benefits e. Tax benefits f. Flexibility in paying premium
16. In thinking about life insurance which company in your mind comes first?
a. LIC b. Tata AIG c. Met life
d. ICICI prudential e. SBI life f. Others (specify)
17. Source of your information:
a. Friends b. Relatives c. Newspaper
d. Magazine e. Internet f. Agent
18. What factors limit your choice of a life insurance policy? (Rank them from 1 to 7, 1
being the strongest choice):
a. Premium b. Total income c. Total savings
d. Reputation of the company e. Location of the company
f. Variety of life insurance products g. Familiarity with the agent
19. If your strongest preference is Premium, please specify the reasons…....………………………
…………………………………………………………………………………………………………………………………………
…………………………………………………………………………….……………………………………………………………
20. If your choice is one other than Premium, please specify the reasons……………………………
…………………………………………………………………………………………………………………………………………
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