Professional Documents
Culture Documents
A
PROJECT REPORT
ON
Training Undertaking at
Titled
“COMPARISON BETWEEN FUTURE ANAND PLAN AND LIC’s
JEEVAN ANAND PLAN”
Submitted in partial fulfillment for the Award of degree of Master of
Business Administration (2008-2010)
Page 1
PREFACE
Work on the project of analysis of Future Generali Life Insurance, market survey is a very
tough task but through the helping of my colleagues, professors and the other people it’s
become simple.
I would like to introduce myself as one of those aspirants, who are trying to make identity
of their won in the crowd of approaches and opportunity.
The project provides practical environment for us to explore. This report is the outcome of
45 days working with lot of enthusiasm and hardworking.
Through this project, I got good experience and learned a lot about HR and as well as
finance, which shall be of immense help in the future for me. I take this opportunity to
present this report and sincerely hope that it would be of great use to its readers.
POOONAM KUMARI
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ACKNOWLEDGEMENT
Firstly I convey my special thanks to Mr. Ashish Sharma (sales manager) under whom I
did my project. He helped me in my work and provided me the necessary guidance.
I convey to my sincere thanks to all employees of Future Generali India Life Insurance
Company. Their help and co-operation was incompatible throughout the project. They
provide me many details helpful in the preparations of this study report.
I pay my sincere thanks to all the student of my class for their co-operation, support and
good wishes.
POONAM KUMARI
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Contents
1. Introduction of Insurance
4. Research Methodology
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THE INTRODUCTION OF INSURANCE SECTOR
WHAT IS INSURANCE
The business of insurance is related to the protection of the economic value of assets.
Every asset has a value. The asset is valuable to the owner, because he expects to get
some benefits from it. Every asset is expected to last for a certain period of time during
which it will provide benefits. After that benefit may not be available. Insurance is a
mechanism that helps to reduce the effects of such adverse situations.
The Life Insurance Corporation of India was formed on 1 September 1956; there were
170 Companies and 75 provident fund societies transacting life insurance business in
India, by 31.08.2007, 16 new life insurance businesses in India.
The metropolitan Life Insurance Company is one of the world’s largest New York, based
Life Insurance Companies.
Insurance is defined as the equitable transfer of a loss, from one equity to another, in
exchange for a premium. Insurer is the company that sells insurance. Insurance rate is a
factor for s certain amount of insurance coverage. Risk management, the practice of
appraising and controlling risk, has evolved as a discrete field of study and practice.
PRINCIPLES OF INSURANCE
2. Define Loss: -
The event that gives rise to the loss that is that is subject to insurance should , at
least in principle, take place at a known time , in a known place , and from a known
cause.
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3. Accidental Loss: -
The event that constitutes the trigger of a claim should be fortuitous, or at least
outside the control of the beneficiary of the insurance. The loss should be ‘Pure’ in
the sense that it results from an event for which there is only the opportunity for
cost.
4. Large loss:
Insurance premium need to cover both the expected cost of losses, plus the cost
of issuing and administering the policy, adjusting losses, and supplying the capital
needed to reasonably assure that the insurer will be able to pay claim.
5. Affordable Premium :
If the likelihood of an insured event is so high, or the cost of the event so large ,
that the resulting premium is large relative to the amount of protection offered, it
is not likely that anyone will buy insurance, even if an offer.
6. Calculable Loss:
There are two elements that must be at least estimable, if not formally calculate:
the probability of loss and the attendant cost.
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NEED AND IMPORTANCE OF INSURANCE
Risk arises because there are need to be fulfilled. The risk attached to early death arises
because of need to maintain the family that is left behind. If there were no needs, there
would be no risk. Insurance is therefore related to the needs of individuals.
Someone could be seriously concerned about the welfare of a movement for trees or for
animals, at some neglect of own personal comforts. It is necessary to be sensitive to the
need.
Protection of the standard of living of the family which is at risk on early death.
Provide the necessary income to maintain the standard, after providing for
repayment of loans and other debts.
Future expenses on account of children’s education, marriage, start of some
business and so on, which are ambitious areas.
Continuance of business, when financiers for life insurance policies as collateral
security, or partners need to rearrange finances on the death of a partner.
Substitute income when earning capacity ceases due to old age or disabilities.
PURPOSE OF INSURANCE
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The damage may or may not happen. Insurance is done against the possibility that
the damage may happen. Insurance is relevant only if there are uncertainties.
If the loss is not financial, insurance may not be possible. Examples of non
economic losses are love and affection of parents, leadership of managers,
innovative and creative abilities etc.
ROLE OF INSURANCE
Insurance is an attractive option for investment, while most people recognize the risk
hedging and tax saving potential of insurance, many are not aware of its advantages as
an investment option as well. Insurance products yield more compared to regular
investment option, and this is besides the added incentives (bonuses) offered by insurer.
One cannot compare an insurance product with other investment schemes for the
simple reason that it offer financial protection from risk, something that is missing in non-
insurance product.
In fact, the premium one pay for an insurance policy is an investment against risk.
Thus before comparing with other schemes, one must accept that a part of the told
amount invested in life insurance goes towards providing for the risk cover, while the rest
is for savings.
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In Life Insurance, unlike non-life products, you get maturity benefits on survival at
the end of the term. In other words, if you take a life insurance policy of 20 years and
survive the term, the amount invested as premium in the policy will come back to you with
added returns. In the unfortunate event of death within the tenure of the policy, the family
of the decreased will receive the sum assured.
First and Foremost, insurance is about the risk cover and financial protection, to be more
precise to help outlast life’s unpredictable losses. Designed to safeguard against losses
suffered on account of any unforeseen event, insurance provides products you with that
unique sense of security that no other form of investment provides.
Section 10 (10D) of Income Tax Act, 1961 would apply. Under this, the amount of
maturity value is paid to the policyholder which is totally tax fee. Section 80 c is
applicable. Under this a person can invest maximum of Rs. 1 lac out of his annual income
for which no tax is levied.
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A Life Insurance is a contract, within the meaning of the Indian Contract Act 1872. A
contract is an agreement between two or more parties to do or not to do, so as to create a
legally binding relationship. Insurance is a contract between the insurer and the
policyholder. The policyholder can be different from the person whose life is insured, as
will be seen later. Insurance is a specialized type of contract. A simple contract must
have the following essentials:-
Apart from the usual essentials principals of a valid contract, insurance are subject to two
additional principles.
Life insurance is a only way to safeguard against the unpredictable risks of the
future.
Life insurance is essential for the conservation of many businesses.
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Life insurance is a way of life.
TYPES OF INSURANCE
A term insurance policy is a pure risk cover for a specified period of time. What
this means is that the sum assured is payable only if the policyholder dies within the
policy term. For, instance, if a person buys Rs. 2 lac policy for 15- years, his family is
entitled to the money if he dies within that 15 – years period.
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What if he survives the 15 – year’s period? Well, then he is not entitled to
any payment; the insurance company keeps the entire premium paid
during the 15- years period.
As the name suggest, a Whole life policy is an insurance cover against death,
irrespective of when it happens.
Under, this plan the policyholder pays regular premiums until his death, which the
money is handed over to his family.
This policy, however fails to address the additional needs of the insured during his
post-retirement years. It doesn’t take into account a person’s increasing needs
either. While the insured buys the policy at a young age, his requirements increase
over time. As a result of these drawbacks, insurance firms now offer either a
modified whole life policy or combine in with another type of policy.
Endowment Policy
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In addition to the basic policy, insurers offer various benefits such as double
endowment and marriage/education endowment plans. The cost of such a
policy is slightly higher but worth its value.
In an annuity, the insurer agrees to pay the insured a stipulated sum of money
periodically. The purpose of an annuity is to protect against risk as well as provide money
in the form of pension at regular intervals.
Over the years, insurers have added various features to basic insurance policies in order
to address specific needs of a cross section of people.
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Insurance Regulatory and Development Authority (IRDA):
Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in
Parliament in December 1999. The IRDA since its incorporation as a statutory body in
April 2000 has fastidiously stuck to its schedule of framing regulations and registering the
private sector insurance companies. The other decisions taken simultaneously to provide
the supporting systems to the insurance sector and in particular the life insurance
companies were the launch of the IRDA’s online service for issue and renewal of licenses
to agents. The approval of institutions for imparting training to agents has also ensured
that the insurance companies would have a trained workforce of insurance agents in
place to sell their products, which are expected to be introduced by early next year. Since
being set up as an independent statutory body the IRDA has put in a framework of
globally compatible regulations. In the private sector 12 life insurance and 6 general
insurance companies have been registered.
Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA.
1. Subject to the provisions of this Act and any other law for the time being in force, the
Authority shall have the duty to regulate, promote and ensure orderly growth of the
insurance business and re-insurance business.
2. without prejudice to the generality of the provisions contained in sub section.
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a. Issue to the applicant a certificate of registration, renew, modify, withdraw,
suspend or cancel such registration.
b. Protection of the interests of the policy holders in matters concerning assigning of
policy, nomination by policy holders, insurable interest, settlement of insurance
claim, surrender value of policy and other terms and conditions of contracts of
insurance.
c. Specifying requisite qualifications, code of conduct and practical training for
intermediary or insurance intermediaries and agents.
h. Calling for information from, undertaking inspection of, conducting enquiries and
investigations including audit of the insurers, intermediaries, insurance
intermediaries and other organizations connected with the insurance business;
i. Control and regulation of the rates, advantages, terms and conditions that may be
offered by insurers in respect of general insurance business not so controlled and
regulated by the Tariff Advisory Committee under section 64U of the Insurance
Act, 1938 (4 of 1938);
j. Specifying the form and manner in which books of account shall be maintained
and statement of accounts shall be rendered by insurers and other insurance
intermediaries;
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m. Supervising the functioning of the Tariff Advisory Committee;
n. Specifying the percentage of premium income of the insurer to finance schemes for
promoting and regulating professional organizations.
o. Specifying the percentage of life insurance business and general insurance business
to be undertaken by the insurer in the rural or social sector;
The Insurance Regulatory and Development Authority Act was introduced to end the
monopoly of State-owned companies and to invest in the Insurance Regulatory Authority
power to control the insurance sector.
As per the section 4 of IRDA Act' 1999, Insurance Regulatory and Development Authority
(IRDA, which was constituted by an act of parliament) specify the composition of Authority
the Authority is a ten member team consisting of
a. A Chairman;
b. Five whole-time members;
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c. Four part-time members,
Regulatory Issues:
The IRDA Bill lies down that the Indian promoter must dilute the stake in the private
insurance firms from 74 per cent to 26 per cent in ten years. The bill stipulates tough
solvency margins -- Rs 500 million for life insurance firms, Rs 500 million or a sum
equivalent to 20 per cent of net premium income for general insurance and Rs 1 billion for
reinsurance business.
The insurer has to maintain separate accounts relating to fund of shareholders and
policyholders. The funds of policyholders should be retained within the country but does
not cover repatriation of profits and dividends. Insurance companies under the new
regime will have to have exposure to rural and social sectors. Foreign investment in
insurance, the bill states, is crucial to financing infrastructure and better insurance cover.
The key to success in opening up the insurance sector in India is regulation. An example
of how poor regulation can destroy a market is the mutual fund industry. A combination of
improper marketing practice has resulted in a loss of investor faith in that industry.
Incidentally, the insurance industry in India itself has gone through the same phase.
One of the reasons for nationalization of the insurance industry (LIC in 1956 and GIC in
1973) was the mismanagement and malpractice of erstwhile private players. But if the
statements of IRDA officials are anything to go by, the new regulations are expected to be
on the right track. N. I. Rangachary, chairman, IRDA, has already provided the timetable
for the changes once the Bill is passed. The IRDA has already indicated that it will have
tough norms for new participants. This is the most compelling reason why private sector
(and foreign) companies, which will spread the insurance habit in the societal and
consumer interest, are urgently required in this vital sector of the economy. With the
nation's infrastructure in a state of imminent collapse, India couldn't have afforded to be
lumbered with sub-optimally performing monopoly insurance companies and therefore the
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passage of the Insurance Regulatory & Development Authority Bill on December 2, 1999
heralds an era of cautious optimism where stakes are high for all parties concerned. For
the Govt. of India, Foreign Direct Investment (FDI) must pour in as anticipated; for foreign
insurers, investments must start yielding returns and for the domestic insurance industry -
their market penetration should remain intact. On the fringe, the customer is pondering
whether all the hype created on liberalization will actually benefit him.
In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor R.
N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its
future direction. The Malhotra committee was set up with the objective of complementing
the reforms initiated in the financial sector. The reforms were aimed at “creating a more
efficient and competitive financial system suitable for the requirements of the economy
keeping in mind the structural changes currently underway and recognizing that
insurance is an important part of the overall financial system where it was necessary to
address the need for similar reforms”
In 1994, the committee submitted the report and some of the key recommendations
included:
Structure:
• Government stake in the insurance Companies to be brought down to 50%.
• Government should take over the holdings of GIC and its subsidiaries so that these
subsidiaries can act as independent corporations.
• All the insurance companies should be given greater freedom to operate.
Competition:
• Private Companies with a minimum paid up capital of Rs.1bn should be allowed to
enter the industry
• No Company should deal in both Life and General Insurance through a single entity
• Foreign companies may be allowed to enter the industry in collaboration with the
domestic companies
• Postal Life Insurance should be allowed to operate in the rural market
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• Only one State Level Life Insurance Company should be allowed to operate in each
state
Regulatory Body:
• The Insurance Act should be changed
• An Insurance Regulatory body should be set up
• Controller of Insurance (Currently a part from the Finance Ministry) should be made
independent.
Investments:
• Mandatory Investments of LIC Life Fund in government securities to be reduced from
75% to 50%
• GIC and its subsidiaries are not to hold more than 5% in any company (There current
holdings to be brought down to this level over a period of time)
Customer Service:
• LIC should pay interest on delays in payments beyond 30 days
• Insurance companies must be encouraged to set up unit linked pension plans
• Computerization of operations and updating of technology to be carried out in the
insurance industry.
The committee emphasized that in order to improve the customer services and increase
the coverage of the insurance industry should be opened up to competition. But at the
same time, the committee felt the need to exercise caution as any failure on the part of
new players could run the public confidence in the industry.
Hence, it was decided to allow competition in a limited way by stipulating the minimum
capital requirement of Rs.100 crores. The committee felt the need to provide greater
autonomy to insurance companies in order to improve their performance and enable them
to act as independent companies with economic motives. For this purpose, it had
proposed setting up an independent regulatory body.
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Introduction of Future Generali India Life and Non Life
Insurance Company Limited
Company Profile
Future Generali is a joint venture between the India-based Future Group and the Italy-
based Generali Group.
Future Generali is present in India in both the Life and Non-Life businesses as Future
Generali India Life Insurance Co. Ltd. and Future Generali India Insurance Co. Ltd.
Future Group
Future Group, led by Mr. Kishore Biyani, is positioned to cater to the entire Indian
consumption space. The Future Group operates through six verticals:
The group’s flagship enterprise, Pantaloon Retail, is India’s leading retail company with
presence in food, fashion and footwear, home solutions and consumer electronics, books
and music, health, wellness and beauty, general merchandise, communication products,
E-tailing and leisure and entertainment. The company owns and manages multiple retail
formats catering to a wide cross-section of the Indian society and its width and depth of
merchandise helps it capture almost the entire consumption basket of the Indian
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consumer. Headquartered in Mumbai (Bombay), the company operates through 4 million
square feet of retail space, has over 150 stores across 35 cities in India and employs over
15,000 people. The company’s revenues for FY 05-06 were Rs. 2017 crore.
Some of the group’s subsidiaries include Home Solutions Retail India Ltd, Future Bazaar
India Ltd and Converge Retail India Ltd, which leads the group’s foray into home
improvement, retailing and communication products, respectively. Other group
companies include, Pantaloon Industries Ltd, Galaxy Entertainment and Indus League
Clothing. It has also entered joint venture agreements with a number of companies
including ETAM group, Gini & Jony, Liberty Shoes, Staples and Planet Sports, a company
that owns the franchisee of international brands like Marks & Spencer, Debenhams,
Guess and The Body Shop in India.
Future Capital Holdings, the group’s financial arm, focuses on asset management
through real estate investment funds (Horizon and Kshitij) and consumer-related private
equity fund, in division. It also plans to get into insurance, consumer credit and offer other
financial products and services.
Future Group’s vision is to, "deliver Everything, Everywhere, Every time to Every Indian
Consumer in the most profitable manner." One of the core values at Future Group is,
‘Indian’ and its corporate credo is – Rewrite rules, Retain values.
Generali Group
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Established in Trieste on December 26, 1831, Generali is an international group present
in more than 40 countries and 5 th largest company in the world with insurance companies
and companies mostly operating in the financial and real estate sectors. Its ranked is 47 th
in Global fortune list of 500’s (2009). Over the years, the Generali Group has
reconstructed a significant presence in Central Eastern Europe and has started to
develop business in the principal markets of the Far East, including China and India.
Pioneering spirit
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Inclination towards innovation and continuous search for new and better solutions, being
open to changes and being ambitious to continuously improve and innovate.
Passion for clients
Emphasis on clients and their needs, searching for the optimal solution to satisfy them
both by supplying high quality products and services as well as by providing them with
transparent and thorough information.
Responsibility
Ethical choice of accepting the consequences of one’s own actions and of being loyal to
the organization, taking the initiative and making decisions within one’s own competence
and responsibility.
Respect
Strong belief that “doing business” implies respecting the rules; rules linked to our duties
towards shareholders as well as rules affecting the relationship with all our stakeholders,
especially our employees and the community where we operate.
Flexibility
Ability to be open and to encourage others to stay open to change, to maintain and
improve work effectiveness in new situations, to adapt one’s attitude and behavior to work
effectively with different people, to readily adapt to changing priorities, new procedures
and methods, better ideas and strategies.
Integration
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Ability to grow and work together by listening to each other and openly and constructively
comparing different ideas, which is fundamental to improve both oneself and business
results.
Professionalism
Continuous commitment of the individual and of the organization to develop knowledge
and to increase the value of experience, in order to achieve a specific and distinctive
know-how.
Transparency
A “must” in the exchange of opinions and information, based on clear purposes and on
behavioral coherence in order to create and strengthen confidence amongst people and
integrity in business performance.
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In recent years, the Group has made a significant return to central-eastern European
markets and has set up offices in the principal markets of the Far East, among which
China and India.
In the last decade, the Group has widened its product offerings from only insurance to
include the entire range of financial and real estate services and asset management.
The Group's Mission
Become the leading insurance group in terms of profitability in the major European
countries in which the Group operates and play an important role in high-potential
markets.
Grow in the retail and SME (Small & Medium-sized Enterprises) sectors by
implementing a distribution strategy based primarily on agents networks and
focused on a multi-brand approach.
FUTURE GROUP
Deep Understanding of Markets & Segments
Established Brands
Sales & Distribution
Culture
Investments &
Infrastructure
GENERALI GROUP
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Multifaceted distribution strategy
Processes, systems & Technology
Financial Strength
To be the preferred Total Insurance Solutions & Services Provider enabling our
customers to fulfil their lifetime dreams and aspirations.
Community
Positioning
• Knowledge Organization with Leadership Approach
• One Stop Total Insurance Solutions & Services Provider
• Customer Centric Model embracing Passion, Convenience and Service Excellence
Objective
• To provide superior customer service through our knowledge-based business partners
and employees supported by innovative products and services
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1. Insta life
2. Future care
3. Future Assure
4. Future Sanjeevani
5. Future Pension Plan
6. Future Pension Advantage Plan
7. Future Freedom
8. Future Guarantee
9. Future Child 23
10. Future Child 21
11. Future Anand
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Profile of LIC
The Life Insurance Corporation of India popularly known as “LIC of India” was
incorporated on September 1, 1956 by nationalizing 245 Indian as well as foreign
companies. It was established 52 years ago with a view to provide an insurance cover
against various risks in life. The luminaries who spearheaded this move at that time
visualized an entity that will provide life insurance to Indians, especially the vast rural
masses, at an economical cost and channel the savings for the betterment of the nation.
It is the largest life insurance company in India and also the country’s largest investor. It is
fully owned by the Government of India and headquartered in Mumbai.
Incorporated on June 19, 1989; its main objective is to provide long term finance for
construction or purchase of houses or apartments. The company provides long terms
finance to individuals for purchase, construction, repair and renovation of new \ existing
flats\houses. It also provides finance on existing property for business, personal needs
and gives loans to professionals for purchase or construction of clinics\ nursing homes\
diagnostic centers\office space and also for purchase of equipments. It has set up
representative office in Dubai and Kuwait to cater to the non- resident Indians in countries
covering Bahrain, Dubai, Kuwait, Qatar and Saudi Arabia. It has client group of over 9,
40, 000prudent house owners who enjoy the company’s financial assistance.
Vision
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Mission
Explore and enhance the quality of life of people through financial security by providing
products and services of aspired attributes with competitive returns and by rendering
resources for economic development.
Objective of LIC
Spread life insurance widely in particular to the rural areas and socially and
economically backward classes. This is done with a view to reach all the insurable
persons in the country and provide them adequate financial cover against death at
a reasonable cost.
To maximize mobilization of people’s savings by making insurance linked savings
adequately attractive.
Bearing in mind, the primary obligation to its policyholders, whose money it holds
in trust, the investible funds to be deployed to the best advantage of the investors
as well as the national priorities and the obligations of attractive returns.
To conduct business with utmost economy and keeping in mind that the money
belongs to the policyholders.
It acts as a trustee of the insured public in its individual and collective capacities.
To meet the various life insurance need of the community that would arise in the
changing social and economic environment.
It ensures that all people working in the corporation are involved to the best of their
capability in furthering the interests of the insured public by providing efficient
service with courtesy.
Promote amongst all agents and employees of the corporation a sense of
participation, pride and job satisfaction through discharge of their duties with
dedication towards achievement of corporate objective.
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Board of Directors
Chairman TS Vijayan
LIC has eight zonal offices and 105 divisional offices located in different parts of India. It
compromises of 2,048 branches and employs over 10, 02, 149 agents for soliciting life
insurance business from public. LIC has extended its activities in 12 countries from
outside India, primarily to cater to the insurance needs of non-resident Indians. LIC aims
at strengthening it relationship with its vast customer base by providing value-added
service such as credit cards and offering premium payment facility to the policyholders. It
is the largest insurance player in India and its objective is to channelize its funds for the
benefit of the community at large. It enjoys a near monopoly power in the solicitation and
sale of life insurance policies in India. The corporation has major business houses as
clients, under the group business of India. It has more than 1, 18,000 corporate clients
covering more than 3, 15, 00,000 members. Apart from the corporate group insurance
business the pension& group schemes is responsible for ‘Aam Aadmi Bima Yojna’,a
social security schemes for the rural landless households under the aegis of the
Government of India.LIC has been investing a major portion of its funds in socially-
oriented sectors with a view to reach every insurable person in the country and provide
adequate financial cover against death at a reasonable cost. Another goal is to mobilize
people’s savings adequately attractive.LIC has recently tied up with Policybazaar.com an
insurance portal that enables the consumers to get detailed information on the policy. It is
one of the leading online non-life and life insurance aggregator to sell its policy Jeevan
Aastha on the internet.
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Products
Children Plans
Jeeevan Anurag
CDA Endowment Vesting at 21
CDA Endowment Vesting at 18
Jeevan Kishore
Child Career Plan
Child Fortune Plus
Marriage Endowment or Educational
Annuity Plan
Jeevan Chhaya Child future Plan
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Jeevan Surabhi-15 Years
Jeevan Surabhi-20 Years
Jeevan Surabhi-25 Years
Bima Bachat
Pension Plans
Jeevan Nidhi
Jeevan Akshay-VI
New Jeevan Dhara-I
New Jeevan Suraksha-I
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Group Scheme
Group Term Insurance Schemes
Group Term Insurance Scheme in Lieu of EDLI
Group Leave Encashment Scheme
Group Mortgage Redemption Assurance Scheme
Gratuity Plus
Group critical Illness Rider
Special Plans
Golden Jubilee Plan
New Bima Gold Special Plan
Bima Nivesh 2005
Jeevan Saral
Jeevan Madhur
Social Security Scheme
Janashree Bima Yojna (JBY)
Siksha Sahayog Yojana
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Aam Admi Bima Yojana
ULIPS are insurance plans that combine the benefit of investment with insurance. They
give the investor an option to put a part of their premium in various investment portfolios
and derive the benefits depending upon the performance of the funds chosen by them.
ULIPs were launched at an opportune time when stock markets had just taken off. Being
market- linked, they were major beneficiaries of the secular rise in stock markets. ULIPs
have gained high acceptance due to the attractive features they offer.
These include:
1. Flexibility
2. Transparency
Changes in the plan & net amount invested are known to the customer.
Convenience of tracking one’s investment performance on a daily basis.
3. Liquidity
Option to withdraw money after few years
Low minimum tenure.
Partial / Systematic withdrawal allowed
4. Fund Options
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Option to choose fund mix based on desired asset allocation.
Insurance companies are required to declare the NAV of various ULIPs on a daily basis.
The movement of NAV enables the policy holder to assess the performance of his
investment and accordingly make intervention in the form of switches, withdrawal and
top-ups. After opening up of the insurance sector, Unit-linked insurance policies (ULIPs)
have become increasingly popular.
Achievements of LIC :
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Departmental details
The organization having such a huge size has to have a well defined hierarchical
structure and LIC is not an exception to this fact. A well defined proper organization
structure with officials with exact knowledge of their duties is a must for an organization to
prosper. LIC has a vast network of offices across the length and breadth of our country
and abroad so it has defined and maintained its organizational structure in the following
way. LIC has its main central head office at ‘Yogaakshema’ Jeevan bima marg at
Mumbai. Then it is followed by eight zonal offices namely central zone, eastern zone,
east central zone, northern zone, north central zone, southern zone, south central zone,
western zone respectively. After these eight zonal offices there are several divisional
offices under each zonal office and these divisional offices are mostly in each big city. At
last comes the branch office and there are several branch offices under each divisional
office. At all the branch offices there is a branch manager and several departments and
the major function of these branch offices is sales and servicing of the policies. In a
branch office the top most is a branch manager and under his control are seven different
departments with each of these departments functioning independently to each other.
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that all the information provided by the customer is true and the proposal form and all
other details and proofs are legal. After scrutinizing the new policy it issues the first
premium receipts (FPR) and then issues the policy bond. If anything is found
insufficient the proposal form is sent back to the sales department to correct the
mistake and again submit it.
3. Policy Service Department – After the policy bond is issued, the case is passed
on to this department to take care of after sales service of the policy. It takes care of
the premium dates and if the policy is lapsed then its revival is done by this
department. Also if any loan is required by the customer against his/her policy then its
approval has to be given from the policy service department only.
5. Claims Department – All types of claims i.e. survival benefit claim, maturity claim
and death claim are settled by this department. In case of death claim if death occurs
after three years then no investigation is involved in the settlement process and if it
occurs before three years then proper investigation is done and the claim is
considered to be an early claim case.
6. Micro Department – This department has the all important function of co-
coordinating with each department. Each day’s business is collected and its four
copies are made and one copy is sent to the divisional office, second is submitted to
the branch manager, and third remains with the in charge of micro department and
fourth in the branch office.
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RESEARCH METHODOLOGY
A Research Design is the framework or plan for a study which is used as a guide in
collecting and analyzing the data collected. It is the blue print that is followed in
completing the study. The basic objective of research cannot be attained without a proper
research design. It specifies the methods and procedures for acquiring the information
needed to conduct the research effectively. It is the overall operational pattern of the
project that stipulates what information needs to be collected, from which sources and by
what methods.
The title of this study is to carry on brief study on “Comparison between Future Anand
Plan and LIC Jeevan Anand plan”
Future Anand Plan = Endowment + whole life cover + premium holiday + guaranteed
additions + compounded bonuses & more.
Future Anand is a unique combination of whole life & endowment assurance , the all time
favorite of true Indian conservative and savings savvy customer , an economical way of
taking two covers in a single policy and still paying much less than two policies.
Future Anand is a traditional wealth creation plan for future financial security. The
customer can choose a short premium payment term & get back the sum assured along
with guaranteed additions and bonuses as maturity benefit and also stay insured till 99
yrs for 125% of life cover after premium paying term. Minimum premium paying term is 8
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years & maximum is 20 years. Rs. One lac is the minimum sum assured (insurance
cover) which can be taken under this plan. It is available for persons between ages of 12
– 62 years.
Future Anand comes with guaranteed additions of 3.5% per annum for first 5 years which
are compounding year after year & from 6 th year onwards policy earns compounded
reversionary bonuses. On death during the premium paying term, sum assured along with
guaranteed additions & vested bonuses (if any) plus terminal bonus is payable. On death
of life assured after premium paying term, 125% of sum assured along with terminal
bonuses is payable to the nominee. The plan comes with 5 optional riders to take
additional cover against accidental death , accidental total permanent disability , waiver
of premium on disability , critical illness rider and term assurance rider . The policy can
be surrendered or loan can be availed up to 90% of surrender value. There are large sum
assured discounts on premium and the premium payment modes can be annual,
semiannual, quarterly or monthly ECS depending on the choice of the customer. Special
feature of this plan is the Premium Holiday “Auto cover” wherein one can choose not to
pay premium for up to 2 years while the life cover continues.
In an era where customers lost confidence on markets and are looking for conservative
guaranteed returns, Future Anand would be the right preferred life insurance plan by both
urban and rural customers.
The plan is basically a double benefit endowment / savings plan mainly targeted at
customers in the age group of 25-50. This can also be pitched as
1. A savings plan for couples having children who would require cash flows at the
end of a certain period ( say a person has a child of three yrs and plans an
expensive education after say 15 yrs then the premium paying term can be
suitably taken so that the maturity benefits can be used for the event planned)
2. Position as a family plan for a holiday after say 10 year / 20years / Silver or golden
jubilee wedding Anniversary celebrations etc.
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39
3. Plan retirement with the maturity proceeds ( buy annuity with the maturity
proceeds)
4. Plan first home say at age 30 / second home at age 45 etc. The maturity proceeds/
loan on the policy can be used for seed money for the housing loan etc.
5. Maturity Proceeds can be planned to meet the expenses of daughter’s marriage /
son’s higher education etc.
6. The following are the additional features of the Future Anand product and has a
clear edge over LIC’s Jeevan Anand.
Key Features
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40
Benefits
1. Endowment benefit
We will pay 100% of sum assured along with guaranteed additions and vested bonus (if
any) at the end of the premium paying term.
In case of your demise, we will pay an amount equal to the sum assured along with
guaranteed additions and vested bonus (if any) and terminal bonus (if any).
In case of your demise, we will pay an amount equal to 125% of the sum assured and
terminal bonus (if any) to the nominee.
In case of death of a minor life assured (age below 18 years as on last birthday), the
death benefit becomes payable to the policyholder (proposer).
4. Guaranteed additions
The compounding annual guaranteed additions under the policy are 3.5% per annum of
the sum assured for the first five years of an in-force policy. This amount will become
payable only at end of the premium paying term.
5. Bonuses accrued
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41
From the sixth year onwards, the policy shall participate in the profits arising out of the
company’s ‘with profits’ life insurance business. It gets a share of the profits emerging
from this business in the form of bonuses. Compounded reversionary bonuses would be
declared as a percentage rate, which apply to the sum assured and guaranteed additions
in respect of the basic policy benefit and all attached bonuses. Compound reversionary
bonus will be declared based on our long term view of investment returns, expenses,
mortality and other experiences. Once declared, the reversionary bonuses form part of
the guaranteed benefits to the plan. Future bonuses are, however, not guaranteed and
will depend on future profits of the company. The company may also declare a terminal
bonus, depending on experience, that will be paid along with death benefit.
Tax benefits
Tax benefits are available u/s 80C and 10(10D) of the Income Tax Act. For further details
consult your tax advisor. Tax benefits are subject to change from time to time. Future
Group’s and Generali Group’s liability is restricted to the extent of their shareholding in
Future Generali India Life Insurance Company Limited.
Disclaimer:
For detailed information on this product including risk factors, terms and conditions etc.,
please refer to the product brochure, consult your advisor or visit our website before
concluding a sale. Tax benefits are subject to change. Insurance is the subject matter of
solicitation.
Term assurance rider Additional amount, equal to the sum assured selected under this
benefit is paid, in case of death due to any cause. Accident death rider Additional amount,
equal to the sum assured selected under this benefit is paid, in case of death due to an
accident. Accidental total and In case of the life assured becoming totally and permanent
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42
disability permanently disabled due to an accident, the rider sum assured is paid in 10
equal annual installments. In case of the death of the life assured, surrender or maturity
of the Policy occurring before the payment of all installments, the balance of the
installments is payable in lump-sum. Wavier of premium on All future premiums (including
rider premiums) disability rider will be waived on accidental total and permanent disability
Critical illness (core) Amount equal to the sum assured selected under this rider benefit is
paid on diagnosis of any one of the six critical illnesses (cancer, stroke, kidney failure,
CABG, heart attack and major organ transplant). The sum assured is payable on survival
for 28 days from the onset of any of these critical illness / conditions.
Rider Benefits
Eligibility Criteria
The plan is available for individuals who are under the age bracket of 12 to 62 years (as
on last birthday) you may choose a sum assured as low as Rs. 1, 00,000. The maximum
will depend upon the underwriting guidelines of the company Premium paying mode:
Regular premium mode only. You may pay yearly, half-yearly or quarterly premiums. In
case of monthly mode, premiums can be paid under the ECS method only. In case of
quarterly mode where installment premium is less than Rs. 2,500/-, premiums can be
paid under ECS method only.
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43
About LIC Jeevan Anand Plan
Jeevan Anand is the combination of Endowment Assurance and Whole Life plan.
The risk cover will continue even after the maturity that means “Zindagi Ke Saath Bhi
Zindagi Ke Bad Bhi…” Jeevan Anand plan no. 149 provides financial protection against
death throughout the lifetime of the life assured with the provision of payment of a lump
sum at the end of the selected term in case of his survival.
For Example: Mr. Pankaj, age 25 years, takes Jeevan Anand policy for 25 years for Sum
Assured Rs. 1 lakh. Now on Maturity Pankaj will receive Rs. 2, 12,500/- (Rs. 1 lakh sum
assured Plus Rs.1, 12,500/- is the estimated bonus at Rs.45/- per thousand per year.)
In case, Mr. Pankaj, dies (After premium paying term is over) at the age of 60 years, his
nominee will get additional Rs. 1 lakh equal to sum assured amount. Since Mr. Pankaj
has already received the bonus, LIC will not pay second time bonus.
In case, Mr. Pankaj dies during the Premium Paying Term, his nominee will get Rs.1 Lakh
(sum Assured) + Accrued bonus till Mr. Pankaj’s death.
Key Features:
2. Even after the Premium Paying Term (PPT) is over, risk cover continues till the
death of the policy holder.
3. Accident Benefit is available during the Premium paying term adn thereafter
upto age 70.
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5. Double accidental cover upto age 70.
6. Tax Saving
Special Features
1. Moderate Premiums
2. High bonus
3. High liquidity
4. Savings oriented.
Premiums are usually payable for the selected term of years or until death if it occurs
during the term period. This policy not only makes provisions for the family of the life
assured in the event of his early death but also assures a lump sum at a desired age. The
lump sum can be reinvested to provide an annuity during the remainder of his life or in
any other way considered suitable at that time.
Benefits
Survival Benefits:
Sum Assured along with all vested bonuses payable at the end of the premium paying
term (Endowment term).
Accident Benefit:
The Double Accident benefit is available during the premium paying term and thereafter
up to age 70. The premium for this has been built into the tabular premium rates.
Maximum accident cover available under this plan will be Rs. 5 lakh ( this limit excludes
accident benefit taken under other plans).
Premium Stoppage:
If payment of premiums ceases after at least three years' premiums have been paid , a
free paid-up policy for a reduced Sum Assured will be automatically secured provided the
reduced sum assured, exclusive of any attached bonus, is not less than Rs. 250/-. The
reduced sum assured will become payable on the event as stipulated in the policy.
Bonus:
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45
If it is a 'with profits' policy note that every year the LIC distributes its surplus among
Policyholder to 'with profits' polices in the form of bonuses. Substantial bonuses have
been declared in the past after each valuation of policy liabilities.
Comparative Study of Future Anand Plan vs LIC Jeevan Anand Plan
Even after the Premium Paying Term (PPT) is over, risk cover continues till the
death of the policy holder.
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46
Accident Benefit is available during the Premium paying term and thereafter up to
age 70.
Tax Savings
Death benefit after premium paying Death benefit after premium paying
term is 125 % of SA term is 100 % of SA
Accidental Death Benefit upto Rs. ADB in built , but maximum is 5 Lac
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Future Anand Plan vs LIC Jeevan Anand Plan
Future Anand
Jeevan Anand
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48
Future Anand Plan vs LIC Jeevan Anand
Future Anand
Jeevan Anand
Future Anand
The maturity value is equal to sum assured along with the vested bonuses and
guaranteed additions after completion of premium paying term.
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49
Jeevan Anand
Benefits in case of survival to the end of selected term - the sum assured along with
the vested bonuses is payable on death in a lump sum on survival to the end of the term.
An additional Sum Assured is payable on death thereafter.
Future Anand Plan vs LIC Jeevan Anand
Future anand
Jeevan anand
Sum Assured along with vested bonuses are payable on death during the premium
paying term. An amount equal to the Sum Assured is payable if death occurs after the
premium paying term. Simple Reversionary Bonus accrues during the premium paying
term and is payable at the end of the premium paying term or on earlier death along with
final additional bonus, if any. No Bonus is paid on death after the premium paying term.
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Future Anand Plan vs. LIC Jeevan Anand
Future Anand
As defined in Sec 113 of the Insurance Act 1938, the guaranteed surrender value will be
set equal to 30% of premiums paid under the base policy (excluding any extra premium
for occupation, non-standard age proof and non-standard lives) excluding the premium in
the first policy year under regular premium policies less any amount paid to the
policyholder. The guaranteed surrender value will become payable after three years of
annual premiums have been paid and is available during the policy term.
A discounted value of the guaranteed additions and bonuses allocated to the policy will
also bead. The current rate of discount will be 9% per annum. This rate is subject to
change from time to time.
Jeevan anand
The policy may be surrendered after it has been in force for 3 years or more. The
guaranteed surrender value is 30% of the basic premium paid excluding the first year’s
premium. Any extra premium paid and premium towards accident benefit are also
exclude.
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Future Anand Plan vs LIC Jeevan Anand
Future Anand
Accidental Death Benefit upto Rs. 30 lac is available as a rider.
Jeevan Anand
Accident Benefit an additional sum assured (subject to a limit of Rs.5lac) is payable in a
lump sum on death due to accident up to age 70 of life assured.
Future anand
Jeevan anand
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Premium paying mode:
Premium can pay yearly, half-yearly, quarterly, monthly or through salary deductions as
opted by you throughout the selected term of the policy or till earlier death.
Future anand
Complete or partial withdrawals are available after 8 years (if the policy term is 99).
Jeevan anand
Partial / Systematic withdrawal allowed. Option to withdraw money after few years
(comfort required in case of exigency.
Objective of my research
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53
To find out factors that influence customers to purchase insurance policies and
give suggestions for further improvement.
Type of research
Analysis of feedback
Being a comparative study of two products the researcher selected Future Anand plan of
Future Generali India Insurance Company and LIC Anand plan of LIC of India insurance
company. The study is mainly based on primary data collected from field source.
PRIMARY SOURCES
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54
These include the survey or questionnaire method, telephonic interview as well as the
personal interview methods of data collection .
SECONDARY SOURCES
These include books, the internet, company brochures, product brochures, the company
website, competitor’s websites etc, newspaper articles etc
Sample size
For the survey, a sample size of 50 has been taken into consideration.
The main statistical tools used for the collection and analyses of data in this project are:
Questionnaire
Pie Charts
Scope of study
The scope of the study lies in finding out the perception of customers in Jodhpur City.
Through responses taken by 100 customers during a period of 45 days and highlighting
the key areas which require some concern on part of FGI of India and improving upon
which the product is demanded. The present study, analysis, findings and suggestions
proposed by the present researcher will be of immense use for future researcher with
similar studies in insurance market.
Limitation of study
Due to the following unavoidable and uncontrollable factors the factors, the result might
not be accurate. Some of the problems faced while conducting the survey are as follows:-
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Chances of some biasness could not be eliminated.
A majority of respondents show lack of cooperation and are biased towards their
own opinions. Some of the persons were not so responsive.
Possibility of error in data collection because many of investors may have not
given the actual answers of my questionnaire.
Some respondents were reluctant to divulge personal information which can hinder
the validity of all responses.
No 19 38
Total 50 100
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No. of Respondents
38%
Yes
No
62%
ANALYSIS:
Yes 41 82
No 9 18
Total 50 100
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No. of Respondents
Yes
No
41
Q3. Are you interested in the product Future Anand offered by FGI ?
No 30 60%
Yes 12 24%
Total 50 100%
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58
No. of Respondents
No
Yes
12 Can't Say
30
ANALYSIS:
Yes 35 70%
No 13 26%
Can’t Say 2 4%
Total 50 100%
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59
No. of Respondents
4
26 Yes
No
Cant Say
70
ANALYSIS:
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60
30
70
Others 7 14%
Total 50
No. of Respondents 100%
7
10
Advertisements
Friends and
Relatives
Direct Selling Agents
12 Others
21
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ANALYSIS:
From the survey it was found that amongst 50 respondents
Q7. Please express your opinion for the premiums paid for the
above policies?
4
14 Very
8
High
High
Modera
te
13 11 Low
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ANALYSIS:
Satisfied 12 24%
Moderate 10 20%
Unsatisfied 11 22%
No. of Respondents
Highly Unsatisfied 8 16%
Total 50 100%
8 9
Highly Satisfied
Satisfied
Moderate
11
12 Unsatisfied
Highly Unsatisfied
10
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ANALYSIS:
Findings
Most of the people buy life insurance as just a tax benefit tool or as a life cover
while only a few of the respondent take it as a saving option. The reason for this is
lack of knowledge of insurance benefits among the people.
A Majority of the respondent buy insurance products because of the need reason
while rest of the respondents buy for the brand purpose.
A Majority of the people come to know about the policies from the Direct Selling
Agents.
A Majority of the people are satisfied by the riders associated with their policies
offered in Future Anand
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Most of the respondents are satisfied by the services offered by there insurance
company while some says that they are not satisfied by the services.
Most of the respondents want more Transparency from the side of the company
regarding both the products.
STRENGTHS:
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65
numbers of ranges are under ULIP life insurance, investment as well as
pension plan
Products:
Flexibility to switch your fund value at your own discretion four
times a year viz. maximizer, protector, balancer, preserver.
Greater transparency-policy holder knows what is happening to
his money and where the company has invested his money.
Liquidity options-you can make complete or partial withdrawals
any time after 3 years.
Life insurance plans are eligible for deduction under sec 80.
WEAKNESSES:
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Plan does not offer any guarantee or assured return.
Product profile is not very comprehensive.
Mortality, management and administrative charges are
sky scrapping as compared to its competitors.
OPPORTUNITIES
THREATS
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Past performance of these plans is not indicative of the
future performance of the plan.
The sum invested in the funds is subject to market risks
and there can be no assurance that the objective of plan
will be achieved.
All benefits payable under the policy are subject to tax
laws and other financial enactment, as they exist from
time to time.
CONCLUSION
After overhauling the all situation that boosted a number of products associated with
multinational in the Insurance Sector to give befitting competition to the established
behemoth FGI in private sector, we come at the conclusion that:
There is very tough competition among the private insurance companies on the
level of new trend of advertising to lull a major part of Customers.
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The entry of more Pvt. Players in the Insurance Sector has expanded the product
segment to meet the different level of the requirement of the customers. It has
brought about greater choice to the customers.
FGI has vast market and very firm grip on its traditional customers and monopoly
of life insurance products.
So according to the data available form the survey one can conclude that even though
the LIC Jeevan Anand Plans are very much popular in Metro and semi cities, the product
awareness of Future Anand is very low among the people. The company faces a large
amount of competition. To sustain itself it must promote its products through advertising
and improve its selling techniques. Consumers must be aware of the new plans available
at Future Generali Indian Insurance Company. The medium of advertising used could be
television since most of its competitors use this tool to promote their products. The
company must be promoted as an India company since consumers seem to have more
trust in investing in Indian firms. The unit linked concept must be specifically promoted.
The general perception of life insurance has to change in India before progress is made
in this field. People should not be afraid to invest money in insurance and must use it as
an effective tool for tax planning and long term savings. Future Generali India Insurance
Company could tap the rural markets with cheaper products and smaller policy terms.
There are individuals who are willing to pay small amounts as premium but the plans do
not accept premiums below a certain amount. It was usually found that a large number of
males were insured compared to females. Individuals below the age of 30 were interested
in investment plans. This was a general conclusion drawn during prospecting clients.
People of city and at the same time there is a need to create the different image of the
company among the people by any means like advertisement, seminars or meetings.
Suggestions
The study has provided with the useful data from the respondents. There has a lot to be
recommended. Following are the recommendations:
There is a need for better promotion for the investment products & services. The
FGI should advertise its products through television because it will reach to the
masses.
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More returns should be provided on Insurance plans.
As the bank provides the Insurance facility to its customers. It should provide this
facility by tie up with the other Insurance organizations as well. The main reason
is that, the entire customers do not want Insurance of only one company. They
should have choice while selecting a suitable Insurance plans.
Advertise about the company and its products it motivate individuals to purchase
insurance
Create a positive perception about insurance
Speak about the good features a plan offers like high returns, life cover, tax
benefits, indexation, accident cover while prospecting customers
Try to sell the product/plan which the consumer requires and not the plan where
the advisors benefit is higher
Improve the efficiency in operations
Bring out policies with small premiums payable for short periods of time – Rs.
5000 – Rs. 10000 per annum for 10 years
Attract the youth of India with higher returns on investment as returns are the
motivating factor which influence purchase of insurance
Promote insurance in colleges and corporate houses
Promote Future Generali India Insurance as an Indian Company to build trust
FGI could have a brand ambassador or a mascot to promote its services.
Should have partial withdrawals from the first year onwards
Tap the rural market where there is large potential
Diversify product portfolio
Make products more straight forward – reduce complex The future topics for research in
the organization could be setting up of an appropriate ad campaign. It is very vital to the
companies’ success that the people of India know about FGI its products and their special
features and how insurance in general can help them in their future. The advertisements
have to be emotionally appealing. They might also include a celebrity. The brand name of
Future could be used to give a push to FGI and its products. The general perception of
insurance as “inauspicious” should be done away with and individuals and corporations
accept insurance on power with other investment opportunities.
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The other area of research could be in the management of funds FGI possesses and how
it can maximize returns for its investors. A research project could be undertaken on how
to ensure that the money gets invested in the right companies and earns a medium – high
return on investment. Another area of research could be an analysis of the sales and
marketing techniques used by FGI. A large number of changes could be introduced and
this would help in saving operating costs and improving the efficiency of the firm.
APPENDIX
a. Yes
b. No
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71
Q2. Are you satisfied with your current insurance product?
a. Yes
b. No
Q3. Are you interested in the product Future Anand offered by FGI?
a. No
b. Yes
c. Can’t Say
Q4. Are you interested in the product Jeevan Anand offered by LIC?
a. Yes
b. No
c. Can’t Say
a. Advertisements
b. Friends and Relatives
c. Direct Selling Agents
d. Others
Q7. Please express your opinion for the premiums paid for the
above policies?
a. Very High
b. High
c. Moderate
d. Low
e. Very Low
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Q8. Are you satisfied with the incentives (tax benefits or
Bonuses) associated with your policy?
a. Highly satisfied
b. Satisfied
c. Moderate
d. Unsatisfied
e. Highly Unsatisfied
Bibliography
www.lic.com
www.futuregenerali.com
www.wikipedia.org
Brochures provided by the FGI
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Brochures provided by the LIC of India
Matters given by FGI
Magazine
Insurance World
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