A

PROJECT REPORT
ON
“CUSTOMER PERCEPTION ABOUT BENEFITS OF
BRIGHT STARS PLUS”
WINTER TRAINING ORGANISATION

BHARTI AXA LIFE INSURANCE CORPORATION LTD.

SUBMITTED IN PARTIAL FULFILLMENT FOR THE DEGREE OF MASTER OF

BUSINESS ADMINISTRATION (MBA)

(SESSION 2008-2010)

Submitted To: Submitted by:

Mr. GOURAV SOM RAJ (MBA 2 nd year)
Faculty S/o Sh. ROOP LAL
Institute Roll no. 4046
Uni. Roll No-1378
Uni. Regd. No. 08-HIM-1

HIMALAYAN INSTITUTE OF MANAGEMENT, KALA-AMB.

Under the patronage of Maa Saraswati Educational Trust,( Regd. )

Approved By AICTE, Delhi.(Government of India)

Affiliated to- Himachal Pradesh University, Shimla

1
 Acknowledgement

It is said, “No learning is possible without any proper guidance and no research
endeavour is a solo exercise, some contribution is performed by various individuals”. By
acknowledging the guidance, support and assistance, I pay my deepest sense of gratitude to the
Management of Bharti Axa Life Insurance Company Limited.

I am very much thankful to the management of the Bharti AXA Life Insurance Company Ltd.
for giving me an opportunity to do this project as a part of my PGPM program. The completion
of this project is a successful and satisfactory out come of so many helping hands. I think it
proper to express my deep obligation to my advisers.

First and foremost, I am especially thankful to Mr. Naresh Gupta (Agency Development
Manager, Bharti AXA Life Insurance company Ltd. Jammu) for his active co-operation and
help for the completion of my project at Jammu. I also thankful to Miss. Arpana Bajaj (Agency
Manager) and staff member of the organization for rendered service and provide various
information to my purpose. Their suggestions are helping me in various stages.

I am immensely thankful to Dr. Vikas Arora (Director), Himalayan Institute of Management,

kala amb distt. Sirmour (H.p.) for his co-operation at all the time.

My special wishes and thanks shall always be for those who responded me and
extended their co-operation in preparing and collecting data by which this Project Report has
been smoothly conducted.

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~3~
 PREFACE

Theoretical knowledge without the practical exposure is of life value. Theoretical studies in
classroom are not sufficient to understand the functioning and nature of research. Therefore it
becomes necessary to undergo any research project work. Practical project supplements the
theoretical studies i.e. it covers what is left uncovered in the classroom. It exposes a student to
invaluable pleasure of experiences.

I complete my research project on the topic “Customer Perception

about the benefits of BRIGHT STARS PLUS”. During the research project, I got an opportunity
to learn valuable things, which I could not have been able to learn from theory classes.

In nutshell, whole my project was invaluable experience in the

pursuit of knowledge. In the forthcoming pages attempt has been made to present a
comprehensive report concerning different aspects of my research. The overall gain to me will be
reflected in the report itself.

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 Declaration

I hereby declare that this report on “Customer perception about the benefits of bright stars
plus.” has been written and prepared by me during the academic year 2008-2010.This project
was done under the able guidance and supervision of Mr. Naresh Gupta, ADM Jammu Branch
in partial fulfilment of the requirement for MBA-marketing course of the Himalayan institute of
management, kala amb

I also declare that this project is the result of my own effort and has not been submitted to any
other institution for the award of any Degree or Diploma.

Place: Jammu
Mr. Som Raj

MBA- Marketing.

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 INDEX
CONTENTS PAGE NO.
1. Organisation overview 7-24

A. Bharti AXA Life Insurance fact sheet

a) The company
b) Bharti AXA Life Insurance company Ltd.
(i) Bharti enterprises .
(ii) AXA group
 History
 AXA name
 AXA Asia pacific holdings
 AXA global set of values
(iii) Vision of Bharti AXA life
(iv) Our values
(v) Ambition 2012, earning preference
(vi) Our strategy
(vii)Our presence
(viii)Management profile
(ix) Under the umbrella of Bharti
(x) Bharti is the first
(xi) Achievements
(xii) Awards

2. Objective of the report 25

3. Scope of the report 26

4. Executive summary 27

5. Literature review 28-29

6. Project in the company 30-77

(i) Introduction
(ii) Background
(iii) Indian insurance industry
(iv) Purpose and need of insurance
(v) How insurance works
(vi) Role of insurance in economic development
(vii)What is life insurance
(viii) Why do i need life insurance

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 (ix) Key benefits of life insurance
(x)Principle of life insurance
(xi) Life insurance contracts
(xii) Essentials of a contract
(xiii)Section 45 of insurance act 1938
(xiv)Facts which need not be disclosed
(xv)Different risks
(xvi)Needs and insurance
(xvii)Life stage profiler
(xviii)Life insurance plans
(xix)Human life value
(xx) What is linked policy
(xxi)Bright stars plus
(a)Advantages
(b)How does bright stars plus works
(c)Benefits of bright star plus
(d)Applicable charges
(e)Plan details
(f)Tax benefits
(g)Terms and conditions
(h)Computation of unit price
(j)Risk of investment in ULIPs

7. Research methodology 78-80

8. Data analysis and interpretation 81-92

9. Finding 93

10. Limitations of the study 94

11. Suggestion and recommendations 95

12. Conclusion 96

13. Biblography 97

14. Annexure 98-100

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ORGANSATION OVERVIEW

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 A. BHARTI AXA LIFE INSURANCE FACT
SHEET

(a) THE COMPANY

Bharti AXA is a joint venture between Bharti enterprises, a trusted brand name and AXA world
leader in financial protection and wealth management.

 A Trusted Brand Name A Trusted Brand

name.
 All India Presence Global Presence.

 Largest In the Telecom Largest In the

industry Insurance Industry.
 Strong Financial Base Strong Financial Base

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 (b) Bharti AXA Life Insurance Company Limited:-
Bharti AXA Life Insurance is a joint venture between Bharti, one of India’s leading business
groups with interests in telecom, agri. business and retail, and AXA, world leader in financial
protection and wealth management. The joint venture company has a 74% stake from Bharti and
26% stake of AXA.
The company launched national operations in December 2006. Today, it has over 5200
employees across over 12 states in the country. Our business philosophy is built around the
promise of making people "Life Confident".

(i) Bharti Enterprises:-

Bharti Enterprises is one of India’s leading business groups with interests in telecom, retail,
manufacturing, agri. business and financial services. Bharti Airtel is Asia’s leading
integrated telecom services provider with operations in India and Sri Lanka. Bharti Airtel has
been at the forefront of the telecom revolution and has transformed the sector with its world-
class services built on leading edge technologies. In financial services, Bharti is partnering
with AXA of France to offer life insurance, general insurance and asset management. Bharti
Retail, the 100% subsidiary of Bharti Enterprises operates multiple format consumer friendly
stores. Bharti Wal-Mart is a B2B JV with Wal-Mart for wholesale cash-and-carry and back-
end supply chain management operations. The other businesses in the group are Beetel for
communication and media devices and Bharti Del Monte India, a JV with Del Monte to offer
fresh and processed fruits & vegetables in India as well as international markets.

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 (ii) AXA Group:-
 AXA is a French global insurance companies group headquartered in Paris. AXA is not
the name of a single company but a group of companies independently organized and
operated according to the regulations of many different countries. The AXA groups of
companies are engaged in life, health and other forms of insurance, as well as investment
management. The AXA group operates primarily in Western Europe, North America and
the Asia Pacific region and the Middle East. The AXA Group encompasses five operating
business segments: Life & Savings, Property & Casualty, International Insurance
(including reinsurance), Asset Management and Other Financial Services.AXA
ranks as the 15th biggest company in the world (based on revenue) on the 2006 Fortune
Global 500 list.

 History
The Company was originally founded in 1816 as Mutuelle de L'assurance contre L'incendie (the
Ancienne Mutuelle). It acquired Compagnie Parisienne de Garantie in 1978 and became
Mutuelles Unies.It went on to buy the Drouot Group in 1982 at which time it adopted the AXA
name. The takeover of The Equitable, a well known American insurer, came in 1991.It bought
Union des Assurances De Paris (UAP), France's largest insurer, in 1996 becoming AXA-UAP for
a while before reverting to the name AXA in 1999. Then in February 1999 AXA acquired
Guardian Royal Exchange. In May 2000 AXA acquired all shares it did not already own in Sun
Life & Provincial Holdings. On 14 June 2006 AXA acquired the leading Swiss insurance
company Winterthur Group from Credit Suisse for approximately €9 billion.

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  The AXA name
Despite being written in upper case, "AXA" is not an acronym, but was chosen because its name
can be pronounced easily by people who speak any language. After acquiring the Drouot Group
in 1982, the company hired an outside consultant to conduct a computer-aided search for a new
name. The selection criteria consisted of a short and snappy name to convey vitality, a name that
begins with the letter A so that it would appear near the top of all lists, and something that could
be pronounced easily in every language, consistent with the group's desire for an international
presence. In 1985, Chairman and CEO Claude Bébéar chose the name AXA.

 AXA Asia Pacific Holdings

AXA Asia Pacific Holdings Ltd (AXA APH) is listed on the Australian stock exchange and is
52.3% owned by AXA SA. AXA APH is responsible for AXA SA’s life insurance and wealth
management businesses in the Asia-Pacific region. It has operations in Australia, New Zealand,
Hong Kong, Singapore, Indonesia, Philippines, Thailand, China, India and Malaysia. AXA APH
had A$106.4 billion in total funds under management and administration at 30 June 2007 and
reported a profit after tax before non-recurring items of A$374.0 million for the six months
ended 30 June 2007

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(iii) VISION of Bharti AXA
Our vision is to be a leader and the preferred company for financial protection and wealth
management in India.

(iv) OUR VALUES

 Professionalism
 Innovation

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 Team Spirit
 Pragmatism
 Integrity

(v) Ambition 2012, earning preference

Becoming the preferred company in the industry is the founding objective of ambition 2012. It
gives meaning to the initiatives undertaken by axa people around the world, and mobilizes axa
people in the workplace.

(vi) Our Strategy

 To achieve a top 5 market position in India through a multi-distribution, multi-product

platform.
 To adapt AXA’s best practice blueprints as a sound platform for profitable growth.
 To leverage Bhartis local knowledge, infrastructure and customer base.
 To deliver high levels of shareholder return.

 To build long term value with our business partners by enhancing the proposition for their
customers.
 To be thee employer of choice to attract and retain the best talent in India.
 To be recognized as being close and qualified by our customers.

(vii) Our presence

 Hyderabad
 Kolkata

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 Chennai
 Ahmadabad
 Ludhiana
 Luck now
 Surat
 Kochi
 Indore
 Chandigarh
 Vadodra
 Nagpur
 Bhubaneswar
 Jaipur

 Mehsana
 Nawashair
 Bhatinda
 Noida
 Gurgao
 Howrah
 Kharagpur
 Durgapur
 Siliguri
 Jamshedpur
 Vijayawada
 Pondicherry
 Calicut
 Trivandrum
 Trissur
 Erode
 Amritsar
 Jalandhar
 Patiala
By 31st December 2008 we will be in 68 cities and 203 points of presence.

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Management
Profile

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 Sunil Bharti Mittal
Founder, Chairman and Managing director
of Bharti group

. Sunil Mittal got interested in push Button

Phone while on a trip to Taiwan, and in 1982, introduced the phones to India replacing the old
fashioned, bulky rotary phones that were in use in the country then. Bharti Telecom Limited
(BTL) was incorporated and entered into a technical tie up with Siemens AG of Germany for
manufacture of electronic push button phones.

The turning point came in 1992 when the India government was
awarding licenses for mobile phone services for the first time. One of the conditions for Delhi
cellular license was that the bidder has some experience as telecom operator. Mittal clinched a
deal with the French telecom group Vivendi. Two years later, Sunil secured rights to serve New
Delhi. In 1995, Bharti Cellular Limited (BCL) was formed to offer cellular services under the
brand name Airtel. Within a few years Bharti became the first telecom company to cross the 2-
million mobile subscriber marks.

Always on the move and making and impact and

excelling in whatever he did, this clear thinking risk taker has changed the face of the Indian ICT
space. For his contributions he has been honoured with several awards. He was chosen as one of
the top entrepreneurs in the world for the year 2000 and amongst ‘Stars of Asia’, by ‘Business
Week’, he received IT Man of the year Award 2002 from Dataquest and CEO Of the Year, 2002
Award (World HRD Congress).

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 He is the member of National Council of
Confederation of Indian Industry (CII), Federation of Indian Chambers of Com. (FICCI),

Chairman, Indo-US Joint Business Council, Member, Advisory

Committee constituted by Ministry of IT.

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Nitin Chopra
Chief Executive Officer

Nitin Chopra (49) is the Chief Executive Officer (CEO) of Bharti AXA Life
Insurance Company Ltd (Bharati AXA). An engineer from Indian Institute of
Technology (IIT) Kanpur and an MBA from Indian Institute of Management (IIM)
Ahmedabad, Nitin brings with him 24 years of rich experience in the corporate world,
of which the last 15 years have been in the financial services industry.

He started his career with the Unilever Group, before moving on to Bank of America
NT & SA, where he spent nine years in different capacities, including Vice President
& Business Director, Retail Liabilities. Nitin was instrumental behind several ‘firsts’
in the Indian retail banking industry, including introducing 365 extended banking,
doorstep banking and tiered fee. He played a pivotal role in the transition of Bank of
America’s retail business to ABN AMRO Bank, as a consequence of a regional sale.

Following the sale, he moved to ABN Amro Bank N.V as Head of the Consumer
Banking Division from July 1999 to May 2006. He played a significant role in
conceptualizing best practices in the Banc assurance business in India, with innovative
product and distribution strategies. Launch of Bancafe and Mobile Power are some of
the market ‘firsts’ to his credit. He enabled the Bank achieve leadership position as a
Wealth Manager. During Nitins stint, the revenue for consumer business increased
over seven times.

As the CEO of Bharti AXA, he manages the entire Indian operations of the private life
joint venture between Bharti Enterprises, one of India’s leading business groups with
interests in telecom, agri. business and insurance, and AXA, world leader in financial
protection and wealth management

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Tim Thomas
Chief Operating Officer

Tim Thomas is the Chief Operating Officer of Bharti AXA Life Insurance Company. A
Bachelor of Commerce and Bachelor of Laws from the University of Melbourne, Tim has over
12 years of experience in financial services. Tim's first assignment was with the chartered
accounting and management consulting firm Coopers and Lybrand (now PWC). He then moved
to Colonial Group as Corporate Counsel before taking key corporate finance responsibilities.
Tim was awarded a corporate scholarship to pursue a Master of Business Administration at the
University of Melbourne (Melbourne Business School) which he completed with Honours in
1999.

In 2000 Tim joined Medi bank Private, market leader in the Australian private health insurance
market, as Head of Strategy. He then joined AXA Asia Pacific Holdings Ltd in 2002 in Group
Strategy where he lead several key strategic initiatives for the group including the design of the
successful AXA 6 business programmed for the Australia wealth management business and the
India market entry strategy. Tim moved to India in early 2005 as the AXA's Chief
Representative and Market Entry Director where he lead the establishment of the joint venture
with Bharti across life insurance, general insurance and asset management, and launched the life
insurance business. As Chief Operating Officer Tim is currently responsible for the life insurance
operating platform, and is involved in several key business change initiatives across AXA in
Asia.

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Priya Ranjan
Director – Human Resources
Priya Ranjan is Director - Human Resources at Bharti AXA Life Insurance Company.
He brings to the business over 15 years of HR experience in diverse fields spanning financial
services, information technology and manufacturing. He specialises in building large scale
businesses from their project days.

Before joining Bharti AXA Life, Ranjan was with JPMorgan Chase Bank, Singapore as Vice
President & Regional HR Manager - Technology & Operations (APAC) from May 2005, after
serving the office of Vice President & Head - HR for the Global Service Centre of the Bank in
India for about 3 years. Between June 1997 and May 2002, Ranjan was with GE Capital as Vice
President & Head - HR for the credit card business, where he was a part of the Project Team
responsible for creating the business in India.

He also has an entrepreneurial venture to his credit with Bangalore-based Team Excel, which
specialised in recruitment & HR consulting. His first assignment was with Tata Steel as Sr.
Personnel Officer from 1991 to 1994, followed by Microloans Ltd. as Manager - HR for two
years. Ranjan is a BA (Hons) from St Xavier's College, Kolkata and holds a Post Graduate
Diploma in Personnel Management from XLRI.

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Shyamal Saxena
Chief Distribution and Marketing Officer

Shyamal Saxena is the Chief Distribution and Marketing Officer of Bharti AXA Life Insurance
Company.Shyamal Saxena brings to the business over 15 years of experience in the banking and
financial services sector. Before joing us in October 2007, he was with HDFC Bank as Executive
Vice President – Retail Banking. He joined the Bank in 1999, after a seven year stint in various
retail banking capacities at Bank of America. Shyamal is a management graduate from Jamnalal
Bajaj Institute of Management Studies.

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 UNDER THE UMBRELLA OF BHARTI

1. Bharti Airtel Ltd

Bharti airtel Ltd is India’s leading provider OF

TELECOMMUNICATIONS SERVICES. THE COMPANY HAS 4 DISTINCT BUSINESS
DIVISIONS – MOBILE & TELEPHONE SERVICES, BROADBAND SERVICES, LONG
DISTANCE SERVICES AND ENTERPRISES SERVICES.

2. Bharti Tele Tech Ltd

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 BHARTI TELE TECH LTD. MANUFACTURES AND
EXPORTS WORLD-CLASS TELECOM EQUIPMENT UNDER THE BRAND ‘BEETAL’.

3. Telecom Seychelles Ltd

TELECOM SEYCHELLES LTD PROVIDES TELECOM SERVICES IN SEYCHELLES,
UNDER THE BRAND ‘AIRTEL’.

4. Bharti Telesoft Ltd

BHARTI TELESOFT LTD DELIVERS BEST-IN-CLASS,

REVENUE-CRITICAL VAS PRODUCTS AND SERVICES TO TELECOM CARRIERS.

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 5. Teletech Services (India) Ltd

TELETECH SERVICES (INDIA) LTD IS JOINT

VENTURE WITH TELETECH INC., USA .IT OFFERS A RANGE OF CUSTOMER
MANAGEMENT SERVICES.

6. Field Fresh Foods Pvt. Ltd

FIELD FRESH FOODS PVT. LTD IS
BHARTI’S VENTURE WITH EL ROTHSCHILD GROUP OWNED ELRO HOLDINGS
INDIA LTD., TO EXPORT FRESH AGRI PRODUCTS EXCLUSIVELY TO MARKETS IN
EUROPE AND USA.

BHARTI IS THE “FIRST”

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 I. To launches India’s first private sector National Long Distance service.

II. Mobile services to cross the three million customer mark and to cross 1, 00,000
in Himachal.

III. To launch world’s first Flexi – Recharge pre-paid Coupon for its customer.

IV. To announce innovative outsourcing to enhancing Quality of Customer services.

V. To launch talk-time transfer service for its pre-paid customers in Delhi.

VI. To win the prestigious ‘MIS Asia IT Excell

Achievements

2001 : Bharti crosses 1 million customer mark in mobile services

& records top-line growth of 67%.
2002 : Bharti gets international long distance service license and listed on BSE,
NSE and DSE
2003 : Bharti tele-ventures near break-even Maintains market leadership with a
market share of 26.5% of all India mobile customer base.
2004 : Airtel crosses the 6 million customer mark nationally,

Bharti Tele-Ventures crosses Rs.5, 000 crores revenues & earns net profit
of over Rs.600 crores for the year

2005 : Bharti Enterprises and AXA Asia Pacific holdings limited announce
partnership for a life insurance joint venture in India
2006 : Bharti and Wal-Mart sing memorandum of understanding

2007 : Sunil B. Mittal chosen for “Padma Bushan Awards”

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 Awards

 Airtel wins the “World Communications Best Brand Award”

 Bharti Tele-ventures is the “Asian Mobile news Mobile Operator Of The Year”

 Airtel chosen as ‘Most Preferred Mobile Service’ by CNBC Awaaz Consumer

Awards

 Bharti Tele-ventures Is the Indian mobile Operator of the Year 2005

 Bharti wins Silver Trophy at the Cll National Six Sigma Awards.

 Bharti Tele-Ventures amongst the top technology companies in the world -

Business week.

 Bharti foundation wins Golden Peacock award for corporate social responsibility.

 OBJECTIVE OF THE
PROJECT

 To know customer perception about benefits of bright stars plus.

 To know reasons from customer for purchase of life insurance products.
 To know the popularity of ULIP in present scenario.

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 To know investment concern of investors.
 To know investment portfolio of investors.
 To know which product of Bharti Axa Life will customer like most.
 To know satisfaction level of customer.
 To know market share of Bharti Axa Life Insurance Company Ltd

SCOPE OF THE PROJECT

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The scope of the study lies in finding out the perception of customers about the BENEFITS OF
BRIGHT STARS PLUS in JAMMU AND KATHUA CITY through responses taken by 200
customers during a period of 60 days and highlighting the key areas which acquire some concern
of the BHARTI AXA LIFE INSURANCE COMPANY LIMITED and improving upon which
company may strengthen its customer base. 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.

EXECUTIVE SUMMARY

The project titled “CUSTOMER PERCEPTION ABOUT BENEFITS OF BRIGHT STARS

PLUS”.

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Possession of Insurance Policy & Recruitment of financial Advisors has been increased through
decades, which is best seen in the rise of customer by different Insurance Life Insurance
Companies.

According the recent market survey, it is being observed that the Insurance companies are doing
well in the marketing & retention of customers. In the near future there is a huge possibilities of
increase of the Insurance market because of the better service provided by the companies &
market competition.

In this project the main emphasis is given to the benefits of bright stars plus provided to the
customer, perception of customers from the companies, aware the company about customer
expectation.

LITERATURE REVIEW

Dr.N.Panchanatham & S.jhansi (2008) stated that today maximum number of people have the
knowledge of insurance and its benefit as a result the urban population got more attention and it led to
good insurance penetration in urban area as well as rural area also. Maximum policy holders have
cordial relationship with agents and policy holders are interested to recommend the policy for their
friends & relatives.

Sanket vij &H.J.Ghoshroy (2008) find in their present study researcher believe that for enhanced
customer satisfaction and better services quality, the customer centric delivery mechanism of insurance

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services supported by eCRM technologies play a significant role in customer delight movement .And also
believed that the service providers positive frame of mind and respect for their clients would delight the
customers of life insurance sector of India.

Sunayna khurana (2008) stated that protection is the main purpose of buying an insurance policy. Only
6.3% of the respondent faced problems. And 56%of the respondents are ready to buy new insurance
plans from the same company.

Paromita Goswami (2007) observe that proper implementation would not only ensure increased
customer satisfaction but also help in acquiring new customers at same time retaining the old customer.
Improved customer satisfaction would also result in positive world of mouth and consequently better

customer acquisition and retention.

B S Bodla and Sushma rani verma (2007) a large number of respondent have got inured themselves for
life coverage and for future contingencies. LIC has got the maximum 93% market share among various
life insurance players. Most of the respondents were found to be satisfied with performance of the
insurance companies.

T Sri jyothi (2007) he stressed that the importance of adaptation measures to attract insurance
companies towards offer in catastrophic risk insurance and disaster insurance at affordable prices.

Sunil Mahesware (2005) in her article entitled managing insurance managing agent pointed out that
only quality agent can sale insurance product in market.

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Jack Burke (2005) stated that, the art of building a relationship stressed that only post sale service help
in capturing more customers.

Gautam Bansal and Pawan Teneja (2005) find that life insurance advertisement on TV will be more
effective if they have emotional appeals has better influence. It is more socially oriented.

Ravi kumar Sharma (2005) he observed that LIC has higher brand awareness. LIC agents are more
effective than other private insurance agents. Rural people have less faith in private players.

Dobhal (2002) stated that media had traditionally played little part in influencing decisions, but today
there is a growth and shift from print to television.

Matienzo peter j (2001) stated that selling of insurance is more effective when a blend of personal
involvement is added to it. Value added practices such as ringing the clients telephone on his birthday or

sending a gift. Also providing some value added service to client such as providing information and
expert comments on other areas not related to the profession helps.

Tandon,et al (1997) reported that majority of the respondents have a positive attitude towards
advertisement in general. They have clearly indicated that advertisement has a useful role to play in the
society.

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B.K.S.Parkesh Rao and B.H.Venkateswara Rao (2005) stated that the establishment of micro-branches
and the appointment of specialized insurance agents in rural areas help policy holders to market
different insurance product.

PROJECT

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 IN THE
COMPANY

INTRODUCTION
According to Maslow’s need hierarchy, security needs are second only to basic needs. Man’s
desire to feel safe and protected from future disasters or undesirable events led to the concept of
insurance.A thriving Insurance sector is of vital importance to every type of economy whether
developed or developing or under developed, as it encourages the savings habit and provide a
safety net to rural/urban enterprises and productive individuals. By saving, people help the
nation. The amount paid as premium is the most important tool for development and growth of a
nation as it generates long term investible funds. Worldwide, Insurance is used as a risk cover

~ 34 ~
instrument whereas Indian consumer perceives it as a tax-saving and investment option. The vast
potential of the 250 million strong middle class population of India, can be unleashed by
repositioning it as a risk cover instrument. The factors which could lead to a larger market
penetration are-

 Greater market awareness

 Increase tax base
 Education
 Changing socio-economic trends.
All this can be achieved by giving business opportunity to quality people as an agent advisor in
insurance sector and thus expanding the distribution channel. Product and prices in an insurance
industry are easily duplicated and thus are more or less same. So the difference lies in the
services provided by the companies which give competitive edge in the long run. So the channel
through which a company can achieve market penetration by providing efficient services should
be that of recruiting more and more advisors in its distribution channel.

The advisor’s role is very important in an insurance sector as they are able to accomplish the
following important services-:

 Assessing and analyzing the client’s risk profile.

 Finding the best possible solution for the customer.
 Designing product according to the need of the customer
 Negotiating the best deal available
 Continuity of the service throughout the period of Insurance claims advisory services.
The reason why this channel distribution system is lagging in India is because of high cost of
recruiting but low revenue due to lower penetration of the market. Channel decisions are now
elevated to a strategic level. The overriding concept is to become customer-centric and to focus
channels on improving the customer experience. But it is not advisable to use all channels to
serve all customers. Some customer segments may prefer certain channels, but if these segments
are not profitable, it may be prohibitively expensive to serve them using their preferred channels.

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Consequently, insurance companies need to tailor their channels to appeal to the largest number
of profitable customers to maximize earnings

(ii) Background

By any yardstick, India, with about 200 million middle class households, presents a huge
untapped potential for players in the insurance industry. Saturation of markets in many
developed economies has made the Indian market even more attractive for global insurance
majors. Graphs and statistics reflect the low percentage of per capita penetration of insurance in
India compared to other developed and developing countries.

The Insurance sector in India is one and half centuries old. Pre-liberalization, the Insurance
market was monopolized by LIC, GIC and its four subsidiaries. The opening up of the Insurance
sector has seen a surge not only in the number of foreign players entering the market but also in
the variety of products being offered. The total premium in India is approximately 2% of our
GDP, which is far below the world average of 7.8% the insurance penetration in India is only 2%

Per capita income of the India is expected to grow at over 6% for the next 10 years,

In a similar way, with the increasing awareness levels among Indian citizens;

The demand for insurance is expected to grow at an attractive rate of interest.

An independent consulting company, The Monitor Group, has estimated that the

Life insurance market will grow from Rs.218 billion in 1998 to Rs.1003 billion

By 2008 (a compounded annual growth of 16.5%).

INDIAN INSURANCE INDUSTRY

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Life Insurance:
In 1818 the British established the first insurance company in India in Calcutta, the Oriental Life
Insurance Company. First attempts at regulation of the industry were made with the introduction
of the Indian Life Assurance Companies Act in 1912. A number of amendments to this Act were
made until the Insurance Act was drawn up in 1938. Noteworthy features in the Act were the
power given to the Government to collect statistical information about the insured and the high
level of protection the Act gave to the public through regulation and control. When the Act was
changed in 1950, this meant far reaching changes in the industry. The extra requirements
included a statutory requirement of a certain level of equity capital, a ceiling on share holdings in
such companies to prevent dominant control (to protect the public from any adversarial policies
from one single party), stricter control on investments and, generally, much tighter control. In
1956, the market contained 154 Indian and 16 foreign life insurance companies. Business was
heavily concentrated in urban areas and targeted the higher echelons of society. “Unethical
practices adopted by some of the players against the interests of the consumers” then led the
Indian government to nationalize the industry. In September 1956, nationalization was
completed, merging all these companies into the so-called Life Insurance Corporation (LIC). It
was felt that “nationalization has lent the industry fairness, solidity, growth and reach.”

Some of the important milestones in the life insurance business in India

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.
1956: The market contained 154 Indian and 16 foreign life insurance companies.

(iv) Purpose and need of insurance:-

The business of insurance is related to the protection of the economic value of assets. Every asset
has value. The asset would have been created through the efforts of the owner, in the expectation
that, either through the income generated there from or some other output, some of his needs
would be met. In the case of a factory or a cow, the production is sold and income generated. In
the case of a motorcar, it provides comfort and convenience in transportation. There is no direct
income. There is normally expected life time for the asset during which time it is expected to

~ 37 ~
perform. The owner, aware of this, can so manage his affairs that by the end of that life time, a
substitute is made available to ensure that the value or income is not lost. However, if the assert
gets lost earlier, being destroyed or made non functional, through an accident or other
unfortunate event, the owner and those deriving benefits there from suffer. Insurance is
mechanism that helps to reduce such adverse consequences.

A human life is also an income generating asset. This asset also can be lost through unexpectedly
early death or made non-functional through sickness and disabilities caused by accidents.
Accidents may or may not happen. Death will happen, but the timing is uncertain. If it happens
around the time of one’s retirement, when it could be expected that the income will normally
cease, the person concerned could have made some other arrangements to meet the continuing
needs. But if it happens much earlier when the alternate arrangements are not in place, insurance
is necessary to help those dependent on the income.

(v) How Insurance works?

While it may seem complex, insurance is really quite simple: The payments (or premiums) of the
many pay for the losses of a few. Your premiums go into a large pool, if you will, at your
insurance company. The claims of the few are paid from that pool. Because there are more
people contributing to the pool than there are making claims, there is always enough to pay the
claims – even large single claims like when someone is permanently disabled as a result of a car
collision, or many smaller claims like those resulting from a natural disaster. (The 1998 ice storm
that hit parts of Ontario, Quebec and New Brunswick resulted in an estimated 700,000 claims for
damage totaling $1.4 billion.) However, large disasters (such as the ice storm) do come close to
emptying the pool.

Insurance for insurance companies:-

Even when the pool comes close to emptying, there is another pool from which insurance
companies can draw to pay claims. Some of your premiums are used by your insurance company
to buy reinsurance – insurance for insurance companies. Sometimes losses are so big – like those

~ 38 ~
resulting from an earthquake – that there is no way that an insurance company can cover the
costs. Reinsurance is an extra layer of protection against large losses.

Annual replenishing:-
Your insurance is an annual contract, so the pool operates for only one year at a time. Your
premiums and the premiums of others are based on how much money the insurance companies
think they will need to pay the coming year’s claims. Your premiums do not build up over the
years – unlike the premiums for some types of life insurance. 

The Business of Insurance:-

Insurance companies are called insurers. The business of insurance is to (a) brings together
persons with common interests (sharing some risks), (b) collect the share or contribution (called
premiums) from all of them, and (c) pay out compensations (called claims) to those who suffer
from the risks. In India, insurance business is classified primarily as life and non-life insurance
or general insurance.

Reinsurance:-

Reinsurance is a means by which an insurance company can protect itself with other insurance
companies against the risk of losses. Individuals and corporations obtain insurance policies to
provide protection for various risks (hurricanes, earthquakes, lawsuits, collisions, sickness and
death, etc.). Reinsurers, in turn, provide insurance to insurance companies. There are many
reasons why an insurance company would choose to reinsure as part of its responsibility to
manage a portfolio of risks for the benefit of its policyholders and investors. The main use of any
insurer that might practice reinsurance is to allow the company to assume greater individual risks
than its size would otherwise allow, and to protect a company against losses. Reinsurance allows
an insurance company to offer higher limits of protection to a policyholder than its own assets

would allow. For example, if the principal insurance company can write only $10 million in
limits on any given policy, it can reinsure (or cede) the amount of the limits in excess of $10
million. Reinsurance’s highly refined uses in recent years include applications where reinsurance
was used as part of a carefully planned hedge strategy

(vi) Role of Insurance in Economic Development:-

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For economic development, investments are necessary. Investments are made out of savings. A
life insurance company is a major instrument for the mobilization of savings of people,
particularly from the middle and lower income groups. These savings are channeled into
investments for economic growth.
An insurance company’s strength lies in the fact that huge amounts come by way of premiums.
Every premium represents a risk that is covered by that premium. In effect, therefore, these vast
amounts represent pooling of risks. The funds are collected and held in trust for the benefit of the
policyholders. The management of insurance companies is required to keep this aspect in mind
and make all its decisions in ways that benefit the community. This applies also to its
investments. This is why successful insurance companies would not be found investing in
speculative ventures. Their investments benefit the society the society at large.

The very existence of risk that is, uncertainty concerning the future, is a severe handicap in
economic activities. Insurance removes the fear, worry and anxiety associated with this future
uncertainty and thus encourages free investment of capital in business enterprises and promotes
efficient use of existing resources. Thus insurance encourages commercial and industrial
development and there by contributes to a vigorous economy and increased national
productivity.

Present day organization of industry, commerce and trade depend entirely on insurance for their
operation, banks and financial institutions lend money to industrial and commercial undertakings
only on the basis of the collateral security of insurance. No bank or financial institution would
advance loans on property unless it is insured against loss or damage by insurable perils.

(vii) What is Life Insurance?

Life insurance ensures that your family will receive financial support in your absence. Put
simply, life insurance provides your family with a sum of money should something happen to
you. It protects yours family from financial crises.

In addition to serving as a protective cover, life insurance acts as a flexible money-saving

scheme, which empowers you to accumulate wealth-to buy a new car, get your children married
and even retire comfortably.

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 (viii)Why Do I Need Life Insurance?
Isn't that what you ask yourself all the time? Here's a small answer to that

You need Life Insurance because typically the need for income continues for those who are
financially dependent on you, but there is no guarantee of your ability to earn consistently and
for the rest of your life. Life insurance can help you safeguard the financial needs of your family.

This need has become even more important due to steady disintegration of the prevalent joint
family system, and emergence of nuclear families. The need to protect your family's ever
growing needs is why you need Life Insurance.

(ix)Key Benefits of Life Insurance

Life insurance, especially tailored to meet your financial needs

Need for Life Insurance

Today, there is no shortage of investment options for a person to choose from. Modern day
investments include gold, property, fixed income instruments, mutual funds and of course, life
insurance. Given the plethora of choices, it becomes imperative to make the right choice when
investing your hard-earned money. Life insurance is a unique investment that helps you to meet
your dual needs - saving for life's important goals, and protecting your assets.

Let us look at these unique benefits of life insurance in detail.

Asset Protection

From an investor's point of view, an investment can play two roles - asset appreciation or asset
protection. While most financial instruments have the underlying benefit of asset appreciation,
life insurance is unique in that it gives the customer the reassurance of asset protection, along
with a strong element of asset appreciation.

 The core benefit of life insurance is that the financial interests of one’s family remain protected
from circumstances such as loss of income due to critical illness or death of the policyholder.
Simultaneously, insurance products also have a strong inbuilt wealth creation proposition. The
customer therefore benefits on two counts and life insurance occupies a unique space in the
landscape of investment options available to a customer.

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Goal based saving

Each of us has some goals in life for which we need to save. For a young, newly married couple,
it could be buying a house. Once, they decide to start a family, the goal changes to planning for
the education or marriage of their children. As one grows older, planning for one's retirement
will begin to take precedence.

 Clearly, as your life stage and therefore your financial goals change, the instrument in which
you invest should offer corresponding benefits pertinent to the new life stage.

 Life insurance is the only investment option that offers specific products tailor-made for
different life stages. It thus ensures that the benefits offered to the customer reflect the needs of
the customer at that particular life stage, and hence ensures that the financial goals of that life
stage are met.

 The table below gives a general guide to the plans that are appropriate for different life stages.
 

  Life Stage  Primary Need Life Insurance Product

Young & Single Asset creation Wealth creation plans

Wealth creation and mortgage

Young & Just married Asset creation & protection
protection plans

Children's education, Asset Education insurance, mortgage

Married with kids
creation and protection protection & wealth creation plans

Middle aged with Planning for retirement & Retirement solutions & mortgage
grown up kids asset protection protection

Across all life-stages Health plans Health Insurance 

~ 42 ~
 (x)Principles of Life Insurance:-
Indeminity
A contract of insurance contained in a fire, marine, burglary or any other policy (excepting life
assurance and personal accident and sickness insurance) is a contract of indemnity.

Utmost good faith

Since insurance shifts risk from one party to another, it is essential that there must be utmost
good faith and mutual confidence between the insured and the insurer. In a contract of insurance
the insured knows more about the subject matter of the contract than the insurer. Consequently,
he is duty bound to disclose accurately all material facts and nothing should be withheld or
concealed. Any fact is material, which goes to the root of the contract of insurance and has a
bearing on the risk involved. It is only when the insurer knows the whole truth that he is in a
position to judge (a) whether he should accept the risk and (b) what premium he should charge.

Insurable interest
-A contract of insurance affected without insurable interest is void. It means that the insured
must have an actual pecuniary interest and not a mere anxiety or sentimental interest in the
subject matter of the insurance. The insured must be so situated with regard to the thing insured
that he would have benefit by its existence and loss from its destruction.

Cause proxima
The rule of cause proxima means that the cause of the loss must be proximate or immediate and
not remote.

Risk
In a contract of insurance the insurer undertakes to protect the insured from a specified loss and
the insurer receive a premium for running the risk of such loss. Thus, risk must attach to a policy.

Mitigation of loss
In the event of some mishap to the insured property, the insured must take all necessary steps to
mitigate or minimize the loss, just as any prudent person would do in those circumstances. If he
does not do so, the insurer can avoid the payment of loss attributable to his negligence.

Subrogation
The doctrine of subrogation is a corollary to the principle of indemnity and applies only to fire
and marine insurance. According to it, when an insured has received full indemnity in respect of
his loss, all rights and remedies which he has against third person will pass on to the insurer and
will be exercised for his benefit until he (the insurer) recoups the amount he has paid under the
policy. It must be clarified here that the insurer's right of subrogation arises.

~ 43 ~
Contribution
Where there are two or more insurance on one risk, the principle of contribution comes into play.
The aim of contribution is to distribute the actual amount of loss among the different insurers
who are liable for the same risk under different policies in respect of the same subject matter.
Any one insurer may pay to the insured the full amount of the loss covered by the policy and
then become entitled to contribution from his co-insurers in proportion to the amount which each
has undertaken to pay in case of loss of the same subject-matter.

(xi)Life Insurance Contracts

A life insurance policy is contract, in terms 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.
(xii) Essentials of a Contract
(a) Offer and acceptance
(b) Consideration
(c) Free consent are consensus ‘ad idem’
(d) Capacity to contract
(e) Legally binding relationship
(f) Legality of object or purpose
(g) Capability of performance

Insurance is a specialized type of contract. Apart from the usual essentials of a valid contract,
insurance contracts are subject to two additional principles viz. Principle of Utmost Good Faith
& Principle of Insurable Interest. These apply to both life and non-life Insurance.

(xiii) Sec. 45 of Insurance Act 1938

Insurer’s right to declare the policy void is however, restricted by sec. 45 of Insurance Act 1938
which says that if a policy has run for 2 years or more no insurance company can call it to
question on the ground of any false or inaccurate statements unless such misrepresentation is
material to the risk and fraudulently made
(xiv) Facts which need not be disclosed:
(a) Facts which which are common knowledge (b) Facts of law (c) Facts which a survey can
reveal (d) Facts about with insurance company has waived further information (Principle of
waiver)
(b)To start with, you must have an insurable interest in the item you want covered. In other
words, any untoward happening related to the insured item should result in a financial loss to
you. For instance, you have a financial interest in insuring a house you own. However, if you

~ 44 ~
have rented a house, it’s your responsibility to get it insured only if it is explicitly stated so in the
lease agreement. If it is not stated but you still insure it, and subsequently raise a claim, it is
likely to be rejected by the insurer on the grounds that you don’t have any insurable interest in
the property, the owner of the house does. By the same principle, good belonging to others that
might be lying in your house are not covered as part of your home insurance policy. If these are
stolen or damaged, your insurer is likely to reject any claim made by you.

(xv) Different Risks

The life ins. Business deals with risks relating to life of human beings. The circumstances
(perils) that create the loss of damage (risks) are mainly two, death and old age. Ins. Does not
prevent either. Human beings also run the risk of sickness, accidents and unemployment these
risks are insured by general insurance co. However supplementary benefits are riders.

Risk can be managed by.

 Prevention is avoidance

 Retention
 Transfer
(xvi) Needs and Insurance
Risks arise because there are needs to be fulfilled. The risks attached to early death arise because
of the need to maintain the family that is left behind. If there were not needs, there would be no
risks. Insurance is, therefore, related to the needs of individuals. Different plans are designed
with different benefits, so that they may cater to the different needs of people. While selling life
insurance, therefore, it is necessary to be aware of the needs of people.

Protection of the standard of living of the family is at risk on early death. Insurance must provide
the necessary income to maintain the standard, after providing for repayment of loans and other
debts. Modern lifestyles subject people to debts on account of car, house, appliances and
equipment’s at home obtained on hire purchase arrangements. Future expenses on account of
children’s education, marriage, start of some business and so on, which are ambitions and
dreams these needs have to be met, after meeting the costs of inflation. People would not be
consciously aware of these as formidable problems in the future. Even if they do, they may not
be willing to sacrifice some of the pleasures of the present in order to provide for the future. This
is the difficulty, which life insurance agents’ face.

~ 45 ~
 (xvii) Life Stage Profiler
All through your life, several significant events the birth of your child, moving to a larger home,
his or her education and wedding, buying a new car, retiring from work will occur at various
stages and demand your financial commitment. If you plan in advance for these events, you will
quite naturally be prepared when they occur

Life insurance is an effective tool that assists you to plan for your future such that you are
financially equipped to meet all your goals.

 Which important goals should you plan for in advance?

1) Your family's protection - so that your loved ones are secure should an unfortunate event
happen to you. Buying Life insurance assures that your family receives a lump sum that safely
tides them over any financial crises that might occur in your absence.

 2) Child's education: As parent, your primary responsibility is to ensure your children's future.
Our Education Insurance plans ensure your child receives money at key stages of his or her
education even in your absence.

 3) Savings: Savings plans allow you to steadily save towards a pre-decided goal in a secure
manner. These plans provide you with a host of benefits. You can choose the premium, the
underlying fund in which you want to invest your money, the ratio between protection and
investment as per your requirements.

 4) Retirement: Retirement plans help you secure regular income for your retired life. During
the Accumulation phase, you systematically save while you are working. When you retire, the
Payout stage of the plan begins. You then purchase an annuity, which will serve as a steady
stream of income, for the rest of your life.

 5) Health: An integral part for financial planning is protecting oneself against any medical
emergencies as well. Hence, a very prudent decision would be to choose a combination of plans
that look after your finances and offer you a protective health cover to ensure your financial
planning is in track despite any major illnesses.

~ 46 ~
 (xviii) Life Insurance Plans
Life insurance products assure your family will receive financial support, even in your absence.
Put simply, when you buy insurance you provide your family with a sum of money, should
something happen to you. It thus permanently protects your family from financial crises.

 In addition to serving as a protective cover, when you buy insurance you create a flexible
money-saving scheme, which empowers you to accumulate wealth to buy a new car, get your
children educational solutions, and even retire comfortably.

 Today, there is no shortage of investment options for a person to choose from. Given the
plethora of choices, it becomes imperative to make the right choice when investing your hard-
earned money, and online insurance is an ideal choice in today’s technology driven world.
Buying Life insurance online is a way to make a unique investment that helps you to meet your
dual needs - saving for life's important goals, and protecting your assets.

 From an investor's point of view, an investment can play two roles - asset appreciation or asset
protection. While most financial instruments have the underlying benefit of asset appreciation,
buying life insurance online gets you the unique reassurance of asset protection, along with a
strong element of asset appreciation.

 When you buy life insurance online the core benefit is that the financial interests of one’s family
remain protected from circumstances such as loss of income due to critical illness or death of the
policyholder. Simultaneously, buying life insurance online gives a strong inbuilt wealth creation
proposition. The customer therefore benefits on two counts and online insurance products
occupy a unique space in the landscape of investment options available to a customer.

 As your life stage and therefore your financial goals change, the instrument in which you invest
should offer corresponding benefits pertinent to the new life stage. Online insurance products are
the only investment option that offer specific products tailor-made for different life stages. You
are thus ensured that the benefits offered to the customer reflect the needs of the customer at that
particular life stage, and hence ensures that the financial goals of that life stage are met. 

On the basis of which life stage you are in and the corresponding insurance needs, Bharti AXA
plans can be categorized into the following three types:

~ 47 ~
Wealth Confident plans

Guarantee Builder plans

Dream Life Pension plans

~ 48 ~
Aspire Life plans

Save Confident plans

~ 49 ~
Secure Confident plans

 (xix) Human Life Value

What is your Human Life Value?

Beyond all doubt, your life is invaluable. Yet, there is a certain worth that can be attributed to the
financial support you offer your parents, spouse or children. This worth is referred to as Human
Life Value (HLV). In the future, if your family does not have the protective blanket of your
presence, they will no longer be able to enjoy the benefits of the income you earned. Put simply,
Human Life Value is the present value of your future earnings.

Why should you calculate your Human Life Value?

You should calculate your Human Life Value so you can accordingly invest in insurance plans
that provide your family with adequate finances and hence security even in your absence.

How do you determine your Human Life Value?

Your Human Life Value is determined by 3 factors:

1. Your age
2. Current and future expenses
3. Current and future income

As a thumb rule, if you are 30 years of age, you should insure yourself for an amount
approximately 8 times your annual income. At 35, your investment should be close to 6 times
your income. Of course, the exact amount of your investment should be determined by the
number of people who depend on you, you’re existing investments and your life stage. For
example, if you are 30 years of age and have two children and parents to provide for, the amount
you invest should be reflective of your requireme

~ 50 ~
 (xx) What is linked policy?
Most importantly, what are ULIPs? Here, you will find all the information you need to set your
mind at ease about how to invest in ULIPs, and which ULIP is right for you.
 
ULIPs are a category of goal-based financial solutions that combine the safety of insurance
protection with wealth creation opportunities. In ULIPs, a part of the investment goes towards
providing you life cover. The residual portion of the ULIP is invested in a fund which in turn
invests in stocks or bonds; the value of investments alters with the performance of the underlying
fund opted by you.
 
Simply put, ULIPs are structured in such that the protection element and the savings element are
distinguishable, and hence managed according to your specific needs. In this way, the ULIP plan
offers unprecedented flexibility and transparency.

Working of ULIPs

It is critical that you understand how your money gets invested once you purchase a ULIP:
 
When you decide the amount of premium to be paid and the amount of life cover you want from
the ULIP, the insurer deducts some portion of the ULIP premium upfront. This portion is known
as the Premium Allocation charge, and varies from product to product. The rest of the premium
is invested in the fund or mixture of funds chosen by you. Mortality charges and ULIP
administration charges are thereafter deducted on a periodic (mostly monthly) basis by
cancellation of units, whereas the ULIP fund management charges are adjusted from NAV on a
daily basis.
 Since the fund of your choice has an underlying investment – either in equity or debt or a
combination of the two – your fund value will reflect the performance of the underlying asset
classes. At the time of maturity of your plan, you are entitled to receive the fund value as at the
time of maturity. The pie-chart below illustrates the split of your ULIP premium:
Broadly, insurance plans can be distinctly divided into ULIP (Unit Linked Insurance Plans) and
traditional plans. A brief detail of both segments:

(a) ULIPs (Unit Linked Insurance Plans)

ULIPs, or Unit Linked Insurance Plans, have gained high acceptance due to the attractive
features they offer. Benefits include flexibility, Transparency, Liquidity, and Fund Options.
 

~ 51 ~
  Flexibility 

 Flexibility to change your life cover: ULIPs give you the flexibility to choose your
sum assured (insurance cover) at the time of policy inception. Moreover, some
ULIPs allow you to increase your sum assured over the term of the plan. This is
crucial as your protection needs keep on changing with time .Typically, greater the
financial liabilities you have such as repayment of a home loan, greater will be your
need for protection.
 Flexibility to change premium amount: With ULIPs you can easily change
premium amount as most ULIPs provide you the option to increase or reduce
premiums after a certain period of time to match your premium paying capability.
Another distinguishing feature of ULIP is Top up which is an additional
contribution over & above regular premium so that if you receive extra money today
you can invest the amount in your policy & maximize your investment gains.
 Flexibility to opt for a rider: ULIPs also enable you to customize the policy with
optional riders to enjoy additional protection. Riders are additional or supplementary
benefits that are bought along with the main insurance policy. Some of the
commonly offered riders by most insurance companies are critical illness benefit
rider, accident & disability benefit rider, waiver of premium rider etc. For ex. a
critical illness rider cover major critical illnesses like heart attack etc. In case of
contracting any of the above illness, the insurance company pays the insured
amount.

 Flexibility to choose your fund option: Most of the ULIPs come with an in - built
range of fund options to choose from –ranging from aggressive funds to conservative
funds so that you can decide to invest your money in line with your investment
preferences and needs. What’s more, ULIPs even come with the option of switching
between different fund options so that you are able to reap maximum benefits from
your investments.

 Transparency 
 
ULIPS offer a high degree of transparency, where all charges in the plan as well as the entire net
amount invested is made known to the customer. ULIPs also offer the convenience of tracking
your investment performance on a day to day basis, so you can decide instantly where you want
your assets allocated.

~ 52 ~
  Liquidity 
 
A ULIP offers you the option of withdrawing money a few years into the plan, allowing for the
exigencies of life. Alternatively, a ULIP will also allow for partial/systematic withdrawal should
the need arise.
 Fund Options 
 
A ULIP will offer you a wide choice of funds, ranging through equity, debt, cash, or a
combination of the three. The customer is also afforded the option of choosing your fund mix
based on your desired asset allocation.
 Equity Funds: In this type of fund, sometimes also called growth funds, there
would be more investments in equities which are shares/stocks traded in the stock
market.
 Debt Funds: In this type of fund, also called Bond funds, the investments are
primarily in Government and Government guaranteed securities and such safe debts
and other high investment grade corporate bonds.
 Money market funds: In this type of fund, sometimes also called liquid funds, the
investment may be more in short term money market instruments such as treasury
bills, commercial papers, etc.

 Balanced Funds: In this type of funds, the investments are in both equity as well as
debts.

(b) Traditional Plans

These are the oldest types of insurance plans available. These plans cater to customers with a low
risk appetite. Some of the common features of traditional plans are:
  1. Steady Investment

1. Major chunk of investible funds are in debt instruments.

2. Steady and almost assured returns over the long term.
2. Features
1. Death benefit is Sum Assured + guaranteed & vested bonus.
2. Helps in asset creation as they are for a long tenure.
3. Premium to Sum Assured ratios are fixed for each plan and age.
4. Generally withdrawals are not allowed before maturity

~ 53 ~
Bright stars
PLUS
{The launch pad for your child’s bright future}

~ 54 ~
 Bharti Axa life

In this Policy, the investment risk in the investment portfolio is borne by the Policyholder.

As a caring parent, you want only the best for your child. As your child grows, his aspirations
will grow too and so will your responsibilities. Whether it’s higher studies abroad, a grand
wedding or a comfortable home … you can now ensure that your child is always one step ahead
– financially. Bharti AXA Life Bright Stars with Jumpstart Benefit is a unique child plan
designed to give your child the right launch pad into a promising future. At maturity, this plan
offers an additional lump sum amount to take care of the finances at the key stages of your
child’s life. What’s more, the plan also provides you with a life protection cover – so should
anything unfortunate happen to you, Bharti AXA Life Bright Stars ensures that your dreams for
your child still live on. The plan also offers the flexibility to make modifications, depending on
the changing needs of your child. As his dreams grow, the plan will grow too… so financial
hurdles will never come in the way of his growing dreams! With Bharti AXA Life Bright Stars,
you can fulfill all the dreams you have for your child, and give him what he deserves. A bright
future!

~ 55 ~
 What is Bharti Axa Life Bright Stars PLUS?

This is a regular premium unit-linked Insurance Policy, which offers you the twin, benefits of
protecting your loved ones & creating wealth for them over the desired period.

You can plan & invest in a systematic manner through this product for certain important events
(financial goals) in your life like your child’s higher education / marriage or buying a house!

Bharti AXA Life Bright Stars plus offers you the twin benefits of protecting your loved ones &
creating wealth for them over the desired period.

(a)What are your advantages with Bharti Axa Life Bright Stars plus:

Smart financial solution for protecting your family- in unfortunate event of death-
• The sum assured gets paid out to your nominee immediately PLUS
• Bharti AXA Life will pay ALL your future premium into the investment funds to ensure
that the ambitions of your loved ones are achevied PLUS
• Jumpstart benefits during the policy term
• Jumpstart benefit (7% or 5% of average fund value depending on term chosen ) is
credited to your investment fund irrespective of whether the life is alive or not
• You can in any of 6market – linked investment funds
• A number of flexibilities to take care of your changing needs- switches, premium
redirection, Top- ups, Partial withdrawals, Decrease of premium, Cover continuance etc
• The death benefit is payable even if you have opted for the cover continuance option
• You can enchance your protection in this product by adding riders
• Tax benefits for premiums paid and benefits received, as per the prevailing tax laws

Enjoy the benefits of high returns along with a life cover. Also, receive an additional amount
through Jumpstart Benefit at Policy maturity.

~ 56 ~
(b)How does Bharti AXA Life Bright Stars PLUS work

Choose your premium and Policy Benefit Period,

which decides the Sum Assured

Enhance your protection by

Adding riders

Choose from 6 Investment Funds to invest

your premiums

In case of death,

Sum Assured

is paid out

immediately

Bharti AXA Life

Pays all future

Premiums into

On maturity, you will get

Policy Fund Value + Jumpstart Benefit

~ 57 ~
 (c)Benefits of Bharti AXA Life Bright Stars plus

1. Life Insurance Benefit:

The Sum Assured under the Policy is based on the Policy benefit period chosen by you.

Policy Benefit Period Sum Assured

7 years 5 times Annualized Regular Premium

10 years 5 times Annualized Regular Premium

15 years 8 times Annualized Regular Premium

20 years 10 times Annualized Regular Premium

25 years 10 times Annualized Regular Premium

In the unfortunate event of death of the Life insured during the Policy benefit period, the
following benefits are available:

 Payment of Sum Assured immediately

 All the future premiums payable till maturities are waived off and
 The Policy continues until maturity with the nominee having the right to
exercise all the applicable benefits under the Policy
2. Maturity Benefit:
On maturity of the Policy, you or your nominee will get the Policy Fund Value PLUS Jumpstart
Benefit.

The Jumpstart Benefit gives you financial freedom, so your child is not constrained when it
comes to taking advantage of various career opportunities.

Life Insurance Benefit: With built-in life insurance plus critical illness cover (optional), it
provides complete, all-round protection for your child.

~ 58 ~
 3. Special Additions with Jumpstart Benefit:
Policy term Jumpstart benefit Credited to investment fund
7 years &10 years 5% of average fund value At maturity
15 years 7% of average fund value At maturity
20 years &25 years 7% of average fund value 5 years before maturity (End of
15th / 20th policy year)

*calculated as a %of average policy fund value at the end of previous 36 policy months.

4. Critical Illness Benefit Rider:

In addition to your life insurance benefit, you can also enhance your protection by adding
Critical Illness Benefit Rider by paying a nominal amount. This rider will pay the chosen Rider
Sum Assured in case you are diagnosed with any of the below mentioned critical illnesses and
subject to the terms and conditions Contained in the Critical Illness Benefit Rider – Policy Bond:

 Cancer
 Coronary Artery Bypass Surgery
 Heart Attack
 Kidney Failure
 Major Organ Transplant
 Stroke

You can use this Rider Sum Assured to meet various expenses that are generally incurred in
treatment of critical illnesses like hospitalization expenses, surgery, cost of medicines, diagnosis,
possible loss of pay etc. Please ask your advisor to show you the separate rider brochure for
details of applicable terms and conditions of this rider.

~ 59 ~
5. Choice of Investment Funds:
You have a choice of investing your premiums in any or all of the four investment funds, as per
your financial objective.

Investment Fund Objective Asset Allocation Risk-Return Potential

Growth Opportunities To provide long term Listed equities: 80%-
Fund capital appreciation 100%,
through investing in stocks Cash and money market
across all market instruments:0%-40% High.
capitalization ranges.
Grow Money Fund To provide long term Listed equities:80%-100%,
capital appreciation Cash and money market
through investing across a instrument:0%-40%
diversified high quality High.
equity portfolio.
Save ‘n’ grow Money To provide steady Listed equities:0%-60%,
Fund accumulation of income in Corporate bonds and bank
medium to long term by deposits:0%-50%,
investing in high quality Government bonds and
debt papers and securities:0%-40%,
government securities and Cash and money market Moderate.
a limited opportunity of instruments:0%-40%
capital appreciation.
Steady Money Fund To provide steady Corporate bonds and bank
accumulation of income in deposits:20%-80%,
medium to long term by Government bonds and
investing in high quality securities:20%-80%,
debt papers and Cash and money market Low.
government securities instruments:0%-40%
Safe Money Fund To provide capital Corporate bonds and bank
protection through deposits:0%-60%,
investment in low risk Government bonds and
money market and short securities;0%-60%,
term debt instruments with Cash and money market Low,
maturity of 1year or lesser instruments:0%-40%
Build India Fund To provide long term Listed equities:80%-100%,
capital appreciation Cash and money market High.
through exposure to equity instruments:0%-20%,
investment in corporate bonds and bank
infrastructure and allied deposits:0%-20%
sectors, and by
diversifying investment
across various sub-sector
of the infrastructure sector

~ 60 ~
6. Manage your investments with Switch and Premium Redirection facility:
Through the feature of switches & premium redirection you can manage your asset allocation
between equity & debt depending on your needs. For example you may wish to move your
money to a low-risk investment fund option before maturity of the Policy to protect against
adverse movements in equity markets

You can switch 12 times in a Policy year free of charge, beyond which a charge of Rs. 100 per
switch is levied. The minimum value of a switch should be Rs. 1000.

You can also redirect your future premiums after first Policy year into different funds with
Premium Redirection facility. This facility can be availed of any number of times free of charge.
The minimum allocation in any chosen investment fund should be 5%.

7. Top-up Premiums:
You can invest a bonus received from your employer or profits earned from your business or any
other surplus in your existing investments to achieve your financial goals faster.

With the top-up option, you can boost your contribution any time after the first Policy year. The
minimum amount of a single top-up is Rs. 1000. The total amount of top-up in a Policy year
cannot be more than 25% of total regular premiums paid till that date. Top-up premium has no
effect on your Sum Assured.

8. Liquidity Benefit with Partial Withdrawal:

We all need money during our lifetime to full fill certain goals. From time to time, you may need
money to pay for your child’s education, going on a long vacation, pay off an existing loan etc.

You can withdraw money from your Policy Fund Value any time after completion of three
Policy years. Each partial withdrawal should be a minimum of Rs. 1000 and after withdrawal the
Policy Fund Value should not be less than 120% of the Annualized Regular Premium. Two
partial withdrawals are free of charge in a Policy year and each subsequent partial withdrawal
will be subject to a charge of Rs. 100.

~ 61 ~
9. Decrease in Premium:
While we recommend that you pay the agreed amount of annual premium for the entire term of
the Policy, we also understand that sometimes you may face financial constraints which might
make it difficult for you to pay the agreed premium throughout the term. Therefore, in this
product, we allow you to decrease the premium amount any time after completion of two Policy
years. Decrease in premium will decrease your Sum Assured in the same proportion. Annualized
Regular Premium can be reduced subject to the following condition:

During 3rd policy year, the Annualized Regular Premium can be reduced such that the revised
premium is at least higher of

 75% of first year Annualized Regular Premium

 Minimum Annualized Regular Premium
From 4th policy year onwards, the Annualized Regular Premium can be reduced to the
minimum Annualized Regular Premium.

10. Cover Continuance Option:

While we recommend that all your regular premiums be paid on the respective due dates, we also
understand that due to sudden changes in lifestyle like increased responsibilities or unexpected
increase in household expenses may affect your future ability to pay premiums.

Now you need not worry if you are unable to pay premiums into your Policy. The cover
continuance option entitles you to continue your Policy with all benefits if you are unable to pay
premiums (as per the table below). Once you have opted for this option, you cannot pay any
further premiums or top-ups under the Policy.

Policy Benefit Period

7 years 10 years 15 years 20 years 25 years

Cover
continuance
3 annualized 3 annualized 5 annualized 5 annualized 5 annualized
available regular regular regular regular regular
after premiums premiums premiums premiums premiums

payment of

~ 62 ~
A flexible plan that adapts to the changing needs of your child over time.

11. Extended Maturity Benefit with Settlement Option:

You may want to take advantage of Bharti AXA Life’s fund management expertise even after
maturity of your Policy. You can avail any of the following options at maturity:

 Take entire maturity proceeds (Policy Fund Value + Jumpstart Benefit) as lump sum
payment on maturity; or
 Take the maturity proceeds (Policy Fund Value + Jumpstart Benefit) at regular intervals
in installments over 5 years after the maturity
 A combination of the above mentioned two options
date (extended maturity period). The value payable at such intervals will be calculated at
the unit price as on the relevant date

At any time during the extended maturity period, you have an option to withdraw the balance
available Policy Fund Value as on that date. However, you will not be entitled to life insurance
benefit or partial withdrawals / switches between investment funds or top-ups during this period.

UPlease note that during the extended maturity period, the investment risk in the investment
portfolio continues to be borne by the Policyholder.

~ 63 ~
(d) What are the applicable charges in this product?
1. Premium allocation charge: This charge is levied at the time of premium allocation and
depends on the premium amount, Policy benefit period and the Policy year.

Premium Band 1 = Annualized Regular Premium between Rs. 15,000 and Rs. 99,999.

Premium Band 2 = Annualized Regular Premium of Rs. 1,00,000 & above.

Policy 7 years 10 years 15 years 20 years 25 years

Term
Policy Year
1 Premium 28% 35% 35% 45% 50%
Band 1
Premium 25% 32% 32% 36% 50%
Band 2
2 Both 9% 15% 15% 24% 24%
3 Premium 5% 5% 5% 5% 5%
4++ Bands 0% 0% 0% 0% 0%
Top-up premium subject to an allocation charge of 1.5% for both Premium Bands.

2. Risk benefit charge: This charge is applied on the Sum Assured and is deducted
proportionately on a monthly basis by cancellation of units from the Policy Fund Value. The risk
benefit charge will depend on your age at entry and Policy benefit period chosen and this charge
will remain the same throughout the Policy benefit period.

Annual Risk Benefit charges per Rs. 1000 of Sum Assured are as follows:

Risk Benefit Charge for a 30-year-old

Age Policy Benefit Period

~ 64 ~
 7 years 10 years 15 years 20 years 25 years

Male Rs. 2.95 Rs. 3.74 Rs. 4.15 Rs. 5.02 Rs. 6.68

Female Rs. 2.75 Rs. 3.38 Rs. 3.60 Rs. 4.21 Rs. 5.49

3. Policy Administration Charge: This charge is deducted by cancellation of units from the
Policy Fund Value on a monthly basis. The charge is Rs. 60 per month increasing at 5%
p.a. on every policy anniversary.

5. Fund Management Charge: This is a charge that is levied on each of the Investment
Funds and is adjusted in the unit price calculation on a daily basis. The charges for the
funds are as follows:
Fund Name % of policy fund Fund Name % of policy fund
value (p.a.) value (p.a.)

Growth 1.35% Save n Grow money 1.25%

opportunities plus
Grow money plus 1.35% Steady money 1.00%
Build India 1.35% Safe money 1.00%

5. Surrender Charges: The Surrender Charge is applied if and when you surrender your Policy
in the first 5 Policy years. The surrender value that you will receive will be the Policy Fund
Value less this charge. The surrender charges are applicable on the Policy Fund Value and are as
follows:

Surrender 7 years 10 years 15 years 20 years 25 years

year
Year 1 75% 75% 91% 91% 91%
Year 2 50% 50% 80% 80% 80%
Year 3 25% 25% 50% 50% 50%
Year 4 0% 0% 25% 25% 25%
Year 5 0% 0% 10% 10% 10%
Year 6 ++ 0% 0% 0% 0% 0%

~ 65 ~
If the Policy is surrendered within the first three Policy years then the surrender value as on the
date of intimation of surrender will be paid only after the completion of three Policy years.

(e) Plan details :

Parameter Eligibility criteria

Policy term options 7 years, 10 years, 15 years, 20 years, & 25 years
available
Minimum age at 18 years
entry
Maximum age at 70 years less policy term (7, 10, 15 & 20- year terms)
entry 75 years for 25- year term
Maximum age at 70 years (7, 10, 15 &20- year terms)
maturity 75 years for 25- year term

Minimum Minimum 7years 10years 15years 20 years 25 years

premium premium
(RS. P.a.)
Annual 36, 000 20, 000 15, 000 15, 000 12, 000
mode
Semi- 15, 000 15, 000 12, 000
annual
mode
Quarterly 18, 000 18, 000 12, 000
mode
Monthly 24, 000 18, 000 18, 000 12, 000
mode

~ 66 ~
* Through ECS only

Get tax benefits under section 80C & section 10 (10D)

The following table shows the benefit of Bharti AXA Life Bright Stars for a 30-year-old Male
paying a premium of Rs. 36,000 per annum under annual mode.

Monthly_Equity_Roundup_–_November_2009_

Policy Benefit Period 10 years 15 years 20 years

6% 10% 6% 10% 6% 10%

Sum Assured (Rs.) 1,80,000 2,88,000 3,60,000

Policy Fund Value at 4,01,34 4,97,18 6,71,71 9,30,931 10,02,48 15,69,6

4 4 3 9 10
Maturity (Rs.)

Jumpstart Benefit (Rs.) 17,247 20,592 30,002 39,976 45,595 68,498

Total Maturity Benefit 4,18,59 5,17,77 7,01,71 9,70,907 10,48,08 16,38,1

(Rs.) 1 5 5 5 08

Death Benefit (Rs.) 5,98,59 6,97,77 9,89,71 12,58,90 14,08,08 19,98

1 5 5 7 5 ,108

6% and 10% are assumed gross investment rates per annum on Grow Money Fund.

(f) What are the tax benefits under this product?

You can avail of the tax benefits on the premiums paid and the benefits received as per the
prevailing tax laws under Section 80C and Section 10 (10D) of the Income Tax Act, 1961. The
tax benefits are subject to change as per change in Tax laws from time to time.

Section 41 Of Insurance Act 1938

~ 67 ~
“No person shall allow or offer to allow, either directly or indirectly, as an inducement to any
person to take out or renew or continue an insurance in respect of any kind of risk relating to

lives in India, any rebate of the whole or part of the commission payable or any rebate of the
premium shown on the Policy nor shall any person taking out or renewing or continuing a Policy
accept any rebate except such rebate as may be allowed in accordance with the published
prospectus or tables of the Insurer.”

Section 45 Of Insurance Act 1938

“No Policy of life insurance shall after the expiry of two years from the date on which it was
effected, be called in question by an insurer on the ground that statement made in the proposal
for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any
other document leading to the issue of the Policy, was inaccurate or false, unless the insurer
shows that such statement was on a material matter or suppressed facts which it was material to
disclose and that it was fraudulently made by the Policyholder and that the Policyholder knew at
the time of making it that the statement was false or that it suppressed facts which it was material
to disclose.

Provided that nothing in this section shall prevent the insurer from calling for proof of age at any
time if he is entitled to do so, and no Policy shall be deemed to be called in question merely
because the terms of the Policy are adjusted on subsequent proof that the age of the Life insured
was incorrectly stated in the proposal.”

(g) Terms and Conditions

1. If any regular premium due within the first three years of the Policy remains unpaid even
after the grace period of 30 days, the Policy lapses and all the benefits under the Policy
cease to exist. You can however, revive the Policy by paying all the unpaid premiums
within a period of two years from the due date of the last unpaid premium. If the Policy is
not reinstated during the Reinstatement Period, the Policy will stand terminated and the
Policy Fund Value as at the expiry of Reinstatement Period net of Surrender Charge as on
the lapse date shall be payable at the completion of the third Policy year or at the end of
the Reinstatement Period, whichever is later.

2. If the due premiums have been paid for at least three consecutive Policy years from the
Policy Date and subsequent premiums are unpaid, you may reinstate the Policy within

~ 68 ~
 two years from the date of first unpaid premium by resuming premium payment by
paying all the unpaid premiums and the appropriate Premium Allocation Charge shall be
deducted from the above mentioned payment. During the period allowed for
reinstatement, the Policy shall continue to be in effect by levying applicable Policy
Charges. At the end of the allowed period for reinstatement, if you have not opted for

cover continuance option, only the Policy Fund Value, after deducting applicable
surrender charges will be paid and the Policy will terminate. In an event of death during
the Reinstatement Period, the death benefit shall be paid out.

3. At any time during the Policy benefit period, after completion of 3 Policy years, if the
Policy Fund Value falls below 120% of the Annualized Regular Premium, then the Policy
will be terminated & the surrender value will be paid out.

4. In case of death of the Life insured during the Policy benefit period

a. Where the Life insured and Policyholder are same, the Policy will continue till
maturity of the Policy (provided that the nominee gives an undertaking-cum-
indemnity bond) and nominee is entitled to all the applicable benefits under the
Policy, viz. partial withdrawals, switches, surrender, premium redirection &
extended maturity benefit. Top-ups & change in annualized regular premium is not
allowed. Also, nomination is mandatory where the life insured & policyholder are
same.

b. Where the Life insured and Policyholder are different, the Policy will continue till
maturity of the Policy and the Policyholder is entitled to all the benefits available
under the Policy.

5. Top-up benefit is not available after the death of the Life insured.

6. Free-look option: If you disagree with any of the terms and conditions of the Policy, you
have the option to return the original Policy Bond along with a letter stating reasons for
the objection within 15 days of receipt of the Policy Bond (“the free-look period”). The
Policy will accordingly be cancelled and an amount equal to the sum of (Premium
Allocation Charge, Policy Administration Charge, Risk Benefit Charge, deducted from the
Policy Fund Value) and (the Policy Fund Value less stamp duty and underwriting
expenses incurred by the Company), will be refunded to the Policyholder.

~ 69 ~
 7. If the Life insured under the Policy, whether medically sane or insane, commits suicide,
within one year of the Issue Date or the date of reinstatement of the Policy, the Policy
shall be void and the Company will only be liable to pay the Policy Fund Value as on the
date of intimation of death and all the benefits under the Policy shall cease to exist
including future payment of premiums by the Company.

8. This is a non-participating Unit Linked Insurance Policy.

(h) Computation of Unit Price

The unit pricing shall be computed based on whether the Company is purchasing (appropriation
price) or selling (expropriation price) the assets in order to meet the day to day transactions of
unit allocations and unit redemptions i.e. the life insurer shall be required to sell / purchase the
assets if unit redemptions / allocations exceed unit allocations/redemptions at the valuation date.

The appropriation price shall apply in a situation when the Company is required to purchase the
assets to allocate the units at the valuation date. This shall be the amount of money that the
Company should put into the fund in respect of each unit it allocates in order to preserve the
interests of the existing Policyholders. The unit price will be computed as follows: Market value
of investment held by the fund plus the expenses incurred in the purchase of the assets plus the
value of any current assets plus any accrued income net of fund management charges less the
value of any current liabilities less provisions, if any. This gives the net asset value of the fund.
Dividing by the number of units existing at the valuation date (before any new units are
allocated), gives the unit price of the fund under consideration. and do not in any manner indicate
the quality of the Investment Funds The expropriation price shall apply in a situation when the
Company is required to sell assets to redeem the units at the valuation date. This shall be the
amount of money that the Company should take out of the fund in respect of each unit it cancels
in order to preserve the interests of the continuing Policyholders. The unit price will be computed
as follows: Market value of investment held by the fund less the expenses incurred in the sale of
the assets plus the value of any current assets plus any accrued income net of fund management
charges less the value of any current liabilities less provisions, if any. This gives the net asset
value of the fund. Dividing by the number of units existing at the valuation date (before any units
are redeemed), gives the unit price of the fund under consideration.

~ 70 ~
(i) Risks of investment in unit-linked Policies:

 Bharti AXA Life Bright Stars is a unit-linked insurance Policy and is different from
traditional insurance Policies.

 The premium in unit-linked insurance Policy are subject to investment risk associated
with capital market and the NAV of the units may go up or own based on the
performance of the investment funds and the factors influencing the capital markets and
the insured is responsible for his / her decisions.

 Bharti AXA Life Insurance Company Ltd. is only the name of the insurance company
and Bharti AXA Life Bright Stars is only the name of the unit-linked insurance Policy
and does not in any way represent or indicate the quality of the Policy, its future
prospects and performance or the returns.

 Bharti AXA Life Bright Stars does not provide for participation in the distribution of
surplus or profits that may be declared by the Company.

~ 71 ~
 Growth Opportunities Fund, Grow Money Fund, Steady Money Fund and Save‘n’grow
Money Fund are the names of the Investment Funds, their future prospects or returns.

RESEARCH
METHODOLOGY
~ 72 ~
 Research always starts with a question or a problem. Its purpose is to question through the
application of the scientific method. It is a systematic and intensive study directed towards a more
complete knowledge of the subject studied. Marketing research is the function which links the
consumer, customer and public to the marketer through information- information used to
identify and define marketing opportunities and problems generate, refine, and evaluate marketing
actions, monitor marketing actions, monitor marketing performance and improve understanding of
market as a process.

Marketing research specifies the information required to address these issues, designs, and the
method for collecting information, manage and implemented the data collection process, analyses
the results and communicate the findings and their implication.

I have prepared our project as descriptive type, as the objective of the study demands the answers of
the question related to find the customers perception about life insurance product and popularity of
ULIP in present scenario.

SAMPLING METHOD AND SAMPLE SIZE:-

Introduction:-

To get final conclusion of my research study and to know customer perception about life
insurance product I need to conduct a survey. To full fill my objective I made questionnaires to
collect primary data. I have gathered secondary data and primary data and collected information
from the combination of these two data.

Primary data: -

I have taken great care while collecting primary data to answer that it is relevant, accurate,
current and unbiased. I have taken a sample of 200 people. I have visited them personally to get
data.

Secondary data: -

~ 73 ~
Secondary data consist of information that already exists somewhere, having been collected for
another purpose. I have gathered secondary data from website of different operators, different
magazines, newspapers and libraries.

Sample size: -

I have taken sample size of 200 respondents. Because the population is too large so it is difficult
to survey.

The Marketing Research Process:

As marketing research is a systemic and formalized process, it follows a certain sequence of

research action. The marketing process has the following steps:

 Formulating the problems

 Developing objectives of the research
 Designing an effective research plan
 Data collection techniques
 Evaluating the data and preparing a research report
In order to accomplish this project successfully following steps have been taken-

Step-1 Preparation

1. Introduction: the research process

2. Approaches to research

3. Planning and designing research projects

4. Using the literature

5. Secondary data sources.

Step-2 Approaches to Data collection

6. Observation

~ 74 ~
 7. Qualitative methods

8. Questionnaire surveys

9. Experimental methods

10. Sampling and its implications

Step-3 Analysis

11. Analyzing secondary data

12. Survey analysis

13. Statistical analysis

14. Qualitative analysis

Step-4 Reporting

15. Reporting research results

~ 75 ~
 DATA ANALYSIS
AND
INTERPRETATION

Here I have formed a questionnaire to study why people go for life insurance. What is people’s
major motive behind investing in life insurance? Do they decide upon their own or they take
guidance of an agent? What is their perception about Reliance Life Insurance Company Limited?

Questions:-

There are 14 questions in the questionnaire. Out of these 14 questions, some questions are close
ended and other questions are open ended.

~ 76 ~
Target Population:-

I had conducted this survey among 200 people, and the target group was a mix of people from
the society. I asked the questions to people in randomly (only adult)

Because every body can be a consumer of life insurance product and it essential for each
individual and reduce the financial burden of government and it will give security to dependant. I
have taken 123 male and 73 female as sample to know gender biasness in purchasing life
insurance product and their awareness. From this sample I have collected 83 samples, whose age
between 18 to 30 year and another 117 sample, age more than 30 year.

Analysis: I have used pie charts, and some other statistical measures to analyze the questions.

1. Survey to find out the educational qualification of respondents:

Educational Qualification No. Of percentage

Respondent
s
High school 30 15%
Intermediate 50 25%
Degree and above 80 40%
Technical 40 20%
Total 200 100%
Table 1:

90
80
Chart 1:
70
60
50
80
40
30 50 percentage
40 No. Of Respondents
20 30
10
0
l e e l ~ 77 ~
hoo iat ov ica
sc d ab n
e ch
gh er
m
an
d Te
Hi In
t e
e
gr
De
Interpretation: It is clear from the table and chart that 60% respondents are graduate and above or
technically qualified remaining 25%are intermediate and only 15% are high school passed.

2. Survey to find out the occupation of respondents:

Table 2

Occupation No. Of respondents percentage

Professional 60 30%
Employee 70 35%
Business 40 20%
Agriculture 30 15%
Total 200 100%

Chart 2:

~ 78 ~
 No. Of respondents
30 60

Professional
Employee
40 Business
Agriculture

70

Interpretation: It is clear from above table and chart that occupation wise 35% of respondents
are employee and rest are represented as professional 30%, Businessmen 20% and 15% are
agriculturist.

3. Survey to find out the annual income of respondents:

Table 3:

Annual income (in Rs) No. Of respondents percentage

Below 80,000 40 20%
80,000-150,000 50 25%
150,000-250,000 80 40%
Above 250,000 30 15%
Total 200 100%

Chart 3:

~ 79 ~
 No. Of respondents
30
40

Below 80,000
80,000-150,000
150,000-250,000
Above 250,000

50
80

Interpretation: It is revealed that majority of respondents are fall in income group 150,000-

250,000 that is around 40%, and remaining 25% are fall in 80,000-150,000, 20% fall in income
group below 80,000 and rest 15% are fall in above 250,000.

4. Survey to find out Reason for purchase of life insurance product:

There could be any motive of people behind investing in a life insurance policy. The main
purpose of life insurance is the Risk cover of one’s life. But some people consider different
advantages of a life insurance policy. Some people consider Tax benefit as the main advantage of
life insurance. Some believe that life insurance is an investment so they tend to invest in life
insurance. While some people believe that it is a compulsory saving. Now let’s see what all
people say.

Table 4:

Reason for purchase of life No. Of Respondents Percentage

insurance product
Peace mind/ security 100 50%
Income protection 50 25%
~ 80 ~
Recommended by advisor 14 7%
Recommended by family/ 6 3%
friend
Tax saving purpose 24 12%
others 6 3%
Total 200 100%

Here we can see that majority of the people tend to invest in life insurance for the peace
mind/security. The next preferred option is income protection. We founded from the discussion
with public and some experts that those people with a low income tend to invest in life insurance
to gain tax benefit. Others include only loan as a reason to purchase life insurance product.

Chart 4:

Reason for purchase life insurance product

Peace mind/security
Income protection
Recommended by advisor
Recommended by family/friend
Tax saving purpose
others

~ 81 ~
Interpretation: It is clear from the table 4 and chart 4 that most of customer, 50% purchase
insurance product for peace mind/ security. 25% customer are purchase insurance product for
income protection and 7% customer are purchase insurance product recommended by advisor,
3% customer are purchase insurance product recommended by family/ friend, 12% customer are
purchase insurance product for tax saving and 3% customer for other purposes.

5 Survey to find out criteria most valued by customer as a life insurance purchaser:-

Generally we know that a person buy policy through agent, we generally assume that there is
greater roll of professional advice in purchasing life insurance product. And brand/trust is valued
by the customer as a very important criterion. Now day’s main attraction to buy life insurance plan
is to return/fees. So these are the some believe that we value the life insurance product in above
way. Now let’s see what people say.

Table 5:

Most valued by customer as a No. Of respondents Percentage

life insurance purchaser
Return/ fees 74 37%
Brand/ trust 62 31%
Professional advice 28 14%
Product 24 12%
After sale services 12 6%
Others 0 0%
Total 200 100%

Chart 5:

~ 82 ~
 Criteria most valued by customer as a life insurance purchasers

After sales
service
Professional6%
advice
14% Return/fees
37%

Brand/trust
31%
product
11%

Interpretation: It is clear from table 5 and chart 5 that most of customer valued i.e. 37% return/ fees
as a life insurance purchasers, 31% customer valued brand/ trust, 14% customer valued
professional advice, 12% valued products, 6% after sale services and 0% valued other purposes

6 Survey to find out “how many people interested to invest and their investment
concern”:-

After introduction of ULIP in life insurance product, life insurance products are known by
customer as an investment option. And agents are selling ULIP products as a best investment
option. So I have put this question to know how many are really interested to invest and whether
they are choosing life insurance product (ULIP) or any other option for investment.

Table 6:

~ 83 ~
Investment concern of No. Of Respondents percentage
Respondents
Building cash reserve 74 37%
Funding for child 34 17%
Life insurance product 34 17%
Asset purchase 26 13%
Retirement 24 12%
Others 8 4%
Total 200 100%

Chart 6:

No. Of Respondents
80
70
60
50
40
30 No. Of Respondents
20
10
0
e ld t e t rs
rv hi uc as en
ese r c
r od
r ch m the
r fo p u re O
as
h
ing n ce etp Reti
c a s
in
g nd ur As
li d Fu ins
Bu Lif
e

Interpretation: It is clear from the above table and chart that most customer i.e.37% invested for
building cash reserve, 17% invested for funding for child, 17% invested for life insurance
product, 13% customer’s investment is concern with asset purchase, 12% invested for retirement
and 4% for other purposes.

~ 84 ~
7 Survey to know current investment portfolio of investors:-

Objective behind this question is to know the acceptability of ULIP as an investment option. How
they decide there investment portfolio and percentage of different investment option in their
current investment portfolio. So we can make a product that can full fill there current demand.
Like; we can add different feature like mutual fund, fixed deposit, government securities etc. in our
life insurance product. Now let’s see what all people say………….

Table 7:

Investment portfolio of investor No. Of Respondents percentage

Fixed Deposit 92 46%
ULIP 24 12%
Share Market 16 8%
Government Securities 16 8%
Mutual Fund 16 8%
Bonds 12 6%
Gold 12 6%
Land 8 4%
Total 200 100%

Chart 7:

~ 85 ~
 100
90
80
70
60
50 92
40
30 percentage
20 28 No. Of Respondents
10 16 16 16 12 12 8
0
it t es
os UL
IP ke nd nds ld nd
p ar riti l Fu Go La
De u Bo
ed r e M Sec tua
a t u
Fix Sh men M
r n
ve
Go

Interpretation: It is clear from the above table and chart that majority of the customer’s investment
portfolio i.e. 46% consist of fixed deposit, 14% investor invest in ULIP, 8% in share market, 8% in
government securities, 8% in mutual fund, 6% in bonds, 6% in gold and 4% investor’s invest in
land.

Table 8:

Customer perception about No. of Respondents percentage

benefits of BRIGHT STARS
PLUS
BHARTI AXA LIFE will pay 90 45%
all your future premium into
the investment funds
Jumpstart benefit 20 10%
6 market-linked investment 50 25%
funds
Cover continuance 30 15%
Tax benefits 10 5%
Total 200 100%

Chart 8:

~ 86 ~
 100 90
80
60 50
40 30
20
20 10
0

percentage
No. of Respondents
Interpretation: It is
clear from the above
table and chart that
majority of customer
i.e. 45% purchase
BRIGHT STARS
PLUS for the benefits
which BHARTI AXA
LIFE will pay all your future premium into the investment funds, 25% customer’s perception
about benefit of 6 market-linked investment funds, 15% for cover continuance, 10% for
jumpstart benefit which company gives to its customer and 5% for tax benefits.

FINDING

~ 87 ~
Every study is completed only if it has some outcomes in the form of finding. The finding of my
study is as follows.

1. Referring table 1 and chart 1, it is clear that majority of respondents i.e. 60% are
degree and above or technical qualified.
2. Referring table 2 and chart 2, it is clear that 35% respondents an employees which
gets the services of BHARTI AXA LIFE and only 15% are agriculturist.
3. It is clear from the questionnaire that majority of the customers who gets the
services of BHARTI AXA LIFE are between age group 30 – 50 years.
4. Referring table 3 and chart 3, it is clear that 40% respondents are fall in income
group 150,000-250,000 and only 15% respondents have income above 250,000.
5. Referring table 4 and chart 4, it is clear that majority of customer’s i.e. 50%
purchase life insurance product for peace mind/ security and 25% customer
purchase life insurance product for income protection.
6. Referring table 5 and chart 5, it is clear that most customer’s i.e. 37% as a life
insurance purchaser gives value to return/ fees and only 6% gives value to after
sale services.
7. Referring table 6 and chart 6, it is clear that majority of customer’s investment
concern i.e. 37% for building cash reserve and only 12% concern with retirement.
8. Referring table 7 and chart 7, it is clear that most customers’ i.e.46% investment
portfolio consist of fixed deposit and only 4% customers invested in land.
9. Referring table 8 and chart 8, it is clear that 45% customer give importance to
BHARTI AXA LIFE will pay your entire future premium into your investment

fund and only 5% gives importance to tax benefits.

~ 88 ~
Limitations of the study:

Inspite of every care taken on the part of the researcher there were certain limitations which
could not be overcome and are as follows:

 Some of the persons were not so responsive.

 Possibility of error in data collection because many of investors may have not given the
actual answer of my questionnaire.
 Sample size is limited to 200 people only. The sample may not adequately represent the
whole market.
 Some respondents’ were reluctant to divulge personal information which can hinder the
validity of all responses.
 The research study was confined to Jammu and Kathua city only.

The above are some of the aspects which posed real problem in the
way of completion of the research work but the majority of respondents were cooperative and my
gratitude are due to them.

~ 89 ~
 SUGGESTION AND RECOMMENDATION:

 To increase the level of insurance penetration BHARTI AXA LIFE may focus on
bringing products that suit to be rural customers.
 The company if possible should invest in advertising, conduct road shows and spend
money on hoardings, so that it can better propagate awareness about its various lesser
known products.
 BHARTI AXA LIFE should also tie up with several other banks to sell its products i.e
through bancassurance.
 The company has the option of tying up with local NGO’s for selling its rural insurance
products.
 Customer friendly documentation i.e it should made easier and faster.
 BHARTI AXA LIFE should keep a check that its agents equally promote all its products.
 BHARTI AXA LIFE may provide additional funds to its development officers and
agents.
 All the hidden charges should clearly be stated in the form and explained by the agents
and BHARTI AXA LIFE should provide better training to its agents.
 Claim settlement process should be made fast and must not involve lengthy decision
making process.
 Some special focus should be laid on individual risk coverage while designing the
products.

Conclusion
After going through this research I found that the perception of the customer on insurance, bharti
axa life insurance market position, the products (Bright Stars plus) benefits to the customer, to
the advisor that’s all. When the customers are understand the benefits of the product then they
are agree to buy this product.

~ 90 ~
 Our exhaustive research in the field of Life Insurance threw up some interesting
trends which can be seen in the above analysis. A general impression that we
gathered during Data collection was the immense awareness and knowledge among
people about various companies and their insurance products. People are beginning to
look beyond LIC for their insurance needs and are willing to trust private players with
their hard earned money. People in general have been impression by the marketing
and advertising campaigns of insurance companies. A high penetration of print, radio
and Television ad campaigns over the years is beginning to have its impact now.

 Another hearting trend was in terms of people viewing insurance as a tax saving and
investment instrument as much as a protective one. A very high number of
respondents have opted for insurance for such purposes and it shows how insurance
companies have been successful to attract public money in recent times.

 The general satisfaction levels among public with regards to policy and agents still

 Requires improvement. But therein lays the opportunity for a relative new comer like
Reliance. LIC has never been known for prompt service or customer oriented
methods and Reliance can build on these factors.

~ 91 ~
 BIBLIOGRAPHY

The following references and websites that I have followed to complete this
project……..

 IC 33 LIFE INSURANCE

 BHARTI AXA LIFE PRODUCTS BROCHURE

 www.bharti-axalife.com

 www.goggle.com

 www.irda.com

 www.wikepedia.com

 www.myiris.com

~ 92 ~
 ANNEXURE

A SURVEY ON CUSTOMER PERCEPTION ABOUT LIFE INSURANCE PRODUCT

[For Answers Put Tick Mark in the boxes ( ]

Name:

Occupation:

Address:

Age:

Email :

Phone no.:

1.Which product of Bharti Axa Life customer will purchase more:

(a).Wealth confident (b).Bright stars plus (c.)Dream life pension plan

(d.)Save confident (e).Aspire life (f.)Secure confident

2. Are you satisfied with the plans of bharti Axa Life insurance:

a.)Below 30%

b)30% -50%

c)50%-70%

3. Reasons for purchase of life insurance product:

(a) Peace mind/security (b) Income protection (c) Recommended by advisor

(d) Recommended by family/friends (e) Tax saving purpose

(f) Others:

~ 93 ~
4 If yes, what is your investment concern:-

(a) Life insurance product (b) Building cash reserves

(c) Retirement (d) Asset purchase (e) Funding for children

(f) Others (specify):

10. Your current portfolio consists of:-(You can put more than one

(a) Share markets (b) Fixed deposit (c) Government securities

(d)Mutual funds (e) Bonds (f) ULIP (g) other (specify):

14.your perception about benefits bright stars plus?

(a) Bharti Axa Life will pay all your future premium (b) Jump start benefits (c) Tax
benefits

(d) cover continuance (e) 6 investment funds

~ 94 ~