A RESEARCH PROJECT REPORT ON EMPLOYEE JOB SATISFACTION Submitted in partial fulfillment for the award of Degree of MASTER OF BUSINESS

ADMINISTRATION Of
CHHATTISGARH SWAMI VIVEKANAND TECHNICAL UNIVERSITY BHILAI Session 2007-09 Submitted BY M.B.A. SEM-II, 2008
LOGO OF COLLAGE & TAG LINE

DEPARTMENT OF MANAGEMENT RUNGTA INSTITUTE OF ENGINEERING & TECHNOLOGY

Kohka-Kurud Road ,Bhilai-490024,(C.G),INDIA

A Project Report on
Investors Perception Towards Unit Linked Insurance Policies with special reference to icici bank A Study in Raipur City.

Submitted in partial fulfillment for the award of

MASTER OF BUSINESS ADMINISTRATION (2006 08)

GUIDED BY:
Mr. Abhishek Tiwari
Regional Sales Manager

SUBMITTED BY:
MBA IInd Sem

BHILAI INSTITUTE OF TECHNOLOGY (AN ISO 9002 CERTIFIED INSTITUTE) DURG (C.G.)
2

Certificate

This is to certify that the project work done onInvestors Perception Towards
Unit Linked Insurance Policies with special reference to icici bank A Study in Raipur City. submitted to BHILAI INSTITUTE OF TECHNOLOGY (C.G.) by student of

M.B.A 2nd semester in partial fulfillment of the requirement for the award of degree Business administration in a bonafide work carried out by him under my supervision and guidance. This work has not been submitted anywhere else for any other degree/diploma.

Date :---------------Raipur---------------

(M.B.A.Dept, Director)
Bhilai institute of technology

Declaration

I hereby firmly declare that this project report entitled Investors Perception Towards Unit Linked Insurance Policies A Study In Raipur City. is submitted at the Bhilai Institute of technology, c.g. swami vivekanand technical University in partial fulfillment of the degree of Master in Business Administration is a bonafied works and it has not been submitted to any other University and institution for any degree or diploma.

DATE: MBA 2
nd

sem

PLACE:

Bhilai institute of technology Durg (C.G.)

Acknowledgement
The appetite to search the facts, the skill to link them with one another, and the art to present them in a meaningful manner ..isnt it the crux of any study ? But this can not be turned into substance without the cooperation of learned authorities on the subject and the resourceful individuals. Any study of this magnitude requires the marshalling of information ranging from Arawali to Alps, and any single person cannot do such Himalayan tasks. It needs co-operation of many, and I have been fortunate enough as I got help from all the related authorities. I am glad to offer my prime sense of gratitude to Mr. Abhishek Tiwari, regional Sales Manager, ICICI Bank, Raipur (C.G.). I am obliged to Dr. P.B. Deshmukh Add. Director and head of the department of Bhilai institute of technology and I thank Mr. Sanjay Guha, my project guide, Bhilai institute of technology C.G. Swami vivekanand technical University Durg (C.G.) for her inquisitive guidance in the design and development of this work. They have been an ever enthusiastic fountain of inspiration and encouragement. I take this as an opportunity to express my warmest regards for my friends and class mates for their inspiring co-operation. I am indebted to all the respondents who sacrificed their time and willingly discussed with me a variety of issues related with the subject. Finally I am beholden to my parents and brother for their blessings and inspiration.

DATE: MBA 2 nd Sem

PLACE:

Bhilai institute of technology Durg (C.G.)

TABLE OF CONTENT
CHAPTER 1
1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18

INTRODUCTION

Page No.

What is Perception? Factors That Influence Perception What is investment? Basic concept of investment What is Insurance? Purpose and need of insurance How insurance works What is Life Insurance? Superiority of life insurance to other forms of savings Buying of life insurance policy Unit Linked Insurance Plans Features of Unit Linked Insurance Plans How Unit Linked Insurance Plans Works? Unit Linked Insurance Plans are Good Unit Linked Products Offer in terms of Value Addition Is Investment Risk Left to the Customer who Buys ULIPs? Companies Providing Unit Linked Insurance Plans Justification Of The Study

CHAPTER 2
2.1 2.2 2.3 2.4 2.5 2.6

RESEARCH METHODOLOGY

Statement of Problem Purpose of Study Objectives of Study Population Sample Size Sample Unit 6

2.7 Sources of Data 2.8 Sampling Method 2.9 Delimitation

CHAPTER 3 CHAPTER 4 BIBLOGRAPHY APPENDIX

ANALYSIS AND INTERPRETATION OF DATA FINDINGS, LIMITATION AND SUGGESTION

CHAPTER - 1 INTRODUCTION

1. INTRODUCTION
1.1 WHAT IS PERCEPTION?
Perception is a process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment. However, what one perceives can be substantially different from objective reality. It need not be, but there is often disagreement. For example, its possible that all employees in a firm may view it as a great place to work favorable working conditions, interesting job assignments, good pay, an understanding and responsible management but, as most of us know, its very unusual to find such agreement.

1.2 Factors That Influence Perception:A number of factors operate to shape and sometimes distort perception. These factors can reside in the perceiver, in the object or target being perceived, or in the context of the situation in which the perception is made. a) Factors in the perceiver Attitudes Motives Interests Experience Expectations b) Factors in the situation Time Work setting Social setting c) Factors in the target Novelty Motion Sounds Size Background

Proximity Similarity

1.3 INTRODUCTION TO INVESTMENT

The economic progress of a country is to a certain extent linked with the growth of the capital market. Growth of capital market is directly linked with the savings of the people .The savings alone cannot provide growth to the capital market. The faster growth of capital market pre-suppose two things Availability of savings with the public Necessary know how of investments.

In India, not withstanding a high rate of savings by the community, the capital market is not in a position to grow fast because the common man has not acquired the necessary know how himself to select appropriate avenues of investment which will serve his needs.

Therefore savings are mainly directed towards Fixed Deposit with bank/ post office Real State Gold

Investment in capital market is a tough job and requires study of capital market and the intelligence to interpret the graph of capital market. It is almost a technical job and requires an expert guide. If the investor is assured that there are organizations of repute with necessary expertise to select appropriate avenues of investment where the yield is attractive enough, with utmost security of capital invested, it would create a proper climate for diversion of a part of savings. Financial institutions possess the required expertise and hence they have been successful in moping up public savings through life insurance policies. Thus life insurance policies also provide an opportunity of participation in capital market which will assure a reasonable capital appreciation on his investment, to those who are generally shy to invest their savings in equities and debentures because of its complicated procedures. Therefore more and more people are investing in life insurance policies.

1.4 BASIC CONCEPT OF INVESTMENT

Investing is never an easy process. However, a sound understanding of some basic concepts makes the process of investment decision much easier. The following steps can help you get started on your path to becoming a successful investor. 1. Identify financial needs and goals - The first step is to understand your financial needs and goals .An investor has to decide when he needs money and for what purpose? He has to list his financial goals and when they will materialize and how much money is required for the same .The answer will help them to arrive at the time frame for investment short term, medium term long term.

2. Understand tolerance to risk - Before making an investment decision it is important to ascertain investors feelings about risk . Will he be comfortable with fluctuations in the value of investment? Or he will settle for lower returns, without ups and downs? 3. Estimating required rate of return - The required rate of return depends on investors financial goals and the time required to achieve them. In this case, as investment horizon reduces, for the same level of savings, higher risk is to be taken. Alternatively, if investors are not willing to take higher risk, he has to save a higher amount. CONCEPT OF INSURANCE

1.5. What is Insurance?

The business of insurance is related to the protection of the economic value of assets. Every asset has a value. The asset would have been created through the efforts of the owner, in the expectation that, either though 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 motor car, it provides comfort and convenience in transportation. There is no direct income. There is a normally expected life time for the asset during which time it is expected to 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 asset 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 a mechanism that helps to reduce such adverse consequences.

1.6 PURPOSE & NEED OF INSURANCE:

Assets are insured, because they are likely to be destroyed or made nonfunctional, through an accidental occurrence. Such possible occurrences are called perils. Fire, floods, breakdowns, lightning, earthquakes, etc. are perils. The damage that these may cause the assets, is the risk that the assets are exposed to. The risk only means that there is a possibility of loss or damage. It may or may not happen. There has to be an uncertainty about the risk. Insurance is done against the contingency that it may happen. Insurance is relevant only if there are uncertainties. If there is no uncertainty about the occurrence of an event, it cannot be insured against. There are other meanings of the term risk. To the ordinary man in the street risk means exposure to danger. In insurance practice, risk is also used to refer to the peril or loss producing event. For example, it is said that fire insurance covers the risks of fire, explosion, cyclone, flood etc. Again it is used to refer to the property covered by insurance, for example, a timber construction is considered to be a bad risk for fire insurance purpose. Here the term risk refers to the subject mater of insurance. Conceptually, the mechanism of insurance is very simple. People who are exposed to the same risks come together and agree that, if any one of the members, suffers a loss, the others will share the loss and make good to the person who lost. All people who send goods by ship are exposed to the same risk related to water damage, ship sinking, piracy, etc. Those owning factories are not exposed to these risks. But they are exposed to different kinds of risks like, fire, hailstorms, earthquakes, lightning, burglary, etc. Like this, different kinds of risks can be identified and separate groups made, including those exposed to such risks. By this method, the risk is spread among the community and the likely big impact on one is reduced to smaller manageable impacts on all.

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The manner in which the loss is to be shared can be determined before hand. It may be proportional to the likely loss that each person is likely to suffer, which is indicative of the benefit be would received if the period befell him. The share could be collected from the members after the loss has occurred or the likely shares may be collected in advance, at the time of admission to the group. Insurance companies collect in advance and create a fund from which the losses are paid. 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 ones retirement, when it could be expected that the income will normally cease, the person concerned could have made some other arrangement to meet the continuing needs. But it happens much earlier when the alternate arrangements are not in place, insurgencies necessary to help those dependent on the income. In the case of a human being, he may have made arrangements for his needs after his retirement. These would have been made on the basis of some expectations like he may live for another 15 years, or that his children will look after him. If any of these expectations do not become true, the original arrangement would become inadequate and there could be difficulties. Living too long can be as much a problem as dying too young. These are risks which need to be safeguarded against. Insurance takes care. Insurance does not protect the asset. It does not prevent its loss due to the peril. The peril cannot be avoided, through insurance. The peril can sometimes be avoided, through better safety and damage control management. Insurance only tries to reduce the impact of the risk on the owner of the asset and those who depend on that asset. It compensates, may not be fully, the losses. Only economic or financial losses can be compensated. The concept of insurance has been extended beyond the coverage of tangible assets. Exporters run the risk of the importers in the other country defaulting as well as losses due to sudden changes in currency exchange rates, economic policies or political disturbances. These risks are now insured. Doctors run the risk of being charged with negligence and subsequent liability for damages. The amounts in question can be fairly large, beyond the capacity of individuals to bear. These are insured. Thus, insurance is extended to intangibles. In some countries, the voice of a singer or the legs of a dancer may be insured; even through the advantage of spread may not be available in these cases. Satisfaction of economic needs required generation of income from some source. If the property, which is the source of such income, is lost fully or partially, permanently or temporarily, the income too would stop. The purpose of insurance is to safeguard against such misfortunes by making well the losses of the unfortunate few, through the help often the fortunate many, which were exposed to the same risk but saved from the misfortune. Thus the essence of insurance is to share losses and substitute certainty by uncertainty. There are certain basic principles which make it possible for insurance to remain popular and a fair arrangement. The first is the fact that people arte exposed to risks and that the consequences of such risks are difficult for any one individual to bear. It becomes bearable when the community shares the burden. The second is that no one person should be in a position to make the risk happen. In other words, none in the group should set fire to his assets and ask others to share the cost of damage. This

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would be taking unfair advantages of an arrangements put into place to protect people from the risks they are exposed to. The occurrence has to be random, accidental, and not the deliberate creation of the insured person.

1.7 HOW INSURANCE WORKS:

People facing common risks come together and made their small contributions to a common fund. The contribution to be made by each person is determined on the assumption that while it may not be possible to tell beforehand, which person will suffer, it is possible to tell, on the basis of past experiences, how many persons, on an average, may suffer losses. The following two examples explain the above concept of insurance. Example 1 In a village, there are 400 houses, each valued at Rs. 20,000.0 Every year, on the average, 4 houses get burnt, resulting into a total loss of Rs. 80,000. If all the 400 owners come together and contribute. Rs. 200 each, the common fund would be Rs. 80,000. This is enough to pay Rs. 20,000 to each of the 4 owners whose houses got burnt. Thus the risk of 4 owners is spread over 400 house-owners of the village.

Example 2 There are 1000 persons who are all aged 50 and are healthy. It is expected that of these 10 persons may die during the year. If the economic value of the loss suffered by the family of each dying person is taken to be Rs. 20,000 the total loss would work out to Rs. 2,00,000/- the total loss contributes Rs. 200/- a year, the common fund would be Rs 2,00,000/- This would be enough to pay Rs. 20,000 to the family of each of the ten persons who die. Thus the risks in cases of 10 persons are shared by 1000 persons.

1.8 What is life insurance?

Life Insurance is a contract for payment of a sum of money to the person assured (or failing him/her, to the person entitled to receive the same) on the happening of the event insured against. Usually the contract provides for the payment of an amount on the date of maturity of at specified dates at periodic intervals or at unfortunate death, if it occurs earlier. Among other things, the contract also provides for the payment of premium periodically to the company by the assured. Life insurance is university acknowledged to be an institution, which eliminates risk, substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate events of the death of the breadwinner. By and large, life insurance is civilizations partial solution to financial uncertainties caused by untimely death. Life insurance, in short, is concerned with two hazards that stand across the life path of every person: that of dying prematurely leaving a dependent family to fend itself and that of living to old age without visible means of support. Human Life is an income generating asset; this asset can be loosed through unexpected death or made nonfunctional through sickness or disability caused by an accident. There is no certainty that an accident will happen. On the other hand there is a certainty that death will happen, but its timing is uncertain. Life Insurance protects against loss of income of an individual. Life Insurance does not protect the asset. does not prevent its loss.

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Insurance reduces the impact of risk on the owner and those who depend on the asset. It must however be noted that, only economic and financial losses can be compensated. For e.g., the emotional support that the bread winner provides can neither be evaluated nor compensated. However, the financial support can be evaluated and compensated. Any Insurance is designed to compensate a policy holder for a loss suffered, by the payment of money, repair, replacement or reinstatement. In ever case policy holder is entitled to be put back in the financial position as he or she was immediately before the event insured against occurred. There must be no element of profit of loss to the policy holder. Most, but not all insurance policy are indemnity contracts. Life Insurance plan are broadly classified into: 1. Traditional 2. Unit Linked Plans 3. Individual or Group Policies

4. 5. 6. 7.

With and without profit policies Other different type of policies Annuities Products for Women and Children

1.9 Superiority of Life Insurance to Other Forms of Savings: Protection: Savings through life insurance guarantee full protection against risk of death, the full sum assured is payable (with bonuses wherever applicable) whereas in other savings schemes, only the amount saved (with interest) is payable.
Aid to Thrift: Life insurance encourages thrift. Long term saving can be made in a relatively painless manner because of the easy installment facility built into the scheme (premiums can be paid through monthly, quarterly, half yearly or yearly installment). The salary savings scheme, popularly known as SSS, provides a convenient method of paying premium each month through deduction from ones salary. The salary savings scheme can be introduced in an institution or establishment subject to specified terms and conditions. Liquidity: Loans can be raised on the sole security of a policy which has acquired (a paid up) value. Besides, a life insurance policy is also generally accepted as security for even a commercial loan. Tax Relief: Relief in income tax is available for amounts paid by way of premium for life insurance subject to the income tax rates in force. Assesses can avail themselves of provisions in the law for tax relief. In such cases the assured in effect pays a lower premium for his insurance than he would have to pay otherwise. Money When You Need It:

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A suitable insurance plan or a combination of different plans can be taken out to meet specific needs that are likely to arise in future, such as childrens education, start in life or marriage provision or even periodical needs for cash over a predetermined stretch of time. Alternatively, policy moneys can be so arranged to be made available at the time of ones retirement from service to be used for any specific purpose, such as for the purchase of a house or for other investments. Subject to certain conditions, loans are granted to policyholders for house building or for purchase of flats.

1.10 Buying of Life Insurance Policy:

Any person who has attained majority and is eligible to enter into a valid contract can take out a life insurance policy for himself/ herself and on those in whom he/she has insurable interest. Policies can also be taken out, subject to certain conditions, on the life of ones spouse or children. While underwriting proposals, factors such as the state of health of the life to be assured, the proponents income and other relevant factors are considered by the corporation.

Epilogue: So Long As The Maintains Of A Family Depends On Caring Power Of The Bread Winner; So Long As The Caring Power Can Be Destroyed By Death, Old Age Or Disability; Just So long Will Life Insurance Continue To Be The Keystone Of The Individual And Those Who Are Dependent Upon Him.

1.11 UNIT LINKED POLICIES: A Unit Linked Policy is a Life Assurance Policy in which the benefit depends upon the portfolio of shares. Unit Linked Insurance Plans (ULIP)
Unit-linked plans are modern products that are consumer friendly and as anywhere in the world, these are gaining popularity and finding wide acceptance in India as well. A Unit Linked Insurance Plans is a policy, which provides for life insurance where the policy value at any time varies according to the value of the underlying assets at the time. ULIP is life insurance solution that provides for the benefits of protection and flexibility in investment. The investment is denoted as units and is represented by the value that it has attained called as Net Asset Value (NAV). ULIP came into play in the 1960s and became very popular in Western Europe and Americas. The reason that is attributed to the wide spread popularity of ULIP is because of the transparency and the flexibility which it offers.

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Unlike traditional insurance products, customers find unit-linked plans more transparent, flexible and easy to understand. A customer who buys a unit-linked policy can far more easily understand the charges he pays towards the savings component, the life cover, and the riders. And he has the option to choose from different fund options for the investment component depending on his appetite for risk. As times progressed the plans were also successfully mapped along with life insurance need to retirement planning. In todays times, ULIP provides solutions for insurance planning, financial needs, financial planning for childrens future and retirement planning.

1.12 Features of Unit Linked Insurance Plans:

ULIP distinguishes itself through the multiple benefits that it provides to the consumer. The plan is a one-stop solution providing: Life protection Investment and Savings Flexibility Adjustable Life Cover Investment Options

Transparency Options to take additional cover against Death due to accident Disability Critical Illness Surgeries Liquidity Tax planning

1.13 How Unit Linked Insurance Plan Works?

Each premium paid by insured person is split: a part is used to provide life assurance cover, while the balance (after the deduction of cost, expenses, etc.) is used to buy units in a unit trust. In this way, a small investor can benefit from investment in a manage fund without making a large financial commitment. As they are linked to the value of shares Unit Linked policy can go up and down in values. Policy Holders can surrender the policy at any time and the surrender value is the selling price of the units purchased by the date of cancellation (Less expense). A small part of a contribution is used for providing life cover and the balance is invested in units. Legal heirs are entitled to the amount of insurance cover and entitled units in case of death of the insured. In Unit Linked Policies, in order to offset the erosion in money value, there is a trend to issue Unit Linked Policies. Sum Assured is expressed in units whose price is linked to an inflation related index. So, the price of Unit keeps on fluctuating with a rise or fall of the index. The benefits are also paid in units which when expressed in its prevailing price on the date of payment of claim; protect the life insured against inflation.

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1.14 Unit-Linked Insurance Plans are Good:

Most insurers in the year 2004 have started offering at least a few unit-linked plans. Unit-linked life insurance products are those where the benefits are expressed in terms of number of units and unit price. They can be viewed as a combination of insurance and mutual funds. The number of units that a customer would get would depend on the unit price when he pays his premium. The daily unit price is based on the market value of the underlying assets (equities, bonds, government securities, etc.) and computed from the net asset value. The advantage of unit-linked plans is that they are simple, clear, and easy to understand. Being transparent the policyholder gets the entire upside on the performance of his fund. Besides all the advantages they offer to the customers, unitlinked plans also lead to an efficient utilization of capital. Unit-linked products are exempted from tax and they provide life insurance. Investors welcome these products as they provide capital appreciation even as the

yields on government securities have fallen below 6 per cent, which has made the insurers slash payouts. According to the IRDA, a company offering unit-linked plans must give the investor an option to choose among debt, balanced and equity funds. If you opt for a unit-linked endowment policy, you can choose to invest your premiums in debt, balanced or equity plans. If you choose a debt plan, the majority of your premiums will get invested in debt securities like gilts and bonds. If you choose equity, then a major portion of your premiums will be invested in the equity market. The plan you choose would depend on your risk profile and your investment need. The ideal time to buy a unit-linked plan is when one can expect long-term growth ahead. This is especially so if one also believes that current market values (stock valuations) are relatively low. So if you are opting for a plan that invests primarily in equity, the buzzing market could lead to windfall returns. However, should the buzz die down, investors could be left stung. If one invests in a unit-linked pension plan early on, say when one is 25, one can afford to take the risk associated with equities, at least in the plan's initial stages. However, as one approaches retirement the quantum of returns should be subordinated to capital preservation. At this stage, investing in a plan that has an equity tilt may not be a good idea. Considering that unit-linked plans are relatively new launches, their short history does not permit an assessment of how they will perform in different phases of the stock market. Even if one views insurance as a long-term commitment, investments based on performance over such a short time span may not be appropriate.

1.15 Unit-linked products actually offer in terms of value-addition: 16

When you are looking at a long-term plan, there are always factors that will change from time to time to meet any challenges. Also, plans change so that the company can offer some amount of customization. Among other things, we offer to add the cover to the policy, add riders when necessary, and change the investment structure. We also let customers choose from different fund options on the investment without compromising on the basic product. While all these options do come with caps to follow the regulatory framework, they definitely offer value-addition to the customer. And, with the NAV (net asset value) of the fund calculated at the end of the day, the customer knows the value of his funds. I must add that in case of death, the beneficiary gets the sum assured or the NAV of the fund, whichever is higher. So, there is no reduction in protection in these plans.

1.16 Is the investment risk left to the customer who buys unit-linked plans?
For any investor, the idea is to maximize returns. Wise customers know that the era of guaranteed returns is over. The fall in interest rates in the past 18 months is indication enough of what lies ahead. What unit-linked products offer is a long-term investment option where returns are far more real and there is no compromise in the protection that the policy offers.

In the guaranteed returns regime, the guaranteed component was met by paying lower interest rates to those who did not have any guarantee on their plans. Compared to this, unit-linked plans offer greater value to the customer. Yes, to an extent the risk is in the hands of the customer. However, the flexibility to opt for funds means that the customer can benefit as well. And finally, the returns that these products offer are bound to be relatively higher than what similar traditional plans offer. In order to cater to customers with very low risk appetite we also offer a unitized, with-profit plan across our products, where the bonus rate is declared in advance for the year. This is a conservative approach, but it has its takers. With this option, at the end of the policy the policyholder gets a share of the bonus that the company earns. In this case, there is an assured return that is benchmarked to the current bond rates (5 per cent last year).

1.17 Companies Providing Unit Linked Insurance Plans

In India, there are following fifteen life insurance companies which are providing Unit Linked Insurance Plans: Life Insurance Corporation Of India Bajaj Allianz Life Insurance Company Limited ICICI Prudential Life Insurance HDFC Standard Life SBI Life Insurance Birla Sunlife Tata AIG Life Insurance Max New York Life Aviva Life Insurance Kotak Mahindra Old Mutual ING Vysya Life Insurance Reliance Life

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Met Life Sahara Life Shriram Life

1.18 JUSTIFICATION OF STUDY:

Indians savings are invested predominantly in fixed deposits, insurance, government backed instruments or end up as idle cash. In the present scenario because of decreasing returns on savings,tax benefit getting bleaker day by day,defaulting of even government backed institutions have made small and medium investors to look beyond traditional options of investment. It is in this context the research work tries to assess objectively the perception of investors and pattern of investment in Raipur city. It also charts out the prime factors which affect the investment in general and specifically in unit linked life insurance policies.

CHAPTER 2 RESEARCH
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METHODOLOGY

RESEARCH METHODOLOGY
The success of any event heavily depends upon the way chosen for its execution. This includes ensures of some basic question to the specific focus on constraints as well. In other words they can call the methodology as the backbone of any research. It also includes research or study method. Thus when they talk of methodology they not only talk of methodology they not talk of methods but also consider the logic behind the methods they use in the context of their study objective and explain way use are using them so that study results are capable of being evaluated logically.

2.1 Statement Of Problem: Investors Perception Towards Unit Linked Insurance Policies A Study In Raipur City. 2.2 Purpose Of The Study:

The purpose is to study the perception of investors towards unit linked insurance policies in Raipur city.

2.3

Objectives Of The Study

The objectives set for the study are To find out the awareness of investors about the unit linked insurance policies in Raipur city.

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To find out the reason why investors invest into unit linked insurance policies. To find out the factor influencing investors for purchasing unit linked policy of a particular company. To find out the market share of different Insurance Companies dealing in Unit Linked Insurance Policies.

2.4 Population:
Population refers to the total of items about which information is desire. The attributes that are the object of study are referred to as characteristics and the units possessing them are called as elementary units. The aggregate of such units is generally described as population. Thus, all the units in any field of inquiry constitute universe and all elementary units constitute population. The population can be finite and in finite the population is said to be finite if it is consist of a fixed number of elements so that it is possible to enumerate it in its totality. An infinite population is which it is theoretically impossible to observe all the elements.

The population is specific group of people, firms, conditions, activities etc. which forms the pivotal of research for developing and using a sample, it become primary duty of a researcher to define the population from which to draw the sample. Population To achieve the objective the city of Raipur was selected.

2.5Sample:
The sample is the representative unit of population. The researcher has taken the consumer as sample for this research. Since in this research the researcher has collected the sample according to his own convenience. So the sample is convenient sample and the sample size of the research is 100. This refers to number of items to be selected from the universe to constitute a sample. The size of the sample should neither be excessively large, nor too small. It should be optimum. An optimum sample size is one, which fulfills the requirement of efficiency, representativeness, reliability, and flexibility.

2.6 Sampling Method

The researcher adopted Convenient Sampling Method. In this method the sample units are chosen primarily on the basis of convenience to the investigator. In this type of sampling, the researcher selects items for the sample deliberately; his choice concerning the items remains supreme. In other words, under this sampling the organizers of the inquiry purposively choose the particulars unit of the universe for constituting a sample on the basis that the small mass that they so select out of a huge one will be typical or representative of the whole.

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2.7

Data Collection:

The task of data collection begins after a research problem has defined. Researcher should keep in mind two types of data, primary data and secondary data. The primary data are those, which are collected afresh and for the first time, and thus happen to be original in character. The secondary data, on the other hand, are those which have already been collected by someone else and which have already been passed through the statistical process. Both, primary data and secondary data were used in accomplishment of objective of the research.

2.8

Questionnaire:

The term questionnaire refers to a self-administered process whereby the respondent himself/herself reads the questions and records his/her answers without assistance of an interviewer. Although the instrument is essentially question asking and data gathering tool. A questionnaire is more structured and standardized. The questionnaire consists of a number of questions printed or typed in a definite order on a form or a set of forms. This method of data collection is quite popular in case of big enquiries.

2.9

Delimitation:

There is some specific delimitation in the study they are:1. The generalization of data is subjective to the population of Raipur city. 2. The generalization of finding is subject to the accuracy of data provided by the respondents.

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CHAPTER - 3
ANALYSIS AND INTERPRETATION OF DATA

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3.1 ANALYSIS AND INTERPRETATION OF DATA

Analysis is an attempt to organize and summaries data in order to increase result, usefulness in such a manner that enables to relate critical points with the objectives of study. The data after collection has to be processed an analyzed in accordance with the out line laid down for the purpose at the time of developing the research plan. Technically speaking, analyzing implies editing, coding, classification and tabulation of collected data so that they are amenable to analysis. The terms analysis refers to the computation of certain measures along with searching for pattern of relationship that exists among data groups. Interpretation refers to task of drawing inferences from the collected facts after an analytical and/or experimental study. In fact, it is a search for broader meaning of research finding the task of interpretation has to measure aspects that is (i) the effort to establish continuity in research though linking the results of a given steady with those of another and (ii) the establishment of some explanatory concepts. Interpretation is concerned with relationships within the collected data, partially over lapping analysis. Interpretation also extends beyond the data of the study to include the result of other research, theory, and hypotheses. Thus, interpretation is the device though which factors that seem to explain what has been observed by researcher in the course of study can be better understood and it also provides a theoretical conception, which can serve as a guide for further researches. Interpretation is essential for the simple reason that the usefulness and utility of research finding lie in proper interpretation. Interpretation leads to the establishment of explanatory concepts that can serve as a guide for further research studies; it opens new avenues of intellectual adventure and stimulates the quest for more knowledge.

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Part A: - Demographic Profile of Respondents

Age Profile

Age-group Less than 25 years 25 30 years 30 35 years 35 40 years 40 50 years 50 years and above Total

Respondents 06 28 31 18 11 06 100

Percentage (%) 06% 28% 31% 18% 11% 06% 100%

Age Profile
40 30 20 10 0 Respondents 6 28 31 18 11 6 Less than 25 years 25 30 years 30 35 years 35 40 years 40 50 years 50 years and above

Interpretation From the above table it is found that majority of respondents (31%) are under the age group of 30 35.

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Gender

Gender Male Female Total

Respondents 89 11 100

Percentage (%) 89% 11% 100%

Gender
100 80 60 40 20 0 Respondents 11
Male Fem ale

89

Interpretation From the above table it is found that majority of respondents (89%) are male.

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Marital Status

Marital Status Married Unmarried Total

Respondents 69 31 100

Percentage (%) 69% 31% 100%

Marital Status
80 60 40 20 0 Respondents 31 Married Unmarried 69

Interpretation From the above table it is found that majority of respondents (69%) are married.

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Qualification

Qualification Under Graduate Graduate Post Graduate Total

Respondents 19 47 34 100

Percentage (%) 19% 47% 34% 100%

Qualification of Respondent
50 40 30 20 10 0 Respondents 19 47 34 Under Graduate Graduate Post Graduate

Interpretation From the above table it is found that majority of respondents (47%) are graduates.

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Employment Status

Employment status Employed Unemployed Self-employed Total

Respondents 67 09 24 100

Percentage (%) 67% 09% 24% 100%

Employment Status
70 60 50 40 30 20 10 0 67

Employed 24 9 Respondents Unemployed Self-employed

Interpretation It is found from the above table that majority of the respondents (67%) are employed.

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Occupation Profile

Occupation Entrepreneur Engineer Lawyer Doctor Academician Government Service Others Total

Respondents 18 17 03 06 19 15 22 100

Percentage (%) 18% 17% 03% 06% 19% 15% 22% 100%

Occupation
25 20 15 10 5 0 Respondents 3 6 18 17 19 15 22

Entrepreneur Engineer Lawyer Doctor Academician Government Service Others

Interpretation It is found from the above table that majority of respondents (22%) are others.

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Nature of Family

Nature of Family Joint Family Nuclear Family Total

Respondents 43 57 100

Percentage (%) 43% 57% 100%

Nature of Family
60 50 40 30 20 10 0 43 Joint Family Nuclear Family 57

Respondents

Interpretation It is found from the above table that majority of the respondents (57%) belongs to nuclear family

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Income Profile

Income (monthly) Up to Rs.10,000 Rs.10,000 Rs.15,000 Rs.15,000 Rs.20,000 Rs.20,000 Rs.25,000 Rs.25,000 Rs.30,000 Rs.30,000 and above Total

Respondents 08 12 25 18 22 15 100

Percentage (%) 8% 12% 25% 18% 22% 15% 100%

Income Profile
25 20 15 10 5 0 Respondents 8 12 25 22 18 15 Up to Rs.10,000 Rs.10,000 Rs.15,000 Rs.15,000 Rs.20,000 Rs.20,000 Rs.25,000 Rs.25,000 Rs.30,000 Rs.30,000 and above

Interpretation It is found that majority of the respondents (25%) falls under the income group of Rs.15,000 Rs.20,000.

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Part B

Awareness of Unit Linked Insurance Policies

Awareness Yes No Total

Respondents 86 14 100

Percentage (%) 86% 14% 100%

Awareness of Unit Linked Insurance Policies 100 80 60 40 20 0 Respondents 14

Yes No

86

Interpretation - It is found from the above table that majority of respondents (86%) in Raipur city are aware of Unit Linked Insurance policies provided by various Life Insurance company.

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Sources of Information

Sources Newspapers/Magazines Television Friends Relatives Leaflets/Brochures Insurance Agents Others Total

Respondents 12 15 09 05 16 26 03 86

Percentage (%) 13.95% 17.44% 10.46% 5.82% 18.61% 30.23% 3.49% 100%

Sources of Information

Newspapers/Magazines Television Friends

30 25 20 15 10 5 0 12 15 9 5 16

26

Relatives Leaflets/Brochures

Insurance Agents Others

Respondents

Interpretation - From the above table it is found that majority of respondents (30.23%) consider insurance agents as main source of information.

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Unit Linked Insurance Plan is Covered by LICs

Awareness Yes No Total

Respondents 77 09 86

Percentage (%) 89.53% 10.47% 100%

Unit Linked Insurance is covered by LICs

100 80 60 40 20 0 Respondents 9 77 Yes No

Interpretation - From the above table it is found that majority of respondents (77%) in Raipur city are aware that Unit Linked Insurance Policies are offered by Life Insurance Companies (LICs).

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Investors Awareness of Portfolio Management and Selection done in Unit Linked Insurance Policies:

Awareness Yes No Total

Respondents 37 49 86

Percentage (%) 43.02% 56.98% 100%

Awareness Of Portfolio Management and Selection done in Unit Linked Insurance Policies 60 50 40 30 20 10 0 Respondents Yes No 37 49

Interpretation - From the above table it is found that majority of respondents (56.98%) in Raipur city are not aware of Portfolio Management and Selection done in Unit Linked Insurance Policies:

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Purchase of Policy

Purchase Yes No Total

Respondents 72 14 86

Percentage (%) 83.72% 16.28% 100%

Purchase of Policy
80 60 40 20 0 14 Yes No 72

Respondents

Interpretation - From the above table it is found that out of 86 respondents, who are aware of Unit Linked Life Insurance policies, only 72 respondents have taken Unit Linked Life Insurance policies.

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Reason Considered while purchasing ULIPs

Factors Risk Coverage Investment Planning Tax Relief Others Total

Respondents 16 26 22 08 72

Percentage (%) 22.22% 36.11% 30.56% 11.11% 100%

Reason Considered while purchasing ULIPs

Risk Coverage

30 25 20 15 10 5 0 16

26 22

Investment Planning

Tax Relief

8
Others

Respondents

Interpretation - From the above table it is found that majority of respondents (36.11%) considered investment planning as the main reason for purchasing unit linked insurance policies.

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Factors Influencing in Investing in ULIPs

Influencer Policy Structure Company Name Growth of Fund Advertisement Others Total

Respondents 23 09 26 05 09 72

Percentage (%) 31.94% 12.50% 36.12% 6.94% 12.50% 100%

Factors Influencing in Investing in ULIPs

30 25 20 15 10 5 0 9 5 Respondents 9 23 26 Policy Structure Company Name Growth of Fund Advertisement Others

Interpretation - It is found from the above table that majority of respondents (36.12%) are influenced by the growth of fund while taking decision in investing in Unit Linked Insurance Policies.

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Holder of policy

Holder Spouse Self Parent Children Total

Respondents 21 24 11 16 72

Percentage (%) 29.17% 33.33% 15.28% 22.22% 100%

25 21 20

24

16 15 11 10 5 0 Respondents

Spouse Self Parent Children

Interpretation - From the above table it is found that majority of respondents (33.33%) made unit linked insurance plans for themselves.

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Mode of Investment

Mode Regular Premium Single Premium Total

Respondents 51 21 72

Percentage (%) 70.83% 29.17% 100%

Mode of Investment
60 50 40 30 20 10 0 Respondents 21 Regular Premium Single Premium 51

Interpretation - From the above table it is found that out of 72 respondents, 51 respondents prefer to pay regular premium and only 21 respondents prefer to pay single premium.

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Best Life Insurance Company

Life Insurance Companies Bajaj Allianz ICICI Prudential SBI Life LIC ING Vaisya Birla Sunlife Others Total

Respondents 19 21 12 09 02 05 04 72

Percentage (%) 26.39% 29.17% 16.67% 12.5% 2.78% 6.93% 5.56% 100%

Best Insurance Company

Bajaj Allianz

25 20 15 10 5 0 19 21 12 9 5 2 Respondents 4

ICICI Prudential SBI Life

LIC ING Vaisya Birla Sunlife Others

Interpretation - According to majority of respondents (29.17%) ICICI Prudential Life Insurance Company is the best life insurance company dealing in ULIPs in Raipur City.

Perception Towards the Best Company According to respondents a particular insurance company is best in market because of following reasons1. Good and satisfactory services provided by company 2. Good reputation in the market 3. Better schemes and benefits provided by the company

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sBenefits Availed

Benefits Availed Yes No Total

Respondents 14 58 72

Percentage (%) 19.44% 80.56% 100%

Benefits Availed
60 50 40 30 20 10 0 Respondents 14 Yes No 58

Interpretation - From the above table it is found that out of 72 respondents only 11 respondents (19.44%) has availed benefits from ULIPs.

Different Benefits Availed by the Respondents According to respondents they availed following benefits from Unit Linked Insurance policy1. Benefit from Rider 2. Partial Withdrawal Benefit

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Satisfaction with Procedural Formalities

Satisfaction Yes No Total

Respondents 11 03 14

Percentage (%) 78.57% 21.43% 100%

Satisfied with Procedural Formalities

12 10 8 6 4 2 0 Respondents 3 Yes No 11

Interpretation - From the above table it is found that out of 14 respondents, 11 respondents are satisfied with the procedural formalities while receiving the benefits from the company providing ULIPs.

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Respondents suggestions towards procedural formalities According to respondents the procedural formalities while receiving benefits from the company can be made satisfactorily through following ways1. Paper formalities must be reduced while providing benefits. 2. Proper information must be provide to holders so that they can receive the benefits easily 3. Apart from the procedural formalities most of respondents are of opinion that while dealings with respondents the behavior of company people must be good.

Suggestions for improvement According to respondents the following benefits should be included in Unit Linked Insurance policies provided by different companies1. More disease coverage 2. Providing more riders 3. Tied up with more hospitals

Suggestions for Effectiveness According to respondents Unit Linked Insurance policies can be made more effective through following ways1. More advertisements in regional languages to be made about life insurance policies 2. Minimum and simplified formalities 3. Transparency in terms and conditions

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CHAPTER - 4 FINDINGS,LIMITATION AND SUGGESTION

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4.1 FINDINGS:
Majority of respondents i.e., 86% are aware of unit linked insurance policies in Raipur city. Most of respondents i.e., 56.98% are not aware of portfolio management done in unit linked insurance policies in Raipur city.

Majority of respondents invest into unit linked insurance policies for Investment Planning (36.11%) and Tax Relief (30.56%) followed by Risk Coverage (22.22%) and Other reason (11.11%).

Growth of Fund (36.12%) and Policy Structure (31.94%) is the factor influencing investors for purchasing unit linked policy of a particular company followed by Policy Structure (31.94%), Company Name (12.5%), Others (12.5) and Advertisement (6.94%).

It is found that 71.4% of market share is captured by LIC followed by ICICI Prudential (7.56%), Bajaj Allianz (7.35%), HDFC Standard Life (2.9%), SBI Life (2.3%),Birla Sunlife (1.9%), etc.

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4.2 LIMITATIONS:

Any research or study always has some limitations under which this has to be undertaken. This one too was not an exception. These limitations are poised by the environment some external and some inherent. This study has been conducted with utmost consideration to the adequacy of data and quality of information, though as mention earlier the reliance on the sources can not be minimized to zero in context of precision. The limitation can be enlisted as hereunder:1. The perception level of the respondents. 2. Availability of documents as sources of secondary information. 3. Reliability of information collected from various public information sources such as magazines and website. 4. Respondents are not willing to fill the questionnaire. 5. Sometimes the respondents are not available at their place. 6. Very often the respondent do not express their true feelings, in such case their habit, preference, practice, cannot be assessed correctly. 7. Some of the respondents refuse to give the important information best known to them. 8. The sample size was reduced to 61 from 100, as there was no response error. However in spite of these limitations all efforts have been put to make the report correct, genuine, and fulfilling the objectives of the reports.

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4.3 SUGGESTION

On the basis of this study, the following suggestions have been made to make the Unit Linked Insurance Plans more effective: There is need to bring more awareness of various Unit Linked Insurance policies among the investors by providing them vouchers and literatures in different regional languages. The insurance companies should not insist upon fulfillment of there own business objectives rather than they must insist on welfare of investors. There should be free, fair, justified and honest competition amongst the various insurance companies. Investors should be given timely information of the governments changed policies regarding insurance sector. Attempts should be made by the Insurance companies for creating awareness among its Investors regarding investment of funds of Unit Linked Policies in different Portfolios.

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BIBLOGRAPHY

50

BIBLOGRAPHY
Book Reference 1. Kotler philip, Marketing Management New Delhi, Prentice hall of India, 2003

2. Kothari C.R, Research Methodology New Delhi, vishwa Prakash, 2003 3. Robbins S. P. Organizational Behavior New Delhi, Pearson Education, 2004, Tenth Edition, Page no. 123 124. 4. Life Insurance Programme Based on IRDA Syllabus NIS SPARTA Ltd. Web Reference

1. www.google.com
2. www.icicibank.com

3. www.iciciprulife.com

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APPENDIX

52

QUESTIONNAIRE
Respected Sir/Madam, I am conducting a survey entitled Investors Perception Towards Unit Linked Insurance Policies A Study In Raipur City. I need your help in conducting this study. Kindly provide me your valuable opinion to fill this questionnaire. Your information will be kept confidential and will be exclusively used for academic purpose.
Anil shrivastava M.B.A. 2nd Sem Bhilai institute of technology Durg(C.G.)

Part A
1. Demographic Information a) Name:-........................................................................................................................ b) Address:-.................................................................................................................... c) Phone Number:-......................................................................................................... d) Age group:Less than 20 [ ] 36-40 [ ] e) Sex:f) Martial Status:20-25 [ ] 41-45 [ ] 26-30 [ ] 45-50 [ ] Male Married [ ] [ ] 31-35 [ ] 50 and above [ ] Female Unmarried Post Graduate [ ] Post Graduate [ ] Self-employed [ ] Self-employed [ ] [ ] [ ]

g) Educational Qualification:Graduate [ ] Under Graduate [ ] h) Educational qualification of spouse:Graduate [ ] Under Graduate [ ] i) Employment status:Employed [ ] Unemployed [ ]

j) Employment status of spouse:Employed [ ] Unemployed [ ]

k) Number of earning member:l) Number of dependents:m) Monthly Personal Income:Up to Rs.10,000 [ ] Rs.10,000-15,000 [ ] Rs.20,000-25,000 [ ] Rs.25,000-30,000 [ ] 53

Rs.15,000-20,000 [ ] Rs.30,000 and above [ ]

n) Average monthly income of family:Up to Rs.10,000 [ ] Rs.10,000-15,000 [ ] Rs.20,000-25,000 [ ] Rs.25,000-30,000 [ ] o) Nature of family:Joint family [ ] p) Occupations:Entrepreneur [ ] Doctor [ ] Government service [ ] Nuclear family Engineer Academician Businessman [ ] [ ] [ ] [ ]

Rs.15,000-20,000 [ ] Rs.30,000 and above [ ]

Lawyer Others

[ ] [ ]

Part B
2.(a) Are you aware of Unit Linked Insurance Policies of various insurance companies? Yes [ ] No [ ] 3. From which source you collected the information? News papers [ ] Television [ ] Friends [ ] Relatives [ ] Leaflets/Brochures [ ] Insurance Agents [ ] Others [ ] _______________ 4. Are you aware that Unit Linked Insurance Policies are offered by life insurance companies? Yes [ ] No [ ] 5. (a) Are you aware of portfolio management and selection done in ULIPs? Yes [ ] No [ ] (b) If yes, please mention the source of information? ___________________________ 6(a) Have you taken any Unit Linked Insurance Policies ? Yes [ ] No [ ] (b) If yes, then please mentionName of the company _________________________________________________ Name of the policy ___________________________________________________ 7. Please mention the reason considered by you while purchasing the unit linked insurance policies. (Please tick only one) Risk Coverage [ ] Investment Planning [ ] Tax Relief [ ] Others [ ] _________________________ 8. Which factor mostly influences you while investing in ULIPs of particular company? Policy Structure [ ] Company Name [ ] Growth of Fund [ ] Advertisment [ ] Others [ ] _____________________ 9. For whom you have purchased unit linked insurance policies Self [ ] Spouse [ ] Children [ ] Parents [ ] 54

10. Which mode of investment do you made in ULIPs? Regular Premium [ ] Single Premium [ ] 11(a).According to you which company is best in the market with respect to ULIPs? LIC [ ] ICICI Prudential [ ] Bajaj Allianz [ ] Birla Sun Life [ ] ING Vaisya [ ] SBI Life [ ] Others [ ] _____________________ (b).Please state the reason _______________________________________________ ___________________________________________________________________ _ 12(a).Have you availed any benefits from unit linked insurance policies? Yes [ ] No [ ] (b) If yes, then specify the benefits you have received. ____________________________________________________________________ _ (c) Are you satisfied with the procedural formalities on your part while receiving the benefits from the company? Yes [ ] No [ ] (d) If no, then how it can be simplified? ____________________________________________________________________ _ 13. What other sort of benefits you wish to be provided by ULIPs? ____________________________________________________________________ _ ____________________________________________________________________ _ 14. Do you have any suggestion to make unit linked insurance policies more effective? _____________________________________________________________________ _____________________________________________________________________

Signature

Thanks for your co-operation!!!

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