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Summer Training Project Report On ": Customers-Perspective of ULIP "
Summer Training Project Report On ": Customers-Perspective of ULIP "
“ Customers-Perspective of ULIP
”
AEGON RELIGARE
LIFE INSURANCE COMPANY
FACULTY OF COMMERCE,
BANARES HINDU UNIVERSITY.
Submitted by:
Khushboo Jain
Roll no. 09
MRIM
PREFACE
It gives me immense pleasure to present this research report on
“CUSTOMER-PERSPECTIVE ON ULIP”. The research incorporates analysis
of the features of various unit linked plans, its demand in the market and
after sales service.
The report addresses various issues, which would help in identifying the
needs of individuals and suggesting for the right unit linked plan.
I have given my best efforts to cover all the aspects related to the topic and
to make the report purposeful.
Acknowledgement
It is said that bidding thanks to the well-wisher lessens the weightage of its contribution.
However mentioning the words of thanks is the only way to express the gratitude. At the outset,
I would like to thank AEGON Religare Life Insurance (ARLC) for having given me an
opportunity to do a project on market research on customer perspectives.
I would also like to thank Mr. Anil Chaturvedi (Branch Manager) for providing me with
valuable inputs throughout the course of the project.
My sincere thanks to Miss Shradha Gupta (Trainer) and Mr. Prakash (Business Manager)
for helping me out immensely with the execution of the project plan.
I owe a lot to the entire marketing team of ARLC for having provided me with a lot of help and
encouragement at every stage of the project.
I also sincerely thank all the clients of ARLC for having provided me with critical insights into
the operations of ARLC.
Last but not the least, I wish to express my sincere thanks to FACULTY OF COMMERCE
for providing me an opportunity for conducting this training.
INDEX
S. No. Content
1 Objective
2 Industry profile
3 All About ULIPs
4 Profile of the Company
5 Products
6 SWOT Analysis
7 Competitors
8 Research Methodology
9 Customers
10 Data Interpretation
11 Recommendation & Suggestions
12 Questionnaire
13 Bibliography
PRIMARY OBJECTIVE
To know about customer perspective of Unit Linked Insurance Plans.
SECONDRY OBJECTIVE
Limitations
Every Research work suffers from certain limitations .The survey undertaken is
also not free from all defects .The purpose of presenting the limitations is to
help the reader in forming opinion about the reliability and validity of the
present result.
1. The universe selected for the survey comprised of only Varanasi. So the
result should not be generalized for the entire bulk.
2. Sample size is too small which may affect the reliability of the result
4. The survey is one sided i.e., I studied the topic from customer’s & company.
Competitors’ viewpoint has not been covered.
INDUSTRY PROFILE
Many may not be aware that the life insurance industry of India is as old as
it is in any other part of the world. The first Indian life insurance company
was the Oriental Life Insurance Company, which was started in India in
1818 at Kolkata.
A number of players (over 250 in life and about 100 in non-life) mainly with
regional focus flourished all across the country. However the government of
India, concerned by the unethical standard adopted by some player against
the consumers, nationalized the industry in two phases in 1956(life) and in
1972(non-life).The insurance business of the country was then brought
under two public sector companies, Life Insurance Corporation of India (LIC)
and General insurance Corporation of India (GIC).
In line with the economic reforms that were ushered in India in early
nineties, the Government set up a committee on reforms (popularly called
the Malhotra Committee) in April 1993 to suggest reforms in the insurance
sector. The Committee recommended throwing open the sector to private
player to usher in competition and bring more choice of the consumers. The
objective of the insurance to penetration of insurance as a percentage of
GDP, which remains low in India even compared to Insurance Regulatory
and Development Authority (IRDA) Bill in 1999. IRDA was set up as an
independent regulatory, which has put in place regulations in line with
global norms. So far it is not made public.
Since being set up as an independent statutory body the IRDA has put in a
framework of globally compatible regulations. In the private sector 12 life
insurance and 6 general insurance companies have been registered.
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 risk on the owner
of the asset and those who depend on that asset. It only compensates the
losses- and that too, not fully. Only economic consequences can be insured.
If the loss is not financial, insurance may not be possible. Examples of non-
economic losses are love and affection of parents, leadership of managers,
sentimental attachments to family heirlooms, innovative and creative
abilities, etc.
There is no other scheme which provides this kind of benefit therefore life
insurance has no substitute. Even so, a comparison with other form of
saving will show that life insurance has the following advantages:-
• In the event of death, the settlement is easy. The heirs can collect the
moneys quicker, because of the facility of nomination and
assignment.
• The facility of nomination is now available for some bank accounts.
• There is a certain amount of compulsion to go through the plan of
savings.
• In other forms, if one changes the original plan of savings, there is no
loss.
• Creditor can not claim life insurances moneys. They can be protected
against attachment by courts.
• There are text benefits, both in income tax and capital gains.
Marketability and liquidity are better. A life insurance policy is
property and can be transferred or mortgaged. Loan can be raised
against the policy.
• Life insurance is not only the best possible way for family protection.
There is no other way.
• Insurance is the only way to safeguard against the unpredictable risks
of the future. It is unavoidable.
• The value of human life is far greater than the value of property only
insurance can preserve it.
• Life insurance is not surpassed by many other savings or investment
instruments, in terms of security, marketability, stability of value or
liquidity.
• Insurance, including life insurance, is essential for the conservation of
many businesses, just as it is in the preservation of homes.
• Life insurance enhances the existing standards of living.
• Life insurances help people live financially solvent lives.
• Life insurance perpetuates life, liberty and the pursuit of happiness.
Unit Linked Insurance Plans (ULIPs)
ULIP is an abbreviation for Unit Linked Insurance Policy. A ULIP is a life
insurance policy which provides a combination of risk cover and
investment. The dynamics of the capital market have a direct bearing on
the performance of the ULIPs.
Unit Linked Insurance Policies (ULIPs) as an investment avenue are closest
to mutual funds in terms of their structure and functioning. ULIPs is allotted
units by the insurance company and a net asset value (NAV) is declared for
the same on a daily basis.
Similarly ULIP investors have the option of investing across various schemes
,i.e., diversified equity funds, balanced funds and debt funds to name a few.
Generally speaking, ULIPs can be termed as mutual fund schemes with an
insurance component. However it should not be construed that barring the
insurance element there is nothing differentiating mutual funds from ULIPs.
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.
One of the big advantages that a ULIP offers is that whatever be your
specific financial objective, chances are that there is a ULIP which is just
right for you. The figure below gives a general guide to the different goals
that people have at various age-groups and thus, various life-stages.
Flexibility of ULIPs
Most unit linked policy holders opt for ULIPs because of the flexibility they
offer. There is an option of making lump sum investment or paying regular
premiums using the systematic investment plans (SIP). In ULIPs also one
can choose from annual, half-yearly, quarterly or monthly premium
payment options to suit your financial needs.
Additionally, as a unit linked policy holder, you have the option of investing
your units across various fund options such as equity fund, balanced fund,
debt fund and secure fund. During the tenure of your policy depending on
your risk appetite you can also switch investments from one fund to
another. This gives you the flexibility of customizing your investment plan.
Unit Fund
The allocated (invested) portions of the premiums after deducting for all
the charges and premium for risk cover under all policies in a particular
fund as chosen by the policy holders are pooled together to form a Unit
fund.
BENEFITS OF ULIP
ULIPs provide an opportunity for the discerning investor to benefit from the
return available in their capital market without going for direct investments.
CUSTOMER SATISFACTION:
Contact with current customer is a good way to Build their loyalty. The
more the customer sees someone from your firm, the more likely you’ll get
the next order. The more they know about you, the more they see you as
someone out to help them, the more they know about your
accomplishments-the more loyal a customer they will be.
Building customer loyalty will be a lot easier if you have a royal workforce-
not at all a given these days. It is especially important for you to retain
those employees such as sales peoples, technical support, and the
customer-service people. Many companies give an attention to retaining
sales people but little to support people.
Security of Investments
• AEGON Religare ULIPs invest across different asset classes-Equity
debt & money market.
• Stringent investment norms mandated and monitored regularly by
IRDA.
Flexibilities offered
• Choice of 4 funds with investment in diversified asset classes.
• Choice of switching investment a cross funds.
• Co. manages your hard earned money (you need not be an Expert
financial investor)
Existing trends
• Longer the time spent in financial markets; higher are the Chances of
reaping benefits.
Returns have out performed other investment options, such as Gold, silver,
& government bonds*
.
The Parent Company
AEGON, Religare and Bennett, Coleman & Company
About AEGON
AEGON’s businesses serve over 40 million customers in over 20 markets
throughout the Americas, Europe and Asia, with major operations in the
United States, the Netherlands and the United Kingdom. With headquarters
in The Hague, the Netherlands, AEGON companies employ almost 32,000
people worldwide. The company’s common shares are listed on four stock
exchanges: Amsterdam, London, New York and Tokyo. It manages EUR 351
billion in revenue generating investments. AEGON has more than 160 years
of experience with its roots going back to 1844. It holds 26% equity in our
company.
• One of the few life insurance companies to successfully win the trust
of 10,000 customers within first 6 months
• Launched operations with 38 branches across 32 cities in India, the
highest by any insurance player in India
• First life insurance company in India to offer customers a convenient
option of managing their accounts via the phone
• Launched the hugely successful K.I.L.B.(Kam Insurance Lene ki
Bimari) advertising Campaign, which educated customers on the
concept of Under-Insurance
Our Vision
“To help people to plan their life better”
AEGON Religare helps people to plan their life in a better way by providing
better life insurance plan to its customers. Being a new player in life
insurance market it has to be innovative and make promotional programs.
Our Values
To delight our customers through fresh approach innovative solutions
and seamless delivery
Better understanding our customers’ needs
To provide refreshingly different ways of service
New Initiatives
• India’s first holistic arts initiative including an art fund
• India’s first Film Fund
• India’s first 360 degree content rich online investment portal
Rajiv Jamkhedkar
During his last assignment at Citi, Mr. Jamkhedkar was head of Personal
lending & SME segment, Citibusiness. His main achievement was that he
quadrupled the balance-sheet in 5 years and made these as two of the
most profitable businesses for the bank.
Mr. Jamkhedkar has been involved in start-ups including a three year stint
in HSBC, where he started up the Retail Assets division of HSBC in India. Mr.
Jamkhedkar has a B.Tech Degree in Electronics Engineering from IT - BHU
and an M.B.A. degree from Faculty of Management Studies, Delhi
University.
BOARD OF DIRECTORS
RAJEEV JAMKHEDKAR
SAIBAL GHOSH
YATEESH SRIVASTAVA
DEBMALYA MAITRA
MAJOR COMPETETORS OF AEGON RELIGARE LIFE
INSURANCE COMPANY
PENSION PLAN
Star Child
AEGON Religare Star Child Plan
To be able to meet your children’s needs and aspirations is what you
always strive towards. AEGON Religare Star Child Plan aims to help you in
doing just that. It not only makes provisions for your children’s future but
also ensures that their future remains secured.
This plan not only make provisions for your child’s future but also ensures
that their future is remains secures in the event of your unfortunate
demise, we assure a lump sum premium and waive off of future premium
till maturity.
Features
Invest Protect Option If you opt for Invest Protect option, it will not only
help you gain from your investment but also minimize the risk of returns as
your policy nears maturity. It aims to protect your money by systematically
shifting the Fund from the Enhanced Equity Fund to the Secure Fund during
the last 3 policy years.
4 Fund Options You have the option of choosing from 4 funds – Secure,
Debt, Balanced and Enhanced Equity Fund.
Partial Withdrawal You or the nominee after death of the Life Assured
can partially withdraw your money after first 3 policy years. The maximum
amount of partial withdrawal in any policy year is 50% of the fund value at
the beginning of that policy year. You can also avail of AEGON Religare Star
Child Plan’s Systematic Partial Withdrawal facility by which we redeem units
periodically from your unit account and credit the money to your bank
account. You can opt for systematic partial withdrawal frequency, say
monthly or quarterly for the duration you choose.
Benefits
Get the dual benefit of securing your family financially as well as saving for
a brighter future with our ULIP plans
If you opt for Invest Protect option, it will not only help you gain from your
investment but also minimize the risk of returns as your policy nears
maturity. It aims to protect your money by systematically shifting the Fund
from the Enhanced Equity Fund to the Secure Fund during the last 3 policy
years.
Special Units
You will earn additional special units if your policy term is 15 years or more.
The special units will be added to your account at the end of 10th year and
every 3rd year thereafter. The value of special unit would be equal to
1.50% of the average fund value of the last 36 months before the allotment
of special units.
Key Features
NAV Protector Fund - The NAV Protector Fund aims to maximise gains
from your investments and at the same time protect such gains from
eroding. The premiums allocated to the NAV Protector Fund will be invested
in a mix of equity and money market instruments. The proportion of equity
will be dynamically managed according to a predefined rule.
Reset Days - Every Friday will be the reset day for the Wealth Protect Plan.
Special NAV - Special NAV is 80% (Eighty percent) of the highest NAV
declared on any reset day. Refer to the Terms & Conditions to understand
how a special NAV is calculated for Regular Premium and Top-Up Premium.
Special fund value - Special Fund Value is calculated as, higher of the
NAV as on date or the Special NAV multiplied by the number of units in your
unit account i.e. (Higher of NAV as on date or Special NAV) x Number of Units.
Key Benefits
Partial withdrawal - You can partly withdraw your money after the first 3
policy years. The minimum amount of partial withdrawal is Rs. 5,000 and
the maximum amount of partial withdrawal allowed in any policy year is
20% of the fund value at the beginning of that policy year.
Surrender - You can surrender the policy any time after the first 3 policy
years. Surrender Value is Special Fund Value minus the surrender charges.
Death - In case of your unfortunate demise during the policy term, your
nominee will receive the Sum Assured or the Special Fund Value, whichever
is higher. For further details, refer to Terms and Conditions.
Advantage
It will not only help you gain from your investments but will also minimize
the risk on your returns as your policy nears maturity.
It aims to protect your money by systematically shifting the units from
Enhanced Equity Fund to the Secured Fund during the last three policy
years.
BENEFITS
• Choice of investment funds
• Option of withdrawals
• Option to transfer Funds
• Option to top-up investments
• Tax benefit
Have money but no time to spend it? Ensure that it is not the other way
round tomorrow. Know how much pension you would require when you
retire and start saving for your retirement today.
You've always worked hard to give your family nothing but the best. But
growing expenses, never-ending price hikes and inflation make most of
your plans difficult. Which is why, it becomes all the more important to
invest and set aside that little something for whatever may come your way.
AEGON Religare Premium Gain Plus Plan helps maximize your investments
and gives you the best possible returns.
It will not only help you gain from your investments but will also minimize
the risk on your returns as your policy nears maturity. It aims to protect
your money by systematically shifting the units from Enhanced Equity Fund
to the Secured Fund during the last three policy years. Critical Illness
Rider, Accidental Death, Disability, Dismemberment Rider
BENEFITS
• Choice of investment funds
• Option of withdrawals and to transfer Funds
• Tax benefit
• Option to top-up investments
SWOT analysis of the Company
STRENGTHS:
• AEGON has over 160 years of experience in the insurance business
• Religare is one of India’s leading integrated financial services
group in India
• Highly successful ad campaign K.I.L.B.
• Advance information technology in extensive use
• Has strong commands &popularity in pension plan.
• Joint venture with Bennett & Coleman gives prestige to popularity of co.
• Worldwide distribution network
• Provides a good range of unit linked products(ULIP) to its
customers
WEAKNESSES:
• Loose departmental Structure
• Being a new entrant in India the awareness is low about co
• No decentralization of AEGON Life Insurance Co.
• Less number of offices in the country
OPPORTUNITIES:
• Wide geographical reach
• Still large numbers of people are required to be insured in India.
• Since India is a developing country, it can be seen as a high potential
area
THREATS:
• Close competition in premium and commission charged
• Large Competition
• Being a late entrant in India, the life insurance market has been
already exhausted by others
• The brand is yet to gain popularity
METHODOLOGY
Sample size
The size of the sample (random) was 100. The sample comprised of 100
individuals comprising in the income group of more than or equal to Rs.3 lakh
p.a. and has crossed the age of 25 years. This characteristic was purposely
selected, because of following reasons:
• A person falling in such income group has the ability to save and
invest
• A person of 25 years or more has specified objectives to pursue in his
life
Fieldwork
The fieldwork was performed in the form of data collection. The exercise
involved, filling up of the questionnaires by the customers, detailed face-to-
face conversation, on the spot interviewing and simultaneously reading the
reactions of the respondents.
All the details were recorded objectively. On the whole, the fieldwork was done
unto maximum accuracy from my side but some discrepancy might have crept
in which has already been mentioned under the heading - limitations.
Analysis
After the completion of data collection, the analysis of data took place. Under
this section in-depth and elaborate analysis of the data as well as of the
gathered information was done which was followed by the interpretation and
recommendations.
The interpretation of data has been presented in report in the form of case
studies of individual clients. Most of the items of the questionnaire are related
to the attitude measurement of customers towards Unit Linked Insurance Plans
(ULIPs).
HOW MANY INVEST
no
34%
yes
66%
Analysis
After analyzing the information, of data collected from visited customers, it
was found that out of 100 people only 66 invest their savings, while 34 do
not invest and keep cash idle in their lockers.
Those who are investing do not have complete information about various
financial products available in the market.
PREFERENCE OF INSURANCE
FOR INVESTMENT PURPOSE
yes
no 48%
52%
Analysis
After analyzing the information, of data collected from visited customers, it
was found that out of 100 around 48 preferred insurance for making
investments.
Whereas the others, viz., 52 did not liked insurance as the area of their
investments.
yes
22%
no
78%
Analysis
After analyzing the information, of data collected from visited people, it
was found that out of 100 people, 22 were aware about AEGON Religare
while others have hardly heard about the company,
OBJECTIVE OF INVESTMENT IN
ULIP
Dream
Home
Retirement 13%
28%
Tax
Planning
Child
39%
Education/
Marriage
20%
Analysis
After analyzing the information, of data collected from visited people, it
was found that the major objective for investments in ULIPs is tax
planning, while retirement and child education/marriage are secondary.
35
30 29
25 24
22
under 2 years
20 2-5 years
16 6-10 years
15 11-15 years
over 15 years
10 9
0
1
Analysis
After analyzing the information, of data collected from visited people, it
was found that most people either chose 2-5 years or 6-10 years or 11-15
years time period for investing their funds.
While hardly 25% chose the extreme less than 2 years or over 15 years
time period for investing their funds.
consultant 37
family 18
friends 11
own 34
Analysis
After analyzing the information, of data collected from visited people, it
was found that out of 100 people 37 take the opinion of financial
consultants, while 34 do not take opinions from anyone. Only 29 consult
their family and friends.
30
27
25 24
20
20
16
15 14
10
0
Traditional Mutual FDs Shares ULIP
Plans Funds
Analysis
After analyzing the information, of data collected from visited people, it
was found that still FDs are popular in Varanasi followed by traditional
plans and shares, while mutual funds and ULIPs are new for them.
Fund
Fund's Manager
Objective 16%
27%
Fund House
24%
Past Returns
33%
Analysis
After analyzing the information, of data collected from visited people, it
was found that past returns is the important factor while selecting a fund.
Whereas the objective of the Fund and the reputation of Fund house are
also the relevant considerations while selecting a fund.
Returns
Tax Saving 28%
32%
Analysis
After analyzing the information, of data collected from visited people, it
was found that tax saving and returns on investment are major
considerations while making investment.
Conclusions and Recommendations
Conclusions
1. There are still large numbers of people who do not invest their
savings and keep them idle.
2. Around half of the people consider insurance as a good area for
investing their funds.
3. Even being a late entrant in a highly competitive insurance market
AEGON Religare is well aware among customers.
4. Tax Planning is the major objective for the purchase of ULIPs
followed by Retirement and Child education/marriage.
5. In India people prefer to invest their funds for long terms especially
for period above 5 years.
6. The survey has shown that customers are quite concerned about
their funds and thus take financial consultant’s advice before
making investment.
7. Indian investors are conservative and invest in FDs and traditional
plans.
8. But there are a majority of investors who are switching towards
Mutual Funds and ULIPs.
9. Today’s investor is educated and invests in ULIP after considering
a number of factors like Fund’s objective, reputation of the Fund,
past returns, etc.
10. Safety returns and tax saving ability of a ULIP influence the
decision making ability of customers.
RECOMMENDATIONS
Awareness about the Company
AEGON Religare is quite a late entrant in the life insurance industry, but due
to its extensive promotional programs it is gaining awareness.
Pre-Purchase Queries
For a life insurance company it is useful to allow their prospective
customers to remove all their queries before any sale of policies.
Customer-Service
ULIPs are prone to market changes. Thus, the customer needs to be
informed about it regularly through annual report, covering the fund
performance market developments etc. which should include fund
performance analysis, investment portfolio of the fund, investment
strategies and risk control measures adopted.
Level of Satisfaction
As per the findings of the survey undertaken, the level of satisfaction for
AEGON Religare ULIPs is neither too high nor too low. So a great deal of
effort is needed to garner the goodwill of the client.
Customer Service
1) ARLC should try to maintain more close and convincing relationship
with its customers. It is a very essential element in industrial
marketing.
2) The customer should be provided all information in details as well as
should be acquainted with the facilities and schemes available such
as Annual Reports, Fund’s performance Analysis, etc.
3) The concerned authorities should strictly follow the time schedule
regarding the issue of policy.
4) After sales service should be made more regular and sharp.
5) Customer support department should be expanded in terms of
expertise and personnel. Simultaneously it should be furnished with
new technology in order to make the customer support system more
active and improved.
Comments
Yes No
2. Will you prefer insurance for investment purpose?
Yes No
Yes No
-----------------------------------------------------------------
7. Time horizon in which you have to achieve your financial goal?/how long do you
plan to invest your money?
Under 2 years
2-5 years
6-10 years
Over 15 years
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BIBLIOGRAPHY
Websites
www.AEGONReligare.com
www.IRDA.com
www.insurancemagic.com
BOOKS