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Submitted in the partial fulfillment of the requirement for the award of the degree of


(MAY 2012-JULY 2013) of


Corporate Supervisior: Mr. Pradhuman Chaudhary

Submitted By:Mr. Suyash Singh Bhadauria

Roll No. 201125 Faculty Guide: Mr.Shashank Goel Batch- 2011-2013

I the undersigned declare that the report of the project work entitled : MARKET RESEARCH ON RECRUITEMENT OF FINANCIAL CONSULTANT FOR HDFC LIFE INSURANCE CO. LTD, NOIDA,is based my own work carried out during the course of my study under the supervision of Mr. Pradhuman Chaudhary I assert that the statement made and conclusions drawn are an outcome of the project work. I further declare that to the best of my knowledge and belief that the project report does not contain any part of any work which has been submitted for the awards of any other degree/diploma/certificate in this institute or any other institute. Name: Suyash Singh Bhadauria Roll No: 201125

(Signature of the Candidate)

We acknowledge the valuable support from IRDA in conducting this study. In particular, we would like to thank Mr Hari Narayan and Mr A. Girdhar for commissioning the study to NCAER. Our special thanks go to Ms Yegnapriya Bharath for her untiring support and coordination during the entire study and providing feedback at various critical junctures of the study. We are really grateful to her for her continuous and sustained cooperation. We also thank Mr Srinivas Rao for his help in facilitating the study. Further, we are thankful to Mr Manoj Asiwal for providing necessary administrative support. We would be amiss if we do not thank all the sample respondents across the country for providing the requisite data and information to NCAERs field investigators. But for their generous help, it would not have been possible to give to the study its present shape. Moreover, we are grateful to all our field staff for collecting the necessary information from the sample respondents across the country. Thanks are also due to Mr Suman Bery who was the Director General when the study was commissioned and Dr Shekhar Shah, the current Director General, NCAER whose full encouragement helped the core team in completing this study in time.




Name of the Organization: HDFC STANDARD LIFE INSURANCE CORPORATIOIN Organizational Guide: Mr. PRADHUMAN CHAUDHARY. The service industry is one of the fastest growing sectors in India today. The upcoming sectors which are really showing the graph towards upwards are Telecom, Banking, and Insurance. These sectors really have a lot of responsibility towards the economy. Amongst the abovementioned areas insurance is one sector, which took a lot of time in positioning itself. The insurance business of non-life companies was not much in problems but the major problem was with life insurance. Life Insurance Corporation of India had monopoly for more than 45 years, but the picture then was completely different. Previously people felt that Insurance is only for classes not for masses but now the picture is vice- versa.

On the basis of my research I find that most of the people think that insurance sector is hard and profitable, the reason people think that insurance sector is hard because since insurance is unsought need of the people therefore it is very hard to sell the polices of the company . In my research I also find that more than 80% of the people dont want to join HDFC SLIC as a financial consultant. The reason they said for not joining HDFC SLIC is lack of awareness and salary structure as well as people were satisfied with their own job and they dont have time to sale policy. Some people also said that HDFC SLIC is a private sector company and due to strong market share and awareness among people about LIC, will make their job difficult to work as FC for company.

INTRODUCTION The business of insurance is related to the protection of the ECONOMIC VALUES OFASSETS. Every asset has a value. The asset would have been created through the effortsof the owner. The asset would have been created through the efforts of the owner. Theasset is valuable to the owner, because he expects to get some benefits form it. It is a benefit because it meets some of his needs. The benefit may be an income or in someother form. In the case of a factory or a cow, the product generated by it is sold andincome is generated. In the case of a motor car, it provides comfort and convenience intransportation. There is no direct income. Both are assets and provide benefits.Every asset is expected to last for a certain period of time during which it will provide the benefits. After that, the benefit may not be available.There is a life-time for a machine in factory or a cow or a motor car. None of them willlast for ever. The owner is aware of this and he can so manage his affairs that by the endof that period or life-time, a substitute is made available. Thus he makes sure that the benefit is not lost. However, the asset may get lost earlier. An accident or some other unfortunate event may destroy it or make it incapable of giving the benefits. An epidemicmay kill the cow suddenly. In that case, the owner and those enjoying the benefitstherefore, would be deprived of the benefits. The planned substitute would not have beenready. There is an adverse or unpleasant situation. Insurance is a mechanism that helps toreduce the effects of such adverse situations. It promises to pay to the owner or beneficiary of the asset, a certain sum if the loss occurs.


Insurance has been known to exist in some form or other since 3000 BC. TheChinese traders, traveling treacherous river rapids would distribute their goodsamong several vessels, so that the loss form any one vessel being lost, would be partial and shared, and not total. The Babylonian traders would agree to payadditional sums to lenders, as the price for writing off the loans, in case of theshipment being stolen. The inhabitants of Rhodes adopted the principle of generalaverage of general average, whereby, if goods are shipped together, the ownerswould bear the losses in proportion, if loss occurs, due to jettisoning duringdistress. {Captains of ships caught in storms, would throw away some of thecargo to reduce the weight and restore balance. Such throwing away is called jettisoning} The Greeks had started benevolent societies in the late 7 th centuryAD, to take care of the funeral and families of members ho died. The great fire of London in 1666,in which more than 13000 house were lost, gave a boost toinsurance and the first fire insurance company, called the fire office, was startedin 1680.

The origins of insurance business as in vogue at present, is traced to the LloydsCoffee House in London. Traders, who used to gather in the Lloyds coffee housein London, agreed to share the losses to their goods while being carried by ships.The losses used to occur because of pirates who robbed on the high seas of because of bad weather spoiling the goods or sinking the ship. In India, insurance began in 1818 with life insurance being transacted by an English company, theOriental Life Insurance Co. in 1870 in Mumbai. This was followed by the BharatInsurance co. in 1896 in Delhi, the Empire of India in 1897 in Mumbai, TheUnited India in Chennai, the National, the National Indian and HindustanCooperative in Kolkata.

Later, were established the cooperative Assurance in Lahore, the Bombay Life(originally called the swadeshi life), the India Mercantile, the new India and theJupiter in Mumbai and the Lakshmi in New Delhi. These were all Indiancompanies started as a result of the swadeshi movement in the early 1900s. By theyear 1956, when life insurance business was nationalized and the life InsuranceCorporation of India (LIC) was formed on1st September 1956, there were 170companies and 75 provident fund societies transacting life business in India. After the amendments to the relevant laws in 1999, the L.I.C. did not have the exclusive privilege of doing life insurance business in India. By 31.8.2007, sixteen new lifeinsurers had been registered and were transacting life insurance business in India

The History of Insurance in India

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

1912 - The Indian Life Assurance Companies Act enacted as the first statute toregulate the life insurance business.

1928 - The Indian Insurance Companies Act enacted to enable the government tocollect statistical information about both life and non-life insurance businesses.

1938 - Earlier legislation consolidated and amended to by the Insurance Act withthe objective of protecting the interests of the insuring public.

1956 - 245 Indian and foreign insurers and provident societies taken over by thecentral government and nationalized. LIC formed by an Act of Parliament, viz.LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.The General insurance business in India, on the other hand, can trace its roots tothe Triton Insurance Company Ltd., the first general insurance companyestablished in the year 1850 in Calcutta by the British.

Life Insurance a Basic Need

Life insurance is a contract providing for payment of a sum of money to the personassured or, failing him, to the person entitled to receive the same, on the happening of certain event.A family is generally dependent for its food, clothing and shelter on the income broughtin at regular intervals by the bread winner of the family. So long as the he lives and theincome is received steadily, that family is secure; but should death suddenly intervene thefamily may be left in a very difficult situation and sometimes, in stark poverty.Uncertainty of death is inherent in human life. It is this uncertainty that is risk, whichgives rise to the necessity for some form of protection against the financial loss arisingfrom death; insurance substitutes this uncertainty by certainty.

Few Advantages of Life Insurance.

1. It is superior to an ordinary savings plans: This is so because unlike other saving plans, it affords full protection against risk of death. In case of death, the full sum assured is made available under a life assurance policy; whereas under other savings schemes the total accumulated savings alone will beavailable. The latter will be considerably less than the sum assured, if death occurs duringearly years. 2. Insurance encourages and forces thrift: A savings deposit can be too easily withdrawn. Many may not be able to resist thetemptation of using the balance for some less worthy purpose. On the other hand, the payment of life insurance premiums becomes a habit and comes to be viewed wit thesame seriousness as the payment of interest on a mortgage. Thus insurance, in effect brings about compulsory saving. 3.Easy settlement and protection against creditors: The life assured can name a person or persons to whom the policy moneys would be payable in the event of his death. The proceeds of a life insurance policy can be protectedagainst.The claims of the creditors of the life assured by effecting a valid assignment of the policy. A married womens property act policy constitutes a trust in favor of the wifeand children and no separate assignment is necessary. The beneficiaries are fully protected from creditors except to the extent of any interest in the policy retained by theassured . 4 Administering the legacy for beneficiaries: It often happens that a provision which a husband or father has made through insurance isquickly lost through speculative or unwise investment or by unnecessary expenditure onluxuries. These contingencies can be provided against in the case of insurance. The policyholder can arrange that in the in the event of his death the beneficiary shouldreceive, instead of a single sum (a). payment of the net claim amount by equalinstallments over a specified period of years, or (b).payment of the claim amount bysmaller monthly installments over the selected period followed by a lump sum at the endthereof.

5.Ready marketability and suitability for quick borrowings: After an initial period, if the policy holder finds himself unable to continue payment of premiums he can surrender the policy for a cash sum. Alternatively he can tide over atemporary difficulty by taking loan on the sole security of the policy without delay.Further a life insurance policy is sometimes acceptable as security for a commercial loan. 6.Tax relief: For computing income tax (especially in India the Indian income tax act) followsdeduction from income tax payable, a certain percentage of a portion of the taxableincome of individuals which is diverted to payment of insurance premiums. W hen thistax relief is taken into account it will be found that the assured is n effect paying a lower premium for his insurance.

How InsuranceWorks
The mechanism of insurance is very simple. People who are exposed to the same riskscome together and agree that, if any one of the members suffers a loss, the others willshare the loss and make good to the person who lost. All people who send goods by shipare exposed to the same risk related to water damage, ship sinking, piracy, etc. thoseowning factories are not exposed to these risks, but they are exposed to different kinds of risks like, fire, hailstorms, earthquakes, lightening, burglary, etc. like this, different kindsof risks can be identified and separate groups, made including those exposed to suchrisks. By this method, the risk is spread among the community and the likely big impacton one is reduced to smaller manageable impacts on all.If a Jumbo Jet with more than 350 passengers crashes, the loss would run into severalcrores of rupees. No airline would be able to bear such a loss. It is unlikely that manyJumbo Jets will crash at the same time. If 100 airline companies flying Jumbo Jets, cometogether into an insurance pool, whenever one of the jumbo jets in the pool crashes, theloss to be borne by each airline would come down to a few lakhs of rupees. Thus,insurance is a business sharing.

Role of Insurance in Economic Development

For economic development, investments are necessary. Investments are made outof savings. A life insurance company is a major instrument for the mobilization of savings of people, particularly from the middle and lower income groups. Thesesavings are channeled into investments for economic growth.

An insurance companys strength lies in the fact that huge amounts come by wayof premiums. Every premium represents a risk that is covered by that premium. Ineffect, therefore, these vast amounts represent pooling of risks. The funds arecollected and held in trust for the benefit of the policyholders.

The management of insurance companies is required to keep this aspect in mindand make all its decisions in ways that benefit the community. This applies also toits investments. This is why successful insurance companies would not be foundinvesting in speculative ventures. Their investments benefit the society at large.

The system of insurance provides numerous direct and indirect benefits to theindividual and his family as well as to industry and commerce and to thecommunity and the nation as a whole. Those who insure, both individuals andcorporate, are directly benefited because they are protected from theconsequences of the loss that may be caused by the accident or fortuitous event.Insurance, thus, in a sense protects the capital in industry and releases the capitalfor further expansion and development of business and industry.

The every existence of risk that is, uncertainty concerning the future, is a severehandicaps in economic activities. Insurance removes the fear, worry and anxietyassociated 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 bycontributes to a vigorous economy and increased national productivity.

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

Insurers are closely associated with several agencies and institutions engaged infire loss prevention, cargo loss prevention, cargo loss prevention, industrial safetyand road safety. Before acceptance of a risk, insurers arrange survey andinspection of the property to be insured, by qualified engineers and other experts.

The object of these surveys is not only to assess the risk for rating purposes butalso to suggest and recommend to the insured, various improvements in the risk,which will attract lower rates of premium and what is more important , reduce theloss potential. For example, burglary surveyors make recommendation in regardto security measures such as better locking system, appointment of

Watchman,etc. Engineering surveys play a most useful part in accident prevention asvaluable technical advice is provided in respect of plant and machinery.

Insurance ranks with export trade, shipping and banking services as earner of foreign exchange to the country. It helps to earn foreign exchange and representinvisible exports