A project report Submitted to Punjab technical university As partial Fulfillment of MBA Programme (MARKETING) Submitted by Jagannath Sahu ROLL

NO-840663001 Under the Guidance of MR.Sarata Chandra sahu Lecturer of DISHA COLLEGE OF MANAGEMENT &TECHONOLOGY

DISHA COLLEGE OF MANAGEMENT &TECHONOLOGY AUTHORISED LEARNING CENTER OF PUNJAB TE CHINICAL UNIVERSITY Batch-2008-10

Date-

26/07/2010

TO WHOM IT MAY CONCERN This is certify that Mr.Jagannath Sahu having Reg/Roll No.840663001 (PTU, under DISHA COLLEGE OF MANAGEMENT AND TECHNOLOGY Berhampur 2008-10Batch) has successfu lly completed summer Internship program from 10/06/2010 to25/07/2010 under my gu idance.

I wish him all the success for his future endeavors. Authorised Arun Kumar mohapatro Development Officer LIC Berhampur

DECLERATION I herby declare that the project work. Entitled on “Need & purpose of L I C” Submitt ed by me for the partial Fulfillment of the MBA Programmer in the DISHA, Berhamp ur, Under the Punjab Technical University is my own original work & has been sub mitted. I also declare that no chapter of this manuscript in whole or in part is lifted & Incorporated in this report from any earlier work done by me or others .

Place- Berhampur Date-

Jagannath sahu Roll.No-840663001

ABSTRACT Summer Internship Programmed is usually done to improve our knowledge and skill. To work in augmenting my knowledge regarding the theory and to bridge the gap between my theoretical and practical knowledge about the business environment. This project intends to identify the marketing strategy. Basic purposes are to findings the parameters in the mind of the customers when they are involve the i nsurance company. The data collected are basically primary however to study the survey style, natu re of questionnaires, pattern of analysis. I also took help of secondary sources like from office records etc. This project report are based on information collected by me are true to the bes t of my knowledge and belief. ACKNOWLEDGEMENT I would like to thank all those who directly or indirectly contributed in making this project a success. I owe a lot to Mr. Arun Kumar Mahapatra for his constan t encouragement and support: and to my friends for all the help. I would like thank Mr.Sarata Chandra sahu, Course Coordinator MBA for this help

and support. Friends and parents are an inevitable pat of life in all endeavors. So, we would like to express our sincere thanks for the encouragement and help they have ren dered.

Jagannath Sahu Roll No.840663001 TABLE OF CONTENTS ABSTRACT iv ACKNOWLEDGEMENT v TABLE OF CONTENTS vi 1. INTRODUCTION 1 1.1 RESEARCH DESIGN 3 1.1.1 Need for the Study 3 1.1.2 Objective of the Study 3 1.1.3 Scope of the Study 3 1.1.4 Methodology 5 1.1.5 Sources of Data 5 1.1.6 Sample Size 6 1.1.7 Tools and Techniques 6 1.1.8 Problem of the Study 6 1.1.9 Limitations of the Study 7 1.1.10 Presentation of the Study 7 2. INDUSTRY PROFILE 8 2.1 First India Insurance Company M8701 8 2.2 Insurance Act 1938 8 2.3 The Historic Day - 19th January 1956 10 2.4 Insure Your Risk 10 3. COMPANY PROFILE 11 3.1 About Life Insurance 11 3.2 A Profile of Life Insurance Corporation of India 12 3.2.1 Objective of LIC 13 3.2.2 Mission 14 3.2.3 Vision 14 3.2.4 Benefits of LIC 14 3.2.5 Marketing Strategy of LIC 16 3.2.6 LIC Marketing Strategy With Respect To Various Policy Plans 3.2.7 Current Insurance Market Situation 41 3.2.8 Present Scenario of Globalisation 43 3.2.9 Opportunities 45 3.2.10 Challenges Before the Industry 47 3.2.11 Essentials to Meet the Challenges 50 3.3 SWOT Analysis 51 3.3.1 Strength 51 3.3.2 Weakness 52 3.3.3 Opportunities 52 3.3.4 Threats 52 3.4 Human Resources 52 3.4.1 Basic Training & Induction 53 3.5 Appraisal System 53 3.6 Segmentation 54 3.7 Competitors 55 4. ANALYSIS AND FINDINGS 56 4.1 Consumer Analysis 56

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it was much later on the 19th of January. They too sought to avert the evil conse quences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. The Insurance Act 1938 was the first legislatio n governing not only life insurance but also non-life insurance to provide stric t state control over insurance business. putting the Indian companies at a disadvantage. the Life Insurance Companies Act. 1912 made it neces sary that the premium rate tables and periodical valuations of companies should be certified by an actuary. 1956. However. in Calcutta. The demand for nationalization of life insurance industry was made repeatedly in the past but it gathered momentum in 1 944 when a bill to amend the Life Insurance Act 1938 was introduced in the Legis lative Assembly. that l ife insurance in India was nationalized. the f oreign life insurance companies started insuring Indian lives.4. General Assura nce and Swadeshi Life (later Bombay Life) were some of the companies established during the same period. From 44 companies with total business-in-force as Rs.298 core in 1938. Though the concept of insurance is larg ely a development of the recent past. However. The first two decades of the twentieth century saw lot of growth in insurance bu siness. In 1907. But Indian lives were being treated as sub-standard lives and heavy extra premiums were being cha rged on them. 1 6 non-Indian companies and 75 provident were operating in India at the time of n . later with the efforts of eminent people like Babu Muttylal Seal. it rose to 176 companies with total business-in-force as Rs. National Indian and National Insurance in Calcutta and the Co-operative Assur ance at Lahore were established in 1906.22. During th e mushrooming of insurance companies many financially unsound concerns were also floated which failed miserably. INTRODUCTION The story of insurance is probably as old as the story of mankind. The Life Insurance Companies Act. insurance companies came into existence to carry the message of insurance and social secur ity through insurance to various sectors of society. Hindustan Co-operative Insuran ce Company took its birth in one of the rooms of the Jorasanko. In the year 1912. and the Prov ident Fund Act were passed.2 Suggestions 63 REFFERENCES 64 QUESTIONNAIRE 65 63 1. The United India in Madra s. Starting as Indian enterprise with highly patriotic motives. The same inst inct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also.44 core.2 Insurers’ Analysis 57 5. Life Insurance in its modern form came to India from England in the year 1818. But the Act discriminated between foreign and Indian companies on many accounts. particularly after the industrial era – past few centuries – yet its beginnings date back almost 6000 years. and covered Indian lives at norma l rates. The Indian Mercantile. CONCLUSION & SUGGESTION 5. Bombay Mutual Life Assurance Society heralded the birth of first I ndian life insurance company in the year 1870. O riental Life Insurance Company started by Europeans in Calcutta was the first li fe insurance company on Indian Soil. About 154 Indian insurance companies. Prior to 1912 India had no legislation to regulate insu rance business. All the insurance companies established dur ing that period were brought up with the purpose of looking after the needs of E uropean community and Indian natives were not being insured by these companies. Bharat Insurance Company (1 896) was also one of such companies inspired by nationalism. The Swadeshi moveme nt of 1905-1907 gave rise to more insurance companies. house of the gre at poet Rabindra nath Tagore.1 Conclusion 63 5.

1.00 crore Sum Assured on new policies.1 RESEARCH DESIGN 1. apart fro m its corporate office in the year 1956. initially the ma nagement of the companies was taken over by means of an Ordinance. which can add in decision-making. With a vision of providi ng easy access to its policyholders.00 crores only in the year 1969-70.955 new policies by 15th Oct. The satellite offices are smaller. It may be seen that from about 200. Apart from on-line Kiosks and IVRS. Today LIC functions with 2048 fully computerized branch offices. Kolkata. 7 zonal offices and the corporate office. Since life insurance contracts are long term contracts and during the currency of the policy it requires a variety of s ervices need was felt in the later years to expand the operations and place a br anch office at each district headquarter. LIC’s ECS and ATM premium payment facili ty is an addition to customer convenience.00 crores of New Business in 1957 the corporation c rossed 1000. The same motives which inspired our forefathers to bring insurance into existence in this country inspire us at LIC to take this message of protection to light the lamps of secu rity in as many homes as possible and to help the people in providing security t o their families. LIC’s Wide Area Network covers 100 divisional offices and connects all the branches through a Metro Area Networ k. their compe titor’s strategies about the customer’s perceptions for their product and those of t . by 1985-86 LIC had already crossed 7000. But with re-organization happe ning in the early eighties. Bangalore. Any marketing manager in orde r to take decisions regarding the marketing mix of their products require tactfu l and unbiased information about t6he existing and potential market. 33 divisional offices and 212 branch offices.ationalization.01. LIC has tied up with some Banks and Service providers to offer on-line premiu m collection facility in selected cities. I nfo Centers have been commissioned at Mumbai. posting a healthy growth rate of 16.00 crore mark of new business. The d igitalized records of the satellite offices will facilitate anywhere servicing a nd many other conveniences in the future LIC continues to be the dominant life insurer even in the liberalized scenario o f Indian insurance and is moving fast on a new growth trajectory surpassing its own past records. LIC has launched its SATELLITE SAMPARK offi ces. with the objective of spreading life insurance much more widely and in particular to the rural are as with a view to reach all insurable persons in the country. Chennai. and branches were made acc ounting units. 2005. New Delhi.1 Need for the Study As we all know the need of any research survey lies in its ability to bring out certain facts.32. 100 divisional offices. LIC has issued over one crore policies during the current year . LIC had 5 zonal offices. Pune and many other cities. and the Life Insur ance Corporation of India was created on 1st September. As a result of re-organization servicing functions were transferred to the branches. Ahmadabad. leaner and closer to the customer. Re-organization of LIC took place and large numbers of new branch offices were opened. 1. It worked wonders with the performance of the corporation. LIC has crossed many milestones and has set unprecedented perf ormance records in various aspects of life insurance business. From then to now. providing them ade quate financial cover at a reasonable cost. Nationalization was accomplished in two stages. Hyd erabad. th e ownership too by means of a comprehensive bill.67% over the corresponding period of t he previous year. and later. It has crossed the milestone of issuing 1. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956. and it took another 10 years for LIC to cross 2000. 1956.

• Primary Data • Secondary Data Primary Data: Primary data were collected from the customers of LIC to know their behavior and satisfaction level towards insurance policy by putting questionnaire to the cus tomers. 1. The present study. articles in the magazines.6 Sample Size The sampling universes for the survey are the policyholders of LIC kin Berhampur . anal ysis. findings and suggestions proposed by the present researcher will be of imm ense use for future researcher with similar studies in insurance market. These da ta were collected from books. 1.r. The main purpose of the study is to know about the marketing strategies of LIC – p articularly “Marketing of services” of better service opportunities to their custome rs and to what extent they are gaining customers’ satisfaction towards their rende red services. various report s and booklets of the company.4 Methodology The purpose of methodology section is to describe the research procedure. The research methodolo gy consists of the following aspects: 1.s. monthly and annual journals of LIC. The questionnaire comprises of • Multiple questions • Ranking questions • Open end questions • Suggestion questions • Scoring questions.1. LIC)”.he substitutes.1. records. By doing proper marketing research. So the present study is concerned with “Marketing Orientation and the Level of Satisfaction of Customers towards the Services Pro vided by Insurance Sectors (w.1. 1. it enables marketers to predict how consumer would react in the market place and to understand the reason they made the purchase decision.1. Secondary Data: The secondary data was collected from various bibliographical sources.5 Sources of Data After the objective of the study has been clearly stated the next step in formal research project into determine the sources of data from which the data is requ ired to be collected for the purpose of achieving data efficiency. This includes the sampling procedure and the data collection. 1.3 Scope of the Study As growth of insurance business rests on services provided by the company and po licyholders satisfaction level.1. The information considered of two kinds of data.2 Objective of the Study The main obnjective3s of the study is to find out the marketing orientation and level of satisfaction of customers towards the services provided by insurance se ctors with special reference to LIC (Life Insurance Corporation of India).

• Contradictory responses of name customers were a limitation to drawn necessary conclusion.1. There was an increasing demand to start controlled life insurance companies. The people who have different educational level. Bar. • The research study was carried out only at Berhampur. 1. age are co nstitute the target sample in the study. income group. the short span of time could not permit me to have An in-depth study regarding consumer behaviors. chapter 3 contains company profile and finally chapter 4 provides analysis of the content. Therefore the result ma y not be applicable to national or state level.1 First India Insurance Company M8701 The year 1870 heralded the birth of the first Indian Insurance company.city. 2. 1870. the Bomb ay Mutual Life Assurance Society.1.A. Graphs like Pie. On 3rd December. • Some policyholders also hesitate to give data or ever hesitate to answer quest ionnaire. And the sample size is 100.2 Insurance Act 1938 . 2. • It is difficult to generate the main findings since the sample size is small.1.9 Limitations of the Study During the course of the study the researcher faced with the following limitatio ns: • Firstly. 1. Registrar. which came into existence to cover India lives at normal rates.7 Tools and Techniques To analyze the sample data collected from the sample holder of LIC policy and to make a comment on the total population out of which the sample is done. Cone etc . 1. 1. differe nt tools are to be applied for sample responses. are applied for analysis. whi ch the Government turned down on the plea that there by were no significant stat istics adopted for Indians.10 Presentation of the Study Chapter 1 contains the introduction of the project whereas Chapter 2 reveals the industry profile of the project.1. summers Asst. Under this study an attempt is made by management trainee to strengthen brand awareness among insurance buyers in Berhampur City. G. INDUSTRY PROFILE 2. Bombay High Court. It takes into acc ount various problems of customers and a suggested strategy for life insurance C orporation of India. The above are some of the aspects which posed real problems in the way of comple tion of the research work but the majority of respondents were co-operative and my gratitude are due to them. It obser ves consumers buying behavior and their changing preferences.8 Problem of the Study The study has been undertaken in order to find out the behavior of consumer taki ng place in insurance sector among insurance buyers in Berhampur City.

no body had any idea of wha t he was going to talk about. income and li festyle take an appropriate policy at each point in life. • Provision for policyholders. 3.D. insurance is a risk co ver. In separate sub sections it dealt with provident compan ies. It should. Most people thought that he would be talking on th e problems of Bombay state reorganization. Indian as well as foreigner are doing busine ss in India came under Government management and control. W hat follows is an attempt to acquaint readers with some of the concepts of life insurance. Insurance has become cheaper in recent times as private players have come into t he field. COMPANY PROFILE 3. however. All life insurance companies. • Provisions for deposits. with special reference to LIC. What follows is an attempt to acqua int readers with some of the concepts of life insurance. it is cover for risk! And it is absolutely vital that everyone. a burning topic of the day.3 The Historic Day . depending on there age. the prominence of insurance is not as widely understood. It is a cover to ensure that your family is not left unshielded if the earn ing member of the family expires. 1938 was the first comprehensive legislation governing not on ly life but also non-life branches of insurance to provide strict state control over insurance business. the prominence of insurance is not as widely understood. which is one of the most populated in the worl d. Life insurance is a contract that pledges payment of an amount to the person ass .1 About Life Insurance Life insurance in India made its debut well over 100 years ago.30 P. Deshmukh w ould broad cast to the nation at 8. be clearly understood that the following content is by no means an exhaustive description of the terms and conditions of an LIC poli cy or its benefits or privileges. 2. mutual offices and co-operative society as well. to prevent insurers of inadequate financial resources o r speculative concerned from commencing business. as it ought to be. making it possible for the representativ es of policyholders to be on the board of Directors. number of dependents. as it ought to be. The silent features of the act were as follows: • Constitution of a Department of Insurance under a superintendent vested with wid e powers of supervision and control over all kinds of insurance companies. that day. directors. • Periodical valuation for Indian business of foreign companies and the business o f Indian companies.The Insurance Act. with special reference to LIC. In our country. 2. Life insurance in India made its debut well ov er 100 years ago. • Regulation of the compulsory registration of insurance companies and for filling of investment and financial conditions. In our country. But they heard him say: This afternoon the government has promulgated an ordinance regarding life insura nce. which is one of the most populated in the world.M. It should. however. be clearly underst ood that the following content is by no means an exhaustive description of the t erms and conditions of an LIC policy or its benefits or privileges.19th January 1956 When the All India Radio announced that the Finance Minister Sri C.4 Insure Your Risk Life insurance is not an investment.

• Involve all people working in the Corporation to the best of their capability in furthering the interests of the insured public by providing efficient service w ith courtesy. Koraput (1). The Berhampur Division of LIC was originally a sister branch of the division off ice of LIC. the primary obligation to its policyho lders. At present.2.57 crores respectively.       . 3. Life insurance is provided in the country by the life insurance corporation (LIC ) which was set up in 1956 as a result of the amalgamation of 245 private life i nsurance companies into a monolithic public sector organization.1 Objective of LIC • Spread Life Insurance widely and in particular to the rural areas and to the soc ially and economically backward classes with a view to reaching all insurable pe rsons in the country and providing them adequate financial cover against death a t a reasonable cost. kilometer. in the investment of funds. • Meet the various life insurance needs of the community that would arise in the • Changing social and economic environment. • Conduct business with utmost economy and with the full realization that the mone ys belong to the policyholders.94 crores and 2. whose money it holds in trust. Phulbani (1). in short. or • Specified dates at periodic intervals. without losing sight of the interest of th e community as a whole. Life insurance is universally ack nowledged to be an institution. and Nuapada (1).ured (or his nominee) on the happening of the event insured against. Bhawanipatna (1). if it occurs earlier. life insurance is civilizations’ par tial solution to the problems caused by death. The total number of customers covered in the individual insurance plan and group insurance plan are 11. • Maximize mobilization of people s savings by making insurance-linked savings ade quately attractive. That of dying prematurely is leaving a dependent family to fend for itse lf. Bhanjanagar ( 1). The contra ct is valid for payment of the insured amount during: • The date of maturity. covering population of approximately 9. the funds to be deployed to the best advantage of the in vestors as well as the community as a whole.000. That of living till old age without visible means of support. Jaypor e (1). aska (1). Cuttack. is conc erned with two hazards that stand across the life-path of every person: 1. Chatrapur (1). Paralkhemundi (1). substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate eve nt of death of the breadwinner. 2.971 sq. pride and job satisfaction through discharge of their duties with dedicati on towards achievement of Corporate Objective. which eliminates risk . the contract also provides for the payment of premium period ically to the Corporation by the policyholder.2 A Profile of Life Insurance Corporation of India “Life Insurance Corporation” is not only an eminent institution rather it is a popul ar industry. • Act as trustees of insured public in their individual and collective capacities. keeping in view national priorities and obligations of attractive return. Among other things. 62. Nabarangpur (1). Life insurance. The population area of Berhampur Division covers 58. By and large. Promote amongst all agents and employees of the Corporation a sense of participa tion. • Bear in mind. 3. it has 1 4 Branches in different area such as Berhampur (3). or • Unfortunate death. Rayagada (1).

and by rendering resources for economic development. Also. start-in-life or marriage provision or even perio dical needs for cash over a stretch of time can be less stressful with the help of these policies. 3. Alternatively. It allows long-term savings since payments c an be made effortlessly because of the easy installment facility built into th e scheme. even for a commercial loan. What Is A Segmentation: Dividing a market into distinct groups with distinct groups with a distinct need               . Also. a life insurance policy is also gene rally accepted as security. such as." 3." 3.2.3. Besides. For example: The Salary Saving Scheme popularly known as SSS provides a convenie nt method of paying premium each month by deduction from one s salary.2.2. pu rchase of a house or for other investments. Liquidity: In case of insurance. it is easy to acquire loans on the sole security of any po licy that has acquired loan value. in case of demise. Values: Integrity and transparency. The Salary Saving Sc heme is ideal for any institution or establishment subject to specified terms an d conditions.3 Vision "A trans-nationally competitive financial conglomerate of significance to societ ies and Pride of India. half yearly or y early). Money when you need: A policy that has a suitable insurance plan or a combination of different plans can be effectively used to meet certain monetary needs that may arise from timeto-time.4 Benefits of LIC Protection: Savings through life insurance guarantee full protection against risk of death o f the saver.2. life insurance assures payment of the enti re amount assured (with bonuses wherever applicable) whereas in other savings sc hemes. only the amount saved (with interest) is payable Aid to Thrift: Life insurance encourages thrift . Caring and courtesy.5 Marketing Strategy of LIC According to Rajan Saxena Marketing Strategy means “Segmentation” so lets know somet hing about Segmentation.2 Mission "Explore and enhance the quality of life of people through financial security by providing products and services of aspired attributes with competitive returns. quarterly. (Premium payment for insurance is monthly. 1. Children s education. In this c ase the employer directly pays the deducted premium to LIC. loans are granted to policyhol ders for house building or for purchase of flats (subject to certain conditions) . Initiative and innovation. policy money can be made available at the time of one s retirement from service and used for any specific purpose.

measurable customer characteristics (such as location. 2. 3.s. nationality. there are some useful ways of thinki ng about how this might be done. The key task is to find the variable. it is necessary to undertake market research. One way to start the process is to look at the various benefits and think about whether There are groups of customers who would care about different clusters of these b enefits. such as • The segments are measurable . In my opinion. prior brand loyalty. characteristics. The Bases For Segmentation: While it is difficult to determine what will segment a market into different seg ments based on different benefit tradeoffs..that is. 2. Region of the country Urban or rural Behavioral Psycho graphic . you can reach the segment by media (often this can be ascertained by looking at the segment descriptors) 3. Income. or behavior who might require separate products or marketing mixes.often denoted as experts and novice s. The most common profilers used in customer segmentation include the followi ng: Demographic Geographic Age.often how customers use a product can result in their making tradeoffs a cross different benefits. Establishing Possible Bases For Segmenting: It is widely thought in marketing that than segmentation is an art. light users and heavy users of a product often care about different benefits. It’s the only way to deliver what the customer wants. this is typically a reit erative process (i. occupation. To find the needs of customers in a market. but a cook may use a product that is central to a recipe as well). Segmenting markets is simply the analytical process of breaking the mark et into distinct segments. • Application . these different types of prior experience usually highly correlate with diffe rent needs. family size. or some. enter tainment). gender. this may lead to the following bases for beginning about segmenti ng a market. Often in consumer markets. For example. income) that can be used to inform a segmentation exerc ise. you can identify the size of the segment • The segments are reachable . In any event.times lifestyle (as in the case of may cars) can be the basi s of segmentation. buying situation (work vs. Profile rs are the descriptive.e. or variables that split the market into actionable segments there are two types of segmentation variables: • Needs • Profilers The basic criteria for segmenting a market are customer needs. • Prior experience with the product category . however. Before segmenting a market practically. sex. Marketing academics have not been successful at segmenting the markets d ifferently and still finding meaningfully different segments. It’s the only way to have a clear message in the market. then another). let’s first con sider some key issues and questions: 1. not a scienc e.customers who apply a product in a mission critical way often care about different benefits (for business buyers this could be a way central to th eir business. • Usage .that is. A good segmentation will also meet other criteria. trying one way. a ge.

It’s all very confusing. By s egmenting the market. special occasions) Social class Lifestyle type Personality type Segmenting customer groups. one obtains a very clear understanding of customers and ul timately provides a basis for clear and precise targeting and positioning. Jeevan Anurag Komal Jeevan CDA Endowment Vesting At 21 Marriage Endowment Or Educational Annuity Plan CDA Endowment Vesting At 18 Jeevan Kishore Jeevan Chhaya Child Career Plan . 4. people use age. etc. But s egmentation is also very difficult and. and geogr aphy in business markets. medium. one will find the term segmentation applied to demographics and lifestyles in consumer markets and size. customers in different benefit segments have diff erent needs. One can become quite confused about segmentation because the term has been used to signify many things.6 LIC Marketing Strategy With Respect To Various Policy Plans LIC has a family of schemes for this customer and their family to meet various n eeds.Product usage ( light. Simply put. high) Type of user (meals. benefit se gmentation is essentially the idea that customers should be segmented on the bas is of their needs.2. for segm entation (or worse yet. On the internet. heavy users) Brand loyalty (none. July 1968) who first used the term “benefit segmentation. gender. Typically.” Also known as Needs-Based segmentation. but there is a way to make this clearer and the answer li es in the work of Russell Haley (Journal of Marketing. confuse segmentation with terms like one-to-one marketin g as though people are so unique and share little commonality). especially without complete customer dat a. 3. How To Segment Markets Perhaps the most important analytical process of marketing is segmentation. medium. is what I would admit as an art form in marketing. industry.

Child Future Plan Jeevan Aadhar Jeevan Vishwas The Endowment Assurance Policy The Endowment Assurance Policy-Limited Payment Jeevan Mitra(Double Cover Endowment Plan) Jeevan Mitra(Triple Cover Endowment Plan) Jeevan Anand New Janaraksha Plan Jeevan Amrit Jeevan Shree-I Jeevan Pramukh The Money Back Policy-20 Years The Money Back Policy-25 Years .

1000/.sum assu red per year he or his family are entitled to the following benefits on death or permanent disability caused by accident. Disability Benefit: In case policy holder becomes totally and permanently disabl ed due to an accident before reaching the age of 70 and the policy is in full fo rce. this plan is apt for people o f all ages and social groups who wish to protect their families from a financial setback that may occur owing to their demise. This policy not only makes provisions for the family of the Life Assured in even t of his early death but also assures a lump sum at a desired age. Every year the Life Insurance Corporation distributes its surplus among policyholder to ‘with profits’ p olices in the form of bonuses. Premiums are usually payable for the selected term of years or until death if it occurs during the term period.1 per Rs. The amount assured if not paid by reason of his death earlier will payable at the end of the endowment term where it can be invested in an annuity provision for the rest of the policyholder s l ife or in any other way he may think most suitable at time. but only if it is a ‘with profits’ policy. The reduced sum assured will become payable o n the event as stipulated in the policy.     . Accident Benefit: By paying a small extra premium of Rs.Jeevan Surabhi-15 Years Jeevan Surabhi-20 Years Jeevan Surabhi-25 Years Jeevan Rekha (closed for sale) Bima Bachat INSURANCE PLANS . 250/-. is not less than Rs.THE ENDOWMENT ASSURANCE POLICY Features: • Moderate Premiums • High bonus • High liquidity • Savings oriented. Premium Stoppage: If payment of premiums ceases after at least THREE years prem iums have been paid . exclusive of any attached bonus. Even students above the age of 18 year s can avail of this benefit. he will not be required to pay further premiums. (the Disability Benefit is available in respect of the first Rs. Substantial bonuses have been declared in the pas t after each valuation of policy liabilities. Bonus: Is there anything extra payable besides the sum assured at the time of cl aim settlement? Yes. 000 sum assured on any one life) and t he policy will continue to be in force. a free paid-up policy for a reduced sum assured will be au tomatically secured provided the reduced sum assured. Suitable For: Being an endowment assurance policy.20. The lump sum can be reinvested to provide an annuity during the remainder of his life or in a ny other way considered suitable at that time.

GROUP SCHEME . Bima Bachat requires the policy holder to pay only one premium.   . Self-Help Group. INSURANCE PLANS: HILDREN S DEFERRED ENDOWMENT ASSURANCE PLAN Product Summary: This is an Endowment Assurance plan designed to enable a parent or a legal guardian or any near relative of the child (called proposer) to prov ide insurance cover on the life of the child (called life assured). What other benefits do I receive during the specified duration of the policy? For a term of 9 years: The policy holder will receive 15% of the sum assured at the end of every 3rd and 6th policy year. Eligibility: Nodalagency: A State Government Department which is concerned with the welfare o f any such vocation/occupation group. etc. SPECIAL PLANS . Bima Nivesh 2005 is available for t erms 5 and 10 years. It is a single premium. This is the revised version of our popular Bima Nivesh Plan 2004 an d is introduced to meet the overwhelming demand for a single premium plan from o ur customers. The plan has two stages. 9th and 12th policy year. Village Panchayat .JANASHREE BIMA YOJANA Features: The objective of the scheme is to provide life insurance protection to the rural and urban poor persons below poverty line and marginally above the poverty line . The guaranteed surrender value is payable after the policy has run for at least one year. The insurance cover on the child’s l ife starts from the Deferred Date and is available during the latter period. For a term 12 years: The policy holder will receive 15% of the sum assured at th e end of every 3rd. a Welfare Fund/ Society. For a term 15 years: The policy holder will receive15% of the sum assured at the end of every 3rd. INSURANCE PLANS: BIMA BACHAT What is Bima Bachat? LIC’s Bima Bachat is a money-back policy which offers financial security and assur ance to the policy holder and his family. The amount paid for the premium depends on the duratio n of the policy taken and life insurance is available till the date of maturity. NGO. Minimum Membership Size: Twenty five. 6th. ideal investment plan for those who have n o regular income but good periodical income. 6th and 9th policy year. Term Assurance Rider is also available by payment of a single premium at the option of the proposer. one covering the period from the date of commencement of policy to the Deferred Date (called deferment period) and the other covering the period fr om the Deferred Date to the date of maturity.BIMA NIVESH 2005 Bima Nivesh 2005 is a plan with compound rate of guaranteed additions and loyalt y additions.

at the end of the 20th year. Options: You may choose Sum Assured (S. half-yearly. On death during the Extended Term . In case of Plan No 50 it is the policy anniversary date coinciding with or next following the 18th birthday of the child. 19th year and 40% of the Sum Assured along with the reversionary bonuses and the terminal bonus.).) along with interest of 3% p.Sum Assured a long with vested Simple Reversionary Bonuses and Final (Additional) Bonus. It provides the risk cover on the life of child not only during the policy term but also during the extended term (i.A. At maturity. this plan also provides for an imm ediate payment of Basic Sum Assured amount on death of the Life Assured during t he term of the policy. Mode of P remium payment and Premium Waiver Benefit. INSURANCE PLANS -CHILD CAREER PLAN Introduction: This plan is specially designed to meet the increasing educational and other needs of growing children.The Deferred Date in case of Plan No 41 is the policy anniversary date coincidin g with or next following the date on which the child completes 21 years of age. half-yearly. Premiums are waived on death of Proposer provided this benefit is availed. they form pa rt of the guaranteed benefits of the plan. A number of Survival benefits are payabl e on surviving by the life assured to the end of the specified durations. if any. Bonuses: This is a with-profits plan and participates in the profits of the Corporation’s l ife insurance business after the deferred date. if term of the policy is 20 years. For example. 7 years after the expiry of policy term).All the premiums paid (excl uding extra premium and premium for premium waiver benefit. In addition. Premiums: Premiums are payable yearly. quarterly or through Salary deductions over the term of policy. Simple Reversionary Bonuses are declared per thousand Sum Assured annually at the end of each financial year. Maturity Age.e. Benefits under the plan are payable at prespecified durations irresp ective of whether the Life Assured survives to the end of the policy term or die s during the term of the policy. The plan can be taken by a parent on his or he r own life. Premiums may be .Sum Assured is payable. It gets a share of the profits i n the form of bonuses. if any. Payment of Premiums: You may pay the premiums regularly at yearly. 40% of the Basic Su m Assured along with reversionary bonuses declared from time to time on full Sum Assured for the full term and the Terminal bonus. 18th. 20% of the Sum assured will be payab le at the end of the 17th. INSURANCE PLANS .CHILD FUTURE PLAN Death Benefit: On death (after the Date of Commencement of Risk) .JEEVAN ANURAG LIC’s Jeevan ANURAG is a with profits plan specifically designed to take care of t he educational needs of children. Death Benefit: Payment of an amount equal to Sum Assured under the basic plan im mediately on the death of the life assured. if any shall be payable. Assured Benefit: Payment of 20% of the Basic Sum Assured at the start of every y ear during last 3 policy years before maturity.a compounding yearly shall be payable. On death (before the Date of Commencement of Risk) . if an y shall be payable. INSURANCE PLANS . quarterly or monthly and this shall ce ase on the death of the life assured . Policy Term. Once declared.

decrease the risk cover once in a year during the Policy term. INSURANCE PLANS: As individuals it is inherent to differ.000 without any limit at anytime during the term of the policy. the policy will laps e. .1. INSURANCE PLANS . provided the minimum policy term is 10 years and the polic y is held till the vesting date without any switching to any other fund in betwe en.e. the Policyholder shall have the option of reviving the policy within a period of 5 years from the due date of the First Unpaid Premium. In case the Policyholder’s Unit A ccount falls below this limit. 196 1. the Auto-cover facility will compulsorily be availa ble throughout the term of the policy. net of all charges and deductions. the balance in the Policyholder’s Unit Account. Thereafter. for Regular premium policies whe re less than 3 years’ premiums have been paid. subject to the respective minimum limits. for all Regular Premium policies where at least 3 years’ premiums have been paid.paid either for 6 years or up to 5 years before the policy term. provided all due premiums under the Policy have b een paid.a . will have a guaranteed minimum growth rate of 3% p. Each individual? Insurance needs and r equirements are different from that of the others. The benefits under the plan are for the handicapped dependants who are partl y in lump sum and partly in the form of anannuity. The Policyholder can. This will continue to provide relevant risk cov ers even if premiums have not been paid as and when due under the policy. UNIT PLANS . where 3 or more y ears’ premiums have been paid. Top-up (Additional Premium): The policyholder can pay additional premium in mult iples of Rs. and shou ld be sufficient to cover the relevant charges. the Auto-cover facility will compul sorily be available only for a period of 6 months from the due date of the First Unpaid Premium. the risk cover will cease i. However. However. and shall be subject to a minimum balance of one years’ annu alized premium in the Policyholder’s Unit account. how ever.JEEVAN ADHAR Product summary: This plan may be offered to a person who has a handicapped depe ndant satisfying conditions as specified in Section 80DDA of Income Tax Act. In case of yearly or half-yearly mode of premium payment such Top-up can be paid o nly if all premiums have been paid under the policy. LIC? Insurance Plans are poli cies that talk to you individually and give you the most suitable options that c an fit your requirement.FUTURE PLUS Auto-cover: If the Policyholder has opted for risk cover. Minimum Guaranteed Growth rate: For the “Bond“ fund. The plan provides life insurance cover throughout the lifetime of the purchas er. During the period of Auto-cover any/ all unpaid Premiums that have fallen due may be p aid at anytime without interest. the allocated premiums. the policy shall compulsorily be terminated and t he balance amount in the Policyholder’s Unit Account will be refunded to the Polic yholder. at all times. In such cases. compounding yearly. by pay ing all unpaid premiums without interest and on submission of proof of continued insurability to the satisfaction of the Corporation. Increase / decrease of benefits: No increase (except to the extent of Top-up sta ted above) of benefits will be allowed under the plan. The guarantee shall not apply to any Top-up premiums paid under the Policy. then charges for the s ame shall be taken by canceling an appropriate number of units out of the Policy holder’s Unit Account every month. There will be no guarantee under other funds. Notwithstanding what is st ated above. at all times. the Policyholder’s Unit A ccount. For Regular premium policies.The premiums paid under this p lan are eligible for Income Tax relief under Section 80DDA of Income Tax Act.

INSURANCE PLANS .JEEVAN SAATHI Product summary: This is an Endowment Assurance Plan issued on the lives of husb and and wife. within the selected premium paying terms o f 10. Bonuses: This is a with-profit plan and participates in the profits of the Corpo ration’s life insurance business. they form part of the guaran teed benefits of the plan.Premiums: Premiums are payable yearly. half-yearly. monthly or through salary deduction. 25. Alternatively. The Terminal additions would de pend on the future experience of the Corporation. It gets a share of the profits in t he form of Terminal Additions. The policy will be entitled for Terminal Additio ns if at least 10 years premiums have been paid. if earlier. It provides financial pro tection against death throughout the lifetime with regular flow of survival bene fits at five yearly intervals. whichever is earlier. 25 years or for life. Such bonuses are to be added till date of maturity or the second death of the lives covered. Simple Reversionary Bonuses are declared per thousand Sum Assured annual ly at the end of each financial year. Terminal Additions: This is a with-profits plan and participates in the profits of the Corporation’s life insurance business. 15. INSURANCE PLANS . The premium paying terms available are 5. Final (Additional) Bonus may also be payable provided policy has run for certain minimum period. Once declared. The Guaran teed Additions will accrue up to age 65 of the life assured or till his/her deat h. monthly or throug h Salary deductions.100 per thousand Sum Assured for each completed policy year. as opted by you. half-yearly. quarterly. quarterly.LIMITED PAYMENT This is the best form of life assurance for family provision since it enables th . Once declared.THE WHOLE LIFE POLICY. Bonuses: This is a with-profit plan and participates in the profits of the Corpo ration’s life insurance business. 30 or 35 years or till the earlier death. as opted by you. monthly or throug h salary deductions as opted by you throughout the term of the policy or till th e first death of the lives covered. A Final (Additional) Bonus may also be payable prov ided the policy has run for certain minimum period. they form part of the guar anteed benefits of the plan. 15. It gets a share of the profits in the form of b onuses. Alternatively. 20. 20. quarterly. Premium: Premiums are payable yearly.JEEVAN REKHA Product summary: This is a Money Back Whole Life plan. Simple Reversionary Bonuses are declared per thousand Sum Assured annuall y at the end of each financial year. Guaranteed Additions: The policy provides for the Guaranteed Additions at the ra te of Rs. INSURANCE PLANS . the p remiums may be paid in one lump sum (Single Premium). It gets a share of the profits in the form of bo nuses. 10 . half-yearly. Premiums: Premiums are payable yearly. whichever is earlier. It pays the maturity amount on survival of one or both the lives to the en d of the policy term. The plan provides financial protection against death of both the l ives. the premium may be paid in one lu mp sum (single premium).

Such a reduced paid-up Policy will not be entitled to participate in the profits declared thereafter. He need not pay any premium in the later stages of life if and when his conditions might be come adverse.   . However.000. The amount of pension will depend on the then prevailing imm ediate annuity rates under the annuity option chosen.MARRIAGE ENDOWMENT OR EDUCATIONAL ANNUITY PLAN Product summary: This is an Endowment Assurance plan that provides for benefits on or from the selected maturity date to meet the Marriage/Educational expenses of the named child. THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLIC YHOLDER” LIC’S MARKET PLUS: This is a unit linked deferred pension plan.1. half-yearly or qu arterly intervals over the term of the policy. You can also choose the level of cover within the limits. Your Unit Account will be subject to deduction of charges as specified in the Policy Conditions.1. With Profits Limited Payments Policies do not cease to participate in profits after completion of the premium paying period but continue to share in the periodical Bonus Distribution until the death of the Life Assured. quarterly. If the policyholder pays at least 3 years premiums and then discontinues paying any more premiums. but such Bonus as has already been declared on the Policy will remain attached thereto. The allocated premiums will be applied to purchase units as per the Fund type ch osen. Payment of Premiums: You may pay premiums regularly at yearly. a reduced paid-up assurance policy comes into force.000/-. you may choose to purchase pension from LIC or other life insurance company. Further.000/. a Single premium can be paid subject to a minimum of Rs. (b) Benefit on Vesting: On your surviving to the date of vesting.e Life Assured to pay all the premiums during the ordinarily vigorous and most p roductive years of life.increasing thereafter in multiples of Rs. monthly or throug h Salary deductions. Benefits: (a) Death Benefit: If the Life cover is opted for.10. you may opt to commute up to one-third of the Be nefit to be paid as a lump sum.2 UNIT PLANS . throughout the term of the policy or earli er death. The minimum annual premium will b e Rs. which w ill depend on whether the policy is a Single premium or Regular premium contract and on the level of premium you agree to pay. depending on the investment return of the assets representing the chose n Fund. the Sum Assured under the Basic Plan together with the Fund Value of units either as a lump sum or as pen sion. the Fund V alue of the units held in your Unit Account will compulsorily be utilized to pro vide a pension based on the then prevailing immediate annuity rates under the re levant annuity option. INSURANCE PLANS . as opted by you. Alternatively. The premium paying term under this plan is five ye ars minimum and 55 years maximum. Premiums: Premiums are payable yearly.5.000 and thereafter in m ultiples of Rs.MARKET PLUS “IN THIS POLICY. The value of the units in the Unit Fund may increase or d ecrease. then the Fund Value of the units held in the Policyholder’s Unit Account shall be payable either as a lump s um or as a pension. half-yearly. In case the policy is taken without life cover. You can take the plan with or witho ut risk cover.

*For the Life Assured of age less than 12 years before the commencement of risk. you may opt for Critical Illness Benefit equal to the life cover subject to a minimum of Rs.1. Alternatively. Benefits: (a) Death Benefit: Higher of Sum Assured or the Fund Value of the units held in the Policyholder’s Fund Value* shall be available as death benefit. 25.000/-.1. 50.000 and maximum of Rs. The allocated premiums will be applied to purchase units as per the Fund type ch osen. this scheme provides for periodic pay .000/. 5 lakh (including other policies with LIC of India) provided the policy term is 10 years and above. (b) Critical Illness Benefit Rider: If you are between 18 and 50 years of ag e. Your Unit Account will be subject to deduction of charges as specified in the Policy Conditions. depending on the investment return of the assets representing the chose n Fund Type. an additional sum equal to the Critical Illness Benefit shall be payable. INSURANCE PLANS . Options: (a) Accident Benefit option: If you are above 18 years of age.000/. UNIT PLANS . Once declared.MONEY PLUS LIC’s MONEY PLUS “IN THIS POLICY.10.and thereafter in multiples of Rs. Payment of Premiums: You may pay premiums regularly at yearly. Such bonuses are to be added till maturity even if the life assured dies before the maturity date. they form part of the guar anteed benefits of the plan. you may opt f or Accident Benefit equal to the amount of life cover subject to minimum of Rs. It gets a share of the profits in the form of b onuses. 50 lakh (taken all policies with LIC of India and othe r insurers. w hich will depend on whether the policy is a Single premium or Regular premium co ntract. a Single premium can be paid subject to a minimum of Rs.000 and maximum of Rs. THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLIC YHOLDER” This is a unit linked Endowment plan which offers investment cum insurance durin g the term of the policy.000/-. an additional sum equal to Accident B enefit sum assured shall be payable. an amount equal to the Fund value of the units held in the Policyhold er’s Fund Value is payable. (b) Maturity Benefit: On the Life Assured surviving the maturity date of the contract. term chosen and on the level of premium you agree to pay. You can choose the level of cover within the limits. half-yearly or qu arterly intervals over the term of the policy.5.increasing thereafter in multiples of Rs. Simple Reversionary Bonuses are declared per thousand Sum Assured annual ly at the end of each financial year. In case of diagnos is of defined categories of Critical Illness subject to certain terms and condit ions.MONEY BACK WITH PROFIT Unlike ordinary endowment insurance plans where the survival benefits are payabl e only at the end of the endowment period. the Fund Value of units held in the Policyholder’s Fund Value shall be paid in ca se of death.) In case of death by Accident. The minimum annual premium will b e Rs. Final (Additional) Bonus may als o be payable provided a policy is of a certain minimum term.Bonuses: This is a with-profit plan and participates in the profits of the Corpo ration’s life insurance business. The value of the units in the Unit Fund may increase or d ecrease.

ments of partial survival benefits as follows during the term of the policy.2. Premiums: Regular premium can be paid either in yearly. Welcome to the ‘Plus’ Life! The premium will be applied to purchase units as per the Fund type chosen by you . 000. You can even decide the level of premium you wish to pay. These plans help you see your savings yield rich benefits and help you sav e tax even if you don’t have consistent income. 3. The value of the units in the Unit Fund may increase or decrea se. which have already been paid.JEEVAN PLUS Live the ‘Plus’ Life with LIC’s Jeevan Plus – a unique Unit Linked Whole Life plan that offers the twin benefits of investment plus insurance cover through out your lif e.1.5.Alternatively.FUTURE PLUS If the Policyholder has opted for risk cover.25. 10. 15 years. 000 and thereafter in multiples of Rs. Welcome to a life of conv enience. You can choose the level of cover you are most comfortable with. a Single premium can be paid sub ject of a minimum of Rs.7 Current Insurance Market Situation .increasing therea fter in multiples of Rs.1. then charges for the same shall be taken by canceling an appropriate number of units out of the Policyholder’s Unit Account every month. half-yearly or quarterly installments. 15 and 20 years. The minimum annual premium will be Rs. Similarly. An important feature of this type of policies is that in the event of death at a ny time within the policy term. • • • • • • • Jeevan Plus (closed for sale) Future Plus (closed for sale) Bima Plus (closed for sale) Market Plus Money Plus (closed for sale) Profit Plus Fortune Plus UNIT PLANS . Selecting yo ur premium payment options from either single premium or a regular premium. UNIT PLANS . 000/-. the death claim comprises full sum assured witho ut deducting any of the survival benefit amounts. 000/. the bonus is also calculated on the full sum assured. of course so long as the policy holder is alive. This will continue to provide relevant risk covers even if premiums have not been paid as and when due under the policy. UNIT PLAN Unit plans are investment plans for those who realise the worth of hard-earned m oney. 20% of the sum assured be comes payable each after 5. depending on the investment return of the assets representing the chosen Fun d. 10. 15% of the sum assured becomes p ayable each after 5. The unit account will be subject to deduction of charges as specified in the P olicy conditions. and the balance of 40% plus the accrue d bonus become payable at the 20th year. In the case of a 20-year Money-Back Policy (Table 75). and the balance 40% plus the accrued b onus become payable at the 25th year. For a Money-Back Policy of 25 years (Table 93).

51% ING VYASA 0.21% Source:www.2. Reliance Life which has become one of the top five companies ended the year wi th a premium of Rs 930 crore during the year. Though ICICI Prudential Life Insurance remained as the No 1 private sector life insurance company during the year.8%. Bajaj gained 4.6-percentage point market share among priv     . As a result LIC down the years have see n the declining in its career. The following company holds the rest of the market share of the insurance industry.com 3.80% LIC STANDARD 1.83 crore in 2006-07 from Rs 10. 252cr . The 2006-07 performance has thrown a few surprises in the ranking among the private sector life insurance companies. Though LIC still holds 75% of the insurance sector the upcoming natur e of these private players are enough to give more competition to LIC in the nea r future. the total premium of these 14 companies have shot up by 90% to Rs 19. 406 crore during 2006-07.63% BIRLA SUN LIFE 2.37% AMP SANMAR 0. for the first time ever.29% MAX NEW YORK 0. Bajaj Allianz overtook ICICI Prudential in te rms of monthly market share in March.imrbintl.1% vs. Sinc e the advent of the private players in the market the industry has seen new and innovative steps taken by the players in the sector.03% SBI LIFE 1.471. The initiatives taken by the private players are very competitive an d have given immense competition to the on time monopoly of the market LIC.90% AVIVA 0. LIC with a total premium mobilisation of Rs 55. The new players have improv ed the service quality of the insurance. According to the figures released by Insurance Regula tory & Development Authority. LIC market share has decreased from 95%(2002-03) to 81% (2004-05).8 Present Scenario of Globalisation In a tough battle to expand market shares the private sector life insurance indu stry consisting of 14 life insurance companies at 26% have lost 3% of market sha re to the state owned Life Insurance Corporation (LIC) in the domestic life insu rance industry in 2006-07.26 % during the reporting period.56% BAJA ALLIANZ 2. Bajaj s market sh are among private players in non-single premium for March stood at 29. In total the life insura nce industry in first year premium has grown by 110% to Rs 75.79% OM KOTAK MAHINDRA 0.30% ICICI PRUDENTIAL 5. ICI CI Prudential s 23.The introduction of private players in the industry has added colours to the dul l industry.26% METLIFE 0. The market share was distributed among the privat e players. New entrants like Reliance Life and SBI Life had shown a huge growth of over 381% and 210% respectively during the year .36% TATA AIG 1.934 crore has been able to retain a market share of 74. Table – 1 Name of the Player Market Share COMPANY % OF SHARE LIC 82.

SBI Life s growth was driven by increasing c ontribution from ULIP premiums.   .9 per cent of equity in the joint venture. It is estimated that over the next ten years India would require investments of the order of one trillion US dollar. And this part of the population is also subject to weak social securit y and pension systems with hardly any old age income security. ea ch gaining 4% market share in FY07. More competition in this business will spur firms to offer several new produ cts and more complex and extensive risk categorization. There are two legislations that govern the sector. 2007 holds 81. This itself is an indicator that growth potential for the insurance sector is immense. Tog ether with banking services. With the largest number of life insurance policies in force in the world. Insura nce happens to be a mega opportunity in India. It can be seen by a lack of certain products from LIC’s portfolio and lack of extensive risk categorization in several GIC products such as health insuran ce. Spread of insurance will be measured in terms of insurance penetration an d measure of density. Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost two centuries. 3. it will also ensure a great mobilization of funds that can be utilized fo r purpose of infrastructure development that was a factor considered for globali zation of insurance. nearly 80 per cent of Indian population is without life insurance cover whi le health insurance and non-life insurance continues to be below international s tandards. A well-developed and evolved insurance sector is needed for economic development as it provides long-term funds for infrastructure development and at the same t ime strengthens the risk taking ability. With the entry of private players. The entry of new players would speed up the spread of both life and general insu rance. pen More import antly. LIC as on March 31. Bajaj Alliannz Life insurance has added 20 lakh policies while ICICI Prudent ial has expanded over 19 lakh policies during the year. Yet. more than 20 per cent per year even leaving a side the relatively under developed sectors of health insurance. Insurance is a federal subject in India. it adds about 7 per cent to the country’s GDP. Among other private players. It would also result in better customer services and help improve the variety and price of insurance pro ducts.9 Opportunities A state monopoly has little incentive to innovative or offers a wide range of pr oducts. More importantly. It’s a business growing at the rate of 15-20 per cent annually and presently is of the order of Rs 450 billion. Th e Insurance sector.1938 and the IRDA Act. can enable investments in infrastructure dev elopment to sustain economic growth of the country. The insurance sector in India has become a full circle from being an open competitive market to nati onalization and back to a liberalized market again. to some extent.The Insurance Act. Another notable developments of the 2006-07 perf ormances have been the expansion of retail markets by the life insurance compani es. Gross premium collection is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of GDP. it is expected that insurance business roughl y 400 billion rupees per year now.ate sector players for FY07.2.1999. it will also ensure a great mobilization of funds that can be utilized for purpose of infrastructure development that was a factor considered for globalization of insurance. SBI Life and Reliance Life continued to do well.

10 Challenges Before the Industry New age companies have started their business as discussed earlier. Henc e the operating costs of LIC will not be reduced. So business or domestic firms will attempt to invest in ins urance sector. The corporate clients under group schemes and salary savings schemes may shift t heir loyalty from LIC to the private insurers. Agreements of various ventures have a lready been made to be discussed later on in this paper. LIC has overstaffing and with the introduction of full computerization. GIC and its sub sidiaries since it is not up the mark. LIC may face problem of surrender of a large number of policies. Moreover. because their management expenses are very high due to surplus staff. The existing insurer. 3. LIC has more than to 60 products and GLC has more than 180 products in their kit ty. that foreign companies would be ostering a very strong desire to invest something in Indian insurance business.2. which are outdated in the present context as they are not suitable to the ch anging needs of the customers. as the new insurers will operate with lean office and h igh technology to reduce the operating costs. Because the challenge in the entire environment caused by globalization and liberalization the industry is facing the following challenges. Management of claims will put strain on the financial resources. However they cannot be retrenched. as they will get higher package of remuneration. have created a large group of dissatisfied cu stomers due to the poor quality of service. This will be a disadvantage in the competitive market. but if we see the quality and standards of the prod ucts which they issued. At present. LIC and GIC. Not only that they are not competent enough to co mplete with the new products offered by foreign companies in the market. It has been estimated that insurance sector growth more than 3 times the growth of economy in India. There is a likelihood of exit of young dynamic managers from LIC to the private insurer. GIC and its four subsidiary companies are going to face more challenges. they can certainly be a challenge in future. as new insurers will woo them by offer of innovative products at lower prices. a large number of the employees will be surplus.With allowing of holding of equity shares by foreign company either itself or th rough its subsidiary company or nominee not exceeding 26% of paid up capital of Indian partners will be operated resulting into supplementing domestic savings a nd increasing economic progress of nation. Some of thes e companies have been able to float 3 or 4 products only and some have targeted to achieve the level of 8 or 10 products. Hence there will be shift of large n umber of customers from LIC and GIC to the private insurers. growth of insurance business in India is 13 times the g rowth insurance in developed countries.Most important not the least tremendous employment opportunities will b e created in the field of insurance which is burning problem of the present day today issues. They can’t reduce t heir number due to service rules. these companies are not in a position to pose any challenge to LIC and all other four companies operating in general insurance sector. . So it is natural.

Insurers should increase the customer base in sem i urban and rural areas. 3. Asset creation and protection Education insurance.Reaching the consumer expectations on par with foreign companies such as better yield and much improved quality of service particularly in the area of settlemen t of claims. Life Stage Primary Need Life Insurance Product Young & Single Asset creation Wealth creation plans Young & Just married Asset creation & protection Wealth creation and mort gage protection plans Married with kids Children s education.11 Essentials to Meet the Challenges Indian insurance industry needs the following to meet the global challenges Unde rstanding the customer better will enable insurance companies to design appropri ate products. Intense competition from new insurers in winning the consumers by multi-distribu tion channels. customer service and educatio n. affinity groups and direct marketing through telesales and interest. brokers. Promoting health insuranc e and using e-broking to increase the business. Table 2 . the consumers are confused in the market. which offer a huge potential. Selection of right type of distribution channel mix along with prudent and efficient FOS [Fl eet On Street] management. which would eventually creat e sustainable competitive advantages and build a long-lasting relationship Insur ers must follow best investment practices and must have a strong asset managemen t company to maximize returns. The market very soon will be flooded by a large number of products by fairly lar ge number of insurers operating in the Indian market. Thei r confusion will further increase in the face for large number of products in th e market. Increasing awareness will bring number of legal cases filled by the consumers ag ainst insurers is likely to increase substantially in future. The existing level of awareness of the consumers for insurance product s is very low.2. Even the educated consumers are ignorant about the var ious products of the insurance. corporate intermediaries. distribution network. grievances for deficiency in products and services. transfer of the policies and revival of poli cies in the liberalized market is very difficult to LIC and GIC. investment management. which will include agents. determine price correctly and increase profitability. Even with limited range of products offered by LIC and GIC. It is so because only 62% of the Indian population is literate an d less than 10% educated. The table below gives a general guide to the plans that are appropriate for diff erent life stages. issue of new policies. The insurers will have to face an acute problem of the redressal of the consumer s. Major challenges in canalizing the growth of insurance sector are product innova tion. mortgage protection & wealth creation plans Middle aged with grown up kids Planning for retirement & asset protection Retirement solutions & mortgage protection Across all life-stages Health plans Health Insurance   . ban k branches. An efficient CRM system.General Guide to the plans that are appropriate for different life sta ges.

An opportunity to trap untargeted markets.3.(Source: LIC Executive Manual) 3. 3.5 Appraisal System Decide your own salary amount: Your income is directly proportional to the effort put in by you.2 Weakness • • • Lack of Competitive Toward the Private insurance Company They have to fulfill all the unfulfilled customer needs There have not much unit linked product 3. It is no matter how we look to us. The more you s . Loosening of regulations.3. to help you sell better 24-hour information support. 3. opportunity and threat t o a company. Somewhat increased trade barrier. 3.at no extra cost .1 Strength • • • LIC is having More market share in the Insurance industry It cover toward whole the country More Popularity among the people 3. SWOT analysis will feed us with this id ea. Shifts in consumer tastes away from the firm’s product. to help you trac k your performance and income.for our new Financial Consultants.4. The assessment of those things will help the company to adopt chang es keeping in view the growing demand of the customers for a quality product.3 SWOT Analysis SWOT analysis holds a mirror to the strength.3 Opportunities • • • Arrival of new technologies. In order to thrive in th e market to gain more and more market share as well as to protect the old one a company needs to be more and more introspective.4 Human Resources At LIC.3. guidance and support initiatives are as follows: 3.1 Basic Training & Induction Perfects your knowledge about the insurance industry as well as our products • Advanced Training: Upgrades your capability and knowledge through sophisticated training programs customized for the changing world of financial products and ma rkets • Unmatched Support: Marketing activity support to make your task easier advertisi ng & communication support throughout the year customer friendly brochures and s ales aids. Some of our training.4 Threats • • • Entering new private players into the market. re asonable price and good after and before sales service. weakness. but it’s a matter how they look to us.3. training is an inherent element of our support system . 3.

there are three sub-segments . This segment is growing rapidly. So you can look forward to foreign t rips. improving enterprise-wi de support and response times. The statutory savings segment ess entially comprises of the gratuity products for companies. seminars. new companies such as LIC . prizes and special club memberships to the Silver Club.protection. On line trading & E -commerce 3.protection. and managing customer data to look for buying or complaint trends. Group insurance can be taken to provi de low cost life insurance cover as part of employee benefit packages to motivat e employees or to cover the housing or vehicle loan given by employer to employe e.ell. the 4 s ub-segments are . Apart from the ex isting leader LIC.in dividuals and corporate. This ensures that you get a reward. As these products have no savings component to it. the more you earn. The last segment of pension includes products that are aimed at offering customers an income duri ng their retirement years. Investment products provide long term investment growth and insurance cover. which will enable a company to b enefit from the actuarial. 3. Savings products like Endowments and Money-Back s provide a combination of protection and investment benefits. investment. statut ory savings and pension. Group insurance products are taken to provide low cost life insurance cover to a group of people. investment and operational expertise of a specialist company to manage its superannuation Service involves measuring customer satisfaction levels. ICICI Prudential and mo re will seek to be present across all the segments of the market.6 Segmentation The life insurance and pension business has two distinct customers segments . pure risk protection products have been introduced b y some of the new life insurance companies in the market. This year we are sponsoring 124 Financial Consultants for such events. In case of the group business.Among the retai l products for individuals. Long term earning potential: The policies sold by you will give you a renewed income every year.e. The pension segment w ill include products like group superannuation.7 Competitors • ICICI-PRUDIATIAL . In case of the retail business for individuals. LIC SLIC gives many customer services i. savings and pension. TATA AIG. Gold Clu b & Platinum Club We also sponsor our top performing Financial Consultants for international train ing programs and seminars. Your reward: We have several reward programs to inspire good performance and create a positiv e spirit amongst our Financial Consultants. So every yea r your income keeps increasing steadily even if you sell the same number of poli cies. Regular income: The company pays gularly income when you associate with he commission you earn e very 15 days. It can also be used as a substitute for the statutory EDLI subject to approva l by the Regional Provident Fund Commissioner. the premiums are very low compared to other product s. And our commission structure (as per IRDA guidelines) ha s the ability to give you the maximum benefits for every policy you sell.

It ther efore implies that efficiency of the agents is an important aspect of rural mark eting for the private insurance players. thou gh the ICICI Pru Life holds the second position in the Indian Life insurance mar ket. Assistance in purchase and first level underwriters (the agents) has an importan t role to play. it is observed that rural customers having bank accounts have higher poten tial for buying insurance. The brand recall of the SBI Life is higher than the ICICI Pru Life. Factorial analysis also suppo rts the importance of distribution channels . This may be due to “no risk of life” perception. The onus is also in the agents to offer a product affordable to custo mers and profitable to the insurer. the agents play an importan t role in claims settlement. This indicates poor promotional efforts on part of the private life insurance p layers. This may be due to the deep penetration of the State Bank of India (SBI) in the rural banking gamut. therefore. since they mostly do all the work relating to submi ssion of documents with the insurer for claims till release of payments. rural customers expect hassle-free claims and dispute settlement mach inery without resorting to judiciary. rely only on people of trust.40%) of uninsured rural population thinks that life insurance is not needed . Contrarily. The agents play an important role in assisting the rural customers i n buying a right kind of product. This argument can be further substantiated from the resul ts obtained for buying The rural customers consider safety of invested funds as the most important fact or in buying a life insurance followed by claims settlement and assistance in po licy purchases. Flexibility in premiums conventionally a str ategy of LIC should also work well for private players Results suggest that 31. This is obvious because of the low-income levels and money avail able for investment. Also. Rural customers need more advisory services. Factorial analysis of rural customer preferences for life insurance products ind icates the consistency of income is on the top of the rural consumers mind. Also. Rural consumers predominantly are risk avoiders. LIC has been predominantly very success ful in this aspect. The second rank is for behaviour. followed by provision for the s pouse life and others. which implies the possibility of cross selling or ban cassurance. Old age provision.• • • • • SBI LIFE INSURANCE LIC-SLIC BAJAJ ALLIANZ TATA AIG BIRLA SUNLIFE 4. Traditionally. the commercialisation hazards have accentuated the demand for insurance among urban masses (Lakshmi.1 Consumer Analysis Results indicate that males who have qualified the senior school more in the age group of 31-43 represent the highest potency to buying life insurance. Those ru ral households with head of the family more educated but with less family income are more likely to purchase a life insurance policy than those with better soci al security but lesser education. Claim settlement is also vital for rural consu mers. A significant proportion (33. Whereas the legal grievance redressel system is considered effective in ur ban India. ANALYSIS AND FINDINGS 4. the insurance companies cannot project the similar appearance and image they ma intain for an average urban insured. . 2004). guided b y belief in God and superstition.3 0% of the respondents couldn’t recall even a single brand of private life insurer. This logically implies that bancassurance can be an ef fective means of capturing rural market (Table 7).

On similar lines. Some of the private insurers have not been able to meet the statutory requiremen ts especially in the initial years. However. This is an important impli cation for private players. This m ay not be the case for LIC in the public sector since it has huge corpus and wid e distribution network. The results show that in the rural market there is a strong tilt towards long te rm saving products. But increased awareness levels have already transformed this thinking of rural people and they are relying more on unorthod ox channels of distribution like bancassurance. Joint family system s till prevailing significantly in rural areas is a hindrance for marketing of lif e insurance products. which is an area of con . Sales communication (literature and media) in some case of private players is tr aditionally in English language. The use of regional languages by LIC is an effective publicity too l. which is difficult for the private players. which makes little or no impact on potential ru ral customer. Success of LIC and ICICI Pruden tial Life Insurance almost proves this fact. The income levels and the lack of awareness are the other impo rtant reasons for rural population not being insured. as rural population prefers personalised appr oach and that too in accordance with the regional culture. According to Shobit & Shukla (2004). Most of the private players are still struggli ng to design and offer effective products to rural masses. some of them have now become proact ive in their strategies and have now realised the rural potential. There is firm belief among these companies that agents are best su ited for tapping the rural segments. It is communicating developm ent as its thrust area. They feel that the training re quirements must be relaxed especially for the rural agents. children recreation programs. 4.possibly. the fear of life has not been commercially communicated to the rural m asses since long. The problem of high distribution costs is a problem for private insurers. The pure term insurance plans meant for on ly risk coverage are not popular. Some players are also not happy with the mandatory requirement of 100 hours training prescribed by IRDA for agents. The payment frequency of life premiums is not found suitab le in case of some players. private life insurer have started orga nising health check-up programs. The methodology of setting premiums well above the a ctual risk exposure in urban markets does not work in rural markets where lower margins or cost-to-cost basis approach is quite successful. Incentivisation of rural agents is not adequate leading to a cause and effect relationship between the number of agents. Endowment policies for definite term with low premiums and s tandard money back policies that offer return of the accumulated saving at regul ar intervals rank high in popularity. Private companies somewhat lack in coordinating between their underwriting pract ices and marketing activities especially with their risk selection process and p ricing for rural consumers. Probably this may be reason for decline in the number of rural agents. their efforts a nd the rural business. Another noticeable feature of the private players is that marketing strategists are urban executives having no knowledge of rural India. professional style of working has failed to generate confidence and goodwill.2 Insurers’ Analysis The private insurers have been relying on the traditional channels of distributi on especially agents for capturing the market which was in monopolized by LIC fo r many years. LIC has been able to build an image of corporate responsibility and social devel opment. and similar other activities to capture the rural market.

35% 4.70 51.57 21.42 2001-02 37.33% 33.72 464.27% 31-43 15.00 43.69% 30.65 13.00% 33.33% 41.15% Above 56 33. the LIC has wide representations from the various regions of I ndia and communities.70 1983-84 8.30 1260.20 35.76 33.50% new business in the total business 24.00% %age of Total 57. LIC is following acc ess based positioning strategy for market penetration. Table 4 .18% 44-56 7.651.574.40 54.23% 1.461.30 47.53 16. Crores) %age share of the rural Policies Sum Assured 1969-70 4.75% 42.94 2002-03 45.09% 31.79 28.27 35.50% 18.70 57.50% 100.33% %age of Total 12.List of Registered Life Insurance Companies .19 47.68% 32.19 2000-01 109.00% 8.50 55.37 17.59 1997-98 68.Respondents’ Age Groups Gender Male Female 18-30 58. Some life life insurance companies focusing on rural markets have adopted innovative means of distribution like in stead of using agents. So me players like Birla Sun Life are following a variety based positioning and foc ussing on specific products like investment related schemes.550.02 25.82% 27.35 1995-96 52.39% High School 27.04 44.31% 0.20 59.38% 0.00 48.00 1974-75 5.168.67% 33.676.33% Above 56 50.17% Senior School 30.00% Graduate Education Table 6 .cern.33% 28.33% 18.00 41.48 8086.41% 100.75% 50.24 1989-90 30.94 1999-00 97.Rural New Business of LIC Year No.76 13.90 35.23 22.40 27.67% 31-43 58. Niche marketing str ategy used by ICICI Pru Life has been useful to tap High Net worth Individuals ( HNIs) in certain states but failed in others.94 18.00% 25.22 Source: LIC Annual Report 2006. which has worked well.69 1998-99 81.15% 33.70 47.23 35.69 2003-04 62. Contrarily.48% 18.263.33% 15. of Policies (in Lakhs) Sum Assured (in Rs.27% 33.61 251.85 Demographic Information: Age-Gender Relationship % age of Total 30.00% 4. Table 3 .18% 44-56 66.00% 0.00% 42.77% 46. The positioning strategies used by players are overlapping. gramsevaks are used as distribution channels.372.00% Table 5 .90 22.82% 41.54 34.Respondents’ Demographic Information: Education Age Groups % age of Total Below High School PG and above 18-30 9.68 41.55% 0. which have enabled them to utilise their special knowledge for gaining local competitive ad vantage.99% 46.50 14.

ING Vyasya Life Insurance Co.00 HDFC Standard Life Birla Sunlife 3. Ltd.50 Responses Percentage of Respondents 33. Shri Ram Life Insurance Co.50 Tata AIG Unable to Recall Total 100. Ltd.70 Office Environment 25.21 Total 100. Table 7 .Brand Recall Company Recalled SBI Life 21.50 65.30 58. No.50 Allianz Bajaj 2. Ltd. Ltd. India Pvt.80 1.Factors Affecting Purchase of Variables Responses (%age) Very Important Important Assistance in Policy Purchase 28. 3.1 Conclusion 7. Customer remains the prime focus area for marketing act . Pvt. Ltd. Om Kotak Mahindra Life Insurance Co. Pvt.30 31. Tata AIG Life Insurance Co. MetLife India Insurance Co.80 63. 8. 11.80 Behaviour of Agents 25. ICICI Prudential Life Insurance 4.80 3. 12. Birla Sun Life 10. Sahara India Life Insurance Co.50 Post Purchase Services 23.30 Affordability 25.50 Usefulness 22.50 12.63 In any field of marketing the new mantra today is “customers care”.00 5. Max New York Life Insurance Co. 14.00 6.00 Private Players Percentage of respondents 13. Bharti AXA Life Insurance Company Ltd.50 80.40 13.30 Lack of knowledge 25. “customer protecti on”.50 12. LIC of India 2.80 Max New York Life ING Yyasya 2. SBI Life Insurance Co. 9. Ltd.30 Insurance Not Important 65. Name of the Life Insurance Company 1.30 57. 6. AVIVA Life Insurance Co.80 Safety of Invested Funds 41.Sl.50 1. 7. Allianz Bajaj Life Insurance Co. CONCLUSION & SUGGESTION 5. Ltd.Uninsured Respondents Reasons for not being insured Never felt the need of it Not enough funds for it 33.50 62.00 12. 16. 13. AMP Sanmar Insurance Co. Ltd. Ltd. 15.30 5.30 ICICI Pru Life 20.50 Administrative Procedures 12.00 62. Ltd.00 12. Ltd.00 62.50 Claim Settlement 36.78 Bad experiences of others Any other reason 21. 5. HDFC Standard Life Insurance Co.50 Table 8 . Ltd.00 12. and “customer Retention”.50 Table 8 .

• Easy and timely payment of money back policies. Why do you invest your savings? i.2 Suggestions As customer satisfaction is the only source of growth and survival of the instit ution realizing the satisficance LIC could more initiative to improve customers servicing. An effective strategy for marketing would be focusing upon these areas. Verma. Economies Times.G. Finally as per the customer’s suggestion the following measures should be taken to improve the goodwill and make the inst itution more reliable to the customers. • It should provide better service with the premium. Have you invested in any of the following types of investment? . To meet future contingency iii. I t is the customer who determines the market. LIC Magazines. REFFERENCES [1] [2] [3] [4] [5] [6] Consumer Behaviour. The Life Insurance Corporation as a major investment institution plays a very si gnificant role in individual development. Before introducing various types of policies. • LIC policies through service scheme should be implemented. To have secure future iv. Do you invest your savings: ( Yes / No ) If No: Never felt the need of it Not enough funds for it Lack of knowledge Bad experiences of others Any other reason 2. 5. conduct of market resea rch and study of customer is inevitable.Schiffman. QUESTIONNAIRE 1. so listening to the customer is the best way to achieve success.By Harsh V. Marketing Strategies . Business World. • Clear account on deposits and dues should be made. It contributes a lot to national econo my by mobilizing saving through insurance.By L. Business Today. To have good returns on the saving ii.ivity. To get tax rebate 3. • LIC should introduce new policies with low rate of premium.

India? No comments Poor Best 13 . India 12. Where do you have? Why___________________ Why not LIC. Do you have any account in LIC. India Yes No 7. What comment would you rate LIC. In what aspect you feel that LIC is better than its competitors? Speed Transparency Security Easy Returns Satisf action 9.How would you rate LIC. What type of investment you would like to have? Safety only Returns only Safety + Returns + Flexibility Safety + Returns 5. Does it matters if you do not insure yourself? Yes No 11. What are the other companies who provide Insurance other than LIC? ICICI Pru Bajaj Allianz SBI Life Tata AIG HDF-SLIC 8. Do you know about LIC. INDIA Very Important Important Not Important Assistance in Policy Purchase Safety of Invested Funds Affordability Usefulness Claim Settlement Office Environment Administrative Procedures Post Purchase Services Behavior of Agents Average Good . India? If Yes.Shares /Stocks Debentures N.S.C Traditional Investment Mutual Fund Insurance Fixed Deposits Any Other 4. Would you like to have a investment & protection plan with benefits like: Short-Term Investment + High Returns + Safety + Flexibility + Tax Rebate + Insur ance Yes No 10. What do you think about the LIC? Good Better Best Reliable Unreliab le 6. Why ______________If No.