INTRODUCTION

People in all values of life are faces with risk and contingencies an unexpected death, loss
of goods due to theft and natural uncertainties, earthquake floods are some examples of
the rise that every body on earth faces. A time passes life faces more dangers from both
natural and ma made. Insurance is the best plan for surviving from such risky and
contingencies. Insurance does not avoid loss, but it compensates to some extent, the loss
that arise from uncertainties.
Insurance is essentially cooperate effort under any insurance arrangement a large
number of persons in persons in effect a to share a loss which a few of them are like to
insure in future when the sharing is dome amongst a large no. of persons, the individual
share remains fairly steady from year to year. Such association of persons for sharing
anticipated losses may be brought about voluntarily by all participants or may be
organized by a few individuals or by an insurance organizations.
The function of insurance in various is to protect the few against the heavy
financial impact of anticipated misfortune by spreading the loss among many who are
exposed to the risk of similar nature while it is not possible to predict which individual
amongst too many participants are likely to be the victims of future. It is often possible to
forecast the loss which the groups a whole may suffer.

The sharing to such loss among the participants ensures that the victims are
compensated for the loss suffered by them. As a consequence for heavy and uncertain loss
to some is neutralized by the definite contribution of moderate amounts which every
participant is required to make.

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COMPANY PROFILE
HISTORY OF LIFE INSURANCE
In the early time men who engaged in trade by sea attempted to minimize losses
which amongst a large number of persons who were similarly engaged. Naturally many
ships were arrived safely in port and it was only a few that survived loss. The many who
did not sufferer loss contributed to mitigate the sufferings of the few who did. So many
goods followed from this arrangement that the traders adopted the idea in many lands and
gradually they come into existence groups of men who specialized in managing the funds
and studying the rates of loss which occurred in the different types of marine ventures.
This was the beginning of marine insurance.
The evidence in available about crude form of marine contracts made by the Babylonians.
Rhodesians and the Greeks about the middle of the third millennium BC. However, the
early history of insurance is hidden in the mists of antiquity. The earliest available
reference to some form of Insurance is found in the codes of Hammurabi and Manu
(Manav Dharma Shastra). The team YOGAKSHEMA is used in Rig-Vedas suggesting
that some form of community insurance was practiced by the Aryans in India over 3000
years ago.
In India, Burial societies are known to have existed during the Buddhist period,
which were invariably mutual in their character. The village community came to the help
of the families by building up house, protecting the children and apprenticing the boys in
business.

LIC remained for a long time, largely in the lands of foreign companies but, with
the intense of Nationalism that permitted Indians to enter the sector through 20 centrureis,

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Indian offices began to take their due where of the countrys business. From then
onwards, Indian life insurance Business has never looked back and every passing year has
witnessed a slow but a steady rise in the per-capita insurance of the country.

It was in the wake of freedom movement that such companies as the New India.
Industrial and prudential, Jupiter, the Lakshmi, etc., came to be established. A further
spurt in the formation of new companies was

Witnessed during Second World War when inflationary pressure tended to

increase the volume of business written in the country. From then onwards, the Indian
Insurance Business continuously progressed and every passing year witnessed a slow and
steady rise in per-capita insurance in country. At the close of Second World War, the
proportionate share of the business written by the Indian insurers had increased to over
90% of the total new business written in India.
The Government began to exercise a closer supervision and control in matters of funds
of expenditure and general management of insurance business in the insurance Act of
1938. The Department of Insurance under to authority of Superintendent of Insurance was
established. This act was established amended in 1950. The controller of insurance
currently is responsible for the administration of this act.
The Early development of Insurance was spasmodic and was restricted mostly to fields
other than life. Scientific Life Assurance is a heritage from England, where the first life
policy, providing the temporary cover for a period of twelve months, was issued as early
as Ad. The Amicable Society (1705) granted fluctuating sum on death till this society
had accumulated sufficient funds to grant a fixed sum on death (1757).

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The development of mortality tables was a landmark in the history of life assurance. With
this development, life assurance acquired a scientific character. The Equitable society,
founded in 1762, was the first to be founded on scientific basis with premiums computed
according to the age and period of insurance.

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BACKGROUND OF LIC IN INDIA

In India, LIC had its beginning in 1870 when two British Life Corporations started
in India. They first organized to effort to establish with the formation of Bombay Mutural
life insurance Society Ltd. But, it was not extended largely. After a few years, it left to
oriental Government security life Assurance Co. Ltd., to expand the business in organized
manner all over the India. The Bharath and the Empire were established.

The Swedish Movement of 1950 saw the formation of several large companies
such as the Hindustan Co- operative, The United India, The Bombay Life, The National,
The Asian and the Indian Mercantile with the passing of the First Insurance Act in 1912, a
measure control bean to be exercised by the Government.
In the year 1955, approximately the Insurance office has so provident societies
had been registered for transacting the Life Assurance Business in India. A few of these
were foreign companies with their Head Offices outside India. In addition to these
insurance, a large number other insurers who had registered themselves for transaction or
had been taken over by the existing insurers.
During that period it was found out that many mall practices were prevalent
among the insurance companies and the need to bring the insurance companies under a
single fold was widely felt. Hence the Government of Indian decided to nationalize the
Insurance Business.

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NATIONALISATION OF INSURANCE INDUSTRY

The LIC Act (Act XXXXI of 1956) was passed by the parliament in June 1956
and it came into force of July 1st, 1956.

By this Act all the assets and liabilities

apprenticing to the Life Assurance Business in India. Of all registered companies in

Indian and outside the India, all registered Indian insurance were to be transfer to and
vested in the LIC of Indian as from the appointed day. The LIC of India came into
existence of September 1st 1956.

LICS ORGANISAITON STRUCTURE

The Central office of LIC is situated at Mumbai, the Economic Capital of India.
Its activities are decentralized further in 3 types.
* The 7 zonal offices are situated at Mumbai, Delhi, Calcutta, Chennai, and Bhopal.
Hyderabad and Kanpur respectively.
* These zonal offices further decentralized into 100 divisional office and 2048 branches.
The corporation is headed by the Chairman. It will be assisted by LIC Board,
which contains 15 members in various activities like investment planning, marketing, etc.
The Zonal office is headed by the zonal manager and zones advisory committee
assists the zonal manager to conduct the working of each zone. Divisional manager is the
in charge of each division and of each division and the assistant division manger helps
him to monitor the activities of branch office.
Branch office is the independent cost center of corporation, which generates actual
revenue. It is headed by the Branch Manager and assisted by the Assistant Branch
Manager, Administrative officers and Assistant Administrative Officers.

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LIC has wide network of branches in every hook and corner of the country
spreading the gospel of insurance even in remotest rural areas.
What is life insurance?
Life Insurance is a contract for payment of a sum of money to the person assured
(or failing him/ her, to the person entitled to receive the same) on the happening of the
event insured against. Usually the contact provinces for the payment of an amount on the
date of maturity or at specified dates at periodic intervals or on unfortunate death, if it
occurs earlier.

Among other things, the contract also provides for the payment of

premium periodically to the Corporation by the assured. Life insurance is universally

acknowledged to be an institution which eliminates risks, substituting certainty for
uncertainty and comes to the timely aid of the family in the unfortunate event of the death
or of total permanent disability of the breadwinner. By and large, life insurance is
civilizations partial solution to financial uncertainties caused by untimely death.

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Why is superior to other forms of savings?

(i) Protection:
Savings through life insurance guarantee financial protection against risk of death
of the policy holder. In life insurance, on death, the full sum assured is payable (with
bonuses wherever applicable) whereas in other savings schemes, only the amount saved
(with interest) is payable
ii) Aid to thrift:
Life insurance encourages thrift. Long term saving can be made in a relatively
painless manner because of the easy installment facility premiums can be paid through
monthly, quarterly, half-yearly or yearly installments).

The salary savings scheme,

popularly known as SSS, provides a convenient method of paying premium each moth
through deduction from ones salary. The employer remits the deducted to the LIC. The
salary savings scheme can be introduced in an institution or establishment subject to
specified terms and conditions.
iii) Liquidity:
Loans can be raised on endowment type & whole life Policies as per policy
conditions on the sole security of a policy which has acquired a paid-up value. Besides,
a life insurance policy is also generally accepted as security for even a commercial loan /
housing loan.

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(iv) Tax Relief:

Tax relief in Income tax as available for amounts paid by way of premium for life
insurance subjects to the Income Tax rules in force. Assesses can avail themselves of
provisions in the law for tax relief. In such cases the assured in effect pays a lower
premium for his insurance than he would have to pay otherwise.
(V) Money when you need it:
A suitable insurance plan or a combination of different plans can be taken to meet
specific needs that are likely to arise in future, such as childrens education, start- in- life
or marriage provision or even periodical needs for cash over a predetermined stretch of
time. Alternatively, policy moneys can be so arranged to be made available at the time of
ones retirement from service to be used for any specific purpose, such as for the purchase
of a house or for other investment. LIC pension plans also offer regular income in the
form of annuity when you retire from active work or in later part of life at your choice
leaving lump sum purchase price for your heirs. Subjects to certain conditions, loans are
granted to policyholders for house buildings for purchase of flats.

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VARIOUS PLANS OF INSURANCE

The majority of the insurance plans are offered on both with profits without profit
basis the important plans of insurance are

KNOW YOUR LIFE INSURANCE

Life insurance made its debut in India well over 100 years ago. Today, it is the widely
accepted as one of the most attractive financial instruments in an individuals portfolio
that provide on assurance of security with attractive returns. What follows is an attempt to
acquaint readers with some of the concepts of life insurance with special reference to
LIC. It should, however, be understood that the following information is by no means an
exhaustive description of the terms and conditions of an LIC policy or its benefits or
privileges. For more details, please conduct any of our Branch or divisional offices. Any
LIC agent will be glad to help you choose the life insurance plan to meet your needs and
provide other necessary assistance.

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Who can buy a life insurance policy?

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

Medical and Non-medical Schemes

Life insurance is normally offered after a medical examination of the life to be assured.
However, to facilitate greater spread of insurance and also as a measure of relaxation,
subject to certain conditions.

With Profits and Without-Profits Plans

An insurance policy can be with or without profit. In a With-Profit Policy, bonuses
declared, if any, after periodical valuations are allotted to the policy and are payable along
with the contracted amount at the time of the final claim payment. In a Without Profit
Policy, only the contracted amounts are paid. Without any addition. Under some new
plans guaranteed additions & Loyalty Addition are paid in lieu of bonuses.

Keyman Insurance
Keyman Insurance is taken by a business firm on lives of key employees(s) to protect the
firm against the financial loss which may occur owing to the premature demise of the Key
employees.
Plans marketed by Life Insurance Corporation of India

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(Plans in force as at 1.10.2003)

LIC offers a basket of schemes to meet the various needs of individual and his family.

I. Basic Life Insurance Plans

1) Whole Life Assurance plan:

A low cost insurance plan where the Sum assured is payable on the death of the
life assured, wherever it occurs.

2) Endowment Assurance Plan:

Under this plan the sum assured is payable on maturity or on death of the life
assured, if earlier.

3) Jeeven Anand:
This is a unique with profits plan which combines the features of the Endowment
and whole Life Plans. This basic sum assured plus accrued bonus is payable to the
policyholder on his survival till the end of the premium paying term. An additional sum
assured is payable to the nominee on death of the Policy holder after expiry of premium
paying term. On dead the premium paying term, the basic sum assured plus accrued
bonus is payable to the nominee and the policy comes to an end.

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II. Term Assurance Plans

1) Anmol Jeevan-I :
This is a pure Term assurance plan for terms varying from 5 to 25 years and
provides for payment of Sum Assured on death of policy holder during the term of the
policy.

2) Two-Year Temporary Assurance Plan:

Term assurance for period 2 years is available under this plan. the sum assured is
payable only on death of the life assured during the policy term
3) Convertible term Assurance Plan:
The plan provides for term assurance from 5 to 7 years with an option to covert to
a Limited payment whole life policy or an Endowment Assurance Policy without having
to undergo fresh medical examination (I) the option for conversion may be exercised at
anytime during the specified term except during last 2 years provided the policy is in full
force.
4) New Bima Kiran :
In Additions to return of premium paid, this plan provides for Loyalty addition if any, inbuilt lf accident cover and a Term cover after maturity, if the Policy is in full force on the
date of maturity.

III. Specific Plans for children

Various childrens plans are available, viz. Childrens Deferred Endowment
Assurance Jeevan Balya, Komal Jeeven and Jeeval Kishore. Jeevan Sukanya is a plan
specifically designed for female children.
IV. Pension Plans:

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New Jeevan Akshay-I: Single Premium immediate annuity. New Jeeven Dhara-I
& new Jeevan Suraksha I: deferred annuities. The annuitant has five options of annuity
payment to choose from including annuity for life with return of purchase price on death.
Risk cover by way of Term rider option available. Premiums paid under new Jeevan
Suraksha-I up to Rs. 10,000/- are exempted form income tax undersection 80CCC.
V. Plans for Handicapped Dependants
1) Jeevan Aadhar: This is a limited payment whole life policy with guaranteed
addition at the rate of Rs. 100/- per thousand sums Assured p.a. where the claim
amount is paid partly in a lump sum and partly in the form of an annuity. Income
Tax Act, 1961 is available.
2) Jeevan Vishwas this is an Endowment type plan designed for handicapped
dependants whose degree of handicap may not fulfill the definitions of disability
laud down for the Jeevan Aadhar Plan. The benefit is payable partly in a lump
sum and partly in the form of an annuity (pension). The plan also provide for
Guaranteed and loyalty additions.
VI. Other Plans
1) Mortgage Redemption:
Suitable for borrowers repaying a loan in installments as it ensures that the
outstanding loan is repaid in the event of the borrowers death.

2) Bhavishya Jeevan:
A special plan ideally suited for professionals Film Actors, Artists etc. with a
limited span of high income.
3) New Jana Raksha:

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Ideal for people with no regular income. It provides for option of premium
holidays up to 3 years during witch period death cover will be variable from the firs
unpaid premium, provided at least 2 full years premiums have been paid.
4) Fixed Tem (Marriage) Educational Annuity:
An ideal plan for making provision for education, start-in-life or marriage of
children. Claim/Annuity is after expiry of policy term.
5) Money Back Plans:
Besides providing life cover during the term of the policy, survival benefits linked
to sum assured during the term of the policy will be available.
6) Jeevan Surabhi:
A money Back plan where premiums are payable for a limited period, with
periodical increases in insurance cover.
7) Jeevan Rekha:
This plan is a combination of a whole life and Money Back plan 10% of sum
assured is payable on survival after every five years from the date of commencement.
sum assured at any point of time without deduction of survival benefit paid earlier.
8) Jeevan Samriddhi:
This is a money Back type plan with provision for Guaranteed Addition of Rs.65
per thousand sum Assured and Loyalty Addition, if any, payable on maturity or death
earlier. The plan is available for terms 12, 15, 20, 25 years.
9) Jeevan Saathi:
A double cover joint Life Endowment Assurance plan for husband and wife.
10) Jeevan Saathi:
An ideal plan to provide for a childs higher education even during or after of
policy holder.

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11) Jeevan Mira:

A Double-or Triple risk cover Endowment Assurance plan providing for twice or
thrice the sum assured payable on the death of the life assured during the policy.
12) LICs Jeevan Shree-1:
A limited payment Endowment Assurance plan with Guaranteed Additions for
first five years and bonus additions thereafter. A policy designed for short careerists,
professionals and agriculturists.
13) Asha Deep-II:
The plan provides, besides death and maturity payments, contingent benefits in
case the life assured suffers from any of the four defined ailments.
14) Jeevan Asha-II:
The plan provides, besides death and maturity benefits, payment towards the cost
of certain surgical procedures and periodical survival benefit payment. There is also a
provision for Guaranteed Additions @ Ra.70 per thousand S.A
15)Jeevan Bharati:
Money Back plan exclusively for ladies with Guaranteed Addition for first five
years and bonus there after with additional benefits as female critical illness benefit and
congenital disability benefit.
16) Varishtha Pension Bima Yojana:
A Government subsidized pension scheme for senior citizens with Assured Return
of 9% p.a. payable monthly.
17) Bima Nivesh Triple Cover:
A singe premium five and ten years plan with compounding guaranteed additions
of rs.60 per thousand S.A payable on death or maturity.

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INFORMATION TECHNOLOGY IN LIC

Life Insurance Corporation of India is of the very first and largest users of IT in
terms of hardware and in-house developed software. it is forefront in deriving optimum
benefits of latest technological advancements for better and efficiency customer servicing.

1.

2048 Branches are equipped with Front End Application programmers Modules

conversing all policy servicing aspects to give prompt service to our customer from
introduction of policies, acceptance of premium, revival, loan, alterations, etc. up to final
claims settlement.

2. LIC has wide Area Network covering 1801 Branches. This has helped its customer to
pay his premium or get his policy status report as well as quotations for revival, loan,
surrender, etc. from any of the branches to the network.

3. LIC has its own website www.licindia.com which is very attractive and user friendly.
Customer gets policy status report on-line as well as knows about L I Cs products,
services, branch office address, etc. He can get information about L I Cs Grievance
Redressal machinery and can take benefit of other features by NRI etc.
4. LIC has tied up with eight banks and three service providers to give on-line premium
payment facility in all cities covered under its network.

5.

LIC has installed about 150iosks at prominent places across the country given

information about its products, service and customers policy status report. It has provided
IVRS at 59 locations for routine queries of the customer.

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6. LIC has set up Info-Centers in Mumbai, Pune, Bangalore, Kolkatta, Delhi, Hyderabad,
Chennai, Ahmedabad which are equipped with state of fart technology and manned by
trained persons to give any information regarding life insurance products, suitable plans
for every customers and need, etc.

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Some of the projects being undertaken this years are:

1. Web enabling various policies servicing on our website and providing value services
on mobile devices to out customers and filed force.

2. Adopting mobile technology for enhancing promptness and scope of customer service
from any branch.

3. Installation of data warehouse and providing data mining tools for enhancement of
quality of service level product development and other CRM activities.

4. Expansion of internet premium payment services by adopting use of smart card, credit
card.

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INTRODUCTION TO TOPIC
A consumer-An Overview
The term consumer is typically used to refer to someone who regularly purchase from a
particularly store are a company. thus, a person who. Shops at any store or use a particular
pen is viewed as a customer of these firms.
The term consumer more generally refers to any one engaging in any of the activities
used in our definitions of consumer behavior. Therefore, a customer is defined in a terms
of a specific firm while a consumer is not. The traditional viewpoint has been to defined
consumer strictly in terms economic and services. This position holds that consumer is
potential purchase of products and services offered for sale. This view has been
broadened over time so that at least some scholars now do not consider a monetary
exchange essential to the definitions consumers. This change implies that a potential
adopter of service or even philosophies or ideas can also be encompassed by the
definitions. Consequently, organizations such as the Indian Dental Association, UNICEF,
and foster parents plans, as well as religious and political groups can view their various
publics As consumers.
The rational for this position is that many of the activities that people engage in
regarding commercial products and services. At present out attention will be directed.
Towards ultimate consumers, those individuals who purchase for the purpose of
individual or household consumption.

Some have argued that studying ultimate

consumers also reveals much about industrial and intermediate buyers and others
involved in purchasing for business firms and institutions. While not denying this, we
must recognize that much industrial purchasing behavior is unique because it often
involved different buying motives and the influence of a large variety of people. For the

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sake of simplicity we will focus only on the ultimate consumer behavior and ill not
become involved in drawing comparisons with industrial purchasing situations.

The most commonly through of consumer situation, is that of an individual

making a purchase with little or no influence from others. However, in some cause a
number of people can be jointly involved in a purchase decision. For example planning a
vacation or deciding on a new car involved an entire family. In other cases the purchaser
may just be acquiring a product for some one else who has asked for a certain item.
These situation suggest that people can take on different roles in what we have defined
consumer behavior. That table below presents one way to classify these roles.

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What is consumer behavior?

Often the situations in which we find ourselves play a large part in determining
how we behave. Students, for example, act differently in a classroom that they do when
they are in a stadium watching a cricket match. The same holds true of buying behavior.
You might get you hair cut because of an upcoming job interview. On spring break you
might buy a souvenir that seems very strange when you got home. For a close friends
wedding gift, you might buy a fancier branch of small appliance than you would buy for
yourself. These are all example of situational influences, temporary forces associated
with the immediate purchase environment that effect behavior. Situational influence
tends to be less significant when the consumer is very loyal to a branch and when the
consumer is very loyal to a branch and when the consumer is highly involved in the
purchase. However it plays a major role in buying decisions. The five categories of
situation are explained below.

Why study consumer behavior?

Understanding the reasons for studying a discipline enables new to better
appreciate its contributions. Therefore this section presents a justification for the time
and effort that the reader will expend in learning about consumers.

Significance in daily lives:

In a general case the most important reason for studying consumer behavior is the
significant role it plays in our lives. Much of our time is spent directly in the market
place, shopping or engaging in other activities. A large amount of additional time is spent
thinking about products and services, talking to friends about them and seeing or hearing
advertisements about them. In addition. The goods we purchase and the manner in which

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we use them significantly influence how we live out daily lives. These general concerns
alone are enough to justify our study. However, many seek to understand the behavior of
consumers for what are thought to be more immediate and tangible reasons.
When Consumers buy? The time dimension:
Marketers should be able to answer at least two time related questions about
consumer buying:

Is it influenced by the season, week, day or hour?

What impact to past and present events have on the purchase decision

of this mobility varies according to the rigidity of social stratification in a given society.

SOCIAL FACTORS:
A Consumers Behavior Is Also Influenced by Such Social Factors as Reference
Groups, Family and Roles and Statuses.

REFERENCE GROUPS:
Many groups influence a persons Behaviour. A persons references groups
consists of the people that have a direct (face to face) or indirect influence on a person are
called attitudes or behavior. Groups having a direct influence on a person are called
MEMBERSHIP GROUPS. These are groups to which the person belongs and interacts.
Some are primary groups such as family, friends, neighbors and co-workers, with whom
the person interacts fairly continuously. Primary groups tend to of this mobility varies
according to the rigidity of social stratification in a given society.
SOCIAL FACTORS:
A Consumers Behavior is also influenced by Such Social Factors as Reference
Groups, Family and Roles and Statuses.

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REFERENCE GROUPS:
Many groups influence a persons behavior. A persons references groups consists
of the people that have a direct (face to face) or indirect influence on a person are called
attitudes or behavior.

Groups having a direct influence on a person are called

MEMBERSHIP GROUPS. These are groups to which the person belongs and interacts.
Some are primary groups such as family, friends, neighbors and co-workers, with whom
the person interacts fairly continuously. Primary groups tend to

Reference group influence changes as products pass through the product life
cycle. When a product is first introduced, the decision to buy it is heavily influenced by
others. In the market growth stage, group influence is strong on both product and others
heavily influence brand choice, in the product maturity stage, brand choice but not
product choice.

Family:
Family members constitute the most influential primary reference group. The family or
orientation consists of ones parents. From parents a person acquires an orientation
towards religion, politics and economics and a sense of personal ambition, self-worth and
love. Even if the buyer no longer interacts very much with his parents, the parents
influence on the buyers behavior can be significant. In countries where parents live with
their grown children, their influence can be substantial.

A husband-wife involvement varies widely by product category. The wife has

traditionally acted as the familys main purchasing agent, especially for food, sundries
and staple-clothing items. This is changing with the increased number of working wives

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and the husbands doing more family shopping. Convenience goods marketers would me
a mistake to thing of women as the main or only purchasers of their products.
Husband Dominant

: Life Insurance, Automobiles, Television etc

Wife Dominant

: aching machine, Carpeting, furniture

Kitchenware, etc.

Equal

: action, housing, outside entertainment.

Roles and Status:

A person participants in many groups through like,-family, Clubs, organizations
etc. the persons position in each group can be defined in terms of roles and status. Each
than sales manage and a sales manager has more status then an office clerk. People
choose products that communicate their role and status in society.

Thus company

presidents drive Mercedes, wear expensive suits and drink chives regal scotch. Marketers
are aware of the status symbol potential of products and brands. However, status symbols
vary for social classes and also geographically.

PERSONAL FACTORS:
Buyers decisions are also influenced by personal characteristics, notably the
buyers age and life cycle stage, occupation, economic circumstances, life styles and
personality and self-concept.

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AGE AND LIFE CYSLE STAGES:

People buy different goods and services over their life time. They eat food in the
early years, most foods in the growing and mature years and special diets in the later year.
Peoples taste in clothes, furniture and recreation is also age related.

Consumption is also shaped by the stage of the family life the cycle Nine stages of
the family life cycle are listed in table 3.3 along with the financial situation and typical
product interest of each group. Marketers often choose life-cycle groups are their target
market.

PERSONALITY AND SELF CONCEPT

Each person had distinct personality that will influence his or her buying behavior.
By personality, we mean the persons distinguishing psychological characteristics that
lead to relatively consistent and enduring responses to his or her environment.
Personality is usually described in terms of such traits as self-confidence, dominance,
autonomy, deference, sociality, defensiveness and adaptability.

Personality can be a useful variable in analyzing consumer behaviors provided

that personality types can be classified and that strong correlations exist between certain
personality types and product or brand choices. For example, a computer company might
discover that many prospects have self- confidence, dominance and autonomy; this
suggests using Therese appeals in advertising their computer.

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The Objective of the Purchase:

The intend or reasons for a purchase affects the choice made. We are likely to
behave very differently if we are buying a product for a gift as opposed to buying the
same product for our personal use. When purchasing a wristwatch, a consumer may be
most interested in one that provides accurate time at a reasonable price. However that
appearance of the watch bought as graduation present can be very effective.

A market must under stand the consumers objectives in using the product in the
order to design an effective marketing mix. For example, the failure by most watch
makers appeal to the functional, non-gift watch market is what allowed Timex to be so
successful with its reasonable price product.

Conditions under which consumers Buy-States and Moods

Some times consumers arte in temporary state that influences their buying
decision. When you arte ill are rushed, you may be willing to wait in line or you do not
take the time or care that a particular purchase deserves.

Moods can also influence purchases. Feelings such as anger or excitement can
result in purchasers that otherwise would not have been made.

In the excitement

atmosphere of a roc concert, for example, you might pay more for a commemorative Tshirt than you would under normal circumstances. Sales people must be trained to
recognize consumers mopeds and adjust their presentation accordingly.

PSYCHOLOGICAL FACTORS:
A person buying choice is further influenced by four major psychological factors.

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Motivations:
A person has many needs at any given time.

Some needs are biogenic. They

arise from physiological states of tension such as hunger, thirst, discomfort, etc. other
needs are psychogenesis. They arise from psychological states of tension such as the
need for reorganization, esteem or belonging.

Most psychogenesis needs are not intense enough to motivate the person to act on
them immediately. A need becomes a motive with its need that is sufficiently pressing to
derive the person to act. Satisfying the need reduced the felt tension. Psychologists have
developed theories of human motivation. Three of the best-known theories are:

Perception:
A motivated person is ready to act. How the motivated person actually acts is
influenced buy his or her perception of the situation. If any person might see a fast
talking refrigerator sales person as aggressive and insincere. Another shopper might see
the same sales person as intelligent and helpful.

~ 28 ~

Briefs and Attitudes:

Through doing and learning, people acquire beliefs and attitudes; these in turn
influence their buying behavior.

Attitudes head people to behave big a fairly consistent way towards similar
objects. People do have to interpret and react to ever object in a fresh way. Attitudes
economics on energy and thought. For this reason, attitudes are very difficulty to change.
A persons attitude settles in to a consistent pattern, and to change a single attitude may
require major adjustments in other attitudes. Thus a company would be well advised to fit
this product in to existing attitudes rather than to try and change peoples attitudes.

We can now appreciate the many forces acting on the consumer behavior. A
persons purchase choice is the result of the complete interplay of cultural, social,
personal, and psychological factors. Other factors are subjected to marketer influence and
clue the marketer on how to develop product, price, place, and promotional and physical
distribution to attract strong consumer response.

~ 29 ~

ABOUT THE PROJECT

With reference to scope of study LIC is the premier financial organization with a
wide network of branches and field force. LIC is mobilizing huge funds and utilizing
them for people welfare. It is necessary to have about the public opinion the points stated
in supra and hence a survey questioner us framed keeping the above points in mind on
their question are generated.

As an outset a person who wants to save may select different means hence
question number 2 is framed. If a person wants to purchase a life insurance policy the
object should be very clear hence it is necessary to know this object for that question
number 3 is framed.

The motive force which is responsible to purchase a life insurance policy may be
once won interest are he may be advised to take a life insurance policy are succumbed to
the pressure from others hence question 4 is framed.

The product range, their awareness level in the public and identification of various
products offered by LIC can be identified by an individual shows the effective marketing
strategy of the organization. Hence question number 5, 6, 7 are framed.

For any organization after sales, service is the priority area, In LIC, right from
central office to branch office a separate department called policy servicing is established.
However the era of customers delight, customer surprise and customer is king or god. It
is necessary to have the rules of a customer about the service offered by the LIC is
sufficient. Hence Question 8 is framed.

~ 30 ~

The field force of an organization is the feed back carries as they are responsible
for selling of the products. In particularly selling of the Insurance policy. The filed force
is expected to facilitate the maximum service after the sales. Hence Question 9 is framed.

Further emphasizing, the need for the advertising and the public relation, the
achievements of organization are to be essentially highlighted in public. Hence Questions
10,11,12,13 and 14 are framed.

Some times the procedure followed by LIC may not satisfy a policyholder. Hence
question 15 is framed to know that how a policyholder feels about this procedure.

Question 16 gives the most important aspects that are competition in insurance
sector. The public response will essential whether the competition is required or not.

Question 17 is framed to know the expectation of the policyholder on opening of

life insurance sector.

It is already said that LIC funds are control funds and are invested as per the
provision of LIC Act 1956 (section 27 A). Hence interest yield is comparatively lower. If
a competitor is allowed to invest freely to earn more returns and the imposition of
investment on LICs funds tend to continue. It will be unfair game. Hence public is
sought in this contest also.

An offer is made under question 19 to the public regarding the type of products
that they are expecting in the from of insurance. As the most successful financial

~ 31 ~

institution in the country, the competition would like to stay in the market as leader.
Hence question 20 is framed to invite the suggestions from the public.

SURVAY SPECIAL

Suggestions from the respondents are called about a product they expect and the
measure to be taken by LIC to stay in the competition as the market leader. These
valuable suggestions are quoted under the head suggestions.

~ 32 ~

LITERATURE REVIEW
Consumer Behaviour by Hawkins, Best, Coney and Mokherjee: The authors of the book
discussed various factors affecting consumer behaviour for buying such as demographic
and social influences (family and household), group influence, impact of advertising and
internal influences (learning, perception, attitude etc.). The book elucidated the topics
such as types of consumer decisions, purchase involvement and product involvement. The
book also emphasized on information search process and various ways for providing
relevant information to the consumers are recommended in this study. The book also
emphasized on individual judgment and proposed that the ability of an individual to
distinguish between similar stimuli is called sensory discrimination which could involve
many variables related to individual preferences.

Consumer Behaviour by Leslie Lazar and Schiffman: The authors suggested consumer
behaviour as individual differs as from group. The family decision for a purchase decision
is entirely different from individual decision making. The authors discussed various
variables that affect consumer purchase decision. The book focused on family life cycle
and various needs of consumer during different life stages. The family decision making
process as a group decision making is elaborated and it is recommended to segment the
market according to family need hierarchy.

Consumer Behaviour by Bitta and Della: The authors proposed that consumer behaviour
studies play an important role in deciding marketing segments and marketing strategies.
The authors recommended that consumer is often studied because certain discussions are
significantly affected by their behaviour or expected actions. For this reason such
consumer behaviour is said to be an applied discipline. Such applications can exist at two

~ 33 ~

levels of analysis. Market segmentation, consumer decision making and buying behaviour
is considered as core marketing activities in designing effective marketing strategies. The
micro perspective involves understanding consumers for the purpose of helping a firm or
organisation to accomplish its objectives. On the other hand macro or societal perspective
consumers collectively influence economic and social conditions within an entire society.
The authors discussed factors affecting consumer behaviour at micro and macro level for
making a purchase decision.

Consumer Behavior by Karunik and Schiffman: The book highlights dynamic business
environment is turbulent as never before and the service industry as promising as never
before. In this era of intense competition companies understand the customer is the king
in the market and success depends a lot on the efficiency of the managers in delivering
the promised product or services. The responsibility lies on the organisations to develop a
culture, ethics, responsibility, value and quality services should be offered to achieve
higher level of customer satisfaction. Dynamic consumer behaviour is required to analyse
various factors affecting consumer purchase decision directly or indirectly.

Consumer Behaviour by Batra, S, K & Kazmi,: The book has described consumer
decision making process, buyers black box and importance of consumer behaviour studies
for marketers in order to understand what satisfy the ultimate consumer. The book
described vital characteristics of Indian consumer and competitive advantages in Indian
context for the marketers. The consumer decision process, buying roles and consumer
black box are discussed in detail. The various steps evolving consumer decision making
are linked with the life stages. Young buyers, women and children considered as uprising
consumers groups as a part of competitive market situations.

~ 34 ~

OBJECTIVES OF THE STUDY

To know the consumer behaviour towards LIC

To know the investment policy of LIC
To know the services of LIC
To know why investors selects LIC as their investment sector
To know the customers expectation

~ 35 ~

RESEARCH METHODOLOGY
Research methodology:
The Research methodology used for the study was very rigorous. Questionnaires were
made, interviews with customers were held and various books and websites were
consulted for any type of information related to the study. The methodology so applied is
briefly discussed below step-by-step.
Therefore Marketing research can be defined as the systematic design, collection,
analysis, and reporting of the data and finding relevant to a specific marketing situation
facing the company.
Research Design:
Research design is the basic plan which guides the researchers in the collection and
analysis of data required for practicing the research product. In fact the research
design is the conceptual structure with which research is conducted. It consist the blue
print for the collection, measurement and analysis of the data that was followed
completing the study to ensure that study is relevant to the problem and will follow the
predetermined and set data.
Type of Research Design:
Descriptive research: - Descriptive research provides data about the population or
universe being studied. Descriptive Research is used when we are interested in knowing
the characteristics of certain groups such as age, sex, educational level, occupation etc.
But it can only describe the "who, what, when, where and how" of a situation, not what
caused it. Descriptive research is used when the objective is to provide a systematic
description that is as factual and accurate as possible.
DATA COLLECTION TECHNIQUES
PRIMARY SOURCE:
The data required for this stage was regarding the customer relationship and the behavior
and perception of the existing customers towards the products/ services provided by the
bank and also, to get their satisfaction level toward bank. The data could have been
collected by just interviewing the customers but to get a reasonable conclusion and fair
accuracy, questionnaires were prepared and customers were interviewed.

~ 36 ~

Interview was regarding the product usage. Some of the questions asked in the interview
were, do you have knowledge about the various products provided by the bank, do you
use these products, yes/no then why, do you want any changes in the existing product,
will you switch over to another bank for a new products/services which is not yet
introduced in HDFC Bank, etc.
The above questions were really helpful in the conclusion part of the study. Some
customers were very co-operative but some didnt even care to listen. Overall, the study
was a success as far as primary source was concerned.
SECONDARY SOURCE:
The secondary data was collected with the help of various books, websites, bank journal
and employees of the bank. The data collected from the websites and books was good
enough to be included in the study analyzed and concluded but the data got from the
employees of the bank was most accurate and reliable. Various newspapers, magazines,
websites, bank
Journals, etc were checked out for information regarding the latest technological
advancement in retail banking in the bank.
The secondary source didnt provide any personal views of the customers on the
technological advancements but were a great help in completing the report and getting the
details about the bank history, various business groups of the bank, etc.

TITLE OF THE STUDY

CONSUMER BEHAVIOR TOWARDS LIFE INSURANCE OF INDIA
SCOPE OF THE STUDY
The scope contains collections of data from all the Insurance holders and viewers
of the holders.
Basic Assumption
The assumption was that the insurance segment still requires sales promotion and
it is only possible for upper higher groups.

~ 37 ~

Sampling Technique
Questionnaires are the sampling technique for the research. The Questioners are
both structures and open and were used as in instrument.

Contact Method
A printed copy of questionnaires was distributed to the consumers visiting them in
their houses and at the servicing centers at parking areas.

Plan to analysis
The data collected was tabulated and percentages were determined the
interpretations are presented in the form of charts. All interpretations made by me are
realistic and factual.
PURPOSE OF LIFE ASSURANCE
1. For the purpose to housing loans
For the purpose of housing loan, loan can be raised with the surrender value of the
policy. So that while immediate financial needs are met,
Insurance protection continues policies are used as security for commercial loans.

2. Protection of life
Saving through life insurance guarantee financial protection against risk of death
of the policyholder. In life insurance on death, the fall sum assured is payable where as in
other sang schemes only the amount saved.
3. Aid to thrift
Life insurance encourages thrift long term saving can be made in a relatively
painless manner because of the easy installment facility. The salary savings scheme

~ 38 ~

popularly known as SSS. Provides a convenient method of paying premium each month
through deduction from ones salary. The employer remits the deducted premium to the
LIC.
4. Business is of life assurance
Life insurance also services business interest. Some companies may depend for
their successful performance on the ability technical knowledge, experience power to plan
and execute if successful of one or more individual and the premature demise of such
individuals will result in loss of earning to the business firm. Such loss to be business
firm can be avoided by insuring such key men, the firm against possible loss due to the
premature of such individuals. In the case of partnership of firms.
5. Tax relief
There are certain tax concession of income tax allowed by the IT Act to encourage
the habit to thrift and savings among the people. An insurance premium, the individual
can have tax relief subjects to the specified limit by the finance Act time to time.
6. Savings
Insurance can also be used as savings once an insurance arrangement is effected
immediately an estate equal to sum assured is created for a policy holder. He has merely
to maintain the estate by paying the periodical installment of the premiums as they fall
due to the policy in force

~ 39 ~

DATA ANALYSIS & INTERPRETATION

ANALYSIS
Q1. Are you aware about Life Insurance Corporation?
Respondents
Yes
No

%age
100
0

Interpretation:
The above analysis shows that all the respondents are aware about Life
Insurance Corporation.

~ 40 ~

Q2. How do you come to know about Life Insurance Corporation?

Respondents
T.V.
NEWSPAPER
AGENTS
FRIENDS
ANY OTHER

%age
13
24
52
9
2

Interpretation:
The above table shows that out of the 100 respondents 52 respondents came
to know about Life Insurance Corporation from agents, 24 from newspapers,
13 from T.V., 9 from friends and 2 from any other sources.

Q3. Are you satisfied with the policies provided by Life Insurance
Corporation?

~ 41 ~

RESPONDENTS
YES
NO

%AGE
74
26

INTERPRETATION:
From the above analysis we came to know that out of 100 respondents 74
respondents are satisfied with the policies provided by Life Insurance
Corporation and 26 respondents are not satisfied with the policies provided
by Life Insurance Corporation. It means that mostly people are satisfied with
the policies provided by LIC.

Q4. How you rate the policies provided by Life Insurance Corporation?

~ 42 ~

RESPONDENTS
GOOD
AVERAGE
VERY GOOD
EXCELLENT

%AGE
9
16
55
20

INTERPRETATION:
The above analysis shows that out of 100 respondents 55 rate the policies of
Life Insurance Corporation as very good, 16 rate it as average, 9 rate it as
good and 20 rate it as excellent.

Q5 .What you like in the policies of Life Insurance Corporation?

~ 43 ~

RESPONDENT
RATE OF RETURN
AFFORDABLE PREMIUM
LOW PREMIUM ALLOCATION
CHARGES
SURRENDER VALUE

%AGE
38
8
45
9

INTERPRETATION:
The above table shows that out of 100 respondents 45 respondents like the
policy because of low premium allocation charges, 38 like it because of rate
of return, 9 like it because of surrender value and 8 like it because of
affordable premium.

Q6. How you feel the behavior of LIC employers while interacting with
them?

RESPONDENTS

~ 44 ~

%AGE

GOOD
AVERAGE
VERY GOOD
EXCELLENT

4
12
47
37

INTERPRETATION:
The above analysis shows that out of 100 respondents 4 respondents feel the
behavior of LIC employers as good, 12 feel the behavior of LIC employers
as average, 47 feel the behavior of LIC employers as very good, and 37 feel
the behavior of LIC employers as excellent.

Q7. Do you think that LIC is reliable in the coming future?

RESPONDENTS
YES
NO

~ 45 ~

%AGE
89
11

INTERPRETATION:
The above table shows that out of the 100 respondents 89 respondents feel
that the LIC is reliable in the coming future and 11 respondents feel that LIC
is not reliable in the coming future.

Q8. Do you think that Life Insurance Corporation is working better than its
competitors?

RESPONDENTS
YES
NO

~ 46 ~

%AGE
74
26

INTERPRETATION:
The above table shows that out of 100 respondents 74 respondents think that
LIC is working better than its competitors and 26 respondents think that LIC
is not working better than its competitors.

Q9. Are you satisfied with the after sales services provided by LIC?

RESPONDENTS
YES
NO

~ 47 ~

%AGE
88
12

INTERPRETATION:
From the above analysis I came to know that out of 100 respondents 88
respondents are satisfied with the after sales services provided by Life
Insurance Corporation and 12 respondents are not satisfied with the after
sales services provided by Life Insurance Corporation. This means that
mostly people are satisfied with the after sales services provided by Life
Insurance Corporation.
Q10. Do you think that the plans provided by LIC are beneficial?
RESPONDENTS
YES
NO

~ 48 ~

%AGE
78
28

INTERPRETATION:
The above table shows that out of 100 respondents 78 respondents think that
the plans provided by LIC are beneficial and 22 respondents think that the
plans provided by LIC are not beneficial.

FINDING
A survey was conducted in and outskirts of jAGADHRI town. A sample size of
was selected from various groups like employees, professionals, businesspeople and other
randomly and their opinion was segregated and finding are drawn.

~ 49 ~

1. About 49% of customers have felt LIC is a good investment option Then bank,
UTI and other sources. They feel like this because LIC have 2- fold advantage, it is not
only a good investment option but it also covers the good investment option but a life
secured option.
2. LIC is secured in influencing the customers to purchase it can be found from
the analysis that majority of customers that is about 78%purchased life insurance policy
on their one interest. Beside 56% of customers hare about 75% knowledge of a various
policies offered by LIC. This is simply remarkable if we just consider if we just consider
number of policies as it is about 11crores alt all Indian level.
3. It can be seen for the above analysis that the servicing facilities provided by
LIC has to be improved further about 51% of the customers feel the services offered is
very good. But it is notable that 36% of the respondents feel the services provided are
average.
4. LIC is transparent in its operations as it is evident from the analysis that 90%
of customer knows that LIC invests its funds in public welfare activities and also 76% of
the customers are also aware of the fact that LICs claim settlement ratio is highest in the
world. It gives a clean picture of LICs marketing strategy.
5. Although LIC granting free insurance cover in association with state and
central government weaker sections of the society. They analysis of in for that 58% of
customers are not aware about this unmatchable social welfare activity wide publicity is
necessary in this regard.
6. In spite of various achievements of the organization it has not been able to
convince customers that, computation is not required in life insurance section. About
89% of customers expressed that competition is necessary in life insurance sector. But
these customers must be made to understand evils of competition.

~ 50 ~

7. It is revealed from the studies that customers are expecting a lot with regard to
range of products, services, better returns rate of premium etc., this is why, they feel that
if competition is required and they may realize better returns with less premium as well as
wide range of products with improved services.

SUGGESTIONS
All though the respondents are not clear about the product, which would attract
more customers, it is necessary to introduce unit linked insurance schemes. Where better

~ 51 ~

returns are guaranteed and keeping increasing longevity in view policies like double or
treble endowment plans.
The respondents feel that LIC should take up the following measures to stay in
competition as market leader.

Reduction in premium

Professionalizing between work force and field force.

Make the people to understand the need for insurance coverage

Fast service and online payment every where in the country.

Transfer of policy document from one place to another without much

delay.

~ 52 ~

CONCLUSION
In India, there is throat cut competition in the market of Life Insurance that brand service
which adopt new strategy for sale we have come to know about the customer perception
about the insurance sector and how it varies

The buying of life insurance policy is dependent on life protection

Life protection is preferred by the most of the respondent during by a life insurance

policy.
The insurance companies must advertised more in the market because not all

people know more about life insurance policy.

The endowment concept must be specifically promoted.
People should not be afraid to invest money in insurance and must use it an

effective tool for tax planning and long term.

Most number of people wants guaranteed life protection through insurance
policy. So company must focus on this for the customer investment

BIBLIOGRAPHY

~ 53 ~

Fundamentals of marketing

by

Stanton, Etzel and walker.

Consumer Behavior

by

Loudon and Della Bitta.

Marketing and Public Relationship

Public by Insurance Institution of India

Company Brochures and Pamphlets

Magazines:
Indian Express
Business Today

QUESTIONNAIRE
NAME:

~ 54 ~

AGE:

OCCUPATION:

SEX:

Q1. Are you aware about Life Insurance Corporation?

a. Yes
b. No

Q2. How do you come to know about Life Insurance Corporation?

a. T.V

b.

Agents

c. Newspaper

d.

Friends

e. Any Other

Q3. Are you satisfied with the policies provided by Life Insurance
Corporation?
a. Yes
b. No

Q4. How you rate the policies provided by Life Insurance Corporation?
a. Good
b. Average
c. Excellent
d. Very Good

Q5 .What you like in the policies of Life Insurance Corporation?

a. Rate of return

b.

Affordable Premium

c. Low premium allocation charges

d.

Surrender Value

~ 55 ~

Q6. How you feel the behavior of LIC employees while interacting with them?

a. Good

b.

Average

c Very Good

d.

Excellent

Q7. Do you think that LIC is reliable in the coming future?

a. Yes
b. No
Q8. Do you think that Life Insurance Corporation is working better than its
competitors?
a. Yes
b. No
Q9. Are you satisfied with the after sales services provided by LIC?
a. Yes
b. No
Q10. Do you think that the plans provided by LIC are beneficial?
a. Yes
b. No

~ 56 ~