Final Report Summer Internship

Project

RELIANCE LIFE INSURANCE COMPANY LTD

COMPETITIVE ANALYSIS OF
RLIC PRODUCTS

Submitted By:

Arun Kumar Modi

08BS0000572

SIP Faculty Guide: Company

Guide:

Prof. Paul Sumitra

Mr. Sudhakar Reddy

ICFAI Business School

Sales Manager
Bangalore
Reliance Life

ACKNOWLEDGEMENT

I wish to place my profound sense of gratitude towards Reliance Life

Insurance Company Ltd (RLIC) for providing me an opportunity to do my Summer
Internship Program in their esteem organization.

I am extremely grateful to my Project Company Guide, Mr.Sudhakar Reddy

for his persistent guidance, motivation and encouragement in all my ventures.
Without his expertise, my project endeavors would not have taken proper shape and
met success.

I am ever indebted to my Project Faculty Guide, Prof. Paul Sumitra who

guided me through all the unforeseen hurdles that I faced during the course of the
program. I owe the entire credit of work to him and look into more opportunities to
work under his tutelage.

Arun Kumar Modi

 TABLE OF CONTENTS

Page No

Declaration 4

Certificate 5

Executive Summary 6

Introduction 9

About Insurance companies 12

Comparison of products 26

Practical learning 30

Application of marketing Concepts 31

Questionnaire 36

Analysis 38

Reference and Bibliography 47

 DECLARATION

I, Arun Kumar Modi, hereby declare that this project titled “competitive analysis of
RLIC products” has been completed by me over 14 weeks periods with effect from
23rd February to the 23rd may 2009. This project involved studying the various factors
influencing consumer behavior, market segmentation, dynamics involved in
developing a business.

The project was undertaken as a part of the partial fulfillment of the requirement for
the of my M.B.A program. I also declare that this report has not been submitted to any
other institute or company.

Arun Kumar Modi

Date-18-05-09

Place-Bangalore
 TO WHOMSOEVER IT MAY CONCERN

This is to certify that Mr. Arun Kumar Modi has successfully completed the Project
work, assigned to him at RLIC, Bangalore as part of the requirement in the MBA
Curriculum of ICFAI Business School under my guidance and supervision.

He has worked on the project titled “competitive analysis of RLIC products” during
the period February 23rd 2009 – May 23rd 2009.

This project is done in partial fulfillment of the M.B.A. program from the aforesaid
institute.

He is not liable to any dues in this stipulated period of internship.

I wish him all the best in his future endeavors and career.

Yours truly

Mr.Sudhakar Reddy

Sales Manager

RLIC

Bangalore
EXECUTIVE SUMMARY:
Insurance, in law and economics, is a form of risk management primarily
used to hedge against the risk of a contingent loss. Insurance is defined as the
equitable transfer of the risk of a loss, from one entity to another, in exchange for a
premium, and can be thought of as a guaranteed small loss to prevent a large, possibly
devastating loss. An insurer is a company selling the insurance; an insured is the
person or entity buying the insurance. The insurance rate is a factor used to determine
the amount to be charged for a certain amount of insurance coverage, called
the premium[1].

Insurance can be further of 78 types [1] , but here our focus is on life insurance. Life
Insurance is insurance for us and our family's peace of mind. Life insurance is a
policy that people buy from a life insurance company, which can be the basis of
protection and financial stability after one's death. Its function is to help beneficiaries
financially after the owner of the policy dies.

It can also be a form of savings in the long run if you purchase a plan, which offers
the option of contributing regularly. Additionally, a little known function of life
insurance is that it can be tied in with a person's pension plan. A person can make
contributions to a pension that is funded by a life insurance company. These are
considered private pension arrangements.

In addition with a life insurance policy in place, we can:

 provide security for our family.

 protect our home mortgage.
 take care of your estate planning needs.
 look at other retirement savings/income vehicles.

Indian life insurance industry has 20 players[3] registered under IRDA(Insurance

Regulatory & Development Authority ) which functions to protect the interests of the
policyholders, to regulate, promote and ensure orderly growth of the insurance
industry and for matters connected therewith or incidental thereto.

Insurance in India has its history dating back till 1818 started by Anita Bhavsar, when
Oriental Life Insurance Company was started by Europeans in Kolkata to cater to the
needs of European community. It was only in the year 1870, Bombay Mutual Life
Assurance Society, the first Indian insurance company covered Indian lives at normal
rates.

In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were
passed to regulate the insurance business. The oldest existing insurance company in
India is National Insurance Company Ltd, which was founded in 1906 and is doing
business even today. The Insurance industry earlier consisted of only two state
insurers: Life Insurers i.e. Life Insurance Corporation of India (LIC) and General
Insurers i.e. General Insurance Corporation of India (GIC) [5]

Reliance Life Insurance is an associate company of Reliance Capital Ltd., a part of

Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of India’s leading
private sector financial services companies, and ranks among the top 3 private sector
financial services and banking companies, in terms of net worth. Reliance Capital has
interests in asset management and mutual funds, stock broking, life and general
insurance, proprietary investments, private equity and other activities in financial
services. [4]
This is the market share of the private sector insurance companies

Project deals with the competitive analysis of products offered by RLIC(Reliance Life
Insurance company Limited) with other four major private players(ICICI
Prudential,SBI Life, Bajaj Allianz, Reliance Life,HDFC Standard).LIC is not included
in the study as it can result in biasness of the study. By this study findings will be
‘Points of Parity’ and ‘Points of Difference’ amount the offerings of five major
private players in insurance sector.

Along with this comparative analysis, project also throws light on preference of the
customers in terms of various life insurance companies and their offerings which are
result of the survey conducted on 275 respondents.
 Introduction
Objective of project:-

 To find ‘Points of Parity’ and ‘Points of Difference’ amount the offerings of

five major private players in insurance sector.

 To find out factors that influence customers to purchase insurance policies

and give suggestions for further improvement.

Methodology:-
Topic Method of data Data Source
collection
Comparison of products Secondary data analysis Analysis of data and
offered by five major information given on
private players in the portal of the companies.
market

To find out factors Primary Data Collection Questionnaire,

influencing customer
purchase decision Personal Interviews

Primary Data-
The source of primary data was mainly the interview process and data collection through
questionnaires.

Secondary Data-
Secondary data was collected by the following sources -
a. Online research: By finding out the details of products which is available on
websites of the companies.

b. Brochures: Study of brochures of product will be of great help to draw the fair
comparison between the products.
Now before starting the discussion about various insurance companies and their
offerings first have a look at various insurance product offerings as shown in
following table
Types of Offerings Meaning

1. Whole Life Assurance In whole life assurance, insurance company collects premium from the
insured for whole life or till the time of his retirement and pays claim to
the family of the insured only after his death.

2. Endowment Assurance In case of endowment assurance, the term of policy is defined for a
specified period say 15, 20, 25 or 30 years. The insurance company
pays the claim to the family of assured in an event of his death within
the policy's term or in an event of the assured surviving the policy's
term.

3. Assurances for Children i). Child's Deferred Assurance: Under this policy, claim by insurance
company is paid on the option date which is calculated to coincide with
the child's eighteenth or twenty first birthdays. In case the parent
survives till option date, policy may either be continued or payment
may be claimed on the same date. However, if the parent dies before
the option date, the policy remains continued until the option date
without any need for payment of premiums. If the child dies before the
option date, the parent receives back all premiums paid to the insurance
company.

ii). School fee policy: School fee policy can be availed by effecting an
endowment policy, on the life of the parent with the sum assured,
payable in installments over the schooling period.

4. Term Assurance The basic feature of term assurance plans is that they provide death
risk-cover. Term assurance policies are only for a limited time, claim
for which is paid to the family of the assured only when he dies. In case
the assured survives the term of policy, no claim is paid to the assured.

5. Annuities Annuities are just opposite to life insurance. A person entering into an
annuity contract agrees to pay a specified sum of capital (lump sum or
by installments) to the insurer. The insurer in return promises to pay
the insured a series of payments until insured's death. Generally, life
annuity is opted by a person having surplus wealth and wants to use
this money after his retirement.

There are two types of annuities, namely:

Immediate Annuity: In an immediate annuity, the insured pays a lump
sum amount (known as purchase price) and in return the insurer
promises to pay him in installments a specified sum on a
monthly/quarterly/half-yearly/yearly basis. Deferred Annuity: A
deferred annuity can be purchased by paying a single premium or by
way of installments. The insured starts receiving annuity payment after
a lapse of a selected period (also known as Deferment period).

6. Money Back Policy Money back policy is a policy opted by people who want periodical
payments. A money back policy is generally issued for a particular
period, and the sum assured is paid through periodical payments to the
insured, spread over this time period. In case of death of the insured
within the term of the policy, full sum assured along with bonus
http://www.appuonline.com/insurance/insurance-types.html

Reliance Life Insurance[4]

Reliance Life Insurance offers products that fulfill our savings and protection needs.
Our aim is to emerge as a transnational Life Insurer of global scale and standard.
Reliance Life Insurance is an associate company of Reliance Capital Ltd., a part of
Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of India’s leading
private sector financial services companies, and ranks among the top 3 private sector
financial services and banking companies, in terms of net worth. Reliance Capital has
interests in asset management and mutual funds, stock broking, life and general
insurance, proprietary investments, private equity and other activities in financial
services.
Reliance - Anil Dhirubhai Ambani Group also has presence in Communications,
Energy, Natural Resources, Media, Entertainment, Healthcare and Infrastructure.

Vision
Empowering everyone live their dreams.

Mission
Create unmatched value for everyone through dependable, effective, transparent and
profitable life insurance and pension plans.
Goal
Reliance Life Insurance would strive hard to achieve the 3 goals mentioned below:

• Emerge as transnational Life Insurer of global scale and standard

• Create best value for Customers, Shareholders and all Stake holders

• Achieve impeccable reputation and credentials through best business practices

Achievements

• Fastest Growing Life Insurance Company for two years in a row. Current year
growth - 234% (YOY).

• Over 79% growth in market share ; YTD market share in Dec’07 at 7.03%
against 4.07% in Mar’07

• Highest number of branches set up by any company in a short span – Over 500
branches operationalized since Jan’07. Total branch network to cross 740 by
December 31st.

• First Life Insurance company to introduce OTC process – ‘Express Life’ for all
Unit Linked Plans

• Only Life Insurance Player in India to be certified with ISO 2000 9001 for all
its processes

Products
Protection Plans

• Reliance • Reliance • Reliance

Term Plan Simple Term Special Term
Plan Plan
• Reliance • Reliance • Reliance
Credit Guardian Endowment Plan Whole Life Plan
Plan • Reliance • Reliance
• Reliance Special Wealth + Health
Special Credit Endowment Plan Plan
Guardian Plan • Reliance • Reliance
Connect 2 Life Cash Flow Plan

Child Plans

• Reliance Super Invest • Reliance Secure Child

Assure Plan Plan
• Reliance Child Plan • Reliance Wealth +
Health Plan

Savings & Investment Plans

• Reliance Savings • Reliance Super Market

Linked Insurance Plan
• Reliance Super Invest
Assure Plus Plan
• Reliance Super Invest
Assure Plan
• Total Investment Plan I
- Insurance
• Reliance TIPS -Series
I- Insurance
• Reliance Wealth +
Health Plan
• Reliance Super
Automatic Investment Plan
• Reliance Money
Guarantee Plan
• Reliance Cash Flow
Plan
Return Plan
• Reliance Endowment
Plan Reliance Special
Endowment Plan
• Reliance Whole Life
Plan
• Reliance Super Golden
Years Plan
• Reliance Super Golden
Years Plan - Value
• Reliance Super Golden
Years Plan - Plus
• Reliance Connect 2
Life Plan
• Reliance Imaan
Investment Plan
Retirement Plans

• Total Investment Plan • Reliance Wealth +

II - Pension Health Plan
• Reliance Super Golden • Reliance Super
Years Plan Automatic Investment Plan
• Reliance Super Golden • Reliance Money
Years Plan - Value Guarantee Plan
• Reliance Super Golden
Years Plan - Plus

Group Plans

• Employers Liability • Employee Voluntary

Solutions Benefits
• Employee Protection
Solutions

ICICI Prudential[6]

ICICI Prudential Life Insurance Company is a joint venture between

ICICI Bank - one of India's foremost financial services companies-and
Prudential plc - a leading international financial services group
headquartered in the United Kingdom. Total capital infusion stands at
Rs. 47.80 billion, with ICICI Bank holding a stake of 74% and
Prudential plc holding 26%.

Company started its operations in December 2000 after receiving

approval from Insurance Regulatory Development Authority (IRDA).
Today, our nation-wide team comprises of over 2100 branches
(inclusive of 1,116 micro-offices), over 290,000 advisors; and 18
bancassurance partners.

ICICI Prudential is the first life insurer in India to receive a National

Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. For
three years in a row, ICICI Prudential has been voted as India's Most
Trusted Private Life Insurer, by The Economic Times - AC Nielsen
ORG Marg survey of 'Most Trusted Brands'. As we grow our
distribution, product range and customer base, we continue to
tirelessly uphold our commitment to deliver world-class financial
solutions to customers all over India.[4]
Products

Education Insurance Plans

• Smart Kid New Unit- • Single Premium

linked • Smart Kid Regular
• Regular Premium Premium
• Smart Kid New Unit-
linked

Wealth Creation Plans

• Wealth Advantage • LifeLink Super

• LifeStage Assure • LifeStage RP
• LifeTime Gold

Premium Guarantee Plans

• InvestShield Life New • InvestShield CashBank

Protection Plans

• Pure Protect • CashBak

• Life Guard • Home Assure
• Save 'n' Protect

Retirement Solutions
• Life Stage Pension • LifeLink Super Pension
• LifeTime Super • ForeverLife Plan
Pension • Immediate Annuity

Health Coverage Plans

• Health Saver • Cancer Care

• Medi Assure • Diabetes Care Active
• Hospital Care • Diabetes Assure
• Crisis Cover

ICICI Pru Group Solutions Advantage

• Group Super Annuation • Group Term Insurance

• Group Gratuity Plan Plan
• Annuity Solutions • Group Term Insurance
in lieu of EDLI

Rural Plans

• ICICI Pru Suraksha • ICICI Pru Suraksha

Kavach

Micro Insurance Plans

• ICICI Pru Sarv Jana Plan

SBI Life [7]
SBI Life Insurance Company Limited is a joint venture between the
State Bank of India and BNP Paribas Assurance. SBI Life Insurance is
registered with an authorized capital of Rs 2000 crores and a Paid-up
capital of Rs 1000 Crores. SBI owns 74% of the total capital and BNP
Paribas Assurance the remaining 26%.

State Bank of India enjoys the largest banking franchise in India.

Along with its 7 Associate Banks, SBI Group has the unrivalled
strength of over 14,500 branches across the country, arguably the
largest in the world.

BNP Paribas Assurance is the life and property & casualty insurance
unit of BNP Paribas - Euro Zone’s leading Bank. BNP Paribas, part of
the world's top 6 group of banks by market value and a European
leader in global banking and financial services, is one of the oldest
foreign banks with a presence in India dating back to 1860. BNP
Paribas Assurance is the fourth largest life insurance company in
France, and a worldwide leader in Creditor insurance products
offering protection to over 50 million clients. BNP Paribas Assurance
operates in 41 countries mainly through the bancassurance and
partnership model.

SBI Life has a unique multi-distribution model encompassing

Bancassurance, Agency and Group Corporate.

SBI Life extensively leverages the SBI Group as a platform for cross-
selling insurance products along with its numerous banking product
packages such as housing loans and personal loans. SBI’s access to
over 100 million accounts across the country provides a vibrant base
for insurance penetration across every region and economic strata in
the country ensuring true financial inclusion.
Agency Channel, comprising of the most productive force of more
than 63,000 Insurance Advisors, offers door to door insurance
solutions to customers.
SBI Life Insurance offers a slew of products designed for various
segments of society. These include money back products, pension
products, protection cum savings products, and unit linked products.
All these products cater to various requirements of its end users.

Money Back Products

These are traditional saving plans with additional advantage of life
cover and guaranteed cash inflow at regular intervals. Key features of
moneyback plan are periodic return options suited to your needs, and
competitive premium rates. Apart from normal death cover, the plan
also provides four additional covers. Sanjeevan Supreme is designed
for individuals who want to plan for various financial obligations at
specified times in life.

Pension Products
Pension products have been designed keeping in mind the needs of
retired individuals. Four products currently offered under this segment
are Horizon II Pension, Unit Plus Pension, Lifelong Pensions and
Immediate Annuity. Under these plans, one can choose retirement
date, the plan option and the regular premium amount.

Protection cum Savings Products

These products are designed to provide savings and protection at the
same time. These products offer the option of tailoring your policy
according to your requirement and needs, by opting for riders (extra
covers).

Smart ULIP
The portfolio is linked to the volatile market, and fluctuates with it.
The investment risk in portfolio is borne by the policyholder. For first
seven years, guarantee is offered on select NAVs. Guaranteed
Maturity NAV, continues after the premium payment term. It is an
investment based on market economy and offer high returns. The plan
gives one maximum opportunity for growth while protecting
investments against adverse market conditions. Attractive Tax benefits
can be availed under the Income Tax Act, 1961.

ULIP Elite
Under this plan, you can invest in a wide variety of funds and manage
them as per your convenience. Gold and platinum protection covers
are available. You have to pray premium only for a limited term of 3,
5, 7 or 10 years. You can also protect yourselves against accident and
critical illness with the rider cover. You can also add-on to your kitty
through top-up premiums facility. When the policy ends, Fund Value
as on the Maturidy Date is paid. Settlement option is also available.

Group Criti 9
This is a non-participating Group Health Plan providing protection
against nine critical illnesses where assured sum is paid in lump sum
on diagnosis of any one of covered critical illnesses. It has guaranteed
renewability till 65 years of age. Critical illnesses covered are Cancer,
Heart Attack (Myocardial Infraction), Stroke, Coronary Artery Bypass
Surgery, Kidney Failure (End Stage Renal Disease), Major Organ
Transplant, Coma, Multiple Sclerosis and Heart Valve Surgery. The
plan is offered to various groups like employee-employer relationship,
credit life groups, customers of bank / financial institutions, depositors
groups etc.

Unit Plus Child

As a parent you want to secure your child’s future against rising cost
of education and other necessities. Unit Plus Child Plan could be your
solution. Kea features of the plan are market related returns to match
increasing cost of education, loyalty units to celebrate your child
reaching 18 years. new Investment Fund (Equity Optimiser Fund) in
addition to existing funds, pay premium for a limited period, and
flexible plan which adapts to your changing needs.

Horizon
SBI Life Horizon offers the flexibility of Unit Linked Plan along with
Automatic Asset Allocation. Key features of the plan include twin
benefit of insurance cover and market linked returns, expert
management of funds from inception to maturity, automatic asset
allocation of funds, automatic rebalancing of funds at yearly intervals,
automatic cover continuance, liquidity option after 3 years, facility to
top up your investment kitty, and tax benefit.

Birla Sun Life Insurance [9]

Birla Sun Life Insurance pioneered the unique Unit Linked Life
Insurance Solutions in India. Within 4 years of its launch, BSLI has
cemented itsposition as a leading player in the Private Life Insurance
Industry. There has been focus on Investment Linked Insurance
Products, supported with protection products to maintain leadership in
product innovation. There has been focus on Investment Linked
Insurance Products, supported with protection products to maintain
leadership in product innovation. There has been focus on Investment
Linked Insurance Products, supported with protection products to
maintain leadership in product innovation. Multi Distribution
Channels- Direct Sales Force, Alternate Channels and Group offering
convenient channels of purchase to customers. Web-enabled IT
systems for superior customer services. First to have issued policies
over the Internet. Corporate governance and a high degree of
transparency in all business practices and procedures. First to have an
operational Business Continuity Plan. Strong fundamentals based on
the Aditya Birla group's local insight and Sun Life financials's global
expertise.
Protection Plans
• Birla Sun Life
Insurance Term Plan
Saving Plans
• Birla Sun Life
Insurance Guaranteed Bachat
Plan
• Birla Sun Life
Insurance Money Back Plus
Plan
• Birla Sun Life
Insurance Gold-Plus II
• Birla Sun Life
Insurance Saral Jeevan Plan
• Birla Sun Life
Insurance Supreme-Life
• Birla Sun Life
Insurance Dream Plan
• Birla Sun Life
Insurance ClassicLife Premier
Health Solution Plans
• BSLI Health Plan
Retirement Plans
• Birla Sun Life
Insurance Freedom 58
• Birla Sun Life
Insurance Premium Back
Term Plan
• Birla Sun Life
Insurance SimplyLife
• Birla Sun Life
Insurance PrimeLife Premier
• Birla Sun Life
Insurance PrimeLife
• Birla Sun Life
Insurance Flexi Cash Flow
• Birla Sun Life
Insurance Flexi Save Plus
• Birla Sun Life
Insurance Flexi Life Line
• Birla Sun Life
Insurance Single Premium
Bond
• BSLI Universal Health
Plan
• Birla Sun Life
Insurance Flexi SecureLife
Retirement Plan II
Children Plans
• Birla Sun Life Insurance Children's Dream Plan
Rural Plans
• Birla Sun Life
Insurance Bima Suraksha
Super
• Birla Sun Life
Insurance Bima Dhan
Sanchay
Group Plans
• Birla Sun Life
Insurance Group Unit Linked
Plan
• Birla Sun Life
Insurance Group Protection
Solutions
• Birla Sun Life
Insurance Group
Superannuation Plan
NRI Plans
• Birla Sun Life
Insurance PrimeLife Premier
• Birla Sun Life
Insurance PrimeLife
• Birla Sun Life
Insurance Flexi Life Line Plan
• Birla Sun Life
Insurance Flexi Save Plus
• Birla Sun Life
Insurance Bima Kavach
Yojana
• Birla Sun Life
Insurance Group Gratuity Plan
• Birla Sun Life
Insurance Credit Guard Plan
• Birla Sun Life
Insurance Single Premium
Group Term Plan
• Birla Sun Life
Insurance Flexi Cash Flow
• Birla Sun Life
Insurance ClassicLife Premier
• Birla Sun Life
Insurance Single Premium
Bond
• Birla Sun Life
Insurance SimplyLife
Baja Allianz [8]
Bajaj Allianz Life Insurance is a union between Allianz SE, one of the
largest Insurance Company and Bajaj Finserv.
Allianz SE is a leading insurance conglomerate globally and one of the
largest asset managers in the world, managing assets worth over a
Trillion (Over INR. 55, 00,000 Crores). Allianz SE has over 115 years
of financial experience and is present in over 70 countries around the
world.

At Bajaj Allianz Life Insurance, customer delight is our guiding

principle. Our business philosophy is to ensure excellent insurance and
investment solutions by offering customised products, supported by
the best technology. Bajaj Allianz entered into partnership with
Thomas Cook India to provide travel finance. A comprehensive list of
policies and products offered by Bajaj Allianz Life Insurance Co. Ltd.
is as follows:

Unit Linked Plans

• Regular Premium

• New UnitGain Super • YoungCare

• UnitGain Plus Gold • YoungCare Plus
• New UnitGain Plus • New FamilyGain-R
• New UnitGain

• Single Premium

• New UnitGain Premier • New UnitGain Plus SP

SP
Pension Plans

• Annuity

• Pension Guarantee

• Retirement

• Future Income • New UnitGain Easy

Generator Pension Plus SP
• Swarna Vishranti • Future Secure
• New UnitGain Easy
Pension Plus RP

Traditional Plans

• Endowment

• InvestGain • Life Time Care

• SaveCare Economy SP • Super Saver
•

• Money Back

• CashGain

Term Plans

• Protector • New Risk Care

• Term Care

Women Insurance Plans

• House Wives • Working Women

Health Plans

• Care First • Family CareFirst

• Health Care
Children Plans

• ChildGain

Group Plans

• Non Employer • Employer Employee

Employee
• Group Term
• Credit Shield Life(Employer Employee)
• Group Term Life(Non • New Group Gratuity
Employer Employee) Care
• Group Suraksha • New Group
• Swayam Shakti Superannuation Care
Suraksha • Group Save Plus
• Group Loan Protector • Group Term Life in lieu
• Group Income of EDLI
Protection • Group Leave
Encashment Scheme
• Group Annuity
• Group Superannuation
Gold
• Group Gratuity Gold

Micro Insurance

• Alp Nivesh Yojana • Saral Suraksha Yojana

• Jana Vikas Yojana

Other Plans

• Family Assure • Capital Shield

• Fortune Plus • CenturyPlus II
Comparison of term insurance plans

Generally insurance agents shy away from recommending Term

Insurance plans. This is because the term insurance plans have a very
low margin for the insurance agents.
The advantage of term insurance is that you are not paying the
insurance companies to invest on your behalf, the downside is that you
need to be disciplined enough to make good investments yourself.
Term insurance gives us a much larger Sum Assured than other plans,
for the same amount of premium, because its a pure risk cover.
The method used to compare the term plans costs across the insurance
companies was this. We took the following parameters across all
plans:
 • Healthy male life, 30 years age
• Term of 25 years, with regular premium
• Premium paid annually
• Sum Assured of Rs 10 Lakh

The table[11] below shows the premiums for different plans. Note that
the plans have different limits with respect to entry age, maximum
term, etc. So choose whatever suits you best.

Min Max Max Min Max Min Max Cost

Policy Name
entry entry Age term term SA SA (Rs.)

500,00
Aviva LifeShield 18 55 65 5 40 NA 3530
0

New Risk 400,00

Bajaj Allianz 18 60 65 5 40 50 Cr 3730
Cover 0

Secure 500,00
Bharti AXA 18 55 60 5 25 NA 2940
Confident 0

200,00
Birla Term Plan 18 55 70 5 25 NA 3551
0

HDFC Term Plan 18 60 65 10 30 NA NA 3050

ICICI 500,00
LifeGuard 18 55 65 5 30 NA 3025
Prudential 0

250,00
Kotak Term 18 60 70 5 30 5 Cr 4602
0

Term 250,00
Kotak 18 55 60 5 30 5 Cr 3143
Prefered 0

Max New 250,00

Level Term 18 55 60 5 25 5 Cr 3050
York 0

500,00
LIC Anmol Jeevan18 55 65 5 25 3 Cr 3821
0

Metlife Suraksha TA 18 60 65 5 25 50,000None 3600

 60

250,00
Reliance Term Plan 21 60 65 5 25 None 3070
0

300,00
SBI Life Shield -Level 18 60 65 5 25 25 Cr 2964
0

Tata AIG Raksha 18 50 60 10 25 NA None 2640

If we just take a look at the comparative chart of term plans of all the
companies then can easily observe that except for reliance minimum
age of entry in this plan is 18 years but for reliance it is 21, also
minimum sum assured for the above policy is 2, 50,000 is also less if
compare to LIC, SBI Life, ICICI and various others. But the premium
is more or less equal so these competitive companies press an
advantage against reliance in term plans.

Unit Linked Insurance Plans

Unit linked insurance plans (ULIPs) are probably the hottest selling
product for most life insurance companies today. However, when it
comes to evaluating ULIPs from across life insurance companies,
individuals find the task arduous and challenging. The table[12] below
provides information on ULIPs from six leading life insurance
companies, which will help individuals who want to assess their ULIP
products effectively.
Birla SunLife ICICI- HDFC SBI Life (Unit Bajaj (Life Maker Reliance Life
(Flexi Save Prudential Standard Life Plus Regular) Endowment Plan) Insurance
Plus (Lifetime II) (Unit linked (Reliance Market
Endowment endowment Return Plan)
Plan) plan)
ULIP FUND Enhancer Maximiser II Growth Equity fund, Growth fund, Equity fund,
OPTIONS fund, Builder (Growth), fund, Bond fund, Balanced fund, Growth fund,
fund, Balancer II Balanced Growth Conservative Balanced fund,
Protector (Balanced), fund, fund, fund, Secure fund Capital Secure
 fund Protector II Defensive Balanced fund
(Income), fund, Secure fund
Preserver fund, Liquid
fund
ALLOCATION TO Max. 35% in Upto 100% 100% in upto 100% 20-70% in Upto 100% in
EQUITIES Enhancer in growth in Equity Growth fund; 10- Equity fund;
fund; max. maximiser- fund; 30- fund; upto 40% Balanced upto 40% in
20% in II; upto 60% in 20% in fund; 0-15% in Growth fund;
Builder 40% in balanced Bond fund; Conservative upto 20% in
fund; max. balancer-II; fund; 15- 40-100% in fund; Nil in Balanced fund;
10% in nil in 30% in Growth Secure fund NIL in Capital
Protector Protector II defensive fund; 40- Secure fund
fund & 50% in managed 60% in
Preserver fund; nil in Balanced
secure fund
managed &
liquid fund
MINIMUM No min. 20,000 10,000 24,000 15,000 10,000
PREMIUM (RS) premium.
Minimum
Sum
assured: Rs
200,000
(adults) else
Rs 100,000
MIN/MAX AGE AT 30 days -60 0-65 years 18-65 7 years - 65 12 years - 60 30 days - 65
ENTRY (YRS) years (subject to years years years
plan type)
HOW IS SUM Face amount Annual Annual 5-50 times Min sum Min. sum
ASSURED plus policy premium x premium x the regular assured:100,000 assured: upto
CALCULATED fund (term/2) (term/2)-40 premium age 12- 5 times
times the amount annual premium
regular or Rs 500,000,
premium whichever is
amount. lower. Above
age 12- 5 times
annual premium.
Max. sum
assured: upto
age 12 -
500,000. Above
age 12: No limit
RIDERS Yes Yes Yes Yes Yes Yes
AVAILABLE
INITIAL YEARS' 29.9%-65% 25% in the 5%-30% in 10%-25% in 25% in first year 10%-20% in the
EXPENSES in first year. 1st & 2nd initial 2- the 1st year. plus, 20% in 2nd first year.
5%-7.5% in year,3% in Years 3-7.5% in year. (Depends on the
2nd and 3rd the 3rd & (depends 2nd & 3rd policy tenure)
years. 4th year. upon the year. 3-5%
annual in 4th and
 premium 5th year.
amount)
FUND 1% Maximiser 0.80% 1.5% for 0.90% to 1.25% Equity fund and
MANAGEMENT II- 1.5%; equity fund. of net assets in Growth fund:
CHARGES balancer- 1.35% for the fund 1.75%;
1.0%; growth fund. Balanced fund
protector II 1.25% for and Capital
& balanced Secure fund:
preserver- fund. 1% for 1.50%
0.75% bond fund.
EXPENSES 5 1 1 2 Bid-Offer spread 5
AFTER INITIAL of 5% with 1%
YEARS (%) for rounding of
the premium on
its allocation to
the funds.
FIXED MONTHLY 22. Plus 60 20 60 50 40
EXPENSES (RS) * annual
charges as
applicable.
**
PARTIAL 2 free partial Above 1 Above 6 Above 4 Yes. Rs 100 for every
WITHDRAWALS withdrawals partial partial partial withdrawal.
ALLOWED in a year. withdrawal withdrawals withdrawals
will be will be will be
charged @ charged @ charged @
Rs 100 Rs 250 Rs 100
CHARGES ON 2 1 2.5% for 1 Nil. But value is 2
TOP-UPS (%) initial two subject to the
years. 1% bid-offer spread.
thereafter.
SWITCH 2 free 4 free 24 free 4 free 2 free switches 1 free switch
CHARGES switches in a switches in switches in a switches in a per year. every year. 1%
year. Rs 100 a year. Rs year. Rs 100 year. Rs 100 Company may of the amount
for 100 for for per switch charge upto Rs switched
additional additional additional thereafter. 500 per switch thereafter
switches switches switches thereafter (subject to min.
thereafter. thereafter. thereafter. Rs 100 and max.
Rs 1,000).

**From 11th year onwards this charge will increase at the rate of 3% p.a. This charge will not
exceed Rs.100 per month at inception and the maximum rate of inflation is 5% p.a
Above is comparative chart of top private ulip players in the market,
various type of funds are available for the costumer to opt from. All
the companies have more or less same type of funds with different
names. Also the allocation percentage is also same in all. The
difference starts from the minimum premium in Reliance and HDFC
its 10000 and in rest it is higher then it. Method of calculation of
minimum sum assured differs in all the companies Reliance has no
upper limit for maximum sum assured.

Riders are available in all the companies but fund management charge
is high in RLIC as compared to others. Also for partial withdrawals
each company provides some free options but in RLIC it is charge 100
every withdrawal.

Charges on top ups is more or less equal, but switching options is

charged more than other companies.

Practical learning
Phase 1
During the first month of SIP, training sessions for imparting
knowledge of all the products offered by RLIC were held in the
company. It was followed by developing skills of the trainees
regarding the pre-requisites and the steps involved before approaching
the clients and points that should be considered in telecalling.
Phase 2
In second month of SIP, We gained market exposure by selling life
insurance policy of RLIC to individuals.

In last month I visited my home town to get business for my

organization and along with this I will be learning different aspects of
marketing through one to one interaction with the customers or policy
holders and understand market segmentation, consumer behavior,
dynamics involved in the whole process.

Most interesting throughout the training was handling the pressure by

our company guide, and then work under pressure to source the
business. Along with the way in which people reacts to insurance
policy offering made me learn how to pitch the products and then
convince then to buy it

Throughout the project my main focus will be on targeting the

corporate clients.

Application of marketing concepts

1) Buying Behavior of the customers
Types of consumer buying behavior are determined by:
 • Level of Involvement in purchase decision
• Difference between the brands present in the market.

High Involvement Low Involvement

Significant
Difference Complex Buying Varity seeking buying
Between Behavior behavior
Brands
Few
Difference Dissonance-Reducing Habitual buying
Between buying behavior behavior
Brands
i) Complex Buying Behavior

Consumers undertake complex buying behavior when they are highly

involved and perceives significant difference among the brands.
Customers may be highly involved when the products are expensive
risky, purchased infrequently and highly self expressive.

ii) Dissonance Reducing Buying Behavior

This type of buying behavior exists when customers are highly

involved with an expensive, infrequent, or risky purchase but see a
little difference between the brands.

iii) Habitual Buying Behavior

This type of buying behavior occurs under condition of low consumer

involvement and significant brand difference.

iv) Varity seeking buying behavior

Consumer undertakes verity seeking buying behavior in situations

characterized by low consumer involvement but significant perceived
brand differences.
Observation-According to above figure if we judge insurance
industry then clearly insurance falls in complex buying behavior ,as
there is brand differentiation(LIC is most preferred brand in insurance
industry followed by SBI Life and many others) as well as it is an
infrequently purchased product.

2) Buyer Decision Process

Above is consumer buying behavior flowchart along with brief

description. But as my observation consumer doesn’t pass through all
the stages as mostly insurance products are purchased from some
known person, so the stage of information gathering and evaluation of
alternatives get merged and consumer relies upon the information
given by their known. Rest two stages remain same.

Mostly people over react if they are asked to buy an insurance policy
by an unknown person.

3) Personal Selling
Personal selling takes place when a seller or sales person in face to
face interaction with potential buyer tries to persuade him to purchase
the product or service which he is promoting on behalf of a company.
Personal selling takes place at a personal level and involves a personal
transaction. The sales person communicates the products benefits to
the customer in order to convince him to make the purchase.

The personal selling process is as shown below

Prospecting and Evaluation-Process of finding and evaluating
potential customers. It also involves generating of Leeds, Identifing
prospects, and qualifying prospects.

Preapproach-It is a stage in which the following events takes place

creation of prospects profile ,deciding on approach, establishing
objective of sales call ,preparing for the presentation.

Approach-It is the stage in which the sales person makes initial

contact with the potential customers and tries to find out his needs, at
this stage creating a favorable impression on the buyer is more
important.

Presentation-It is most important step in sales process aim of which is

to attract the attention of the prospect and stimulate his interests and
stir a desire for product or service. It is based on AIDA (Attention,
Intrest, Desire and Action) concept.

Handling Objections-Sales person needs to clarify any doubts or

objections that customer may have.

Closing-The stage in which sales person asks the potential customer to

make the purchase

Follow up- The objective of every sales person is to have repeted

sales. This can be achieved by enhancing customer satisfaction, so this
last stage deals with maintaining of long term relation with the
customers.

Observation- Above concept holds true for insurance companies as

most of the selling is personal selling. Sales managers recruited
advisors which further source the business to the company, also all the
interaction and exchange of information is through personal
interaction.

4) Communication Mix in Market

Marketing communication or promotion helps marketers communicate
information to potential customers about the products existence, value
and benefits that can be acquired from it. Communication can also be
in a form of publicity. Marketing communicating mix can be of
following types

1) Product market type-It can be of two types’ consumer market and

industrial market. Consumer market involves sales promotional
activities and public relations whereas industrial marketing involves
personating selling.

2) Pull – Push strategy

Company can adopt either of the above. In pull strategy all the
communication and promotion program tries to pull the customers to
make the purchase.

In push strategy all the promotional efforts are directed towards the
intermediaries, they are motivated by providing special rewards,
omissions etc.

Observation-In reliance consumer marketing is followed and with it

push strategy.
 A SURVEY ON ‘INSURANCE INDUSTRY’

1) Age

a) 18-30 c) 40-50
b) 30-40 d) 50 and above

2) Profile of respondent:

a) Student d) Self –
b) Housewife Employed\Business
c) Working Professional e) Government Service
Employee

3) Annual Income (in Lakh Rs.)

a) 2-5 c) 7-10
b) 5-7 d) 10 and above

4) In which kind of company would you prefer to make a

purchase of insurance?

a) Government owned c) Private Company

company(LIC) d) Foreign based
b) Public Limited company
Company (SBI Life)

5) Do you have a life insurance policy/investment plan in

your name?

a) Yes b) No

6) If yes which company’s insurance policies do you hold?

(Mention if more than one)?
 a) Birla Sun Life c) ICICI Prudential Life
Insurance Insurance
b) Bajaj Allianz Life d) SBI Life
Insurance e) Reliance Life Insurance
f) Others (specify name)

7) If more than one company what led you to switch for

two or more companies?

____________________________________________________________

8) What is the approximate premium paid by you annually

(in Rupees)?

a) Rs. 5,000 – Rs. d) Rs. 25,001 – Rs. 50,000

10,000 e) Rs. 50,001 – Rs. 60,000
b) Rs. 10,001 – Rs. f) Rs. 60,001 – Rs. 80,000
15,000 g) Rs. 80,001 – Rs.
c) Rs. 15,001 – Rs. 1,00,000
25,000
h) More than Rs. 1,00,000 (specify premium)
9) What kind of insurance policy would suit you best in
your current stage of life?

a) Life Insurance c) Pension Plans

b) Life Insurance and d) Child Plans
Investment
Plans(ULIP)
e) Tax saving plans

10) How much would you be willing to spend per annum if

you were to go for above chosen plan?

a) Less than Rs. 6,000 d) Rs. 25,001 – Rs. 50,000

b) Rs. 6,001 – Rs. e) Rs. 50,000 – Rs.
10,000 1,00,000
c) Rs. 10,001 – Rs. f) More than Rs. 1,00,000
25,000

11) Which according to you is an ideal policy term?

(Number of years you would be willing to pay premium)

a) 3 to 5 years e) 21 to 25 years
b) 6 to 9 years f) 26 to 30 years
c) 10 to 15 years g) More than 30 years
d) 16 to 20 years
12) What motivates you to purchase insurance/investment
plans?

a) Advertisements c) Advice from friends

b) High Returns d) Family responsibilities
e) Others (specify)

13) Which Parameters you consider while you go for

insurance?

a) Brand Name d) Services

b) Tax benefits e) Returns
c) Risk Cover

14) Typically what kind of returns would you look at from

your investments? (Please note: Higher returns involve
greater risk)

a) Less than 5% f) 26% - 30%

b) 6% - 10 % g) 31% - 40%
c) 11% - 15 % h) 41% - 50%
d) 16% - 20 % i) More than
e) 21% - 25%
Analysis
Analysis of the data collected of 270 respondents. Out of these respondents
majority are from Bikaner (Rajasthan) i.e. around 160-170, rest from Bangalore,
Jaipur and 10-15 from other cities.

1) Gender ratio.

Above chart clearly proves that Insurance sector is male dominant. It also indicates
that if Insurance Industry if now target female clients they can further increase
number of customers.

42
2) Profession Ratio

Majority of the respondents are either of working profession or government

emp.This is due to two reasons first is convenience sampling

3) Income Levels of the respondents

43
Since the respondents belong to government and working professional class
therefore majority have income bracket of 2-5, so this directly affects their
preference on plans.

4) Preference of companies

LIC is the most preferred company, along with it since SBI is also perceived as
Government Company by most of the people therefore it has also gained lot of
customers in recent time.

5) Ratio of policy holders to non holders

44
Still 26% of the respondents do not have an insurance policy, so companies should
try to find out how to reach then and deliver products of their interest.

6) Market Share according to collected data

45
Market share clearly reflects current situation with LIC leading, it also indicates
that share of private players has also grown remarkably; this growth has mainly
been in ULIP plans of all types.

7) Approximate premium paid

Above is the chart indicating yearly premium paid by respondents. As we have

already seen that most of the people fall in income group of 2-5 lakh so the yearly
premium paid by them also precede it. More than 60% of the respondents are
paying premium between 5k-25 k.

46
8) Age group Preferences

If we notice from the above fig.LIC is preferred by respondents of all age groups,
But rest all the private players have highest number of customers from age group
18-30 which is youth.

We can also see that still private players are not trusted by people of higher age
group, so LIC presses advantage on all of the companies for the rapo which it has
built in last 50 years as the most trusted insurance company.

47
9) Preference of respondents of various
professions

Same as above LIC Is preferred by all profession,but Working professional have

respondents who prefer private companies as compared to lic.Tis is due to a simple
reason as they provide returns higher then LIC.

48
10)Prefrence of various plans

The age group and income level has an impact on their product prefrence.Since
most of them are 18-30 age group with income level 2-5lakh so they mostly prefer
plans having life cover,so this leads to two plans Life Insurance and insurance plus
Investment plans.

49
References:
1. http://en.wikipedia.org/wiki/Category:Types_of_insurance

2. http://www.appuonline.com/insurance/insurance-types.html

3. http://www.irdaindia.org/hist.htm

4. www.reliancelife.com

5. www.licindia.com/

6. http://www.iciciprulife.com/public/About-us/About-Us.htm

7. http://www.sbilife.co.in/sbilife/application?
origin=header.jsp&event=bea.portal.framework.internal.refresh&pagei
d=AboutUs

8. http://www.bajajallianzlife.co.in/why-bajaj-allianz.asp

9.
http://www.birlasunlife.com/birlasunlife/Insurance/BSLI_MP/BSLI_About
Us/Company_Profile/abtus_comprofile.aspx

10. http://www.personalfn.com/insurance/pension1.html

11. http://meramd.com/insurance/termplans

12. http://www.personalfn.com/insurance/ulip.html

13.Principles of marketing-Philip Kotler

14.Marketing Management-ICMR

50