A STUDY ON CHILD INSURANCE POLICIES:

IDBI FEDERAL LIFE INSURANCE COMPANY

LTD

Submitted in partial fulfillment of PGDM

PGDM BATCH 2013-15

Submitted To: Submitted By:

Prof. Ravi Kishore Hibah Wasif

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EXECUTIVE SUMMARY
Insurance is the backbone of a country’s risk management system. Risk is an
inherent part of our lives. The insurance providers offer a variety of products
to businesses and individuals in order to provide protection from risk and to
ensure financial security. They are also an important component in the
financial intermediation chain of a country and are a source of long term
capital for infrastructure and long-term projects. Through their participation in
financial markets, they also provide support in stabilizing the markets by
evening out any fluctuations. The availability of insurance can mitigate the

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impacts of risk by providing products which help organizations and individuals
to minimize the consequences of risk and
has a positive effect on industry growth as entrepreneurs are able to cover
their risks.

The insurance business is broadly divided into life, health, and non-life
insurance.
Individuals, families, and businesses face risks of premature death, depletion
in income because of retirement, health risks, loss of property, risk of legal
liability, etc. The insurance companies offer life insurance, pension and
retirement income, property insurance, legal liability insurance, etc., to cover
these risks. In addition, they offer several specialized products to meet the
specific needs and requirements of businesses and individuals. Businesses
also depend on these companies for various property and liability covers,
employee compensation, and marine insurance.

I Hibah Wasif, have been working with IDBI federal life insurance company
ltd, as a
Marketing Intern for the past 2 months. IDBI Federal Life Insurance Co Ltd is
a joint-venture of IDBI Bank, India’s premier development and commercial
bank, Federal Bank, one of India’s leading private sector banks and Ageas, a
multinational insurance giant based out of Europe. In this venture, IDBI Bank
owns 48% equity while Federal Bank and Ageas own 26% equity each.

In the past two months, I have been through an intense learning mode. With
each continuing month, I gained more experience and more knowledge.
While working with the organization, I completed a project titled: “A STUDY
ON CHILD INSURANCE POLICIES :IDBI FEDERAL LIFE INSURANCE
CO.LTD”

Life insurance for your child may not be the first thing that you think about
when you bring them home from the hospital. In fact, you may not even be
aware that Children’s Whole Life insurance is available. We want to help you
understand the whole life insurance options available to your child.

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 Child Plan is insurance cum investment plan that serves 2 purposes –

 To financially secure your child’s future

 To finance the turning points in his life such as higher education and
marriage

The study aims at deriving plausible information needed to enhance the

company services and also to increase the customer base particularly in the
case of child insurance.

These two months proved to be a great experience for me. I learnt many
valuable lessons and will take them forward and apply them in the future.

INTRODUCTION

Insurance is a contract between the insurance company (insurer) and the

policyholder (insured). In return for a consideration (the premium), the
insurance company promises to pay a specified amount to the insured on the
happening of a specified event.

BACKGROUND OF THE TOPIC

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Insurance is an integral part of any personal financial plan. The type of
insurance and the amount of coverage you obtain all depends on your unique
financial and family circumstances, and must be evaluated carefully. When
considering purchasing coverage, you should review all the potential risks and
the financial impact of these risks on your financial health. This will help you
determine what options to look for and what questions to ask. And as with
any type of financial product, you must read the fine print and consult with a
competent advisor.

Insurance is a form is risk management in which the insured transfers the cost
of potential loss to another entity in exchange for monetary compensation
known as the premium.

Why insurance is important in present scenario:

 protecting family after one's death from loss of income

 Ensuring debt repayment after death
 Covering liabilities.
 Protecting against the death of a key employee or person in your
business.
 Protecting your business from business interruption and loss of
income.
 Protection against unforeseeable health expenses.
 Protecting your home against theft, fire, flood and other hazards.

PRODUCT:
A product means what we produce. If we produce goods, it means tangible
product and when we produce or generate services, it means intangible
service product. A product is both what a seller has to sell and a buyer has to
buy. Thus, an Insurance company sells services and therefore services are
their product. When a person or an organization buys an Insurance policy
from the insurance company, he not only buys a policy, but along with it the

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assistance and advice of the agent, the prestige of the insurance company
and the facilities of claims and compensation. It is natural that the users
expect a reasonable return for their investment and the insurance companies
want to maximize their profitability. Hence, while deciding the product portfolio
or the product-mix, the services or the schemes should be motivational. IDBI
Federal provides many products which cater to the needs of the Indian
customers.

IDBI Federal Products:-

WEALTHSURANCE

INCOMESURANCE

TERMSURANCE

HEALTHSURANCE

GROUP MICROSURANCE

BONDSURANCE

CHILDSURANCE

OBJECTIVES OF THE STUDY

 To analyze Life Insurance products of IDBI Federal Life Insurance Co

Ltd.
 To compare the children insurance products with other companies
money back plans.
 To understand the factors contributing to the product and its promotion.

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  To provide the company with valid and research based suggestions
which might help the company increase the market share.
 The study deals with the factors that can be altered or influenced that
can increase the customer base of the company.

NEED FOR STUDY

 Knowing about insurance based companies in India and performing a

comparative analysis.
 Evaluation of child insurance on the basis of customer data collection.
 Primary data collection through the questionnaires and generate
primary information by processing the crude data.
 Knowing the advantages and disadvantages of insurance policies with
IDBI federal with competitors.
 Comparing and highlighting the advantages of the products of IDBI with
reference to children insurance plan.

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 CHAPTER-1
THE ORGANISATION: BIRD’S VIEW

THE ORGANISATON: BIRD’S VIEW

IDBI Federal Life Insurance Co Ltd is a joint-venture of IDBI Bank, India’s

premier development and commercial bank, Federal Bank, one of India’s
leading private sector banks and Ageas, a multinational insurance giant based

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out of Europe. In this venture, IDBI Bank owns 48% equity while Federal Bank
and Ageas own 26% equity each.
IDBI federal endeavors to deliver the product that provides value and
convenience to the customer. IDBI federal started in March 2008 and within
few months of inception it became one of the fastest growing new insurance
companies. The company offers its services through a vast nationwide
network across the branches of IDBI bank and Federal Bank in addition to
sizeable network of advisors and partners.

Vision:
To be the leader provider of the wealth management, protection and
retirement solution that meets the need of the customer.

Mission:
1. To continue strive to enhance customer experience through
innovative product offering, dedicated relationship management and
superior service while striving to interact with our customer in most
convenient and cost effective way.
2. To be transparent in the way we deal with our customer and act with
integrity.
3. To invest in and build quality human capital in order to achieve our
mission.

Values:
1. Transparency: Crystal clear communication to our partners and
stake holders
2. Value to customer: A product and service offering in which
customer perceive value.

3. Rock solid and Delivery on promise: This translates into being

financially strong, operationally robust and having clarity in claims.
4. Customer friendly: Advice and support in working with customers
and partners.

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 5. Profit to stakeholders: Balance the interest of the customers,
partners, employees and community at large.

HISTORY
 2006: IDBI Bank, Federal Bank and Belgian-Dutch insurance major Fortis
Insurance International NV signed a MoU to start a life insurance company
 2008: IDBI Fortis Life Insurance Co. Ltd., which started its operations in
March 2008
 2008: IDBI Fortis opens its second branch in Andhra Pradesh in
Vijayawada
 2008: IDBI Fortis Life positive on assured return products
 2008: IDBI Fortis launches the Bondsurance Plan
 2009: IDBI Fortis announces Rs 250cr capital infusion
 2009: IDBI Fortis launches Retiresurance Pension Plan
 2009: IDBI Fortis scores with Goalsurance
 2009: IDBI Fortis launches Incomesurance Immediate Annuity
 2009: IDBI Fortis receives bronze Dragon at 'PMAA 2009'
 2009: IDBI Fortis Life Insurance introduces financial inclusion plan in rural
Orissa
 2009: IDBI Fortis launches Termsurance Protection Plan
 2009: IDBI Fortis redefines endowment & money back with
Incomesurance
 2009: IDBI Fortis to open 65 more branches; raise headcount by 1,000
 2010: IDBI Fortis now renamed as IDBI Federal Life Insurance Company

THE ORGANISATION STRUCTURE:

VIGHNESH SAHANE

(MD & CEO)

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BUSINESS SEGMENTATION:

Businesses Segment can be defined as technique used by the companies to

separate business to reflect key develop, sell and develop differences.
Segmentation is basically done by grouping customer according to
homogenous attributes. Segmentation of business allows companies to
focus its marketing where it is most productive. IDBI federal has done its
business segmentation by introducing different range of products into the
market.

Products and Services Offered by IDBI Federal Life Insurance:

1. Childsurance:

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IDBI federal’s childsurance is for the parents who are looking to
make their child’s future shock-proof is its powerful insurance
benefits. Childsurance allows to you to protect your child plan with
triple insurance benefits so that your wealth-building plan remains
unaffected by unforeseen events and your child future remains
secure.

2. Healthsurance:

IDBI federal Healthsurance Hospitalization and surgical plan offers

host of features and benefits that is designed to help the customers to
manage extra burden that comes with hospitalization.

3. Lifesurance:

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 IDBI feral Lifesurance Plan is a saving insurance plan that helps you
to safeguard your wealth at the same time will present better
opportunity to earning better return.

4. Bondsurance:

Bondsurance is designed for customer looking for guaranteed returns

which will not get affected by financial market conditions. It offers
guaranteed return on investment along with life insurance cover.

5.Wealthsurance:

Wealthsurance plan enables the policyholder to save and build

wealth to meet their financial goals. Wealthsurance plan comes up
with a wide range of 13 investment option and 7 insurance benefits
with low charge structure and unmatched flexibility.

6.Homesurance:

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 Homesurance protection plan provides full insurance cover for
properties under construction, thus ensuring that beneficiary gets the
full sanctioned amount in case of an unfortunate event. It also has an
innovative fixed cover for those who would prepay their loans early.

7.Incomesurance:

Knowing customer helped us to combine the Endowment & Money

Back plans into a single plan. It linked the returns to the G-sec rates,
transparently declared by the government. Also, the Guaranteed
Annual Payout and other benefits upon death are tax- free under Sec
10(10D).

8 .Termsurance:

Teramsurance protection plan of IDBI federal offers unique increasing

cover option that can automatically increase the cover every year
without increasing the premium.

SWOT ANALYSIS :

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 STRENGTHS: WEAKNESS:

-Skilled workforce
-High loan rates.
-Reduced labor costs
-Costs

OPPORTUNITIES : THREATS:
-New markets -Increase in labor costs
-Growing demand -Tax changes
-Growth rates and profitability -Unexpected problems
-New products and services. -Global economy

Promotional Practices:
IDBI federal Life Insurance Co Ltd is been involved in number of promotional
practices. IDBI uses different modes of advertisements for promoting their
products. Following are the different modes through which IDBI federal
promotes its products:
1. Print Media:
Print media is one the most reliable, cost effective and easy mode of
advertisement to reach the masses. Main ways of advertising via print
media are:
1. Newspaper:
Paper Pages Cost (in Rs.)

The Economic 3rd 320 per sq. cm

Times
Times of India 3rd 320 per sq. cm

The Hindu 1st 400 per sq. cm

2. Pamphlets:

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 Pamphlets are distributed across India at least 5 times in a month
without any cost. This distribution is mainly done to create maximum
awareness about the products/services.

3. Magazines:
There is no specific magazine in which advertisement is given.
Magazines are selected based on their sales and reputation like
outlook , money etc.

2.Television:
Television is another mode of advertisement used by IDBI federal Life
Insurance Co. Ltd. Like print media television is also very popular
mode of advertisement which easily grasps attention of masses. Mainly
the advertisements of IDBI federal are shown on Cricket channels, star
channels because of their popularity.
Main promotion is done in the month of February and March to:
 Highlight tax benefits
 To combat competition as all the competitor insurance
companies would advertise during this time at great frequency.
Also the companies will soon start displaying their advertisement on
satellite TV like Sun network etc.

Following are the cost associate with running the TVC:

Region/ Channel Cost (in Rs.) Duration/ SLOT

Tamil Nadu 45,000 10 seconds

Local Channels 6000-8000 10 seconds

Cricket channels 60,000 onwards 10 econds

3.Word of Mouth:

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 A strong network of distributors and parent advisors also helps a lot in
promoting products/ services of IDBI federal by Word of mouth.

4.Online:
A viral campaign also runs on the internet by wherein flash videos of
working of product are explained in a very humorous manner. This
video is shown on www.bosskaboss.com

5.Hoarding:
As of now, total number of Hoardings which are put up in Hyderabad
region counts to be 17.
Cost (in Rs.) Time Lease

4,00,000 3 Months

6.Local Events:
Some events are created in and out of the city by IDBI federal to create
more awareness about the IDBI federal and free gifts were given
wherein local marketing people interact with the prospects and try to
gauge their financial needs and respectively pitch the products.
The overall costs associated with such an events totals to Rs. 2,
00,000 pm. Such events are generally conducted in apartments and
schools etc.

Business Life Cycle:

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Business life cycle is referred as various stages of development of a small
business. Every stage has its own unique characteristics and focus on. There
are five different stages of business Life Cycle:

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1. Stage 0- The Aspirational Stage:
Stage 0 is referred as the aspiration stage or can also be termed as
start-up stage, this is the starting stage of business where people start
their business.
2. Stage 1- The Entry Stage:
Stage 1 is the entry stage where people have decided to start their
business and they work actively building market and offers. IDBI
federal was at entry stage on March 2008 when it started its
operations.
3. Stage 2- The Growth Stage:
Stage 2 is the growth stage. The entrepreneurs in the growth stage
have a business plan and are growing their revenues by meeting new
clients and customers. IDBI federal being started in March 2008 is in its
Growth stage. The company is growing very rapidly by becoming
fastest growing new insurance company to garner Rs. 100 cr. in
premium.
4. Stage 3-The Crucible Stage:
Stage 3 is the Crucible stage or the maturity stage. In this stage the
entrepreneurs work at full stream but the demands for their goods and
services exceed their ability to meet it.
5. Stage 4- The Cruise Stage:
Stage 4 is the cruise stage or can also be termed as the decline stage.
In this stage the entrepreneurs have to identify the bottlenecks that
arrived at stage 3 and try to remove them. They have the necessary
team that allows them to focus on their core competencies.

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 CHAPTER-2
THE INDUSTRY ANALYSIS

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 THE INDUSTRY ANALYSIS
Introduction to Insurance Industry:

Insurance is a form of risk management that shields insured from the risk of
any uncertain of unfortunate events. In simple terms insurance can be defined
as transfer of risk from one entity to another in exchange of the payment. The
transaction consists of insured assuming a guaranteed small loss in the form
of payment to the insurer in exchange of the promise to compensate insured
in case of any kind of financial loss to insured. In a layman’s term, insurance
is a guard against monetary loss arising on the happening of an unforeseen
event. In developing countries like India insurance sector still holds lot of
potential which need to be tapped.

Types of Insurance:
Insurance can be classified into three categories:
1. Life Insurance:
Life Insurance is a concord between the insurer and the policyholder,
where insurer promises to pay beneficiary designated sum of money
upon death of the insured person. Life Insurance covers number of
contingencies like Death, Disability, Disease.
2. General Insurance:
General Insurance is a non-life insurance policy including automobile
and homeowner policy. General insurance specifically consist of non-
life insurance. It includes property insurance, liability insurance and
other forms of insurance. Fire and Marine insurance are called property
insurance.
3. Social Insurance:
Social insurance is another type of insurance for weaker section of the
society. It provides protection to weaker section of the society who are
unable to pay premium. Industrial Insurance, sickness insurance,
pension plan, disability benefits, unemployment benefits are some the
type of social insurance.

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2.1. INDUSTRY’S DOMINANT ECONOMIC FEATURES:

Insurance Sector in India:

Indian insurance sector has gone through different phases of competition,

from being an open competitive market to a nationalized market and then
again getting back to liberalized market. Indian insurance sector has
witnessed complete dynamism in past few centuries.

Insurance sector in India has a deep- rooted history. Its mention has been
found in writings of Manu (Manusmriti), Yagnavalkya (dharmashastra) and
Kautilya (Arthshastra). Ancient Indian history has preserved traces of
insurance in the form of marine trade loans and carrier contracts.

Insurance industry in India is governed by Insurance Act of 1938, Life

Insurance Corporation Act of 1956 and General Insurance business Act,
1972, Insurance Regulatory and Development Authority (IRDA) Act of 1999
and other related acts. Insurance industry in India is considered as an industry
with big potential market. One of the reason that India is seen as huge
potential market is because of its huge population and untapped market area
of this population. In terms of population India has an immense potential
expanding their life insurance cover. Majority of people in India are unaware
of the functions and benefits of Insurance because of which insurance sector
has a bright future in India. But it is relevant to consider factors like different
varieties of social structure, urban and rural composition other than very
important factors like age, sex, income level, literacy level. Making
assessment of Life Insurance potential of India is very difficult task due to
wide variance in every aspect of Indian circumstances and without a refined
analysis any estimate would be meaningless.

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.

Indian Insurance Industry at present:

Life Insurance Corporation (LIC) had the monopoly over the market till the late
90’s when the insurance sector in India was opened for private players.
Before that there were only two state insurer, one was LIC (Life Insurance
Corporation of India) and GIC (General Insurance corporation of India).
Indian insurance sector at present has undergone many structural changes in
2000. The Government of India has liberalized the insurance sector in 2000
with IRDA (Insurance Regulatory and development authority) lifting all entry
restriction of foreign players with a specific limit on direct foreign ownership.
Under the current guideline 26% of equity cap is there for foreign players in an
insurance company and proposal is being given to increase this limit to 49%.
Post liberalization insurance industry in India have come a long way and
today it stands as one of the most competitive, challenging and exploring
industry in India. Increased use of new distribution channels are in limelight
today due to entry of private players. In the long run the use of these
distribution channels and modern IT tools has increased scope of the
insurance industry. Also the changing economics patterns, changing political
scenario, modern IT tools will eventually help in reshaping future of Indian
financial market and Life Insurance business in the country.

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Major Players:

Various players in Indian Life insurance are given below:

1. Life Insurance Corporation of India

2. IDBI federal Life Insurance Co. Ltd
3. Bajaj Allianz Life Insurance Co. Ltd
4. Birla Sun Life Insurance Co. Ltd
5. HDFC Standard Life Insurance Co. Ltd
6. ICICI Prudential Life Insurance Co. Ltd
7. ING Vysya Life Insurance Co. Ltd
8. Max New York Life Insurance Co. Ltd
9. Met Life India Insurance Co. Ltd
10. Kotak Mahindra old Mutual Life Insurance Ltd
11. SBI Life Insurance Co. Ltd
12. Tata AIG Life Insurance Co. Ltd
13. Reliance Life Insurance Co. Ltd
14. Aviva Life Insurance Co. India Pvt. Ltd
15. Sahara India Life Insurance Co. Ltd
16. Shriram Life Insurance Co. Ltd
17. Bharti AXA Life Insurance Co. Ltd
18. Futute Generali Life Insurance Co. Ltd
19. Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd
20. AEGON Religare Life Insurance Co. Ltd
21. DLF Pramerica Life Insurance Co. Ltd
22. Star Union Dai-ichi Life Insurance Co. Ltd

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Latest market share of all insurance companies as of march
2011:

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Regulatory Issues:

Insurance Regulatory and Development Authority (IRDA) is a national

agency of government of India. It was formed by an act of Indian Parliament
known as IRDA Act 1999 which was amended in 2002 to incorporate some
upcoming requirement. It is responsible for protecting the interest of policy
holders, to regulate and promote orderly growth of Insurance Industry in
India. To achieve this objective IRDA has taken following steps:

1. IRDA has notified protection of policyholders Interest Regulation 2001

to provide for: policy proposal document is in easily understandable
language; claims procedure in both life and non-life; setting up
grievance redress machinery; speedy settlement of claims and policy
holders servicing. The regulation also provides for payment of interest
by insurer for delay in settlement of claims.
2. Solvency margins are to be maintained by the insurer so that they can
be in a position to meet their obligation towards the policyholder with
respect to payment of claims.
3. The Insurance Company has to clearly disclose the benefits, terms and
condition under the policy.
4. The advertisement issued by the insurer should not mislead the
insuring public.
5. Proper grievance redress machinery should be set up in the head
office and all the other offices by the insurer.
6. If any complaints are received by the policyholder with respect to the
services provided by the insurer under the insurance contact, then the
authority takes up with the insurer.
7. Insurer has to maintain separate account related to the fund of
Policyholder. The funds of the policyholder should be retained within
the country.
8. According to the new regime, Insurance companies will have to
exposure to rural and social sector.

2.2. PORTER'S FIVE FORCES

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Threat of New Entrants. The average entrepreneur can't come along and
start a large insurance company. The threat of new entrants lies within the
insurance industry itself. Some companies have carved out niche areas in
which they underwrite insurance. These insurance companies are fearful of
being squeezed out by the big players. Another threat for many insurance
companies is other financial services companies entering the market. What
would it take for a bank or investment bank to start offering insurance
products? In some countries, only regulations that prevent banks and other
financial firms from entering the industry. If those barriers were ever broken
down, like they were in the U.S. with the Gramm-Leach-Bliley Act of 1999,
you can be sure that the floodgates will open.

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Power of Suppliers. The suppliers of capital might not pose a big threat, but
the threat of suppliers luring away human capital does. If a talented insurance
underwriter is working for a smaller insurance company (or one in a niche
industry), there is the chance that person will be enticed away by larger
companies looking to move into a particular market.

Power of Buyers. The individual doesn't pose much of a threat to the

insurance industry. Large corporate clients have a lot more bargaining power
with insurance companies. Large corporate clients like airlines and
pharmaceutical companies pay millions of dollars a year in premiums.
Insurance companies try extremely hard to get high-margin corporate clients.

Availability of Substitutes. This one is pretty straight forward, for there are
plenty of substitutes in the insurance industry. Most large insurance
companies offer similar suites of services.In some areas of insurance,
however, the availability of substitutes are few and far between. Companies
focusing on niche areas usually have a competitive advantage, but this
advantage depends entirely on the size of the niche and on whether there are
any barriers preventing other firms from entering.

Competitive Rivalry. The insurance industry is becoming highly competitive.

The difference between one insurance company and another is usually not
that great. As a result, insurance has become more like a commodity - an
area in which the insurance company with the low cost structure, greater
efficiency and better customer service will beat out competitors. Insurance
companies also use higher investment returns and a variety of insurance
investment products to try to lure in customers. In the long run, we're likely to
see more consolidation in the insurance industry. Larger companies prefer to
take over or merge with other companies rather than spend the money to
market and advertise to people.

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2.3. DRIVERS FOR CHANGE IN THE BROAD ENVIRONMENT

Domestic Economic Conditions:

Domestic economic conditions play a major role in growth or downfall of an
Insurance company, No matter how financially stable an insurer is; none is
immune to the slow economic growth. In an Indian economy double digit
inflation is one the uncomfortable factor and RBI which is the central bank of
India has a huge task of controlling the inflation without hampering the
economic growth. Trade off between Interest rates and Inflation has been the
core the business of the RBI and the past one year has been very difficult for
the RBI. In an attempt to manage inflation, RBI has been constantly raising
repo rate and reverse-repo rates every quarter but it has not succeeded in
moderating inflation. This simply implies that inflation is more of a supply side
issue than a monetary implication. The implications of this relatively high
interest rates and high inflation regime are unlikely to be positive for
insurance industry. It would be difficult for an Insurance industry to manage
return expectations as they are likely to be high. While competing with a fixed
income product higher assured returns are required for high.
Interest rates in order to increase penetration. There may be some
reductions in actual growth rates, but Indian’s long term fundamentals remain
intact as life Insurance being an industry with long time horizon, it would be
able to tide over economic cycle.

Inflation on the other hand means lower disposal incomes in the hand of the
consumer leading to lower household savings which currently stands at
34.7%, though significantly lower than china which is 50%.

Global Economic Environment:

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According to the Swiss Re’s newly appointed Economist, Kurl Karl low
interest rates and euro debt crisis will prove to be a problem for insurance
industry. According to Kurt karl momentum of growth has been slowed down
due to this two factors, but the only bright spot according to him is the
ongoing growth in the emerging market. However Kurl is lot more optimistic
looking forward to 2013 forecasting a pick-up in investment yield and
premium in a modest improvement in economic conditions.

1. Political Development:
Political developments are the more serious threat in Europe and
US. In Europe this can lead to serious sovereign defaults and also
exit from the euro monetary union.
2. Emerging markets has been negatively impacted by faltering growth
in the developed economy. Also tighter monetary policies on the
part of several emerging economies also slowed down growth.
3. Both global in-force and new business life insurance fell in 2011,
but it again recovered. According to the economist in order to return
to the pre-crisis profitability short- term factors like low investment
returns, high hedging cost and more onerous capital requirement.
Life Insurance industry’s capitalization has improved markedly and
it is in the better shape to cope up with the future challenges.
4. Because of some Regulatory changes in China and India, coming
two years will see life insurance business in emerging market
returning to its long term trend of around 8%.

Demand Drivers:

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Insurance industry in India has become lot more competitive in recent years.
With private players entering into the market, competition level has
significantly increased with more private players trying to gain more market
share. Some of the demand drivers that give change to the smaller
companies to compete against giants like Life Insurance Corporation of India
Ltd (LIC) which has 70% market share are:

1. Rural market:
According to the Mckinsey report, titled India Insurance 2012:
Fortune Favors the Bold, finds that the sector is still in a dissident
with different players in different stage of development and market
presence. According to the Mckinsey’s report the rural penetration
is likely to increase from about 25% at present to around 35-40% in
2012. With 65% of the Life insurance coming from rich urban class,
smaller companies can look for rural and low income group as
potential demand driver.

2. Product Mix;
A better product mix would also drive growth of insurance
companies, with companies making a move to lower the share of
single premium products.

3. Life insurance product can also fill the gap that is created by
growing demand for investment products and long-term savings.

2.4. COMPANIES IN THE STRONGEST/WEAKEST POSITIONS:

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Competitor analysis in marketing and strategic management is a judgment
of strength and weakness of the competitors. Companies generally do this
analysis to understand the strength and weakness of their current and
potential competitors. This analysis provides both offensive and defensive
strategy to identify both opportunity and threats. IDBI federal Life Insurance
is one of emerging insurance company. It is one of the few companies that
have shown rapid growth since the day of its inception. In order to gain
higher market Share Company has to understand its competitors that is their
strength and weakness. Competitor analysis will help IDBI to understand
strength and weakness of their competitors. It will IDBI to come up with
offensive or defensive strategy to identify both opportunity and threats.
Some of the main competitors of IDBI federal are:
1. Life Insurance Corporation of India (LIC)
2. ICICI prudential
3. SBI Life
4. HDFC standard Life
5. Bajaj Alliance

1. Life Insurance Corporation of India ( LIC):

LIC was founded in 1956 with the merger of 243 insurance company
and provident societies. It is the largest insurance and investment
company in India. It is a state owned with 100% stake owned by
government of India.
Products offered by LIC are:
1. Jeevan Arogya plan:
Jeevan arogya plan is a unique non-linked health insurance plan
which provides health insurance against certain specified health
risk. LIC’s jeevan arogya plan is a direct competition to IDBI’s
Healthsurance plan.

2. Bima Account plan:

32
 Under this plan the premiums payed by the customer after
deduction of all charges, will be credited to the policyholders
account maintained separately for each policyholder. If all
premiums are paid the amount held in policyholder’s account will
earn an annual interest rate of 6% p.a

3. Endowment plan:
It’s a unit linked endowment plan which offers investment cum
insurance cover during the term of the policy.
4. Children Plans
5. Plan for Handicapped Dependents
6. Endowment assurance plans
7. Plans for high worth Individual
8. Money Back Plans
9. Special Money Back Plan for Women
10. Whole Life Plans
11. Term assurance plans
12. Joint Life Plan

SWOT Analysis of LIC:

SWOT Analysis is a strategic planning method used to analyze
strength, weakness, opportunity and threat involved in a business or a
project.
1. Strength:
 LIC is India’s largest state-owned company and also India’s
largest investors
 LIC has over 2000 branches all across India and more than
1, 00,000 agents.
 LIC is the largest investor in India with largest fund base.
 LIC has over 1, 15,000 employees across India.
 LIC is the 8th most trusted brand of India.

2. Weakness:

33
  It lacks imagination since it has an image of a government
company
 Red tape, bureaucracy causes the problem since it is a
government company.
 During the economic crises managing a he workforce is a
lot of burden.

2. ICICI Prudential:

ICICI prudential Life Insurance Company is the joint venture of ICICI

bank and Prudential Plc, one of the leading financial service groups in
UK.
Products offered by ICICI prudential:
1. ICICI pru care:
It is an insurance plan that protects family’s future and ensures they
lead their life comfortably.
2. Save n Protect
3. Cash back
4. Home Assure
5. Life Guard
6. ICICI pru iprotect
7. Smartkid Regular premium
8. ICICI pru Elite Life
9. Group term insurance plan
10. Group Gratuity plan
11. Annuity solution
12. ICICI pru life link pension SP
13. Forever Life
14. Immediate annuity
15. ICICI pru heath saver
16. ICICI pru Hospital care

SWOT Analysis of ICICI Prudential:

34
STRENGTHS: Weaknesses:
1.Strong tie up 1.Low customer awareness
2.Brand Equity 2.Less promotion
3.Strong network 3.Untouched Rural Population
4.Huge customer database
5.Strong financial base
OPPORTUNITIES: Threats:
1.Untouched Rural market 1.Competitors
2.Large Uninsured population 2.Customer beliefs in LIC
3.Network Building 3.Fast turnover of employees

Details of Companies inception:

Insurer Foreign Date of Years of
Partners Inception operation
LIC None 01.09.1956 1956-57
ICICI Prudential Prudential plc, 24.11.2000 2000-01
UK
IDBI Federal Ageas, Europe 19.12.2008 2007-08

First Year (Including Single Premium) Life Insurance Premium:

Insurer 2013-12 2012-11 2011-10 2010-09 2009-08

LIC 87012.35 71521.90 53179.08 59996.57 56223.56

(% of profit (21.66) (34.49) (-11.36) (6.71)
share)
ICICI 78262.14 6334.03 6811.83 8034.75 5162.13
Prudential
IDBI 444.95 400.56 316.78 11.90 -----------
federal

35
 2.5. KEY SUCCESS FACTOR’S(KSFs)

Post Liberalization Insurance industry in India has become very competitive.

With private players entering into the India market making the market lot more
competitive. Insurance industry in India has become highly competitive with
different companies and individual agents competing against each other to
gain higher market share. In order to gain higher market share companies
have to differentiate themselves from others. Companies can differentiate
themselves in the market by using a number of critical success factors:

1. Product Quality:
One the most important factor that differentiates companies is by the
quality of product it offers. Quality of product instills a confidence in the
customer that the product offered by the company is better. Better the
quality of product, more successful is the company.

2. Developing relationships with the customer:

Insurance Industry is a highly competitive industry. In order to gain the
market share first priority is to be given to the customer. Range of
product and services should be designed to give the customer what he
desires.

3. Market Segmentation:
Greater market segmentation should be done in which target audience
should be divided into homogenous groups and products and services
should be targeted towards such market. This would tie company to
their client by customized combination of coverage, easy payment
plan, risk management advice and quick claim handling.

36
4. Designing new strategies:
Insurance Industry cannot be satisfied with consolidation of their
existing market, but have to achieve future growth and penetration.
Companies must focus on new distribution channels, strengthening
their existing point of services, direct contact with their ultimate
customer, refresh their marketing setup, new comers should focus on
tapping the market which is left unexploited by public sector
companies.

5. Shift towards Rural market:

Rural market is India is still uncovered by this sector. Insurance
penetration can be achieved by tapping the untapped rural market of
India.

6. Motivating sales force:

Sales force is one the major strength that the company has that could
differentiate them from their competitors. A good sales force can do
wonders to the future of the company, because of which a proper
motivation of sales force is very important for the company. Life
Insurance Company should constantly involve in motivating their sales
force so that they can meet their target on time.

7. Use of technology:
Technology plays a very important role in the success of the company.
Internet based Life insurance will help companies to reduce time and
transaction cost and also improves quality of services to its customer.

37
 2.6ANALYSIS AND SUMMARY
Industry’s Attractiveness and Prospects for Long-Term
Profitability:

The Indian insurance industry has undergone transformational changes since

2000 when the industry was liberalised. With a one-player market to 24 in 13
years, the industry has witnessed phases of rapid growth along with extent of
growth moderation and intensifying competition.

There have also been a number of product and operational innovations

necessitated by consumer need and increased competition among the
players. Changes in the regulatory environment also had a path-breaking
impact on the development of the industry. While the insurance industry still
struggles to move out of the shadows cast by the challenges posed by
economic uncertainties of the last few years, the strong fundamentals of the
industry augur well for a roadmap to be drawn for sustainable long-term
growth.
The decade 2001-10 was characterized by a period of high growth
(compound annual growth rate of 31 percent in new business premium) and a
flat growth (CAGR of around two percent in new business premium between
2010-12), according to KPMG.
There was exponential growth in the first decade of insurance industry
liberalization. Backed by innovative products and aggressive expansion of
distribution, the life insurance industry grew at jet speed. However, this
frenzied growth also brought in its wake issues related to product design,
market conduct, complaints of management and the necessity to make course
correction for the long term health of the industry.

38
Regulatory changes were introduced during the past two years and life
insurance companies adopted many new customer-centric practices in this
period. Product-related changes, first in ULIPs (Unit Linked Insurance Plans)
in September 2011 and now in traditional products, will have the biggest
impact on the industry

In the long run the insurance industry is still poised for a strong growth as the
domestic economy is expected to grow steadily. This will lead to rise in per
capita and disposable income, while savings are expected to be stable.

Insurance growth drivers in India

The demand for insurance products is likely to increase due to the exponential
growth of household savings, purchasing power, the middle class and the
country’s working population. Listed below, are the various underlying growth
drivers for India’s insurance industry:

 Growing of the financial industry as a whole

 Growth of life and non-life industry

 Promoting innovation and removing inefficiency

 Competition and orderly growth

 Growth of specific insurance segments such as motor insurance

Emerging trends

 Multi-distribution i.e. increasing penetration through new modes of

distribution such as the internet, direct and telemarketing and NGOs

 Product innovation i.e. increased levels of customization through

product innovation

 Claims management i.e. timely and efficient management of claims to

prevent delays which can increase the claims cost.

39
  Profitable growth i.e. expanding product range, developing innovative
products and expanding distribution channels

 Regulatory trends i.e. mandated regulatory changes by the IRDA to

promote a competitive environment in both the life and non-life
insurance sectors.

Life insurance: key challenges

In FY12, the life insurance industry witnessed a decline in the first year
premium collected which dropped from INR1, 258 billion in FY11 to INR1, 142
billion, a drop of approximately 10%. This was owing to the following
challenges that the industry faced in

 Products strategy and design

 Cost

 Taxation

 Prospects and challenges of various channels

 Compensation

 Customer service

 Governance and regulatory issues

40
Way Forward:
The Indian insurance market is poised for strong growth in the long run.

Significant latent market - The insurance market has a considerable amount

of latent potential, given the fact that the Indian economy is expected to do
well in the coming decades leading to increase in per capita incomes and
awareness.

Channelizing industry focus - In meeting the significant potential, the

industry has an increased role and responsibility. Three areas of focus could
be — a) product innovation matching the risk profile of the policy holders b)
reengineering the distribution and more significantly c) making sales and
marketing more responsible and answerable.

Distribution - Distribution channels evolved in response to market dynamics

and changing consumer preferences. The alignment of economic incentives
with distribution dynamics should be driven by market forces rather than
regulatory intervention.The stakeholders should eventually work toward
maintaining a favourable environment for stable growth, increasing the
penetration of insurance to rural and increasing the contribution to the
economy.

41
PART-2

42
CHAPTER-3
THE PRESENT STUDY

43
 3.1 BACKGROUND OF THE STUDY:

Insurance is an integral part of any personal financial plan. The type of

insurance and the amount of coverage you obtain all depends on your unique
financial and family circumstances, and must be evaluated carefully. When
considering purchasing coverage, you should review all the potential risks and
the financial impact of these risks on your financial health. This will help you
determine what options to look for and what questions to ask. And as with
any type of financial product, you must read the fine print and consult with a
competent advisor.

Insurance is a form is risk management in which the insured transfers the cost
of potential loss to another entity in exchange for monetary compensation
known as the premium.

INTRODUCTION TO CHILD INSURANCE

Life insurance for your child may not be the first thing that you think about
when you bring them home from the hospital. In fact, you may not even be
aware that Children’s Whole Life insurance is available. We want to help you
understand the whole life insurance options available to your child.

Child Plan is insurance cum investment plan that serves 2 purposes –

 To financially secure your child’s future

 To finance the turning points in his life such as higher education and
marriage

So, like a double-edged sword, the best Child Plan is designed to protect the
future of your child in case of your unfortunate demise and at the same time,
builds a corpus over a term to be utilized to finance the prime moments in his
life like higher education and marriage.

44
Need for Child Plans in India:
Child Plan gives you various benefits such as life cover, building a corpus for
the child's education, future needs and the option of adding specific riders. Go
ahead and invest in an Education Plan, but always compare quotes before
you finally sign on the dotted line.

How is it different from a Term Plan?

Term Plan Child Plan

Death Benefit Death Benefit Paid Policy

In case the Policy
Paid Policy Continues Rest of the Premium
Holder dies
Ends Paid by Insurer

In case the Policy No Maturity

Maturity Benefit
Holder survives Benefit

Features and Flexibilities of a Typical Child Plan:

Work out the detailed specifications of the needs you are looking to fulfill
through a Child Plan. Here are the key parameters you should look for-

Premium Amount – It more or less depends on the Sum Assured and

Maturity Amount you choose.

Mode of Premium Payment –

Regular premium – As the name implies, the premium is paid on a regular
basis. This can be yearly, half yearly or even quarterly.
Single premium – The premium is paid as a single payment.

45
Sum Assured -The thumb rule to follow is that the Sum Assured should be
around 10 times your present income.

Policy Term - An ideal Policy Term for a Child Plan is the time you think your
child needs to get on his feet. If your child is 10 years old, your policy term
should be 8 years.
Maturity Amount - Sit with your financial advisor and taking into account the
inflation rate and other such factors, work out a Maturity Amount that you
would require at the end of the Policy Term. Maturity Amount can be received
as a lump sum or in a frequent period of 5 years.
Waiver of Premium – This is a kind of rider that comes inbuilt in Child Plans.
However, if this is not a part of the policy, it is always advisable to opt for the
same. In case of death of the insured, this rider enables the policy to continue
by passing off the financial burden to pay the rest of the premium to the
insurer.
Partial Withdrawals - Some parents prefer withdrawing chunks of Maturity
Amount at pre-fixed intervals instead of getting a lump sum amount at one go.
The intention to opt for this feature is to meet the financial needs of your kid at
the key moments in his life.
Riders and Benefits – These are the add-ons that make your coverage
financially and qualitatively more valuable -

 Premium Waiver Benefit

 Accidental Death and Disability Benefit
 Critical Illness Rider Benefit

Types of Child Plans

Child ULIPs – A fraction of the premium flows into debt instruments and the
rest into equity instruments. The decision of switching between the funds
remains in the hands of the insured. Since it’s a market linked plan, the return
is decided by the net value of the assets at the maturity period.

46
Child Endowment Plans - The premium flows into debt instruments, the
decision of which is at the discretion of the insurance company. Return is
decided by the bonus payable on maturity.

A Case Scenario:
Mr. Ketan buys a Child Plan for his 8 year old kid with a policy term of 10
years, aiming to get a maturity benefit of Rs 20,00,000. He opts for a life cover
of Rs 25,00,000. He suffered a heart attack after 4 years the policy began.
The insurer is liable to pay the appointee a sum of Rs 25,00,000 and also to
borne the premium to be paid for the rest of the policy term left i.e 6 years.
The child will also get the maturity benefit of Rs 20,00,000 once he reaches
the age of 18 years. The same has been illustrated:

47
COMPETITOR’S CHILD PLANS
LIC’s JEEVAN ANKUR

LIC’s Jeevan Ankur is a conventional with profits plan, specially designed to

meet the educational and other needs of your child. If you are the parent of a
child aged upto 17 years, LIC’s Jeevan Ankur is the most suitable insurance
plan for you which ensures that your responsibilities are met whether you
survive or not and without depending on anyone else.

The risk cover under this plan will be on your life as a parent and the named
child shall be the nominee under the plan. The policy term shall be based on
the age at maturity of the child.

1.Benefits
i) Death benefit:

On death of the Life Assured during the policy term: Basic Sum Assured
shall be payable to the nominee and an income benefit equal to 10% of Basic
Sum Assured shall be payable on each policy anniversary, from the policy
anniversary coinciding with or next following the date of death, till the end of
the policy term.

On death of child, when Life Assured is alive: On death of the child, the
Life Assured will have an option to nominate another child/person and the
policy will continue with the same benefit payable to new nominee/legal heirs
after the death of the Life Assured during the term of the policy.

On death of child/nominee after Life Assured’s death: The policy shall

continue and the benefits shall be payable to the legal heir(s).
ii)Maturity Benefit: At the end of the policy term an assured maturity benefit
equal to Basic Sum assured along with Loyalty Addition, if any, shall be
payable irrespective of survival of the Life Assured.

48
iii) Loyalty Addition: Depending upon the Corporation’s experience the
policy will be eligible for Loyalty addition on the stipulated date of maturity
irrespective of survival of Life Assured.

2. Optional Benefits: You may choose the following optional riders by

payment of additional premium

i) Accident Benefit Rider: This benefit is available under regular premium

policies only. An additional sum equal to Accident Benefit Rider Sum Assured
is payable upon death due to accident. The Accident Benefit Rider Sum
Assured may be opted for an amount upto the Basic Sum Assured subject to
minimum of Rs. 25,000 and maximum of Rs. 50 lakh (including all policies
with LIC of India and other insurers). This benefit will be available only till the
age nearer birthday of the Life assured is 70 years.

ii) Critical Illness Rider: An amount equal to Critical Illness Rider Sum
Assured will be payable in case of diagnosis of defined categories of Critical
Illnesses. The Critical Illness Rider Sum Assured may be opted for an amount
upto the Basic Sum Assured subject to a minimum of Rs. 50,000 and a
maximum of Rs. 5 lakh (including all policies with LIC of India). This benefit
will be available provided the policy matures on or before the Life Assured
attains 60years of age.

Critical Illness Rider can be availed with or without Premium Waiver Benefit. If
Critical Illness Rider is opted with Premium Waiver Benefit, then in the event
of Life Assured diagnosed with any of the Critical Illnesses covered under the
policy, the total future premium in respect of the policy will be waived. The
Basic Sum Assured under such policies should be equal to the Critical Illness
Rider Sum Assured.

49
3. Eligibility Conditions and Other Restrictions (For Basic Plan):

a) Minimum Sum Assured : Rs. 100,000

b) Maximum Sum Assured : No Limit

(The Sum Assured shall be in multiples of Rs. 5000/-)

c) Minimum Age at entry for Life Assured : 18 years (completed)

d) Maximum Age at entry for Life Assured : 50 years (nearest birthday)

e) Maximum Maturity Age for Life Assured : 75 years (nearest birthday)

f) Minimum Age at entry for child : 0 years (last birthday)

g) Maximum Age at entry for child : 17 years ( last birthday)

h) Minimum Term : Higher of (18 – age of child, 8)

years

i) Maximum Term : (25 – age of child) years

4. Sample premium Rates:

Premiums can be paid regularly at yearly, half-yearly, quarterly or monthly

mode (through ECS only) or through SSS mode over the term of policy.
Alternatively, a single premium can be paid.

A grace period of one calendar month but not less than 30 days will be
allowed for payment of yearly or half-yearly or quarterly premiums and 15
days for monthly premiums.

50
Following are some of the sample premium rates (exclusive of service tax) per
Rs. 1000/- S.A.:

Single Premium
Age Policy term
10 15 20 25
20 615.45 494.95 405.95 348.00
30 618.80 503.35 422.10 375.30
40 638.75 541.60 483.60 463.60

Annual Regular Premium

Age Policy term

10 15 20 25

20 90.65 56.45 39.70 31.10

30 91.20 57.50 41.35 33.50
40 94.70 62.35 47.80 41.75

6. Revival:

If premiums are not paid within the grace period then the policy will lapse. A
lapsed policy can be revived from the date of first unpaid premium and before
the date of maturity by paying all the arrears of premium together with interest
within a period of five years, subject to submission of satisfactory evidence of
continued insurability.

The Corporation reserves the right to accept at original terms, accept at

revised terms or decline the revival of a discontinued policy. The revival of
discontinued policy shall take effect only after the same is approved by the
Corporation and is specifically communicated to the life assured. Riders shall
be revived along with the basic plan and not in isolation.

51
7. Paid-up Value:

Under regular premium policies, if after atleast three full years’ premium have
been paid and any subsequent premiums be not duly paid, this policy shall
not be wholly void, but shall continue as a paid-up policy for a reduced paid-
up sum assured. This Paid-Up Sum Assured shall be payable on the date of
maturity or on Life Assured’s prior death.

Further, in case of death during the term of the policy, the paid up value shall
be paid immediately on death. But, neither income benefit nor paid up value
on maturity shall be payable.

Accident Benefit and Critical Illness riders do not acquire any paid-up value.

8. Surrender Value:

The Guaranteed Surrender Value will be as under:

1. Single Premium Policies: The Guaranteed Surrender value will be

available after completion of atleast one policy year and is equal to
90% of the premium paid excluding premium for optional rider and
extras, if any.
2. Regular Premium Policies: The Guaranteed surrender value will be
available after completion of three policy years and atleast three full
years’ premiums have been paid and is equal to 30% of the premiums
paid excluding the premium paid for the first year and all premiums in
respect of optional rider and extras, if any.

9. Policy Loan:

No loan facility will be available under this plan.

52
10. Service Tax:

Service tax, if any, shall be as per the Service Tax laws and the rate of
service tax as applicable from time to time.

The amount of service tax as per the prevailing rates shall be payable by the
policyholder on premium(s) as and when the premiums are paid.

11. Cooling-off period:

If you are not satisfied with the “Terms and Conditions” of the policy you may
return the policy to them within 15 days from the date of receipt of the policy
bond.

12. Exclusion:

Suicide:- This policy shall be void if the Life Assured commits suicide
(whether sane or insane at that time) at any time within one year from the
date of commencement of risk and the Corporation will not entertain any other
claim by virtue of this policy except to the extent of a maximum of 90% of
single premium paid excluding any extra premium (in case of single premium
policies).

53
CHILD CAREER PLAN

Introduction:
This plan is specially designed to meet the increasing educational and other
needs of growing children. It provides the risk cover on the life of child not
only during the policy term but also during the extended term (i.e. 7 years
after the expiry of policy term). A number of Survival benefits are payable on
surviving by the life assured to the end of the specified durations.

Options:
You may choose Sum Assured (S.A.), Maturity Age, Policy Term, Mode of
Premium payment and Premium Waiver Benefit.

Payment of Premiums:
You may pay the premiums regularly at yearly, half-yearly, quarterly or
through Salary deductions over the term of policy. Premiums may be paid
either for 6 years or upto 5 years before the policy term.

KOMAL JEEVAN

Product summary:
This is a Children's Money Back Plan that provides financial protection against
death during the term of plan with periodic payments on survival at specified
durations. The plan can be purchased by any of the parent for a child aged 0 -
10 years.
Commencement of risk cover:
The risk commences either after 2 years from the date of commencement of
policy or from the policy anniversary immediately following the completion of 7
years of age of child, whichever is later.

54
Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through Salary
deductions, as opted by you, up to the policy anniversary immediately after
the life assured (child) attains 18 years of age or till the earlier death of the life
assured. Alternatively, the premium may be paid in one lump sum (Single
premium).

Guaranteed Additions:
The policy provides for theGuaranteed Additions at the rate of Rs.75 per
thousand Sum Assured for each completed year. The Guaranteed Additions
are payable at the end of the term of the policy or earlier death of the Life
Assured.

Loyalty Additions:
This is a with-profit plan and participates in the profits of the Corporation’s life
insurance business. It gets a share of the profits in the form of loyalty
additions which are terminal bonuses payable along with death or maturity
benefit. Loyalty addition may be payable depending on the experience of the
Corporation.

55
HDFC LIFE

Children's Insurance Plans

Successful parenting is no mean accomplishment. A huge contributor to this

success is financial planning for your child's future needs at the right age!
There is really no better gift you can give your child, than the promise of a
secure future with YoungStar Plans from HDFC Life.

HDFC Life YoungStar Udaan

Since the birth of the child, parents make sincere efforts to ensure that their
child can dream big without having second thoughts. We, at HDFC Life, are
here to help you empower your child’s dreams and live the rest of your life as
the proud parents you deserve to be.

HDFC Life Young Star Udaan, is a traditional participating insurance plan and
is ideal for parents who wish to make provision for:

1. Academic expenses that occur prior to college education

2. Specific goals like college fees or marriage expenses etc

3. All miscellaneous and extracurricular expenses that occur during

college/school

4. Three Maturity benefit options to choose from based on which your

survival/maturity benefits payable are decided

1.Aspiration (Endowment benefit) – Lumpsum pay-out at maturity

2.Academia (Moneyback benefit) – payouts during last 5 policy

years with first guaranteed payout higher than subsequent
guaranteed payouts.

56
 3.Career (Moneyback benefit) – payouts during last 5 policy years with
last guaranteed payout higher than previous guaranteed payouts.
3. Two Death Benefit options to choose from based on which death
benefit payable are decided
1. Classic: Policy Terminates after payment of death benefit
2. Classic Waiver: Policy continues after payment of death benefit
+ Future Premiums waived
4. Limited PPT of 7, 10 or Policy term minus 5 years
5. Flexibility to choose your policy term from 15 to 25 years as per your
child’s future needs
6. Guaranteed Additions during first 5 policy years, if applicable
7. Participating plan with accrued bonuses payable at maturity
8. Option to take this policy by filling a Short Medical Questionnaire
(SMQ)2
9. Tax Benefits3 under Section 80C and Sec 10(10D) of Income Tax Act
1961.

 Survival/Maturity Benefits:
The table below specifies the series of money back/endowment payouts, payable at
the end of each year, for a premium paying or a fully paid-up policy.

SA: Sum Assured on maturity. GA: Guaranteed Additions

57
Death Benefit:
Death Benefit Options Death Benefits

Classic Basic Death benefit +

AccruedGuaranteed
Additions+ Accrued Bonuses,
if any

Classic Waiver Basic Death benefit +

Premium Waiver

The table below describes each of the above benefits in detail.

Basic Death Benefit The basic death benefit shall be

the higher of:

o Sum Assured on Death

o 105% of Premiums paid
The Sum Assured on Death shall
be the higher of:

o Sum Assured on Maturity^

o 10 times Annualised Premium
for entry age up to 50 years and
7 times Annualised Premium for
entry age greater than 50 years

Premium Waiver All future outstanding premiums

under the policy will be waived.
The contract shall continue and the
benefits as per Survival benefit and
Maturity Benefit shall be available.

58
HDFC SL YoungStar Super Premium

Children insurance plans help build savings so that over time there is enough
to finance your child’s education, marriage, house or car. HDFC SL
YoungStar Super Premium, a unit-linked insurance plan (ULIP) designed to
accumulate savings for your child's future, even in your absence.

Every parent naturally wants the best for his or her child in every sphere,
particularly education. Best-in-class education is no longer a luxury; it’s a
must-have for anyone who wants to excel in his or her career. But that is
easier said than done, given the escalating cost of education at premier
institutes coupled with increasing competition. Fortunately for you, help is at
hand. Children insurance plans help build savings so that over time there is
enough to finance your child’s education, marriage, house or car.

59
 Flexibility to choose from 4 funds to suit your risk appetite:
1. Income Fund: Higher potential returns due to higher duration and credit
exposure.
2. Balanced Fund: Dynamic equity exposure to enhance the returns while
the debt allocation reduces the volatility.
3. Blue chip Fund: Investments in large cap equities.
4. Opportunities Fund: Investments in mid-cap equities.
 Flexibility to select premium amount – no ceiling on maximum premium
 Flexibility to select tenure of 10, 15 - 20 years
 Flexibility to select the Sum Assured

ADVANTAGES
 Save Benefit - In case of unfortunate death of the parent or a critical
illness
1. Sum Assured is paid to the beneficiary (child)
2. No need to pay any further premiums as we will pay 100% of the
future premiums
3. On maturity, fund value is again paid to the beneficiary
 Save-n-Gain Benefit - In case of unfortunate death of the parent or a
critical illness
1. Sum Assured is paid to the beneficiary (child)
2. No need to pay further premiums as we will pay 50% of the
future premiums towards the policy and 50% of the premiums to
the beneficiary on the premium due date
3. On maturity, fund value is paid to the beneficiary
 Customize a plan suited for your child with the premium, Sum Assured
and the plan option of your choice
 Manage your investment fund(s) either by switching across fund
options or re-directing future premiums into a different fund option
 Tax benefits subject to provisions contained under sections 80C and
10(10D) of the Income Tax Act 1961.

60
3.2 LIMITATIONS OF THE PROJECT:

 Duration of the project is 8 weeks. Within this short time, completion of

the project is a challenge.
 Targeting the customers for the product (Childsurance) and conducting
primary research is a challenge.
 From the data collected through primary and secondary research
analyzing it and giving recommendations and conclusions within this
short time is again a challenge.

3.3 OBJECTIVES OF THE STUDY:

 To analyze Life Insurance products of IDBI Federal Life Insurance Co

Ltd.
 To compare the children insurance products with other companies
money back plans.
 To understand the factors contributing to the product and its promotion.
 To provide the company with valid and research based suggestions
which might help the company increase the market share.
 To know the Pros and Cons of the Childsurance plan.

3.4 RESEARCH METHODOLOGY

The research so carried out is exploratory research on the market of

insurance products available. The research design formulated involves the
following.

SAMPLE: The insurance policy holders or insurance policy prospects, who

want buy a policy

SAMPLE SIZE: The required sample size would range about 100
respondents.

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PRIMARY DATA:

 The primary data is collected with the help of questionnaire response

from the customers.

SECONDARY DATA:

The data is obtained from books and website which help in further process of
the project work.

62
CHAPTER-4
THE DATA ANALYSIS

63
 DATA ANALYSIS

1. Gender of Respondents

No.of Respondents

Female Male
50% 50%

FINDINGS: From the above pie chart it is interpreted that there

are 50% male respondents and 50% female respondents.

2. Marital Status of Respondents

Marital Status

Married
41%
Single
59%

FINDINGS: From the above pie chart it is interpreted that there

are 59% single respondents and 41% married respondents.

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3. If married how many children you have?

Respondents having No.of

children

>=3 1
13% 26%

2
61%

FINDINGS: From the above pie chart it is interpreted that 26%

of respondents have 1 child, 61% have 2 children and 13% have
>=3 children.

4. Age of your child/children?

18 years &
above
Age of child
8%

11-17years
13% 1 Month-4
Years
38%

5 -10years
41%

FINDINGS: From the above pie chart it is interpreted that the

respondents having children of age 1month-4years is 38%, 5-10
years is 41%, 11-17 years is 13% and 18years and above is 8%.

65
5. Occupation of Respondents.

Occupation of Respondents
Govt sector
11%

others
47% Private Sector
35%

Businessmen
7%

FINDINGS: From the above pie chart it is interpreted that the

occupation respondents in Govt sector is 11%, in private sector
is 35% and others is 47%.

6. Education Qualification of Respondents.

10th passed
3% Educational Qualification

Post Graduate
Graduate
& above
44%
53%

FINDINGS: From the above pie chart it is interpreted that

Educational Qualification of respondents post Graduate and
above is 53%,Graduate is 44% and 10th passed is 3%.

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7. Annual Income of Respondents.

Annual Income of Respondents

6,00,000 &
above
16%
Below 1,00,000
27%
3,00000-
5,00,000
26% 1,00,000-
2,00,000
31%

FINDINGS: From the above pie chart it is interpreted that

Annual income of respondents below 1 lakh is 27%, between 1-
2 lakhs is 31%, 3-5 lakhs is 26%,6 lakhs and above is 16%.

8. Are you insured?

No.of Respondents Insured

NO
44%

yes
56%

FINDINGS: From the above pie chart it is interpreted that 56%

respondents are insured.

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 9. If yes which policies do you have?

7%
30%
Life insurance
63% Health Insurance
Others

FINDINGS: From the above pie chart , it is interpreted that 63%

of the respondents have life insurance, 30% have health
insurance.

10. In which company do you have/had policies?

Respondents having policies

Others
HDFC 3%
8%
IDBI federal
12%

SBI Life
16% LIC
61%

FINDINGS: From the above pie chart , it is interpreted that 61% respondents
have policies in LIC,16% in SBI Life, 12% in IDBI Federal,8% in HDFC.

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11. Are you aware of child policies?

Awareness about child policy

No
35%

Yes
65%

FINDINGS: From the above pie chart , it is interpreted that 65%

of respondents are aware about child policies.

12. If yes which company’s child policy are you aware?

Respondents aware about companies

offering child policies
Others
HDFC 2%
6%
LIC
28%

IDBI federal
46% SBI Life
18%

FINDINGS: From the above pie chart , it is interpreted that 46%

of respondents are aware about IDBI Federal child policy,28%
about LIC, 18% about SBI Life.

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 13. Do you have/had a child policy?

Respondents having child policy

Yes
17%

No
83%

FINDINGS: From the above pie chart , it is interpreted that 83%

of respondents do not have child policies.

14. If yes in which company do you have/had?

Respondents having Child policies

HDFC Others
6% 6%
LIC
22%

IDBI SBI
41% 25%

FINDINGS: IDBI Federal Childsurance was taken by 41% of

people who have child policies and then SBI Life followed by LIC.

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15.Why do you/people go for child policies generally?

Reason Respondents having

child policies
others
Future 1%
Benefits Child
30% Education
45%
Child
Marriage
24%

FINDINGS: From the above pie chart , it is interpreted that 45%

of respondents go for child policy for child’s education, followed
by future benefits.

16. How did you come to know about child policies?

Respondents knowing about child

policies
others Agents
14% 20%
Promotions
19%
Family and
Friends
47%

FINDINGS: From the above pie chart , it is interpreted that 47%

of respondents came to know about child policies through family
and friends,20% agents and 19% through promotions.

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 17.Child policies are very useful ?

4% 1% AGREE

STRONGLY
AGREE
35% DISAGREE

60% STRONGLY
DISAGREE

FINDINGS: From the above pie chart , it is interpreted that 95%

of respondents agree that child policies are useful.

18.Which factor mostly affects your buying decision of child policy?

Factors affecting buying decision for

child policies
Premium
paying term
26%
More returns
42%
Premium
amount
32%

FINDINGS: From the above pie chart , it is interpreted that 42% of

respondents go for child policy for more returns and 32% for
premium amount.

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 19.Any up gradation in child policy do you think should be
done? If yes mention.

Upgradation in child policies

No
43%

Yes
57%

FINDINGS: From the above pie chart , it is interpreted that 57% of

respondents wanted upgradation in child policy.

20. Are you aware of IDBI federal Childsurance policy? If yes what
is the source?

Source of IDBI Federal child policies

others Agents
20% 16%
Promotions
10%
Family and
Friends
54%

FINDINGS: From the above pie chart , it is interpreted that 54% of

respondents know about IDBI Federal childsurance policy from
family and friends.

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21. IDBI Federal Childsurance is better than other Child policies.

IDBI Federal childsurance policy is

better
Strongly agree
Disagree 13%
32%

Agree
52%
Strongly
disagree
3%

FINDINGS: From the above pie chart , it is interpreted that 65% of

respondents agree that IDBI Federal childsurance policy is better.

22. Have you seen any advertisements or promotions of IDBI

Federal Childsurance policy? If yes where?

Advertisement of IDBI Federal

others T.v
23% 43%

News Paper
17%
Internet
17%

FINDINGS: From the above pie chart , it is interpreted that 43% of

respondents know about IDBI Federal through advertisement in
T.V.

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FINDINGS:

 56% of people from sample are insured.

 63% of people from sample have Life insurance and 30% people have
health insurance.
 61% of people from sample have policies in LIC, followed by SBI Life.
 65% of the people from the sample are aware of Child policies and the
rest are not aware of child policies.
 46% of people from the sample are aware about IDBI Federal child
policy.
 83% of people from the sample do not have child policy.
 41% of people from the sample have child policies in IDBI followed by
SBI Life.
 47% of people from sample came to know about child policy through
friends and family.
 Almost 95% from the sample agree that Child policies are very useful.
 45% said they take child policies for child’s education and the factor
which affects their buying decision is mostly more returns.
 54% of people from the sample came to know about Childsurance
through Interns, Family and friends.
 Only 20% from the sample knew IDBI Federal through Promotions in
media and social network.

75
 CHAPTER-5
CONCLUSION AND RECOMMENDATIONS

76
5.1 CONCLUSION

The data were collected from the customer’s response of the IDBI Federal
Life Insurance Corporation Limited Hyderabad branch. Based on the
percentage of the customers 100 sample size was collected. The age,
gender, marital statuses, educational qualification, occupation, monthly
income, were analyzed as personal information in the questionnaire.
According to the collected personal information, most of the sample
customers were young age, single, educated, higher income customers who
got insurance. According to the research the IDBI Federal Life Insurance
Corporation Limited Hyderabad needs to create awareness among people as
only 20% of people know about IDBI Federal Life insurance Co. ltd through
promotions.

77
5.2 RECOMMENDATIONS AND SUGGESTIONS:

From the responses I have collected following are few recommendations

given by the people and few are suggestions given by me:

 IDBI Federal Childsurance is a good plan designed for child’s future

and security for the child’s future in the absence of parents. If it can be
redesigned with some sub-plans in such a way that it fulfills specific
needs of customers like Child education planner, Plan for mentally or
physically challenged children.
 The premium amount can be customized for child plans according to
the income level of people so that even low income parents also can
insure their children at least with less maturity benefit.
 Using Childsurance giving some less interest rate for education loans
in IDBI bank can be provided.
 Awareness among people about IDBI Federal Childsurance is very less
so it will be better if promotions are increased in TV, Radio, Internet,
newspapers in order to build the brand image.
 To ensure increase in sales they can tie up with the hospitals also.
 They should highlight the benefits and should differentiate from other
child policies in the promotions and more awareness is needed.
 Expansion of branches even in rural areas is required.
 Facilitating customers by linking policies to bank accounts so that
money can be drawn from the account every year if the policy holder
wants it to happen.

78
 QUESTIONNAIRE
1. Gender
a) Male

b) Female

2. Marital Status
a) Single
b) Married

3. If married how many children you have?

a) 1
b) 2
c) >=3
d) None

4. Age of your child/children?

a) 1 month - 4 years

b) 5 years - 10 years

c) 11years-17 years

d) 18years & above

5. Occupation
a) Govt sector
b) Private sector
c) Businessmen
d) Others.

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6. Education Qualification
a) Post Graduate & above
b) Graduate
c) 12 th passed
d) 10th passed

7. Annual Income
a) 6,00,000 &above
b) 3,00,000-5,00,000
c) 1,00,000-2,00,000
d) Below 1,00,000

8. Are you insured?

a) yes
b) No

9. If yes which policies do u have?

10. In which company do you have/had policy?

a) LIC
b) SBI Life
c) IDBI Federal
d) HDFC
e) others

80
11. Are you aware about child policies?
a) yes

b) No

12. If yes which company’s child policy are you aware?

a) LIC

b) SBI Life

c) IDBI Federal

d) HDFC
e) others

13. Do you have/had child policy?

a)Yes
b)No

14. If yes which company you have/had child policy?

a) LIC
b) SBI Life

c) IDBI Federal

d) HDFC
e) others

15. Why do you/people go for child policies generally?

a) Education
b) Child’s Marriage
c) Future benefits
d) Others

81
16. How did you come to know about child policies?
a) Agents

b) Family &Friends

c) Promotions

d) Others

17. Child policies are very useful

a) Strongly Agree

b) Agree

c) Strongly Disagree

d) Disagree

18. Which factor mostly affects your buying decision of child policy
a)Premium Amount
b)Premium paying term
c)More returns
d)Others

19. Any up gradation in child policy do you think should be done?

20. Are you aware of IDBI federal Childsurance policy? If yes what is
the source?
a) Agents
b) Family &Friends
c) Promotions
d) Others

82
21. IDBI Federal Childsurance is better than other Child policies?

a) Strongly Agree

b) Agree

c) Strongly Disagree

d) Disagree

22. Have you seen any advertisements or promotions of IDBI Federal

Childsurance policy? If yes where?

a) T.V
b) Internet
c) Newspaper
d) others

83