A COMPARATIVE STUDY ON AWARENESS AMONG

CUSTOMERS FOR INSURANCE POLICY IN BHANDUP

(Reference to HDFC)

A Project Submitted to
University of Mumbai for partial completion of the degree of
Master in Commerce
Under the Faculty of Commerce

By

PRATHAMESH KADAM

SEAT NO./ROLL NO.:280217

Under The Guidance of

Mrs. ISHA CHOWDHRI

Ramji Assar Vidyalaya’s

Laxmichand Golwala College of Commerce & Economics,
M.G. Road, Ghatkopar (East),
Mumbai - 400077

December, 2019

I
 A COMPARATIVE STUDY ON AWARENESS AMONG
CUSTOMERS FOR INSURANCE POLICY IN BHANDUP
(Reference to HDFC)

A Project Submitted to
University of Mumbai for partial completion of the degree of
Master in Commerce
Under the Faculty of Commerce

By

PRATHAMESH KADAM

SEAT NO./ROLL NO.:280217

Under The Guidance of

Mrs. ISHA CHOWDHRI

Ramji Assar Vidyalaya’s

Laxmichand Golwala College of Commerce & Economics,
M.G. Road, Ghatkopar (East),
Mumbai - 400077

December, 2019

II
 LAXMICHAND GOLWALA COLLEGE OF
COMMERCE & ECONOMICS

Certificate

This is to certify that Mr. PRATHAMES MARUTI KADAM has worked

and duly completed her/his Project Work for the degree of Master in
Commerce under the Faculty of Commerce in the subject of Advance
Accounting and his project is entitled “A Comparative Study On
Awareness Among Customers For Insurance Policy In Bhandup
(Reference to HDFC)” under my guidance

I further certify that the entire work has been done by the learner
under my guidance and that no part of it has been submitted previously for
any Degree or Diploma of any University.

It is his own work and facts reported by her/his personal findings and
investigations.

ISHA CHOWDHRI

Date of submission:

III
 Declaration by learner

I the undersigned, Mr. PRATHAMESH MARUTI KADAM,

hereby, declare that the work embodied in this project work titled “ A
Comparative Study On Awareness On Awareness Among Customers
For Insurance Policy In Bhandup (Reference to HDFC)”, forms my own
contribution to the research work carried out under the guidance of Mrs.
ISHA CHOWDHRI is a result of my own research work and has not been
previously submitted to any other University for any other Degree/ Diploma
to this or any other University.

Wherever reference has been made to previous works of

others, it has been clearly indicated as such and included in the bibliography.

I, here by further declare that all information of this document

has been obtained and presented in accordance with academic rules and
ethical conduct.

PRATHAMESH M. KADAM

Certified by
ISHA CHOWDHRI

IV
 Acknowledgment

To list who all have helped me is difficult because they are so numerous and
the depth is so enormous.

I would like to acknowledge the following as being idealistic channels and

fresh dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me

chance to do this project.

I would like to thank my Principal, Prof. Vijay Mahida for providing the
necessary facilities required for completion of this project.

I take this opportunity to thank our Coordination Prof. Vijay Mahida, for
her moral support and guidance.

I would also like to express my sincere gratitude towards my project guide

Mrs. ISHA CHOWDHRI whose guidance and care made the project
successful.

I would like to thank my College Library, for having provided various

reference books and magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly
helped me in the completion of the project especially my Parents and Peers
who supported me throughout my project.

V
 TABLE OF CONTENTS

CHAPTER NO. CONTENT PAGE NUMBER

CHAPTER 1 INTRODUCTION 07

CHAPTER 2 LITERATURE
REVIEW 08

CHAPTER 3 RESEARCH 10
METHODOLOGY
CHAPTER 4 INSURANCE 11
INDUSTRY
CHAPTER 5 PROFILE OF HDFC
STANDARD LIFE 14
INSURANCE
COMPANY LIMITED
CHAPTER 6 ANALYSIS AND 28
INTERPRETATION
CHAPTER 7 CONCLUSION, 63
SUGGESTIONS AND
RECOMMENDATION
BIBLIOGRAPHY 67

APPENDICES 68

VI
 LIST OF FIGURES

FIGURES TITLES

6.1 Source of information

6.2 Awareness of insurancr company

6.3 Purpose of taking policy

6.4 Awareness of the policy

6.5 Ranking of the policy

6.6 Preferred premiun period

6.7 Preferred premium payment

6.8 Preferred delivry of policy documents

6.9 Preferred mode of settlement

6.10 Ranking for expecting detail from agent

6.11 Prefered insurance company

6.12 Ranking for selecting an agent

6.13 Preferance for future policy

6.14 Holding insurance policy

6.15 Current typeof policy

VII
 Chapter 1
Introduction

Introduction of Life Insurance

Life insurance is designed to protect life and to product family against financial
uncertainties that may result due to unfortunate demise or illness. It can also view as a
comprehensive financial instrument, as a part of the financial planning offering savings &
investment facilities along with cover against financial loss. By choosing the right policy
as per the needs. i.e. customized solutions, you will be able to plan for a secure future for
yourself and your loved ones.

We all have different financial needs and objectives. But life insurance plays a
fundamental role in most of our plans for financial security. That's because of the variety
of life insurance plans available and the many ways they can be customized to meet
unique needs at different periods of your life.

Statement of the problem

Insurance sector is a booming sector and the penetration in India is quiet low. So,
all the private players are trying to increase the market share in the public. This study also
involves creating awareness among the urban and rural consumer about the insurance
sector and also the various policies involving various premium rates. Since the
penetration of private companies and policies is low among the consumer, it is necessary
to create awareness about life insurance policies and to know the satisfaction level among
consumer. Hence the present studies entitled awareness about it among the consumer.

VIII
The key points bothering current life insurance companies in the Indian
life insurance market are:
1. Lack of trust
This is a reason why many individuals don`t bother with insurance. Many insurance firms
fail to pay claims, and they don`t own up to offering some benefits. Therefore, most
people just see insurance as one of the unnecessary expenses. Many insurance firms do
shut down because of financial challenges and individuals who are the victims of the loss
don`t even think twice about purchasing insurance policies.
2. Mismanagement;
As the owner of the insurance business, one is solely responsible for all issues that his or
her clients may have regarding the management of the insurance business. All insurance
firms that are mismanaged can`t hide their faults for a longer time without the clients
noticing. As time move, there will be a constant increase in the number of clients`
complaints, and if his or her insurance firm is not transparent, then he or she will lose
more customers. Also, incompetent management may cost the company a lot, particularly
if they have poor communication with their clients.
3. Competition
Today, there are many insurance firms on the market and therefore there is an intensive
challenge for insurers. Each company looks for the best way of selling their insurance
products in the best possible way and targets a particular group of individuals. Most
insurance businesses, especially the new ones are the most doubted companies. In fact,
most people trust some of the existing insurance firms compared to the new businesses
since the new enterprises are operated on a thin line between failure and success—and no
one will want to take such risks with the little among of money that they have.

4. Weak manpower
Non-professionals run many of the insurance companies today. In fact, many people think
that what it takes to be an insurance professional is just some knowledge of monetary
studies with no specialized training. Indeed, this has majorly affected the dependability
and operations of insurance firms in this century.

IX
 Chapter 2

REVIEW OF LITERATURE

K. Uma et.al. (2011) found that insurance agents are the primary source
of information followed by pamphlets and bulletins, newspapers,
hoardings. The other sources like radio, friends, and television played
very minor role in creating awareness about life insurance. Seranmadevi
R. et. al. (2011) evaluated investors' inclination on ULIP and found that
the respondents came to know about ULIP mainly through
advertisements. Comparison of these two studies shows that according to
K. Uma et.al. (2011) the main source of information is insurance agent
followed by pamphlets and bulletins, newspapers, hoardings, on the other
hand, according to Seranmadevi R. et. al. (2011) advertisements are the
main source for getting information about life insurance.

Patil S. J. (2012) observed that 97% respondents are familiar with the
products of LIC of India and same proportion of the respondents feel
insurance is essential for life' Comparison of study Patil S. J. on one
hand and studies of K. Uma et. al. (2011) & Seranmadevi R. et. al.
(2011) on the other side shows that the views of these researchers are
totally different. Thus, there are variations about interpretation of the
meaning of awareness about life insurance. Therefore, for the present
study, awareness has been taken as both i.e. sources of getting knowledge
about life insurance and knowledge about need of life insurance.

Paul Clifford et. al. (2010) found that 72% of the respondents are aware
about policies and schemes offered by insurance agencies. As the
education level and age increases from the uneducated to the post graduate,
there is an increase in awareness of the policies offered by the insurance
companies. Moreover, the researcher observed that as the total income
increases, the purpose for buying policy for tax increases. The study
concluded that that 73% of the respondents have taken insurance policy
for the purpose of risk, followed by saving and tax purpose only. As
compared to research work of K.Uma et.al. (2011), Seranmadevi R. et.
al.. (2011) & Patil S. J. (2012), Paul Paul Clifford et. al (2010) research
work looks extensive wherein the researcher tried to establish
relationship between demographic factors and the reasons for buying life
insurance policy. Paul Clifford et. al (2010) found that 72% of the
respondents are aware about policies and schemes offered by insurance
agencies while Patil S. J. (2012) observed that 97% respondents are
familiar with the products of LIC of India. Thus, there are variations in
the findings of these studies.

Sing Silender and Satpal (2009) found that respondents from both states
i. e. Haryana and Delhi favoured risk coverage and least favoured
liquidity while respondents from Delhi favoured surrender value, period

X
of surrender, period of policy and least favoured riders and procedure for
claim settlement. Respondents from Haryana have least favoured riders.
Thus it can be stated that the awareness about risk coverage is more in
both states. Rajeswari K. and Karttheeswari S.(2012) revealed that
different people have different insurance needs and yield/return is the
most important reason for making investments in the policies of LIC of
India. The study further reveals that the security comes first, tax rebate
second and bonus third amongst the determinants for buying insurance
policy from LIC of India. However, there are variations as well as
similarities in the findings of studies of Sing Silender and Satpal (2009)
and Rajeswari K. and Karttheeswari S. (2012). Both the studies found
that risk coverage i.e. security is the priority while buying insurance
policy. According to Sing Silender and Satpal (2009) surrender value,
period of surrender, period of policy are the factors preferred after 'risk'
by the customers on the other hand Rajeshwari K. and Karttheeswari
found that different people have different insurance needs and tax rebate
and bonus are preferred after 'security'.

Mustapha A. O. and Oludare T. A. (2008) found that most of the

Nigerian students regardless from which ethnic groups they belong are
very concerned and aware of the importance of having life insurance
policy. The study further indicates that the University students were
actually aware on the risk of life uncertainty and perceived taking
insurance as one way to address this risk. The major sources of getting
information are their parents, family members (44 percent) and life
insurance agents (more than 23 percent). Twenty percent perceived
wealth creation as the

XI
 Chapter 3
Research Methodology

Objectives of the Study

❖ To create an awareness about insurance company and policies.

❖ To identify the potential policy holders among end users and to create a
relationship between the companies and potential customers.
❖ To find out the customer satisfaction level among people with their respective
insurance companies in which they hold the polices.
❖ To find out the awareness of people about insurance policies.
❖ To offer suggestions based on findings.

Target Population
Working professionals, students, retired individuals, parents and housemakers, people
from varied backgrounds will be the target population for this study.

Sample
Insurance Policy holders and non-holders (almost everyone) were the sampling unit of the
study. The sample size of the study is 100.

Sampling Technique
The Probability Sampling Method was adopted to collect the responses.

Methodology used for Data Collection

The study and outcome was based on Primary as well as Secondary Data. The data
collected from scratch for a specific purpose is called Primary Data and it is collected for
the first time. Questionnaire was selected as a tool to collect the responses from the
respondents. Questionnaire is a research instrument containing a set of questions
pertaining to the relevancy of an idea in mind to gather information from the respondents.

Research Approach
Quantitative Approach involves data that can be transformed into usable statistics. The
questionnaire survey was carefully designed keeping in mind to cover all the important
factors related to consumer behavior towards Insurance Policies. This survey was used in
the study as a Quantitative Approach. Qualitative Approach involves inquiry which
develops the understanding of the problems in the research.

XII
 Chapter 4

Insurance Industry

The business of insurance started with marine business. Traders, who used to
gather in the Lloyd’s coffee house in London, agreed to share the losses to their goods
while being carried by ships. The losses used to occur because of pirates who robbed on
the high seas or because of bad weather spoiling the goods or sinking the ship. The first
insurance policy was issued in 1583 in England. In India, insurance began in 1870 with
life insurance being transacted by an English company, the European and the Albert. The
first Indian insurance company was the Bombay Mutual Assurance Society Ltd, formed
in 1870. This was followed by the Oriental Life Assurance Co. in 1874, the Bharat in
1896 and the Empire of India in 1897.

Later, the Hindustan Cooperative was formed in Calcutta, the United India in
Madras, the Bombay life in Bombay, the National in Calcutta, the New India in Bombay,
the Jupiter in Bombay and the Lakshmi in New Delhi. These were all Indian companies,
started as a result of the swadeshi movement in the early 1900s. By the year 1956, when
the life insurance was nationalized and the Life Insurance Corporation of India (LIC) was
formed on 1st September 1956, there were 170 companies and 75 provident fund societies
transacting life insurance business in India. After the amendments to the relevant laws in
1999, the L.I.C. did not have the exclusive privilege of doing life insurance business in
India. By 31.3.2002, eleven new insurers had been registered and has begun to transact
life insurance business in India.

Need of Insurance

Assets are insured, because they are likely to be destroyed, through accidental
occurrences. Such possible occurrences are called perils. Fire, floods, breakdowns,
lightning, earthquakes, etc, are perils. If such perils can cause damage to the asset, we
say that the asset is exposed to that risk. Perils are the events. Risks are the
consequential losses or damages. The risk to an owner of a building, because of the peril

XIII
of an earthquake, may be a few lakhs or a few crores of rupees, depending on the cost of
the building and the contents in it.

The risk only means that there is a possibility of loss or damage. The damage
may or may not happen. Insurance is done against the contingency that it may happen.
There has to be an uncertainty about the risk. Insurance is relevant only if there are
uncertainties. If there is no uncertainty about the occurrence of an event, it cannot be
insured against. In the case of a human being, death is certain, but the time of death is
uncertain. In the case of a person who is terminally ill, the time of death is not certain,
though not exactly known. He cannot be insured.

Insurance does not protect the asset. It does not prevent its loss due to the peril.
The peril cannot be avoided through insurance. The peril can sometimes be avoided,
through better safety and damage control management. Insurance only tries to reduce the
impact of the risk on the owner of the asset and those who depend on that asset. It only
compensates the losses – and that too, not fully.

Only economic consequences can be insured. If the loss is not financial,

insurance may not be possible. Examples of non-economic losses are love and affection
of parents, leadership of managers, sentimental attachments to family heirlooms, innovate
and creative abilities, etc.

Types of insurance

❖ Automobile insurance
❖ Aviation insurance
❖ Boiler insurance
❖ Builder’s risk insurance
❖ Casualty insurance
❖ Disability insurance
❖ Liability insurance
❖ Marine cargo insurance
❖ Purchase insurance
❖ Credit insurance
❖ Crime insurance
❖ Crop insurance
❖ Directors and Officers liability insurance

XIV
❖ Property insurance
❖ Terrorism insurance
❖ Title insurance
❖ Travel insurance
❖ Workers’ compensation
❖ Life insurance
❖ Total permanent disability insurance
❖ Locked funds insurance
❖ Marine insurance
❖ Financial loss insurance
❖ Health insurance
❖ Professional indemnity insurance
❖ Environmental liability insurance
❖ Pet insurance
❖ Political risk insurance

XV
 Chapter 5
Profile of HDFC STANDARD LIFE INSURANCE Co. Ltd.

HDFC Standard Life Insurance Company Ltd. is one of India's leading private
insurance companies, which offers a range of individual and group insurance solutions. It
is a joint venture between Housing Development Finance Corporation Limited (HDFC
Ltd.), India's leading housing finance institution and a Group Company of the Standard
Life, UK.
HDFC Standard Life is one of the leading life insurance companies having a track
record of declaring bonuses every year since inception. HDFC as on March 31, 2007
holds 81.9 per cent of equity in the joint venture.

STRENGTHS OF HDFC STANDARD LIFE INSURANCE

❖ FINANCIAL EXPERTISE
HDFC Standard Life Insurance has the financial expertise required to
manage long-term investments safely and efficiently.

❖ RANGE OF SOLUTIONS
HDFC Standard Life Insurance has a range of individual and group
solutions, which can be easily customized to specific needs. HDFC Standard Life
Insurance’s group solutions have been designed to offer a complete flexibility
combined with a low charging structure to people.

❖ TRACK RECORD
HDFC Standard Life Insurance’s cumulative premium income, including
the first year premiums and renewal premiums is Rs. 1532.21 Crores Apr-Mar
2005 - 06.
It has covered over 1.6 million individuals out of which over 5, 00,000
lives have been covered through our group business tie-ups.

XVI
VISION:

The most successful and admired life insurance company, which mean that we
are the most trusted company, the easiest to deal with, offer the best value for money, and
set the standards in the industry. 'The most obvious choice for all'

VALUES:

Values that HDFC Standard Life Insurance observes are

❖ Integrity

❖ Innovation

❖ Customer centric

❖ People Care “One for all and all for one”

❖ Team work

❖ Joy and Simplicity

Major competitors of HDFC STANDARD LIFE

❖ Life Insurance Corporation of India

❖ ICICI Prudential Life Insurance
❖ Bajaj Allianz Life
❖ SBI Life Insurance

PRODUCT PROFILE OF HDFC STANDARD LIFE

HDFC Standard Life Insurance offers various insurance solutions to meet every ones
need. HDFC Standard Life Insurance offers various insurance solutions to individuals as
well as to companies looking to provide benefits to their employees.

XVII
 The products that are offered by are mainly classified as follows,
➢ Individual Products.
➢ Group Products.

INDIVIDUAL PRODUCTS

1. PRODUCTION PLAN
(a)Term assurance plan
A pure risk cover plan, which gives you protection against the uncertainties of
life. The Term Assurance Plan is an insurance policy that is designed to help secure your
family's financial needs.
(b) Loan cover term assurance plan

An ideal way to cover your home loan or other loan liabilities. This Plan provides
a lump sum on the unfortunate death of the life assured within the policy term.

2. INVESTMENT PLAN

(a)Single premium whole of life plan

Our Single Premium Whole of Life plan is well suited to meet your long term
investment needs. We provide you with attractive long term returns through regular
bonuses.

3. PENSION PLANS

(a)Personal pension plan

It provides a post retirement income in your golden years and gives you the
flexibility to plan your retirement date and Gives you tax benefits on your premiums. The
plan receives simple Reversionary Bonuses, which are usually added annually. At the end

XVIII
of the term an additional Terminal Bonus may be paid depending on the performance of
the underlying investment.

(b) Unit linked pension

It's an outstanding investment opportunity by providing a choice of thoroughly

researched and selected investments and post retirement income for life and also
Flexibility to plan your retirement date.

(c)Unit linked pension plus

It's an outstanding investment opportunity by providing a choice of thoroughly

researched and selected investments. Regular Loyalty Units to boost your fund value
every year and post retirement income for life and also Flexibility to plan your retirement
date.

4. SAVINGS PLAN
(a)Endowment assurance plan

It's an ideal way to secure your long-term financial goals. Valuable protection to
your family by way of lump sum payment in case of your unfortunate demise within
policy term and Lump sum payment on survival up to maturity date

(b) Unit linked Endowment

It's an outstanding investment opportunity by providing a choice of thoroughly

researched and selected investments. Valuable protection to your family in case you are
not around and Flexible benefit combinations and payment options and also flexible
additional benefit options such as critical illness cover.

(c) Unit linked Endowment plus

It's an outstanding investment opportunity by providing a choice of thoroughly

researched and selected investments. Regular Loyalty Units to boost your fund value

XIX
every year. Valuable protection to your family in case you are not around and Flexible
benefit combinations and payment options and also flexible additional benefit options
such as critical illness cover.

(d) Money back plan

A proportion of the basic sum Assured as Cash lump sums at regular 5-year
intervals within the policy term an ideal way to secure your long- term as well as short-
term financial goals and a lump sum payment on survival up to maturity date. Valuable
protection to your family by way of lump sum payment in case of your unfortunate death
within the policy term.

(e) Children's plan

The Children's Plan is designed to secure your child's future by giving your child a
guaranteed lump sum, on maturity or in case of your unfortunate demise, early in the
policy term. The premiums, paid by you, are invested by the company to give you good
long-term returns.

(f) Unit linked young star

It's an outstanding investment opportunity by providing a choice of thoroughly

researched and selected investments. Valuable protection to your child in case you are not
around. Flexible benefit combinations and payment options and also flexible additional
benefit options such as critical illness.

(g)Unit linked young star plus

It's an outstanding investment opportunity by providing a choice of thoroughly

researched and selected investments. Regular Loyalty Units to boost your fund value
every year and Valuable protection to your child in case you are not around and Flexible
benefit combinations and payment options and also flexible additional benefit options
such as critical illness cover.

XX
GROUP PRODUCTS

(1) GROUP TERM INSURANCE PLAN

The Group Term Insurance (GTI) plan meets this need and serves as an ideal way
for companies to reinforce their bond with their employees. The sort of needs, you, as an
employer need to cater to could be in form of:

❖ Employee benefits
❖ Cover for housing or vehicle loans given by you to your employees
❖ A GTI cover for future service gratuity liability to be taken along with the Group
Unit Linked Plan
❖ One year renewable term insurance plan.
❖ One master policy issued covering all members of the group.

(2) GROUP VARIABLE TERM INSURANCE

The Group Variable Term Insurance is a tailor made insurance policy for third
party institutions. HDFC Standard Life Insurance Company will offer life insurance to
customer’s of one or more of the third party’s specific products in order that in the event
of their death, there will be a lump sum available.

The Group Variable Term Insurance:

❖ On death, will pay a lump sum known as a sum assured. The sum assured varies
over time in order that the customer receives the cover that they need.
❖ Is a group policy.
❖ Has no lengthy underwriting procedures.
❖ Is simple to administer.

XXI
INSURANCE IN INDIA

About 154 Indian insurance companies, 16 non-Indian companies and 75

provident were operating in India at the time of nationalization. Nationalization was
accomplished in two stages; initially the management of the companies was taken over by
means of an Ordinance, and later, the ownership too by means of a comprehensive bill.
The Parliament of India passed the Life Insurance Corporation Act on the 19th of June
1956, and the Life Insurance Corporation of India was created on 1st September, 1956,
with the objective of spreading life insurance much more widely and in particular to the
rural areas with a view to reach all insurable persons in the country, providing them
adequate financial cover at a reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from
its corporate office in the year 1956. Since life insurance contracts are long term contracts
and during the currency of the policy it requires a variety of services need was felt in the
later years to expand the operations and place a branch office at each district headquarter.
re-organization of LIC took place and large numbers of new branch offices were opened.
As a result of re-organization servicing functions were transferred to the branches, and
branches were made accounting units. It worked wonders with the performance of the
corporation. It may be seen that from about 200.00 crores of New Business in 1957 the
corporation crossed 1000.00 crores only in the year 1969-70, and it took another 10 years
for LIC to cross 2000.00 crore mark of new business. But with re-organization happening
in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on
new policies
Today LIC functions with 2048 fully computerized branch offices, 100 divisional
offices, 7 zonal offices and the Corporate office. LIC’s Wide Area Network covers 100
divisional offices and connects all the branches through a Metro Area Network. LIC has
tied up with some Banks and Service providers to offer on-line premium collection
facility in selected cities. LIC’s ECS and ATM premium payment facility is an addition to
customer convenience. Apart from on-line Kiosks and IVRS, Info Centres have been
commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New
Delhi, Pune and many other cities.

XXII
 With a vision of providing easy access to its policyholders, LIC has launched its
SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to
the customer. The digitalized records of the satellite offices will facilitate anywhere
servicing and many other conveniences in the future.

LIC continues to be the dominant life insurer even in the liberalized scenario of
Indian insurance and is moving fast on a new growth trajectory surpassing its own past
records. LIC has issued over one crore policies during the current year. It has crossed the
milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy
growth rate of 16.67% over the corresponding period of the previous year.

Insurance business in India are:

1818: Oriental Life Insurance Company, the first life insurance company on Indian soil
started functioning.
1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company
started its business.
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate
the life insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the
objective of protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies are taken over by the
central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act,
1956, with a capital contribution of Rs. 5 crore from the Government of India.

XXIII
How Insurance Works

The mechanism of insurance is very simple. People who are exposed to the same
risks come together and agree that, if any one of them suffers loss, the others will share
the loss and make good to the person who lost. All people who send goods by ship are
exposed to same risks, which are related to water damage, ship sinking, piracy, etc.
Those owning factories are not exposed to these risks, but they are exposed to different
kinds of risks like, firer, hailstorms, earthquakes, lightning, burglary, etc. Like this,
different kinds of risks can be identified and separate groups made, including those
exposed to such risks. By this method, the heavy loss that any one of them may suffer is
divided into bearable small losses by all. In other words, the risk is spread among the
community and the likely big impact on one is reduced smaller manageable impacts on
all.

Insurance as a Security Tool

The United Nations Declaration of Human Rights 1948 provides that “Everyone
has a right to standard of living adequate for the health and well being of himself and his
family, including food, clothing, and housing and medical care and necessary social
service and the right to security in the event of unemployment, sickness, disability. Life
insurance provides such an alternate arrangement. If this did not happen, another family
will be pushed into the lower strata of society. The lower strata create a cost on society.
Life insurance tends to reduce such a cost. In this sense, the life insurance business is
complimentary to the states efforts in the social management.
In a capitalist society provision of security is largely left to the individual.
Insurance is one of them to provide social security by state under some schemes.

Role of Insurance in Economic Development

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

XXIV
Major Market Players in India:

Presently there are 15 Life insurance companies in the country. There is only one
public sector company LIC and the rest 14 are private sector. Although LIC has been
dominating the Life Insurance business since past few years the private players have now
started to build up momentum.

HDFC – Standard Life

HDFC Standard is a 74:26 joint venture between HDFC and Standard Life. It is a private
sector company. The market share for FY 2005-06 was 2.87%.

Birla Sun Life Insurance Company

Birla Sun Life Insurance Company is a 74:26 joint venture between Birla group and Sun
Life Financial. It is a private sector company. The market share for FY 2005-06 was
1.89%.

ICICI Prudential Life Insurance

ICICI Prudential Life is a 74:26 joint venture between ICICI and Prudential. It is a private
sector company. The market share for FY 2005-06 was 7.35%.

Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India is a 100% government held Public Sector Company.
Being the first to be established LIC is the forerunner in the Life Insurance sector. The
market share for FY 2005-06 was 71.44%.

Kotak Mahindra OLD Mutual

Kotak Mahindra OLD Mutual is a 74:26 joint venture between Kotak Mahindra bank and
Old Mutual. It is a private sector company. The market share for FY 2005-06 was 1.11%.

XXV
Max New York Life

Max New York Life is a 74:26 joint venture between J & Bank, Pallonji & Co and
MetLife. It is a private sector company. The market share for FY 2005-06 was 1.23%.

Aviva Life Insurance India

Aviva Life insurance is a 74:26 joint venture between Aviva and Dabur. It is a private
sector company. The market share for FY 2005-06 was 1.14%.

ING Vysya Life insurance

ING Vysya Life Insurance is joint venture between Exide (50%), Gujarat Cements
(14.87%), Enam (9.13%) and ING (26 %). It is a private sector company. The market
share for FY 2005-06 is 0.79%.

MetLife India

MetLife India is a 74:26 joint venture between J & K Bank, Pallonji & Co and MetLife. It
is a private sector company. The market share for FY 2005-06 was 0.40%.

Bajaj Allianz Life Insurance Co

Bajaj Allianz Life Insurance Company is a 74:26 joint venture between Bajaj Auto
limited and Allianz AIG. The market share for FY 2005-06 was 7.56%.

SBI Life Insurance Company Ltd

SBI Life Insurance Company is a 74:26 joint venture between SBI and Cardiff S.A. It is a
private sector company. The market share for FY 2005-06 was 2.31%.

TATA AIG Group

TATA AIG group is a 74:26 joint venture between Tata Group and AIG. It belongs to the
private sector. The market share for FY 2005-06 was 1.29%.

XXVI
Sahara India Life Insurance Company Ltd

First Wholly Indian Owned Private Life Insurance Company. The market share for FY
2005-06 was 0.06 %.

Shriram Life Insurance Company Ltd

Shriram Life is a recent entrant into the life insurance sector It is a 74:26 joint venture
between the Shriram group through its Shriram Financial Holdings and Sanlam Life
Insurance Limited, South Africa.

MARKET SHARE OF PUBLIC AND PRIVATE SECTOR

COMPANIES

Figure 5.1: MARKET SHARE OF PRIVATE SECTOR INSURANCE

COMPANIES

XXVII
Figure 5.2: MARKET SHARE OF PRIVATE INSURANCE COMPANIES

INSURANCE REGULATORY DEVELOPMENT AUTHORITY

(IRDA):

On the recommendation of Malhotra Committee, an Insurance Regulatory Development

Act (IRDA) passed by Indian Parliament in 1993. Its main aim was to activate an
insurance regulatory apparatus essential for proper monitoring and control of the
Insurance industry. Due to this Act several Indian private companies have entered into the
insurance market, and some companies have joined with foreign partners. In economic
reform process, the Insurance Companies has given boost to the socio-economic
development process. The huge amount of funds that are at the disposal of Insurance
Companies are directed as desired avenues like housing, safe drinking water, electricity,
primary education and infrastructure. Above all the policyholders gets better pricing of
products from competitive insurance companies.

XXVIII
Liberalization

The opening up of Insurance sector was a part of the ongoing liberalization in the
financial sector of India. The domain of State-run insurance companies was thrown open
to private enterprise on December 7, 1999, with the introduction of the Insurance
Regulatory and Development Authority (IRDA) Bill. The opening up of the sector gave
way to the world known names in the industry to enter the Indian market through tie-ups
with the eminent business houses. What was once a quiet business is becoming one of the
hottest businesses today.

Post liberalization

The changing face of financial sector and the entry of several companies in the field of
Life Insurance segment are one of the key results of these liberalization efforts. Insurance
business by way of generating premium income adds significantly to the GDP. Despite
the fact that the market is vast in India for the Insurance business, the coverage is far less
compared with the international standards. Estimates show that a meager 35-40 million,
out of a population of 950 million, have come so far under the umbrella of the insurance
industry. The potential market is so huge that it can grow by 15 to 17 per cent per annum.
With the entry of private players, the Indian Insurance Market may finally be able to
make deeper penetration in to newer segments and expand the market size manifold. The
quality of service will also improve and there will be wide The Life insurance market in
India is likely to be risky in the initial stages, but this will improve in the next three to
five years Therefore, it may be advantageous to be a second-round entrant. In the Life
insurance market the need risk assessment systems and data that are the key to success in
the Life insurance market are significantly underdeveloped in India even today.

XXIX
 CHAPTER 6
ANALYSIS AND INTERPRETATION

The primary data collected through the questionnaire from government officials were
compiled using spss package and the analysis are presented below.

TABLE 6.1
RESPONDENT’s AGE PROFILE

Frequency/
Age(In Years) Percentage
25-35 4
35-45 25
45-55 66
>55 5
Total 100
(Source: Primary Data)

Table 6.1 shows, among the 100 sample respondents, the majority of 66% of the
respondents fall in the age group of 45-55 years. Another 25% fall in the category of 35-
45 years. There are 5% of the respondents who fall in the age group of above 55 years,
while the remaining 4% are in the age group of 25-35 years. Thus, from the analysis it
can be concluded that the majority (66%) of respondents fall in the age group of 45-55.

XXX
 TABLE 6.2
GENDER PROFILE OF RESPONDENT

Gender Frequency/
Percentage
Male 73
Female 27
Total 100
(Source: Primary Data)

Table 6.2 shows, the 100 sample respondents, the majority of 73% of the
respondents are Male, while the remaining 27% are female. Thus, from the analysis it can
be concluded that the male respondents constituted the major position (73%)

TABLE 6.3
MARITAL STATUS OF RESPONDENTS

Marital Status Frequency/

Percentage
Married 99
Unmarried 1
Total 100
(Source: Primary Data)

Table 6.3 shows, among the 100 sample respondents, the majority (99%) of the
respondents are married while the remaining 1% is unmarried among the respondents.
Thus, from the analysis it can be concluded that the majority (99%) of respondents who
are married

XXXI
 TABLE 6.4
EXPERIENCE PROFILE OF RESPONDENTS

Experience of Frequency/
respondent percentage
Less Than 10 11
10-20 27
20-30 57
>30 5
Total 100
(Source: Primary Data)

As it could be seen in Table 6.4, among the 100 sample respondents, the highest
of 57% of the respondents fall in the experience group of 20-30 years. Another 27% fall
in the category of 10-20 years. There are 11% of the respondents who fall in the
experience group of less then 10 years, while the remaining 5% are in the experience
group of above 30 years. Thus, majority (57%) of respondents are in the experience group
of 20-30.

XXXII
 TABLE 6.5
ANNUAL INCOME LEVEL OF RESPONDENTS

Frequency/
Annual income percentage
Less Than 180000 27
180000-300000 50
300000-420000 14
>420000 9
Total 100
(Source: Primary Data)

Table 6.5 shows, out of 100 sample respondents, the majority 50% of the
respondents earn annual income between 180000-300000.Another 27% of respondents
are less than 180000. There are 14% of the respondents who earn between 300000-
420000, the remaining 9% among the respondents earn above 420000. Thus, from the
analysis it can be concluded that the respondents who earn between 180000-300000
constituted the major position (50%).

XXXIII
 TABLE 6.6
AWARENESS ABOUT LIFE INSURANCE POLICIES

Awareness Frequency/
percentage
Yes 100
No 0
Total 100
(Source: Primary Data)

As it could be seen in table 6.6 among the 100 sample respondent all of them were
aware of the life insurance policies, (i.e.) 100%. Thus from the analysis it can be concluded
that 100% of respondents are aware of the life insurance policies.

XXXIV
 TABLE 6.7
SOURCE OF INFORMATION

SOURCE YES NO
Agent 85 15
Employer 15 85
Press 24 76
Relatives 10 90
T.v 37 63
Internet 10 90
Bankers 21 79
Brokers 4 96
Friends 23 77
Mobile 3 97
(Source: Primary Data)

As it could be seen in table 6.7, among the 100 sample respondent, it is clear that
most of the respondents came to know about the insurance through agents (85%) and the
second highest source are the T.V (37%). None of the respondents have come to know
about the insurance through mobile. Thus, from the analysis it can be concluded that 85%
of the respondents came to know about insurance polices through agents.

XXXV
 FIGURE 6.1
CHART SHOWING SOURCE OF INFORMATION

1 00
Rows
YES
NO

75
respondent

50

25

0
A GE NT Cou n t REL A TIV ES Co u nt B ANKE RS Co un t M OB ILE Co u nt
E MP LO Y ER Co u nt T V Cou n t B RO KE RS Cou n t
P RE SS Cou n t INT E RNE T Cou n t FRIE NDS Co un t

source

XXXVI
 TABLE 6.8
AWARENESS ABOUT THE INSURANCE COMPANY

Company name Yes No

LIC 100 0
Birla 26 74
HDFC 75 25
Bajaj 27 73
ICICI 55 45
SBI 55 45
Sriram 18 82
Kotak 6 94
Aviva 3 97
Reliance 12 88
Tata AIG 19 81
Metlife 0 100
Max Newyork 5 95
Sahara 3 97
Barathi 0 100
ING Vysya 16 84
(Source: Primary Data)
As it could be seen in table 6.8 among the 100 sample respondent, it is clear that
100% of the respondents are aware of LIC. And among the private players HDFC has
ranked first (75%) and followed by ICICI (55%), BAJAJ (27%), BIRLA (26%). None of
the respondent has come to know about Metlife and Max Barathi AXA life insurance.
Thus most of the respondents are aware of LIC and in the private sector HDFC Standard
Life insurance.

XXXVII
 FIGURE 6.2
AWARENESS OF INSURANCE COMPANY

O THER Rows
YES
NO
S HRIRA M L IFE

S BI L IFE
companies

ICICI PRUDE NT IAL

B AJA J A LL IA NZ

HDFC S T ANDARD L IFE

B IRL A S UNL IFE

L IC

0 25 50 75 1 00

respondent

XXXVIII
 TABLE 6.9
PURPOSE OF TAKING POLICIES
Purpose Yes No
tax saving 57 43
investment 38 62
life risk 46 54
regular returns 22 78
health maintenance 19 81
retirement benefits 6 94
Others 1 99

As it could be seen in table 6.9 among the 100 sample respondents, 57% have opted Tax
saving as the major purpose of taking life insurance policies and Life risk coverage,
Investment are also the purpose of taking life insurance policies. Thus from the analysis it
can be concluded that most of the respondents are preferred to take policies for the
purpose of Tax Savings.

FIGURE 6.3
PURPOSE OF TAKING POLICIES

O THERS Co u nt Rows
YES
NO
RET IRE ME NT B ENE FIT S Co un t

HEA L TH MA INT ANA NCE Co un t

PURPOSE

REG UL A R RET URNS Co un t

L IFE RIS K COV E RA GE Cou n t

INV E ST ME NT Cou n t

T AX SA V ING Co un t

0 25 50 75 1 00

RESPONDENT

XXXIX
 TABLE 6.10
AWARENESS OF THE POLICIES

Policies Name Yes No

Endowment 83 17
Whole life 41 59
Money back 84 16
With profit 24 76
Joint life 30 70
Children's 41 59
Convertible 2 98
Without profit 2 98
Variable Insurance 0 100
Annuity policy 7 93
Handicapped policy 2 98
Retirement policy 24 76
Salary saving scheme 36 66
ULIP 18 82
(Source: Primary Data)

Table 6.10, shows among the 100 sample respondents, 84% of the respondent are
preferred money back policy and 83% of respondent are preferred endowment policies.
None of the respondents are preferred to Variable insurance, without profit policy and
handicapped policy. Thus from the analysis it can be concluded that most of the
respondents are preferred to take money back and endowment policies.

XL
 FIGURE 6.4
AWARENESS OF THE POLICIES

O THERS Co un t Rows
YES
NO
CHIL DRE N'S PO LICY Co un t

JOINT L IFE PO L ICY Co u nt

POLICIES

WIT H P ROFIT P OL ICY Cou n t

M ONEY BA CK P OL ICY Co u n t

WHO LE L IFE P O LICY Co un t

E NDOWME NT P OL ICY Cou n t

0 25 50 75

RESPONDENT

XLI
 TABLE 6.11
RANKING FOR POLICIES
POLICIES RANK1 RANK2 RANK 3 RANK 4 RANK 5 RANK 6 RANK 7

Endowment 21 27 20 11 15 3 3
Whole life 8 15 8 8 34 22 5
Money back 46 15 10 12 7 9 1
With profit 5 8 1 16 13 36 21
Joint life 4 9 12 18 21 17 19
Children's 5 13 27 17 7 11 20
Others 12 13 21 21 3 1 29

As it could be seen in table 4.11 among the 100 sample respondents, the respondents
preferred Money Back policy as rank 1 (46%) and Endowment policy has been ranked as
2 (27%) and Children's policy has ranked as 3 (27%). Thus from the analysis it can be
concluded that most of the respondents are ranked money back policy as first.

FIGURE 6.5
RANKING FOR POLICIES

O THERS Co un t Rows
R AN K1
R AN K2
CHIL DRE N'S PO LICY Co un t R AN K3
R AN K4
R AN K5
JOINT L IFE PO L ICY Co u nt
R AN K6
POLICIES

R AN K7
WIT H P ROFIT P OL ICY Cou n t

M ONEY BA CK P OL ICY Co u n t

WHO LE L IFE P O LICY Co un t

E NDOWME NT P OL ICY Cou n t

10 20 30 40

RESPONDENT

XLII
 TABLE 6.12
PREFERRED PREMIUM PERIOD
Period Frequency/
Percentage
Annual 21
Half yearly 16
Quarterly 15
Monthly 48
Total 100
(Source: Primary Data)

Table 6.12 shows, among the 100 sample respondents, 48% of the respondents
preferred monthly premium payment period and 21% of the respondents preferred annual
premium payment period. Thus from the analysis it can be concluded that 48% of the
respondents preferred monthly premium payment period.

FIGURE 6.6
PREFERRED PREMIUM PERIOD

50

40
RESPONDANT

30

48

20

10 21

16 15

0
ANNUAL HALFYEARLY QUARTERLY MONTHLY
PREMIUM PAYMENT PERIOD

XLIII
 TABLE 6.13
PREFERRED PREMIUM PAYMENT

Mode Frequency/Percentage
Salary deduction 58
Through agent 11
By cash 7
By cheque 18
Online payment 6
Total 100

Table 6.13 shows, 4.7 among the 100 sample respondents, 58% of the
respondents preferred Salary Deduction as mode of payment and 18% of the respondents
preferred cheque as the mode payment. Thus from the analysis it can be concluded that
58% of the respondents preferred Salary Deduction as mode of payment.

FIGURE 6.7
PREFERRED PREMIUM PAYMENT

60

50

40
RESPONDANT

30
58

20

10
18

11
7 6

0
SALARY THROUGH BY CASH BY CHEQUE ONLINE
DEDUCTION AGENT PAYMENT
MODE OF PAYMENT

XLIV
 TABLE 6.14
PREFERRED DELIVERY OF POLICY DOCUMENTS
Policy Documents Frequency/Percentage
Online 3
By post 22
Through agent 43
Personally at insurance company's 32
Total 100

Table 6.14 shows, among the 100 sample respondents, 43% of the respondents
preferred to get the documents through agent and 32% of the respondents preferred to get
the documents from the insurance office itself. Thus, from the analysis it can be
concluded that 43% of the respondents preferred to get the documents through agent.

FIGURE 6.8
PREFERRED DELIVERY OF POLICY DOCUMENTS

50

40
RESPONDANT

30

43
20

32

22
10

3
0
ONLINE BY POST THROUGH AGENT PERSONALLY AT
INSURANCE
COMAPNY'S
OFFICE
MODE OF DELIVERY

XLV
 TABLE 6.15

PREFERRED MODE OF SETTELEMENT

Mode Frequency/Percentage
By cash 19
By cheque 75
On account transfer 6
Total 100

Table 6.15 shows, among the 100 sample respondents, 75% of the respondents
preferred to get the claims settlement through by cheque and 19% of the respondents
preferred to get the claims settlement through cash. Thus from the analysis it can be
concluded that 75% of the respondents preferred to get the claim settlement through
cheque.
FIGURE 6.9

THE PREFERRED MODE OF SETTELEMENT

80

60
RESPONDANT

40
75

20

19

6
0
BY CASH BY CHEQUE ON ACCOUNT TRANSFER
MODE OF SETTLEMENT

XLVI
 TABLE 6.16

RANKING THE DETAILS EXPECTED FROM AGENT

DETAILS R1 R2 R3 R4 R5 R6 R7 R8
Features of policy 21 13 24 17 16 5 3 1
Premium amount 24 30 14 16 8 2 2 4
Period of premium 21 27 18 12 11 3 6 2
Mode of payment 9 7 18 17 23 17 5 4
Terms & condition 21 20 17 13 13 9 4 3
Other benefits 1 0 2 11 15 28 32 11
Other services 1 0 0 0 9 23 40 27
Settlements 3 4 7 15 6 12 6 47

Table 4.16 shows, among the 100 sample respondents, the respondents are
expecting the details about premium amount because it has been ranked as 1 (24%) and
period of premium has been ranked as 2 (27%) and features of policy has ranked as 3
(24%). Thus from the analysis it can be concluded that most of the respondents ranked
premium amount as first detail followed by period of premium and feature of policy.

FIGURE 6.10

RANKING FOR EXPECTING DETAILS FROM AGENT

S ET TL E ME NT O F CLA IMS AND IT S CO NDITIO NS Co u nt Rows

R AN K1
R AN K2
O THER S ERVICES Cou n t
R AN K3
R AN K4
O THER B ENEFIT S Cou n t
R AN K5
R AN K6
DETAILS

T ERMS AND CO NDITIO NS Cou n t R AN K7

R AN K8
M ODE O F P AY M ENT O F P REM IUM Co u nt

P EROID OF PA Y ME NT Cou n t

P RE MIUM A MO UNT Co u nt

FEA T URES OF T HE PO L ICY Co un t

1 0.0 0 2 0.0 0 3 0.0 0 4 0.0 0

RESPONDENT

XLVII
 TABLE 6.17

PREFERRED INSURANCE COMPANY

Sector Frequency
Public sector 75
Private sector 25
Total 100

Table 6.17 shows, among the 100 sample respondent 75% of respondents are
preferred public sector and 25% of the respondents are preferred private sector. Thus
from the analysis it can be concluded that 75% of respondents are preferred public sector.

FIGURE 6.11

PREFERRED INSURANCE COMPANY

XLVIII
 TABLE 6.18

RANKING FOR SELECTING AN AGENT

Details R1 R2 R3 R4 R5 R6 R7
Knowledge of policy 41 24 9 22 2 1 1
Investment advice 21 20 33 16 3 4 2
Convincing approach 13 29 19 13 12 6 8
Premium details 21 17 16 27 11 8 0
Handling documents 0 5 6 7 41 22 19
Nominee details 2 0 5 5 19 46 23
Claim settlement 1 6 12 10 12 13 46

As it could be seen in table 6.18 among the 100 sample respondents, the
respondents are selecting the agent first to know about the knowledge of the policy
because it has been ranked as 1 (41%) and convincing has been ranked as 2 (29%) and
investment advice has ranked as 3 (33%). Thus from the analysis it can be concluded that
most of the respondents are selecting the agents by knowledge of policy followed by
convincing approach and investment advice.

FIGURE 6.12

RANKING FOR SELECTING AN AGENT

CLA IM S ET T LE ME NT S ERV ICE S Cou n t Rows

RANK1
RANK2
CHA NG E OF NO MINEE SE RVICES Cou n t RANK3
RANK4
RANK5
HANDL ING O VE R O F P O LICY DOCUME NT Co u nt
RANK6
DETAILS

RANK7
P AY ME NT O F P RE M IUM Co un t

CONVINCING A P PROA CH Cou n t

INV E ST ME NT A DV ICE S FO R S E LE CT ING A PP RO P RIA TE PO L ICIE S Cou n t

K NO WL E DG E A B OUT T HE P OL ICIE S Cou n t

1 0.0 0 2 0.0 0 3 0.0 0 4 0.0 0

RESPONDANT

XLIX
 TABLE 6.19
RANKING THE PARAMETERS FOR SELECTING INSURANCE
COMPANY

DETAILS R1 R2 R3 R4 R5 R6 R7 R8 R9 R10 R11 R12

Brand name 17 19 24 9 9 7 6 5 3 0 1 0
Availability of
product & services 13 18 18 16 12 7 5 5 2 1 2 1
Attractive
advertisement 4 3 5 10 11 21 19 9 6 4 2 6
Fulfillment of
customer needs 30 14 16 16 13 2 4 1 1 2 1 0
Fulfillment of
insurance 8 10 11 12 12 20 8 8 4 2 3 2
Terms & procedure 11 13 8 15 20 6 13 7 3 1 1 2
Sales promotion 1 1 2 1 2 9 2 17 19 12 12 22
Premium amount 14 13 11 8 14 10 16 3 2 3 2 4
Period of premium 2 6 2 4 3 13 13 22 16 14 1 4
Mode of premium 0 2 2 5 3 4 12 15 29 21 6 1
Rider clause 0 0 0 1 0 0 0 4 10 26 46 13
Online service 1 1 1 2 1 2 3 5 3 14 23 45
(Source: Primary Data)

As it could be seen in table 6.19 among the 100 sample respondents, the
respondents are selecting the insurance company first to fulfillment of customer needs
because it has been ranked as 1 (30%) and availability of product and services has been
ranked as 2 (18%) and brand name has ranked as 3 (24%). Most of the respondents are
selecting the insurance company first to fulfillment of customer needs followed by
availability of product and services and brand name.

L
 TABLE 6.20

PREFERENCE FOR FUTURE POLICY

Particulars No. of Respondents

Yes 34
No 66
Total 100
(Source: Primary Data)

Table 6.20 shows, among the 100 sample respondent 66% of respondents are
preferred to take policy in future and 34% of the respondents are not preferred to take
policies in future. Thus from the analysis it can be concluded that 66% of respondents are
preferred to take policy in future.

FIGURE 6.13

PREFERENCE FOR FUTURE POLICY

LI
 TABLE 6.21

INTENDED TYPE OF POLICY IN FUTURE

Type of policy Respondent

Endowment policy 11
Joint life policy 8
Whole life policy 4
Children's policy 28
Money back policy 13
ULIP 2
Total 66
(Source: Primary Data)

As it could be seen in chart 6.21 among the 66 sample respondents, 28

respondents are preferred to take Children's policy and 13 respondents are preferred to
take Money Back policy. Thus from the analysis it can be concluded that 28 respondents
preferred to take Children's policy.

LII
 TABLE 6.22

PREFERRED INSURANCE COMPANY IN FUTURE

Company Respondent
LIC 55
HDFC 9
BAJAJ 1
ICICI 1
Total 66
(Source: Primary Data)

Table 6.22 shows, among the 66 sample respondents, 55 respondents are preferred
to take LIC as there company and 9 respondents are preferred to take HDFC as there
company. Thus from the analysis it can be concluded that 55 of the respondents preferred
to take LIC as there company and among the private company HDFC as their company.

LIII
 TABLE 6.23

HOLDING OF INSURANCE POLICY

Particulars Holding Policies

Yes 98
No 2
Total 100
(Source: Primary Data)

As it could be seen in Table 6.23 among the 100 sample respondent 98% of
respondents are currently having policies and 2% of the respondents are not having
policies. Thus from the analysis it can be concluded that 98% of respondents are currently
having policies.

FIGURE 6.14

HOLDING OF INSURANCE POLICY

CURRENT POLICY
YES
NO

98

LIV
 TABLE 6.24

CURRENT INSURANCE COMPANY

Current company Respondent

LIC 64
LIC AND HDFC 27
LIC AND ICICI 4
HDFC 1
OTHERS 2
Total 98
(Source: Primary Data)

Table 6.24 among the 98 sample respondents, 64 respondents is having policies in

LIC and 27 of respondents are having policies in both LIC and HDFC and 4 respondents
are having in HDFC. Thus from the analysis it can be concluded that 64 of the
respondents are having policies in LIC and HDFC is in the second place when compared
to others private players.

LV
 TABLE 6.25

NO. OF POLICIES

No. of Policies Respondent

1 6
2 45
3 36
4 11
Total 98
(Source: Primary Data)

Table 6.25 shows, among the 98 sample respondents, 45 respondents are having
two policies and 36 of respondents are having three policies. Thus from the analysis it can
be concluded that 45 of the respondents having two policies.

LVI
 TABLE 6.26

CURRENT TYPE OF POLICY

Policies Yes No
Endowment 57 41
Joint Life 28 70
Whole Life 14 84
Children 50 48
Money Back 54 44
ULIP 24 74
(Source: Primary Data)

Table 6.26 shows, among the 98 sample respondents, 57 respondents are having
Endowment policies and 54 respondents are having Money Back policies and 50
respondents are having Children's policy. Thus from the analysis it can be concluded that
57 respondents having Endowment policy.

FIGURE 6.15
CURRENT TYPE OF POLICY

Rows
YES
75
NO
NIL
RESPONDANT

50

25

0
E NDOWME NT P OL ICY Cou n t CHIL DRE N'S PO LICY Co un t
JOINT L IFE PO L ICY Co u nt M ONEY BA CK P OL ICY Cou n t
WHO LE L IFE P O LICY Co un
UNIT
t LINKE D INSURANCE P OL ICY Co u nt

POLICIES

LVII
 TABLE 6.27

PRESENT PURPOSE OF TAKING POLICIES

Purpose Yes No
Tax saving 55 42
Investment 39 59
Life risk 36 62
Regular returns 30 68
Health maintain 18 80
Retirement benefits 8 89
(Source: Primary Data)

Tables 6.27 among the 98 sample respondents, 59 respondents are having policies
for the purpose of tax savings and 39 respondents are having policies for the purpose of
Investment. Thus from the analysis it can be concluded that 59 respondents are having
policies for the purpose of tax savings.

FIGURE 6.16

PRESENT PURPOSE OF TAKING POLICIES

Rows
YES
NO
75
NIL
RESPONDANT

50

25

0
T AX SA V ING Co un t REG UL A R RET URNS Co un t
INV E ST ME NT Cou n t HEA L TH MA INT ANA NCE Co un t
L IFE RIS K COV E RA GE Cou n t RET IRE ME NT B ENE FIT S Co un t

PURPOSE

LVIII
 TABLE 6.28

CURRENT PREMIUM PAYMENT PERIOD

Period Respondent
Annual 13
Half yearly 13
Quarterly 20
Monthly 51
One time 1
Total 98
(Source: Primary Data)

Table 6.28 shows, among the 98 sample respondents, 51 respondents are paying
monthly premium payment and 30 respondents are paying quarterly premium payment.
Thus from the analysis it can be concluded that 51 respondents are paying monthly
premium payment.

LIX
 TABLE 6.29

CURRENT PREMIUM AMOUNT PAID ANNUALLY

Amount Respondent
< 3000 23
3000-5000 34
5000-7000 22
>9000 19
Total 98
(Source: Primary Data)

Table 4
6.29 shows, among the 98 sample respondents, 34 respondent's annual premium
payment is in between Rs 3000-5000 and 23 respondent's annual premium payment is
below Rs 3000. Thus from the analysis it can be concluded that 34 respondent's annual
premium payment is in between Rs 3000-5000.

LX
 TABLE 6.30

SATISFACTION LEVEL FOR PRESENT AGENT

Agent Service H.S S C.S D H.D Total

Knowledge about policies 42 50 4 1 1 98
Investment advices 8 83 5 1 1 98
Convincing approach 4 82 10 2 0 98
Payment of premium 9 83 5 1 0 98
Claim settlement 6 37 55 0 0 98
Change of nominee 6 68 21 2 1 98
Handling over the documents 4 34 60 0 0 98
(Source: Primary Data)

Table 6.30 shows, among the 98 sample respondents, the respondents are satisfied
with agent services like Knowledge about the policies, Investment Advices, Convincing
Approach, Payment of Premium and Change of Nominee but the respondents are not
aware of their own Claim settlement and Handling over the Documents, so its comes
under can't say category. Thus from the analysis it can be concluded that the respondents
are satisfied with the current agent services.

LXI
 TABLE 6.31

SATISFACTION LEVEL SCORES FOR AGENT SERVICE

Satisfaction Level Scores No. of Respondents

Highly Dissatisfied Exactly 7 0
Dissatisfied 8 – 14 0
Can't Say 15 – 21 1
Satisfied 22 – 28 86
Highly Satisfied 29 – 35 11
(Source: Primary Data)

Table 4
6.31 clearly shows that 86 respondents are got scores in between 22 – 28, thus, the
respondents are satisfied with the agent service.

LXII
 TABLE 6.32

SATISFACTION LEVEL FOR INSURANCE COMPANY

Insurance company H.S S C.S D H.D Total

Brand name 34 56 6 1 1 98
Product & service 17 80 1 0 0 98
Customer needs 9 81 5 2 1 98
Attractive advertisement 6 81 8 3 0 98
Terms & procedures 9 80 8 1 0 98
Sales promotion 1 67 30 0 0 98
Premium amount 17 74 6 1 0 98
Period of premium payment 15 79 4 0 0 98
Mode of payment of premium 18 70 10 0 0 98
Availability of rider clause 4 42 50 2 0 98
Online service 2 31 65 0 0 98
Loans against policies 3 27 67 1 0 98
Settlement of claims 3 26 69 0 0 98
(Source: Primary Data)

Table 6.32 shows, among the 98 sample respondents, the respondents are satisfied
with the company services like Brand name, Availability of Product and Services,
Fulfillment of Customer needs, Attractive advertisement, Terms and Procedures, Sales
Promotion measures, Premium amount, Period of premium payment, Mode of payment of
premium but the respondents are not aware of Claim settlement, Loans against policies,
Online services and Availability of rider clause, so its comes under can't say category.
Thus from the analysis it can be concluded that the respondents are satisfied with the
current company services.

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 TABLE 6.33

SATISFACTION LEVEL SCORES FOR INSURANCE COMPANY

Satisfaction Level Scores No. of Respondents

Highly Dissatisfied Exactly 13 0
Dissatisfied 14 – 26 0
Can't Say 27 – 39 0
Satisfied 40 – 52 87
Highly Satisfied 53 – 65 11
(Source: Primary Data)

Table 6.33 clearly shows that 87 respondents are got scores in between 40 – 52,
Thus, the respondents are satisfied with the insurance company.

LXIV
 Chapter 7

FINDINGS, SUGGESTIONS & CONCLUSION

7.1 GENERAL FINDINGS

❖ HDFC Standard Life Insurance Co. Ltd. has increased its share capital by Rs 50
Crores.
❖ The two partners in the joint venture, HDFC Ltd. and Standard Life Assurance
Company, U.K. have brought in the additional capital and the share capital of the
company now stands at Rs 218 Crores.
❖ HDFC Standard Life Insurance’s cumulative premium income, including the first
year premiums and renewal premiums is Rs. 1532.21 Crores Apr-Mar 2005 - 06.
❖ It has covered over 1.6 million individuals out of which over 5, 00,000
lives have been covered through our group business tie-ups.
❖ It was necessitated on account of the strong growth shown by the company in the
current financial year in its life insurance and pension business.

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 7.2 SPECIFIC FINDINGS

❖ Majority (66%) of respondents fall in the age group of 45-55.

❖ The male respondents constituted the major position (73%).
❖ Majority (99%) of respondents who are married.
❖ Majority (57%) of respondents are in the experience group of 20-30.
❖ The respondents who earn between 180000-300000 constituted the major position
(50%).
❖ 100% of respondents are aware of the life insurance policies.
❖ 85% of the respondents came to know about insurance polices through agents.
❖ Most of the respondents are aware of LIC and in the private sector HDFC
Standard Life insurance.
❖ Most of the respondents are preferred to take policies for the purpose of Tax
Savings.
❖ Most of the respondents are preferred to take money back and endowment
policies.
❖ Most of the respondents are ranked money back policy as first.
❖ 48% of the respondents preferred monthly premium payment period.
❖ 58% of the respondents preferred Salary Deduction as mode of payment.
❖ 43% of the respondents preferred to get the documents through agent.
❖ 75% of the respondents preferred to get the claim settlement through cheque.
❖ Most of the respondents ranked premium amount as first detail followed by period
of premium and feature of policy.
❖ 75% of respondents are preferred public sector.
❖ Most of the respondents are selecting the agent's by knowledge of policy followed
by convincing approach and investment advice.
❖ Most of the respondents are selecting the insurance company first to fulfillment of
customer needs followed by availability of product and services and brand name.
❖ 66% of respondents are preferred to take policy in future.
❖ 28 respondents preferred to take Children's policy.
❖ 55 of the respondents preferred to take LIC as there company and among the
private company HDFC as their company.
❖ 98% of respondents are currently having policies.

LXVI
❖ 64 of the respondents are having policies in LIC and HDFC is in the second place
when compared to others private players.
❖ 45 of the respondents having two policies.
❖ 57 respondents having Endowment policy.
❖ 59 respondents are having policies for the purpose of tax savings.
❖ 51 respondents are paying monthly premium payment.
❖ 34 respondent's annual premium payment is in between Rs 3000-5000.
❖ The respondents are satisfied with the current agent services.
❖ 86 respondents are got scores in between 22 – 28, so the respondents are satisfied
with the agent service.
❖ The respondents are satisfied with the current company services.
❖ 87 respondents are got scores in between 40 – 52, so the respondents are satisfied
with the insurance company.

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 7.3 SUGGESTIONS

❖ In view of the competition from LIC and other private players in the market,

HDFC Standard Life should organize more awareness campaigns to create

awareness and to promote their existing products.

❖ More new products and services should be innovated through financial

engineering process to tap rural and social sectors.

❖ To retain old customers and to attract new customer's products with adds-on

features should be introduced besides attractive advertisements.

❖ To reach out more customers, tie-ups with companies, in various sectors can be

arranged to cover the insurance needs of their employees.

❖ As the awareness level among the government officials for some insurance

policies like ULIP, Money back plan, Endowment plan, Children's plan,

Protection plan, etc. are very low, periodical awareness programs in the

respective government officials with concurrence of higher officials should be

conducted.

❖ To enhance the satisfaction level of policyholders and to avoid losing the

existing customers periodical market surveys should be conducted.

❖ To utilize one of the most important marketing channel (commercial banks)

very effectively for promoting the products, steps should be taken to make the

banks incorporate successful sales tactics used by them to sell other financial

services.

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 LIMITATIONS

➢ Some of the respondents were not cooperative.

➢ There are chances of biased information provided by the

respondents.
➢ As the sample size is small compared to the total
population, therefore there can‟t be full accuracy.
➢ The time was limited.

➢ Area was limited.

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 5.4 CONCLUSION

Insurance sector is one of the most booming sectors in India. The penetration level
of insurance in India is only 2.3% when compared to 9-15% in the developed nations.
There is a huge market for the Insurance products in the future in India. The results
suggest that the number of household members availing of government insurance
policies, is significantly higher than private insurance policies.

The project was very useful to the researcher to understand the life insurance
business.

LXX
 Bibliography

Books

➢ Khan. M. Y, FINANCIAL SERVICES, Tata Mcgraw Hill, Mumbai

➢ Gordon and Natarajan, Financial Markets and Services, Himalaya Publishing

House, Mumbai

➢ V.A Avadhani, Marketing of Financial Services, Himalaya Publishing House,

Mumbai

WEBSITES

➢ www.hdfclifeinsurance.com

➢ www.irda.com

REPORTS

➢ IRDA Reports

LXXI
 Appendix

• The information that you provide will be kept confidential and will be used only
for academic purpose
• This questionnaire will be for those people who have plans for Insurance Policy

Name: ___________________
Address: ___________________

1. Which age category do you fall in?

(a) 25-35
(b) 35-45
(c) 45-55
(d) Above 55

2. What is your gender?

(a) Male
(b) Female

3. What is your marital status?

(a) Married
(b) Unmarried

4. How long have you been working for (work-experience)?

(a) Less than 10 years
(b) 10-20 years
(c) 20-30 years
(d) More than 30 years

5. Which annual income group do you belong to?

(a) Less than 1,80,000 Rs.
(b) 1,80,000 - 3,00,000 Rs.
(c) 3,00,000 - 4,20,000 Rs.
(d) More than 4,20,000 Rs.

6. Are you aware about Insurance Policies?

(a) Yes
(b) No

7. How did you come to know about them?

(a) Agent (f) Internet
(b) Employer (g) Bankers
(c) Press (h) Friends
(d) Relatives (i) Mobile
(e) TV (j) Brokers

LXXII
8. Which of the following Insurance Company are you aware about?
(a) LIC
(b) HDFC
(c) Birla
(d) Kotak
(e) Reliance

9. What do you think is the purpose of taking Insurance Policies?

(a) Tax saving
(b) Investment
(c) Life risk
(d) Regular returns
(e) Health Insurance
(f) Retirement benefits
(g) Others

10. Which of the following Insurance policies are you aware about?
(a) Endowment
(b) Whole Life
(c) Children’s Policy
(d) Money Back
(e) Retirement Policy

11. On the scale of 1 to 5, rank the following policies in the order of preference (1 being
the most preferable and 5 least).
(a) Endowment
(b) Whole Life
(c) Children’s Policy
(d) Money Back
(e) Retirement Policy

12. What is your preferred premium period?

(a) Annual
(b) Half-yearly
(c) Quarterly
(d) Monthly

13. What is your preferred premium payment mode?

(a) Salary deduction
(b) Through an Agent
(c) By Cash
(d) By Cheque
(e) Others

LXXIII
14. Which mode of delivery of Policy documents do you prefer?
(a) Online
(b) By Post
(c) Through an Agent
(d) Collecting personally from Insurance Company

15. Which mode of settlement do you prefer?

(a) By Cash
(b) By Cheque
(c) Online Account Transfer

16. Which is your preferred Insurance Company Sector?

(a) Public sector
(b) Private sector

17. In order of preference, rank the parameters from 1 to 4, which are most important to
you while selecting an agent.
(a) Knowledge of Policy
(b) Investment advice
(c) Premium details
(d) Claim settlement

18. In order of preference, rank the parameters from 1 to 4, which are most important to
you while selecting an Insurance Company.
(a) Brand Name
(b) Availability of products and services
(c) Terms and Insurance
(d) Premium amount

19. Would you like to prefer a policy in future?

(a) Yes
(b) No

20. Which among the following Insurance Companies would you like to prefer in future?
(a) LIC
(b) HDFC
(c) Bajaj
(d) ICICI

21. Do you currently hold any Insurance Policy?

(a) Yes
(b) No

22. Which among the following Insurance Companies do you hold a policy with?
(a) LIC
(b) LIC and HDFC
(c) LIC and ICICI
(d) HDFC

LXXIV
 (e) Others

23. How many policy(s) do you have currently?

(a) One
(b) Two
(c) Three
(d) Four

24. What is the type of policy that you have?

(a) Endowment
(b) Whole Life
(c) Money back
(d) Children’s Policy
(e) Retirement

25. How much premium amount do you pay annually?

(a) Less than 3,000 Rs.
(b) 3,000 - 5,000 Rs.
(c) 5,000 – 7,000 Rs.
(d) More than 9,000 Rs.

26. How satisfied are you with your Agent’s service?

(Please tick against the suitable response)
(a) Highly Dissatisfied
(b) Dissatisfied
(c) Completely Satisfied
(d) Satisfied
(e) Highly Satisfied

27. How satisfied are you with your Insurance Company?

(Please tick against the suitable response)
(a) Highly Dissatisfied
(b) Dissatisfied
(c) Completely Satisfied
(d) Satisfied
(e) Highly Satisfied

LXXV