INTRODUCTION:

In India, even today, the insurance penetration is only around six per cent of
the total population, with 4.40 per cent in life and just 0.71 per cent in
general insurance. The Insurance Regulatory and Development Authority’s
proposed draft on standard insurance products looks to deepen the market
and enable inclusion. However, further clarity is needed on the guidelines
for implementation. The main challenge is in developing and sustaining
within a viable distribution network. In underpenetrated areas, distribution
and premium collections costs escalate and making it difficult to offer the
products at a nominal cost. One way this issue is tackled by building a
robust online distribution and payment infrastructure, specialised to meet
the needs of the rural population, along the lines of what e-choupal has
successfully implemented.

By investing in life insurance, almost anyone can transfer the

financial risks of dying early, guaranteeing to family members who might
otherwise be left in economic turmoil.

Today's life insurance policies, however, often come with features

borrowed from the investment world, blending traditional insurance with
attributes of a mutual fund account.

Vehicles for Investing in Life Insurance

Those who haven't purchased a policy may be familiar only with

"term" life insurance, which covers the owner for a set period of time, say,
until their child graduates from college. If the owner lives past that date, the
plan expires and is worthless. But some life insurance policies are "cash
value," which means the fees, or premium, initially are greater at the start of
the policy than they would be in a term policy. The excess premium is then
invested in a "separate account," either by the insurer or in an account
controlled by the policy holder, building up cash value. Any investment
gains can be used in a few ways: to increase the death benefit, to borrow
against for any use or to keep the policy in effect if one stop paying monthly
premiums. Policies that offer this investment feature come with
significantly more complex terms, and are offered by salespeople who may
earn a significant commission off one r initial premium. In variable life
insurance policies, the cash value and benefits may actually decrease or go
away completely depending upon the performance of the investments

Flexibility of Investing in Life Insurance:

The death benefit on a variable universal plan may be increased with a
lump-sum payment, or borrowed against in the event of a pressing financial
need like a medical emergency. The ability to skip payments is also
considered an advantage. In addition, the investment account may be shifted
to more conservative or aggressive options.
Let us begin with a very simple question which is why a need for
insurance. The answer lies in any combination of the following options:
1. Investment
2. Tax Benefit and 3. Insurance Benefit

INVESTMENT
People make a mistake of investing in insurance for variety of
reasons. No matter what the investment objective is, it should not cost one
much and returns should be in line with other investment options available
at one’s disposal.

Tax Benefit
The next category of people who invest in insurance is tax payers. Many
fall into the trap of Insurance as an option to save tax. Some of questions
are for them:
1. How much of the initial investment is actually invested?
2. Which funds the policy invests into to get returns they quote?
If one have an insurance policy which invests in few selected
category of funds why don’t one select those funds on own and save?

Insurance Benefits
The need insurance is to be assured within a lot of products and even
compare them by paying the premium for any return . Again term insurance
is coupled with some other investments.

Insurance is something where one can live poorly so one can die
richly and investment is something where one can build wealth. Both
cannot go hand in hand and so invest wisely.

INVESTING IN MUTUAL FUND MFSS:

The basics of investing money in MFss, Bonds, Mutual funds, are
simple and easy as one proceeds step by step . Any successful MFs market
investor is familiar with the basics of mutual find investing. But mostly
investors are not even aware on their investments in mutual funds schemes ,
where their money have been invested.
 Investing in equity, mutual funds, IPO's, keeping an eye
opportunities, watching the trends is not easy but one can learn the steps for
successful investing. For the investor there is a need of regular update on
MFss .

Mutual fund invest

Both the long term and short term investors can benefit from such
type investments but there is a need of regular update on new investing
schemes and the volatility in market investments. The investor use due
diligence while investing in the hot MFs tips.

Indian MFs market is quite mature. In fact India has the largest investor
base in the world after the US and Japan. Investors can invest in shares,
debentures, mutual funds and securities among other investment tools.
Shares are traded in BSE (Bombay MFs Exchange) and the NSE (National
MFs Exchange). Trading can be done online or over the phone through the
help of an intermediary. NRI's can invest in the Indian MFs market under
PIS (Portfolio Investment Scheme) which is regulated by RBI but NRI's are
not allowed day trading that is to buy and sell a MFs on the same day. In
addition to above two main MFs exchanges India have 21 recognised MFs
exchanges but the most active ones are the NSE and the BSE. NSE set up
has a model exchange as a fully automated screen based system. BSE one of
the oldest in the world accounts for the largest number of listed companies
has also started a screen based trading system with the introduction of the
Bombay online trading system. Regulations on the capital markets and the
protection of investors interest is primarily the responsibility of the
Securities and Exchange Board of India (SEBI) headquartered in Mumbai.
consider three parameters while selecting a company. First is the strength of
the business. How does the company make money and how sustainable is
its competitive advantage? For instance, the competitive edge could be in
the form of a substantial market share a strong brand, or a wide distribution
network.

Risks of Investments
Sometimes a mutual fund with a high yield has had a significant
decline in price without a change in the company’s dividend. For a MFs to
have a significant decline in market price, there usually is an accompanying
steep decline in the company’s business and resulting profits. These
fundamental problems often make it impossible for the company to
maintain its dividend payouts and the yield on investment will drop.
If one spot a investment with a large yield in insurance , first it is needed to
check its market price over the previous trends. So risk is that important
factor to consider the pattern of investment .

Insurance guidelines were notified by Insurance Regulatory Development

Authority (IRDA) on 21st December 2005. The main intent of the
guidelines was to ensure that they lead to greater transparency and
understanding of these products among the insured, especially since the
investment risk is borne by the policyholder. It is the endeavor of IRDA to
enable the buyer to make the most informed decision possible when
planning for financial security. The Indian insurance sector has gone
through a sea change after the adoption of liberalization, privatization and
globalization process by the government in the last decade of 20th century.
Consequently, a lot of foreign players entered into the Indian market in
collaboration with the Indian companies to break the monopoly of the state
owned giant the LIC of India, in the field of life insurance
with a capital ceiling of 26 percent. As a 99.46 percent in 2001-
02 decreased to 70.92 percent in 2008-09; and at the same time, its share in
new life policies issued also decreased to 70.52 percent during the same
time period, which is an indicator of the strong building competition
against corporation. At present, there are 24 life insurance companies in
India with variety of innovative and customized products including
INSURANCE PLANSs.

INSURANCE PLANS is an abbreviation for Unit Linked Insurance Policy.

A INSURANCE PLANS is a life insurance policy which provides a
combination of risk cover and investment. The dynamics of the capital
market have a direct bearing on the performance of the INSURANCE
PLANSs. In a INSURANCE PLANS, the investment risk is generally
borne by the investor. The three important things to remember about a
INSURANCE PLANS is that entry costs are high and the brokerage,
commission could be as high as 30 percent of the premium in the first year.
The second thing to remember is that management fee is low in a
INSURANCE PLANS at around. The price of an insurance cover is higher
in a INSURANCE PLANS than in a plain vanilla insurance policy. To that
extent if a person has the time and inclination to research he would be
better off buying separate insurance and mutual funds. The third point that
one must keep in mind is that in India one gets tax benefits on investing in
INSURANCE PLANSs. As INSURANCE PLANSs are an efficient tax
saving instrument too. The tax benefits that one can avail in case he invests
in INSURANCE PLANSs are described below:
3. Life insurance plans are eligible for deduction under Sec. 80C.
4. Pension plans are eligible for a deduction under Sec. 80CCC.
 5. Health insurance plans and critical illness riders are
eligible for deduction under Sec. 80D.
6. The maturity proceeds or withdrawals of life insurance
policies are exempt under Sec 10(10D), subject to
norms prescribed in that section.
Most insurers offer a wide range of funds to suit one’s investment
object and time horizons. Different funds have different risk profiles. The
potential for returns also varies from fund to fund. Investment returns from
INSURANCE PLANS may not be guaranteed. Depending upon the
performance of the unit linked fund(s) chosen; the policy holder may
achieve gains or losses on his/her investments. It should also be noted that
the past returns of a fund are not necessarily indicative of the future
performance of the fund.
The following are some of the common types of funds available
along with an indication of their risk characteristics.

General Description Nature of Investments Risk Category

1. Equity Funds Primarily invested in company MFss Medium to High
With the general aim of capital
appreciation.
2. Income, Fixed Interest Invested in corporate bonds, Medium
and Bond Funds government securities and other fixed
income instruments.
3. Cash Funds Sometimes known as Money Market Low
Funds- invested in cash, bank deposits
and money market instruments.
4. Balanced Funds Combining equity investment with fixed Medium
interest instruments.

The study has been divided into five broad sections. The first
section deals with introduction and in the second section working of
INSURANCE PLANSs has been chalked out. The third section contains
research methodology and objectives of the study. The analysis and
interpretation is presented in section fourth and the last section by way of
conclusion provides some suggestions.

WORKING OF INSURANCE PLANSS

It is critical for an investor to understand how his money gets

invested once he purchases a INSURANCE PLANS. When he decides the
amount of premium to be paid and the amount of life cover he wants from
the INSURANCE PLANS, the insurer deducts some portion of the
INSURANCE PLANS premium upfront. This portion is known as the
premium allocation charge, and varies from product to product. The rest of
the premium is invested in the fund or mixture of funds chosen by him.
Mortality charges and INSURANCE PLANS administration charges are
thereafter deducted on a periodic (mostly monthly) basis by cancellation
of units, whereas the INSURANCE PLANSs fund management charges
are adjusted from net asset value (NAV) on the daily basis.

The pie-chart below illustrates the spilt of Insurance Plans premium:

INSURANCE PLANS V/S MUTUAL FUND

 Insurance Plans and Mutual Fund (MF) are the two most preferred
options for a part time investor to invest into equity. Mutual Fund is pure
investments. INSURANCE PLANSs are the combination of insurance and
investment. This is the type of investment where the characteristics of
insurance and mutual funds are combined.

INSURANCE PLANSs V/S MUTUAL FUND

INSURAN
CE
PLANSs Mutual Funds
Investment Amounts Determined by the investor and Minimum investment
can be modified as well amounts are determined by
the fund house.
Expenses No upper limits, expenses Upper limits for expenses
determined by the insurance chargeable to investors have
company been set by the regulators.
Portfolio Disclosure Not mandatory Quarterly disclosures are
mandatory.
Modifying Asset Generally permitted for free or Entry/exit loads have to be
Allocation at a nominal cost borne by the investor.
Tax Benefits Section 80C benefits are Section 80C benefits are
INSURA
NCE
available on all PLANS available only on
investments investment in tax-saving
funds.
OBJECTIVES
 OBJECTIVES OF THE STUDY
The research carries out a comparative study of the INSURANCE
PLANSs
of different life insurers in terms of their focus, different types of
charges
charged by them from the insured, Mutual fund options available, and
other
important aspects affecting the interest of the policyholders.

To compare the INSURANCE PLANSs of different life

insurers in terms
of their focus.

To compare the different types of charges charged by

insurers from the
insured.

To know the fund options available to the insured.

To know other important aspects affecting the

interest of the policy holders.

To find out the investment decision on insurance

investment and
mutual fund investment.

To study the behavioral pattern of investors through

samples .
Rationale of
The Study
Rationale of The Study
The interest shown by people in the Insurance Plansis because of the many
benefits these plans offer such as high growth potential, life risk cover,
transparency, tax benefits and premium payment flexibility etc. It is one of
the best methods of investments if one is living in an economy that is
booming and is on the path to growth. The units that are part of the share
market are bought with money invested by the investor and as the equity
market grows, the money invested by the investor also increases and gives a
good return. The present paper focuses on the evaluation of the
INSURANCE PLANSs of sampled life insurers operating in the state of
Haryana and Punjab, on the basis of the main components of the plans
highlighted by the insurers and opinions of the policyholders of sampled
companies collected through a questionnaire. The sample has been selected
on the basis of purposive-cum-quota based non-probability sampling
techniques. To make the analysis meaningful, certain simple and advanced
statistical tools like –averages, weighted average, percentage, mean score
and chi-square test etc., were applied for analyzing the collected data. The
Chi-square test was conducted at 99 percent confidence level or 1 percent
level of significance. A five points Likert scale was also used to measure the
intensity of the responses of different respondents from various categories
towards the selected attributes. The important facts and deficiencies were
found out and some viable suggestions are made to make them effective from
the view point of both insurers as well as the policyholders.

The need insurance is to be assured within a lot of products and even

compare them by paying the premium for any return . Again term insurance
is coupled with some other investments. Insurance is something where one
can live poorly so one can die richly and investment is something where one
can build wealth. Both cannot go hand in hand and so invest wisely. But, the
basics of investing money in MFss, Bonds, Mutual funds, are simple and
easy as one proceeds step by step . Any successful MFs market investor is
familiar with the basics of mutual find investing. But mostly investors are not
even aware on their investments in mutual funds schemes , where their
money have been invested. Investing in equity, mutual funds, IPO's, keeping
an eye opportunities, watching the trends is not easy but one can learn the
steps for successful investing. For the investor there is a need of regular
update on MFss .For this study 100 samples from the private sector
executives have been collected through a questionnaire and the study result
reported that, the private sector executives mostly prefer to invest in
insurance funds than MFss as mostly they are self conscious, well informed
on investment . But in MFss , mostly they opined on maximum value on
volatility, expectations, risk and return . It is interesting that most of the
executives invest more freely on insurance funds of any company than the
MFs investment.
 Research
Methodology
 Research Methodology
The present research study has been conducted on the basis of
primary data and is descriptive in its nature. The required primary data for
the study was collected through common questionnaire for all categories of
respondents. The researcher considered all 24 companies in its universe
prevailing in India during 2010-11, when the sample was taken. Out of the
above universe, only seven major companies- LIC of India, ICICI
Prudential Life Limited, Birla Sun Life Insurance Limited, HDFC Standard
Life Limited, Reliance Life Limited, SBI Life Limited and Bajaj Allianz
Life Limited, which offered variety of products and created competitive
market situation in the field, were identified as survey population for the
purpose of research work. From the identified survey population, a sample
of 450 respondents (150 executives and 300 policyholders) was selected
from Nagpur which were related to the sampled companies. The sample has
been selected on the basis of purposive-cum-quota based non-probability
sampling techniques. To make the analysis meaningful, certain simple and
advanced statistical tools like –averages, weighted average, percentage,
mean score and chi-square test etc., were applied for analyzing the collected
data. The Chi-square test was conducted at 99 percent confidence level or 1
 percent level of significance. A five points Likert scale was also used to
measure the intensity of the responses of different respondents from various
categories towards the selected attributes.

The primary data has been collected from 100 investors (private sector
employees) and taken as samples from Nagpur city only through a well
defined questionnaire. The collected data have been interpreted through
using the statistical packages. The t-test was applied for the study .

STUDY RESULTS

The study has been corroborated from the data collected from the
samples (100) from private sector employees of Nagpur city considering the
factors on risk, return, knowledge level, Self-consciousness, investment
amount , information from company/broker/agent front, volatility rate and
expectation, These factors have been tested and compared through using t-
test , standard deviation and standard error with mean value. These factors
have been analysed in different tables reported below.
REVIEW OF
LITRATURE
 REVIEW OF LITRATURE

Kumar (2001) investigated the effects of FII inflows on the Indian

MFs market represented by the Sensex using monthly data from January
1993 to December 1997. Kumar (2001) inferred that FII investments are
more driven by Fundamentals and they do not respond to short-term changes
or technical position of the market. In testing whether Net FII Investment
(NFI) has any impact on Sensex, a regression of NFI was estimated on
lagged values of the first difference of NFI, first difference of Sensex and
one lagged value of the error correction term (the residual obtained by
estimating the regression between NFI and Sensex). The study concluded
that Sensex causes NFI. Similarly, regression with Sensex as dependent
variable showed that one month lag of NFI is significant, meaning that there
is causality from FII to Sensex.

Stanley Morgan (2002) has examined that FIIs have played a very
important role in building up India’s forex reserves, which have enabled a
host of economic reforms. Secondly, FIIs are now important investors in the
country’s economic growth despite sluggish domestic sentiment. The
Morgan Stanley report notes that FII strongly influence short-term market
movements during bear markets. However, the correlation between returns
and flows reduces during bull markets as other market participants raise their
involvement reducing the influence of FIIs. Research by Morgan Stanley
shows that the correlation between foreign inflows and market returns is high
during bear and weakens with strengthening equity prices due to increased
participation by other players.

Agarwal, Chakrabarti et al (2003) have found in their research that the

equity return has a significant and positive impact on the FII. But given the
huge volume of investments, foreign investors could play a role of market
makers and book their profits, i.e., they can buy financial assets when the
prices are declining thereby jacking-up the asset prices and sell when the
asset prices are increasing. Hence, there is a possibility of bi-directional
relationship between FII and the equity returns.

Gurucharan Singh (2004) highlighted that the securities market in

India has come a long way in terms of infrastructure, adoption of best
international practices and introduction of competition. Today, there is a
need to review MFs exchanges and improve the liquidity position of various
scrips listed on them. A study conducted by the World Bank (1997) reports
that MFs market liquidity improved in those emerging economies that
received higher foreign investments.

P. Krishna Prasanna (2008) has examined the contribution of foreign

institutional investment particularly among companies included in sensitivity
index (Sensex) of Bombay MFs exchange. Also examined is the relationship
between foreign institutional investment and firm specific characteristics in
terms of ownership structure, financial performance and MFs performance. It
is observed that foreign investors invested more in companies with a higher
volume of shares owned by the general public. The promoters’ holdings and
the foreign investments are inversely related. Foreign investors choose the
companies where family shareholding of promoters is not substantial.
Among the financial performance variables the share returns and earnings
per share are significant factors influencing their investment decision.
HYPOTHESIS
 HYPOTHESIS

H0: There is more risk and more return on mutual fund investments
than insurance investment .

Ho: There is no significant difference in INSURANCE PLANSs of

different life insurers in terms of their focus

Ho: There is no significant difference in different types of charges

charged by insurers from the insured.

Ho: There is no significant difference in different fund options

available to the insured

Ho: There is no significant difference in different aspects affecting

the interest of the policy holders.
 Data
Collection &
Analysis
 Data Collection & Analysis

On the basis of the information collected and analysis made thereof

with the help of the statistical tools, the following results were noticed
as main findings.
TABLE 1: AREA–WISE FOCUS OF PLANS OF THE SAMPLED
COMPANIES

Focus/Respondents LIC of Private Total Chi-square Table

India Players Value Value
Urban Customers 12(40) 83(69.16) 95(63.33) 9.32 6.635
Rural Customers 18(60) 37(30.84) 55 (36.67)
Total 30(100) 120(100) 150(100)

Note: The figures in brackets show the percentage.

80
70
60
50
LIC
40
Pvt Players
30 Total
20
10
0
Urban Customers Rural Customers

Though, all the life insurers are bound to achieve the prescribed
minimum number of policies to be sold in rural areas of the country, but
yet their focus is on the urban areas except LIC of India, as has been
shown by table 1. The majority (60%) of the executives of LIC of India
were of the opinion that their focus was on rural area customers with
only 30.84% executives of the private life insurers. The respondents of
private players were of the reverse opinion. The test of significance also
signifies the difference in approach of public and private players as the
 table value at 1% level of significance for (degree of freedom 2) is 6.635
and Chi-square value is 9.32.

TABLE 2: CUSTOMER–WISE FOCUS OF PLANS OF THE SAMPLED

COMPANIES

Focus/Respondents LIC of Private Total Chi-square Table

India Players Value Value
Rich Customers 24(80) 100(83.5) 124(82.67) 0.317 6.635
Poor Customers 6(20) 20(16.5) 26(17.33)
90 Total 30(100) 120(100) 150(100)
80

70

60

50 LIC
40 Pvt Players
Total
30

20

10

0
Rich Customers Poor Customers

All life insurers’ plans were found to be and 82.67% for private
players) as against the poor customers (20% for LIC of India and
16.5% for private players). The table value at 1% level of significance
for (degree of freedom 2) is 6.635 and Chi-square value is 0.317
which indicates no significant difference between the approaches of
the two types of insures.
TABLE 3: MAXIMUM FUND OPTIONS IN INSURANCE PLANS

Respondents/Score Number of Total Mean Chi-square Table

Respondents Score Score Value Value

LIC of India 30 114 3.80 0.932 9.210

Private Insurers 120 464 3.87
Total Insurers 150 578 3.85 8.820 11.345
Policy holders 300 1120 3.73
Total 450 1698 3.77

There are different fund options for the policyholders to be chosen

among by them, having risk from very high to low. The minimum 3 fund
options were offered by SBI Life Limited, while the 7 fund options were
give by HDFC Life Insurance Company Limited out of sampled companies,
ranging a very low to very high risk profile. The response on the factor
shows that all respondents including the insurers are of the opinion that there
should be maximum number of fund options for the policyholders to choose
among them according to their choices. The analytical table 3 shows that the
mean score for aggregate respondents was 3.77 followed by 3.87 for private
insurers, 3.80 for LIC of India and 3.73 for policyholders. No significant
difference was found among different types of respondents.
TABLE 4: CLEAR EXPOSURE OF VARIOUS CHARGES IN A
INSURANCE PLANS

Respondents/Score Number of Total Mean Chi-square Table

Respondents Score Score Value Value

LIC of India 30 114 3.80 9.866 9.210
Private Insurers 120 356 2.97
Total Insurers 150 470 3.13 97.024 11.345
Policy holders 300 1228 4.09
Total 450 1698 3.77

It was observed that the different charges charged by the insurers are
not shown in full in a broacher displayed by the company. The
analytical table 4 points out that the policyholders favored the
statement with an impressive mean score of 4.09. The mean score of
private insurers was just 2.97 as against the LIC of
India’s3.80.Itshowed that the private insurers were not interested in
highlighting different expenses and they believe in secrecy, which
may harm customers, who on the other hand want that the expenses
must be disclosed explicitly so that a comparison can be made
between different companies to take a final decision on buying a
policy. The test of significance confirms the gap in opinion between
insurers and policyholders but, no significant difference was found
between the insurers.
TABLE 5: THE EXISTENCE OF HIGH ALLOCATION/ FUND
MANAGEMENT/MORTALITY CHARGES IN A INSURANCE
PLANS

Respondents/Score Number of Total Mean Chi-square Table

Respondents Score Score Value Value
LIC of India 30 76 2.53 2.578 9.210
Private Insurers 120 336 2.80
Total Insurers 150 412 2.75 163.804 11.345
Policy holders 300 1260 4.20
Total 450 1672 3.72

Table 5 expresses the responses on premium allocation charges, fund

management charges and mortality charges. The mean score of the
aggregate respondents was 3.72 which favored the statement, the
policyholders affirmed that the expenses charged by the insurers are
very high (mean score 4.20), contrary to it, the response of the
insurers was against the statement (mean score 2.75). The corporate
respondents including the LIC of India denied the statement
collectively and, the test of significance expressed the difference of
opinion between the insurers and the policyholders. It is one of the
problems due to which the INSURANCE PLANSs were objected by
SEBI to be issued without its permission.
The LIC of India charges 3.3 to 5 percent as Premium allocation
charges on single premium plan which is higher than its competitors
who charge 2 to 2.5 percent generally, excepting the ICICI Prudential
whose charges are 0 to 6 percent. The products of LIC of India are
much economical as compared to private players for policy
administration charges as it charges Rs. 60 in the first year of the
policy and then Rs.20 per year only in the later years, whereas the
private players charge Rs.40-50 per year as fixed charges.
The study reveals that mortality charges are charged by all the
insurers at monthly basis, but are calculated at fixed percentage of per
thousand premiums per annum. These charges are very low 1.42
percent at the age of 25 years and 10.76 percent at the age of 55
years, in case of LIC of India while they are up to 15.56 percent in
case of private life insurers. The LIC of India is very cost effective as
against its competitors as far as the above said two expenses are
concerned.
The fund Management charges are charged at fixed rate by the
insurers on per annum basis. The rates are different on different types
of funds selected by the insured and are charged on daily basis by all
insurers. The lowest rate of charges is being charged by the SBI Life
(0.25 percent), while the maximum rate is charged by the ICICI
Prudential (2.25 percent). The LIC of India’s charges are moderate.
The study also reveals that the commission to be paid to the agents is
never visible to a customer and, the agent may sell a product to get
the maximum return out of that and the product may unsuitable to the
customer, hence the commission should be disclosed. If the
commission paid is apparent, then a customer can be saved from
possible inconvenience and financial loss. In this way, the
possibilities of mis-selling of products by the agents are always there.
The major problem identified was that the plans of different
insurers are not even comparable up to a great extent due to different
formats of brochures and material therein. The policyholders found
that the plan documents to be difficult.
 Table –6
T-Test: RISK AMOUNT
Std. Error
N df Mean t Std. Mean
Deviation
INSURANCE FUND 8 7 2.9667 22.978 .36517 .12911

MFs 8 7 2.8857 35.239 .23162 .08189

Table –6 reveals that out of eight questions responded by the

respondents of the Executives of Private Sector Employees , the mean
response is almost same for all the questions on “Risk bearing capacity
of the executives”, where as the standard deviation shows a negligible
figure for both the investments ,which indicates a lower fluctuation in
risk coverage. The table also indicates the t values of the aggregate of
eight questions asked to them, which is having a less coverage of risk on
impact of the investment in “insurance fund”, which indicated that
investors invest more in Insurance Fund than MFss in response as the
risk bearings of individuals is less .So most of them want to invest in
insurance fund rather than MFs market.
 Table –7
T-Test: RETURN
Std. Error
N df Mean t Std. Deviation Mean

INSURANCE
FUND 8 7 2.8679 20.723 .39142 .13839

MFs 8 7 2.9667 22.978 .36517 .12911

Table –7 reveals that out of eight questions responded by the

Executives , the mean response is almost same for all the questions on
“Return”, where as the standard deviation shows a meager value which
indicates a less gap in the responses to all the eight questions. The table
also indicates the t values of the aggregate of return factor on
investment , it was more on the impact factor “MFs” than insurance
Fund .Most of them responded and agreed that return is more on MFss
than insurance fund investment.
Table –8
T-Test: KNOWLEDGE LEVEL
Std.
N df Mean t Deviation Std. Error
Mean
INSURANCE FUND 8 7 2.8679 20.723 .39142 .13839

MFS 8 7 2.8333 21.157 .37878 .13392

Table –3 reveals that the question response on “Knowledge Level” and

the respondents mean response is almost same for all the questions,
where as the standard deviation .So investors /Executives are more
aware and well adoptable to the MFs investment than the other one. So
more orientation is required for insurance fund.

Table –9
T-Test: Self-Consciousness
Std.
Groups N df Mean t Std. Error
Deviation Mean
INSURANCE FUND 8 7 3.1143 25.077
.35126 .12419

MFS 8 7 3.2500 22.388 .41059 .14517

Table –9 reveals that out of eight questions responded by the
respondents of the Executives of private sector employees, the mean
response is almost same for all the questions on “Self-Consciousness”,
where as the standard deviation shows more on insurance fund and it
indicates a more gap across the questions asked. The table also
indicates the t values of the aggregate questions asked to them, which
is indicated more for investment in insurance fund in response to
“Self Consciousness”. So investors are more acquainted with the
trend of insurance fund management of the companies time to time
than MFss.
Table –10
T-Test: INVESTMENT AMOUNT
Std.
N df Mean t Std. Error
Deviation Mean
INSURANCE FUND 8 7 3.1071 22.320 .39374 .13921
MFS 8 7 3.0500 14.189 .60797 .21495

Table –10 reveals the mean response of all the questions on

“investment amount ”, where as the standard deviation indicated a
mere fluctuation across the questions . Further, the table indicates
the t values of the aggregate of eight questions asked to them, where
more is marked in insurance fund than MFss . So Executives of the
private sector invest more amount in insurance fund than investing in
MFss.
Table –11
T-Test: INFORMATION FROM COMPANY/BROKER/AGENT
FRONT
Std. Std. Error
Groups N df Mean t Deviation Mean
INSURANCE FUND 8 7 3.1071 22.320
.39374 .13921

MFS 8 7 3.0667 13.240 .65513 .23162

Table –11 reveals that the respondents “ Executives of private Sector”,

the mean response is almost same for all the questions on getting
information, where as the standard deviation shows also negligible . The
table also indicates the t values of the aggregate of questions asked to
them, mostly investors get ample of information regarding their status
from company though mobile, internet , e-mails , broker calls and from
agents of the companies than the information presently been provided
on investment on MFss. This MFs market sector investment lacks some
sort of information.
 Table –12
T-Test: VOLATILITY RATE
Std. Error
N df Mean t Std. Mean
Deviation
INSURANCE 13.24
FUND 8 7 3.0667 0 .65513 .23162
14.18
MFS 8 7 3.0500 9 .60797 .21495

Table –12 reveals that out of eight questions responded by the

respondents and the mean value of the questions asked in both the
investment is almost same, where as the standard deviation shows also
very negligible for both the investments . The table also indicates the t
values of the aggregate of eight questions asked on rate of voltility,
which is having a more impact on risk and return of the investment .The
t-value is more on MFs i.e. more volatility in the trend of return than
investing in insurance fund .
Table –13
T-Test: EXPECTATION
Std.
N df Mean t Deviation Std. Error
Mean
INSURANCE FUND 8 7 3.1071 22.320 .39374 .13921
MFS 8 7 3.1334 30.847 .28730 .10158

Table – 13 reveals that out of eight questions responded by the

respondents on expectation , the mean response is almost same for all
the questions on “expectation”, where as the standard deviation shows
a very negligible value. The table also indicates the t values of the
aggregate of eight questions asked to them, which is more on return
from investment of MFs than insurance funds . So the investors expect
more on MFss even if in the same investment in insurance funds. It
depends upon the psychology of the investors that investing ins tock
obviously leads to any other investment , but from the risk and return
point of view, they mostly prefer to invest in less risk investments even
oif the return rate is lower than MFss.
In conclusion , it is tested that, the private sector executives
mostly prefer to invest in insurance funds than MFss as mostly they are
self conscious, well informed on investment . But in MFss , mostly they
opined on maximum value on volatility,expectations, risk and return . It
is interesting that most of the executives invest more freely on insurance
funds of any company than the MFs investment.

risk
expectatio
n

self-concious

informations
investment -
return knowledge
Conclusion
 Conclusion :
Insurance Plansare the creation of the innovative minds of the
insurers in the post reform period. The plan renders two benefits at the
same time investment and safety cover to the insured. The maximum
business of all the life insurers is coming out of the sales of these products
now days. The responsibility of the insurer is very limited in this type of
insurance agreement, but lured by high growth opportunities in the
investment, the customers go for them. But there must be transparency in
functioning of the life insurers and product must be economical for the
customers. The plan should not be focused on urban areas and rich
customers only, rather they should also take care the rural folks who are
poor, as India is a rural country whose approximately two third population
lives in villages. If the shortcoming shown by the study are removed from
the products by the insurers, they van become more effective and will be
benefited by them. The regulators should see to it that more transparency
should be brought out as far as the different types of expenses relating to
the plans are concerned in the interest of the policyholders.
This is a particularly an important valuation measure for investors
seeking regular income. Investors who depend on income from their
investments include retired persons as well as pension and mutual funds,
which invest with the primary objective of maximizing the income return.
These investors like to see a higher dividend yield. Typically higher
dividend yields are associated with more stable and mature companies. In
the absence of any capital gains, the dividend yield is the return on
investment for a MFs. “An investment in knowledge pays the best
interest” Benjamin Franklin. When it comes to investing, nothing will pay
off more than educating yourself. Do the necessary research, study and
analysis before making any investment decisions.
The findings of the study has been interprets as : for MFs option (mutual
fund schemes) , Risk and Expectation – Higher, where as Return ,
Knowledge level and rate of volatility are lower in each case. But incase of
insurance fund investment , the investors are self conscious, get right
information at right time along with the proper investment .
SUGGESTIONS
 Suggestions:
Before making any investment decision, evaluate how it
affects the current asset allocation plan. As time passes by, life
stage changes with the needs as well as income change. So
One should need to monitor and review investment
periodically . It is required to ask questions like:
Has my investment goal changed?
Has my risk tolerance changed?
How has the investment performed compared to the
expectations and its peer group?
Is there a need to change my decision?

After all, we invest to create wealth for ourselves and

achieve peace of mind. Let’s not make our wrong
investment decisions lose it for us.
REFERENCES
 REFERENCES
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 Chuganee, B.B (2001),BusinessIndia , “NewAugust20,

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 Gupta, L.P (2007),counton Insurance “Special

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o Institutional Investment Flows and Equity Returns in India”,
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