1

DISSERTATION REPORT
On
“A study of consumer perception towards investment life
insurance policy.”
Submitted for the partial fulfillment of the degree
Of
MASTER OF BUSINESS ADMINISTRATION

SUBMITTED TO : SUBMITTED BY:

Proff. P B. Singh. Arun Kumar
Department of Business MBA (M) 4 th Sem
Administration. Roll No. –
203089010022

MAHATMA JYOTIBA PHULE ROHILKHAND

UNIVERSITY
Pilibhit Bypass Road, Bareilly
 2
DECLARATION

I, Arun Kumar . a student of MAHATMA JYOTIBA PHULE

ROHILKHAND UNIVERSITY, BAREILLY hereby declare
that this project Report is the record of authentic work carried
out by me during the academic year 2019-2021 and has not
been submitted to any other university or institute towards the
awards of any degree .An attempt has been made by me to
provide all relevant and important details regarding the topic
to support the theoretical advice with concrete research
evidence. This will be helpful to clean the fog surrounding the
various aspect of the topic. I hope that this project will be
beneficial.

Arun Kumar
 3
CERTIFICATE

MJP ROHILKHAND UNIVERSITY

This is to certify that Arun KUMAR I of MBA 4th semester of

MJP Rohilkhand University has completed his project report
on the topic “A study of consumer perception towards
investment life insurance policy” under the Co-Guide of
Dr. RAHUL KUMAR faculty member, of Department
Business Administration ‘MJP Rohilkhand University’.
To best of my knowledge the report is original and has not
been copied or submitted anywhere else. It is an
independent work done by him.

( CO-GUIDE ) (GUIDE)
DR. Priyanka Rastogi. PROFF .P B. Singh.
MJP Rohilkhand University MJP Rohilkhand University

ACKNOWLEDGEMENT
 4

This extensive endeavor, bliss and euphoria that accompany

the successful completion of task that would not be completed
without the expression of gratitude to the people who made it
possible. I take this opportunity to acknowledge all those who
guided, encouraged and helped me in winding up this project.
I am very thankful to my guide PROFF .P B singh and Co-
guide DR. Priyanka Rastogi who gave me guidance throughout
my research work. I would like to extend my feelings of
gratitude towards my mentor for his constant guidance,
support and correcting where I was wrong.

Last but not the least; I would like to extend my deep sense of
gratitude and thanks to my Parents, Friends and God in
successful completion of this project.

Arun Kumar
MBA (M) 4th Sem
MJP ROHILKHAND UNIVERSITY
 5
TABLE OF CONTENTS

 CHAPTER I
- INTRODUCTION
-ABOUT INSURANCE
-TYPES OF INSURANCE
-HISTORY OF INSURANCE IN INDIA

 CHAPTER II
-LITERATURE REVIEW

 CHAPTER III
-RESEARCH METHODOLOGY
-SCOPE OF STUDY
-OBJECTIVES OF THE STUDY

 CHAPTER IV
-DATA PRESENTATION AND INTERPRETATION
-FINDINGS AND ANALYSIS
-LIMITATIONS OF STUDY
-SUGESTIONS
-BIBLIOGRAPHY
 APPENDIX
 6

CHAPTER 1
 7
INTRODUCTION

INTRODUCTION OF THE STUDY

“The Business of Insurance is related to the protection of the economic

values of the assets”.

Every human being has the tendency to save to protect him from
risks or events of future. Insurance is one form of savings where in people
try to assure themselves against risks or uncertainties of future. It is
assurance against risks or events or losses. People can save their earnings
either in the form gold, fixed assets like property or in banking and
insurances. All the savings of people of a country account for gross domestic
savings. In India, although savings rate is high but people prefer to invest
either in gold or fixed assets so that they can make money out of it. Hence
insurance sector is still untapped in India.

INDUSTRY PROFILE

OVERVIEW OF CURRENT INSURANCE INDUSTRY

1. WHAT IS INSURANCE?
Insurance is a tool by which fatalities of a small number are
compensated out of funds (premium payment) collected from plenteous.
Insurance is a safeguard against uncertain events that may occur in the
future.
It is an arrangement where the losses experienced by a few are
extended over several who are exposed to similar risks. It is a protection
 8
against financial loss arising on the happening of an unexpected event.
Insurance companies collect premium to provide security for the purpose.
Loss is paid out of the premium collected from people and the insurance
companies act as trustees to the amount so collected. These companies have
proposal forms which are filled to give details of insurance required.
Depending upon the answers in the proposal form insurance companies
assess the risk and decide on the premium.
Insurance companies are risk bearers. They underwrite the risk in
return for an insurance premium. the function of insurance is to provide
protection, prevent losses, capital formation etc. hence insurance can be
defined as a tool in which a sum of money as a premium is paid by the
insured in consideration of the insurer’s bearing the risk of paying a large
sum .it may also be defined as a contract wherein one party (insurer) agrees
to pay the other party (insured) or his beneficiary, a certain sum upon a
given contingency against which insurance is required.
Insurance industry commands massive funds through sales of
insurance products to large number of clients. Insurers also create liabilities
and commit themselves to compensate for losses occurring to the
policyholders on future date. It also plays an important role in process of
capital formation.

NATURE OF INSURANCE

a) Risk sharing and risk transfer: Insurance is used to share the financial
losses that might occur to an individual or his family on the happening of
specified events. The loss arising from such events are shared by all the
insured in the form of premium.
 9
Example: suppose in a village, there are 250 houses, each valued at
Rs.200000.Every year one house gets burnt, resulting into a total loss of Rs
200000.If all the 250 owners come together and contribute Rs.800 each, the
common fund would be Rs200000.This is enough to pay to the owner whose
house gets burnt. Thus the risk of one owner is spread over 250 house
owners of the village.

b) Risk assessment in advance: Insurance companies are risk bearers. They

assess the risk before insuring to charge the amount of premium.

c) Its not gambling or charity: The uncertainty is changed to certainty by

insuring property and life because the insurer promises to pay a definite sum
at damage or death. Insurance is antithesis of gambling. Failure of insurance
amounts to gambling because the uncertainty of loss is always looming.
Moreover insurance is not possible without premium. So it is different from
charity because charity is given without consideration.

d) Huge number of insured people: It is essential to insure larger number

of people or property to make cost of insurance less consequently premium
would also be less.

e) Assists in capital formation: Insurance provides capital to society.

Accumulative funds are invested in productive channels.

SEMANTICS
 10
1. Risk: It is defined as an uncertainty of a financial loss. It is the
unintentional decline in or disappearance of value arising from
contingency.
2. Policy: It is the document which embodies the insurance contract
3. Whole life policy: It is the policy under which the amount of policy
will be paid only on death of the insured. Premiums may be payable
throughout the life or for a limited period.
4. Endowment policy: Endowment policies entitle the insured to
receive the amount of the policy on his reaching a certain age and
premiums also stops. If death occurs earlier, amount of the policy will
be paid at that time and payment of premium will also stop at that
time.
5. Claim: It is the amount which an insurer has to pay against a policy.
6. Reinsurance: It refers to placing a part of the risk by an insurer with
another insurer. The object is to reduce the possible loss to be borne
by the original insurer, who pays premiums at the ordinary rates to the
reinsurer. Reinsure must pay commission to the original insurer.
7. Premium: A periodic payment made on an insurance policy.
8. Insurance penetration: It is defined as insurance premium as a share
of gross domestic product.
9. Insurance density: Insurance density is defined as per capita
expenditure on insurance premium i.e. premium per capita.
10.Actuary: The actuary is a specialist who combines an understanding
of risks and mathematical technique to develop financial products to
manage these risks, price these products. He helps in designing
insurance plans and then evaluates the financial risk of the company
which it takes while selling an insurance policy.
 11

TYPES OF INSURANCE
Insurance is broadly divided in two segments, based on the nature of
insurance, those are:

1. Life Insurance &

2. Non-Life Insurance or General Insurance. It can be again subdivided
into the following categories:
a) Fire Insurance.
b) Marine Insurance.
c) Social Insurance &
d) Miscellaneous Insurance. (Health insurance, Liability Insurance
etc….)

HISTORY OF INSURANCE GLOBAL

For now we know the meaning of insurance, different types of

insurance. Now let us know the history and reasons for and behind different
types of insurance.
Insurance has existed for thousands of years. The first ever type of
insurance was Property Insurance. It became popular about 3000 BC in
China. It all started when Chinese merchants, as well as their investors,
wanted to ensure that they would see a profit from their goods that they
shipped overseas. In the event that a ship was lost at sea, an insuring partner
would reimburse the owners of the ship and goods. To pay for the loss the
merchant would be sold into slavery to the insurer until the debt was repaid.
This was so because, a merchant could not afford to pay for the lost goods or
even to buy a ship unless someone invested.
 12
Property insurance was also seen in Babylon as well. In Babylon,
merchants and investors entered into a contract, in which the supplier of
money for a trade agreed to cancel the loan if the trader was robbed of his
goods. The trader who borrowed the money paid an extra amount for this
protection in addition to the usual interest. As for the lender, collecting these
premiums from many traders made it possible for him to absorb the losses of
the few. Later this contract was extended to include provisions for a family's
home and even the death of the insured, where life insurance came into
existence. Slowly this concept started to spread across other places like
Greek, Roman.
Since ancient times, communities have pooled some of their resources
to help individuals who suffer loss. Like, about 3500 years ago, Moses
instructed the nation of Israel to contribute a portion of their produce
periodically for "the alien resident and the fatherless boy and the widow."
Later the origin of credit insurance, which was included in the Code
of Hammurabi, a collection of Babylonian laws said to predate the Law of
Moses. Credit insurance means, in ancient times the ship owners obtained
loans from investors to finance their trading expeditions. In case, if a ship
was lost, the owners were not responsible to pay back the loans to the
investors. The risk to the lenders was covered by the interest paid by
numerous ship owners, since many ships returned safely.
By the middle of the 14th century, marine insurance was one of the
most popular types of insurance among nations of Europe. Things changed
dramatically in the 17th century in Europe. In 1666, the Great Fire of
London bought the need for fire insurance .The Great Fire of London burned
for four days and nights. It destroyed 436 acres, 13,200 houses, 89 churches
(including Saint Paul's Cathedral), the Custom House, the Royal Exchange
 13
and dozens of other public buildings. Only six people were victims in the
flames, but hundreds died from shock and exposure.
By 1688, Edward Lloyd was running a coffeehouse in London.
Where, London merchants and bankers met informally to do business. There
financiers who offered insurance contracts to seafarers wrote their names
under the specific amount of risk that they would accept in exchange for a
certain payment, called premium. These insurers came to be known as
underwriters. Finally, in 1769, Lloyd's became a formal group of
underwriters that in time grew as an insurance company.
The concept of insurance developed at a fast pace with the growth of
British commerce in the 17th and 18th century. The first stock companies to
engage in insurance were chartered in England in the year 1720.
In 1735, the first insurance company in the American colonies was
founded at Charleston. Later in the year 1787, fire insurance corporations
were formed in New York. Then later in the year 1759, the life insurance
corporation was started in Philadelphia, America.
The New York fire which occurred in the year 1835 was the main
reason to draw attention to create reserves to meet unexpected losses. In the
year 1837, Massachusetts was the first state to require companies by law to
maintain such reserves. After 1840, life insurance entered a boom period.
The Workmen's Compensation Act of 1897 in Britain required
employers to insure their employees against industrial accidents. Public
liability insurance, fostered by legislation, made its appearance in the
1880s.It attained major importance with the advent of the automobile.
Until the 1950s, most insurance companies in the United States were
restricted to provide only one type of insurance, but then legislation was
passed to permit fire and casualty companies to underwrite several classes of
 14
insurance. Many firms have since expanded and also were responsible for
many mergers.
From this brief accounting of history we can see how insurance came
into existence. Fortunately for us we no longer have to sell ourselves into
slavery if our car is stolen nor we have to be scared of losses due to absence
of reserves. However we can be confident that we will be compensated for
our loss. Without people wanting to secure their investments and great
tragedies throughout history we may not have insurance as we know it today
resulting in peace of mind.

HISTORY OF INSURANCE INDUSTRY IN INDIA

The insurance industry in India over the past century has gone through
big changes. In India this industry reveals the 360 degree turn. 360 degree
turn means that it started in India from being an open competitive market to
nationalization and back to a liberalized market again.
Insurance industry in India started as a fully private system with no
restriction on foreign participation in the Nineteenth Century. Before
independence, a few British insurance companies dominated the Market.
Life insurance was first set up in India through a British company called the
Oriental Life Insurance Company in 1818, followed by the Bombay
Assurance Company in 1823 and the Madras Equitable Life Insurance
Society in 1829.All of these companies operated in India but did not insure
the lives of Indians. They were there insuring the lives of Europeans living
in India. Some of the companies that started later did provide insurance for
Indians. But, they were treated as "substandard" and therefore had to pay an
extra premium of 20% or more. The first company that had policies that
 15
could be bought by Indians with "fair value" was the Bombay Mutual Life
Assurance Society starting in 1871.
The first general insurance company, Triton Insurance Company Ltd.,
was established in 1850. It was owned and operated by the British. The first
general insurance company was the Indian Mercantile Insurance Company
Limited set up in Bombay in 1907.By 1938; the insurance market in India
had nearly 176 companies (both life and non-life).

After the independence, the industry went to the other extreme. It

became a state-owned monopoly. The industry started to witness a problem
like fraud. Hence many regulations were put in place to reduce and control
the problems in the industry. After which Insurance was nationalized. In
1956, the then finance minister S. D. Deshmukh announced nationalization
of the life insurance business and then the general insurance business was
nationalized in 1972. Only in 1999 private insurance companies have been
allowed back into the business of insurance with a maximum of 26% of
foreign holding.
 16
INDIAN SCENARIO

INDIAN
INSURANCE INDUSTRY

LIFE INSURANCE

After the entry of new players and increase in the penetration levels,
could see the insurance sector cross the Rs 2,00,000-core mark in business
by 2010.The current size of the sector is estimated to be at Rs 50,000 crore,
which has seen a compound annual growth rate (CAGR) of around 175
percent in the last few years.
The insurance sector, both life and non life, is likely to grow by over
200 percent, and private insurers are expected to achieve a growth rate of
 17
140 percent as a result of aggressive marketing technique. It added that
state owned insurance companies are likely to be 35-40 percent.
On account of intense marketing strategies adopted by the private
insurance players, the market share of state-owned insurance companies like
GIC, LIC and others has come down to 70 percent in last 4-5 years from
over 97 percent. Despite regulation, the private players are offering 35
percent rate of return to is policy holders against 20 percent by public-sector
insurers.
The industry body also noted that India’s life insurance premium is
1.8 percent as a percentage of GDP whereas it is 5.2 percent in the US, 6.5
percent in the South Korea.
The services sector offers immense opportunities for expansion
opportunities for expansion opportunities and the rural market, also, offers
tremendous growth opportunities for insurance companies.

GENERAL INSURANCE

General insurance in India has been expecting growth except in some

portfolios like motor insurance, fire and engineering. These portfolios are
still under tariff- this means that premium depends on a fixed predetermined
rate structure.
In India, GDS as a proportion of GDP at current prices increased from
26.1% in 2002-03 to 28.1% in 2003-04.house hold sector continued to be the
major contributor to GDS at 24.3% in 2003-04.this can be attributed to soft
interest rates prevailing in housing sector. General Insurance has low market
penetration. It is 1.95% and ranks 51st. However in collection of premium it
is ranked 23rd. The ratio of the premium collected to that of GDP is 0.58.
The main reason for the general insurance industry to perform very poorly
 18
was because of the slow settlement of claims. Moreover the rates of claim
in India were highest in the world. It was 70 percent compared to 40 percent
internationally. This meant that out of 100 people who had insured their
commodities 70 claimed for a loss or damage. The main reason for the lack
of demand for general insurance is that people consider it as an unnecessary
expenditure. However it must be noted that the general insurance has been
earning consistent profits and has an efficient dividend paying record
accompanied by a steady growth in its financial resources. The industry is
recognized as one of the largest financial Institutions in the country. Some of
the private players in this sector are- ICICI – Lombard, Reliance, Royal-
Sundaram, Chholamandalam etc.

PRIVATE PLAYERS IN THE LIFE INSURANCE SECTOR

The different private players in the life insurance sector and their
associations with foreign companies are being given below:

COMPAN INDIAN FOREIGN TOTAL FD FOREIG

Y PROMOTER/PARTN INSURER CAPITA I N
ER L (% CAPITA
(RS ) L
MN.) (RS
MN.)
AMP RELIANCE None 2,170 0 0
SANMAR GROUP(ADAG)
Aviva Life Dabur Aviva (UK) 4,590 26 1193.4
Bajaj- Bajaj Auto Allianz 3680 26 960
Allianz (Germany)
 19
Birla Sun Aditya Birla Group SunLife 4,000 26 1,040
Life (Canada)
HDFC HDFC StandardLife 2,500 18. 470
Standard (UK) 9
ICICI ICICI Bank Prudential 10,850 26 2,820
Prudential (UK)
ING Vysya Bank ING Ins. 4,400 26 680
Vysya (Netherlands)
Kotak Kotak Mahindra Bank OldMutual 2,600 26 680
Mahindra (South Africa)
Old
Mutual
Max Max India NewYorkLife 5,000 26 1,300
Newyork (US)
Met Life J&K Bank Met Life (US) 3,550 26 920
Sahara Sahara India None 1,000 0 0
Life Ins. I
SBI Life SBI Cardiff 3,500 26 910
(France)
TATA TATA Group AIG (US) 3,810 26 990
AIG
Shriram Shriram Sanlam Life
Ins.
Bharti Bharti Group AXA(Australi
AXA a)

Some of the new companies who are waiting to come in to the life insurance
sector are:
a. IDBI-FORTIS.
b. Syndicate Bank
 20
CONTRIBUTION OF THE INSURANCE SECTOR TO
INDIAN ECONOMY
Some surveys have predicted that India and China will play a very
vital role in the years to come. Indian economy can be termed as an
emerging economy as it is doubling its GDP in 3 to 5 years and moreover it
is not dependent on any particular sector for its GDP.
If we look at the GDP of the Indian economy very closely over the
years, we can easily come to know the changing structure of the economy.
We can also come to know the changing contribution of the various sectors
like agriculture, manufacturing and the service sector. In the financial year
1993-94, agricultural sector contributed to 31%, manufacturing accounted to
26.3% and the service sector contributed to 42.7% of the total GDP of the
country. Thus over the years as India became an emerging economy in 2003-
04 manufacturing sector contributed for 21.7 %, manufacturing contributed
for 26.8 whereas service sector contributed for 51.4% of the total GDP.
There has been 7.5% growth in the total GDP of the country and is
estimated to grow at 8.0% in 2006-07. The Indian economy has shown signs
of strong performance despite a rise in oil prices, high inflation rate and
abnormal rains in many parts of the country. The overall growth of the
Indian economy has been equally supported by all the three sectors of the
economy, i.e. the agriculture, manufacturing and the service sector.
Insurance, together with the banking sector, contributes to about 7.3 % of the
total GDP of India, and the gross premium collected contributes to about 2%
of the total GDP of the country
The insurance sector in India has completed a full circle from being an
open competitive market to nationalization and back to a liberalized market
again. Tracing the developments in the Indian insurance sector reveals the
360 degree turn witnessed over a period of almost 200 years.
 21
GOVERNMENT POLICIES REGARDING LIFE
INSURANCE

Insurance Regulatory and Development Authority (IRDA) 1999

Reforms in the insurance sector were initiated with the passage of the IRDA
bill in December 1999.it was set up as an independent body and it has been
able to frame globally compatible legislations.
The IRDA was set up to protect the interests of holders of insurance
policies ,to regulate ,promote and insure orderly growth of the insurance
industry and for matters connected therewith or incidental thereto.
This act extends to whole of India. With the establishment of this act,
government amended Insurance act 1938, Life Insurance Act 1956 and
General Insurance Act 1972.
IRDA was formed on the recommendations of Malhotra Committee. In 1999
government of India has set up Malhotra Committee to examine the structure
of insurance industry and recommend changes, under R.N Malhotra –former
governor of RBI.
 22

CHAPTER 2
 23

LITERATURE REVIEW

Barbara Culiberg and Ica Rojsek (2010), explored a service quality in

retail banking in Slovenia and its influence on customer satisfaction.
Through factor analysis and regression analysis, result suggests that all four
dimensions of service quality as well as service range influence customer
satisfaction. The information provided by this research can be used while
designing marketing strategies to improve customer satisfaction in retail
banking.

C. Meera and D. M. Eswari (2011), explored a study on customer

satisfaction towards cross selling of insurance products and supplementary
services in Coimbatore district, centers around the dependent variable
customer usage behavior and their relationship with the related independent
variables such as Age, Gender, Marital status, Education, Occupation,
Family Income, No. of years banking and Frequency of Visit to bank.
Statistical tools ANOVA and Garrett ranking were used and reveled that
cross selling of insurance product is not influenced by age of respondent but
have strong opinion on cross selling of insurance product is associated with
education (UG), occupation (Business), and frequency of bank visit.

R. Serenmadevi, M. G. Saravanaraj and M. Lathe Natajan (2011),

conducted a study on the insurance product pattern and consumer preference
for ULIP Life Insurance Product with reference to Delhi City to find out
how much the consumer in Delhi city prefer for ULIP Life Insurance. The
collected data were analyzed by using simple percentage analysis, weighted
average method, ranking method, Analysis of variance, chi-square, F-test
and correlation and it is found that most of the customer are satisfied with
ULIP and enjoys an excellent perception of brand value.

Anand Prakash, Sanjay Kumar Jha and S. P. Kallurkar, the research

describe Indians attitude towards service quality for life insurance business
presented through different demographical factors. This research reveals
that, type of customer personality, age, gender, levels of education, and
monthly income influence the attitude towards the service quality and also
provides the research implications useful for business transformation and
further development of research on service quality.
 24
J. N. Mojekwu, (2011), studied modes of exit – trends and patterns of
insurance policy holders in Nigeria. According to this research, most life
insurance policyholders complain of adverse effect of inflation on the policy
values at the time of payment on the happening of the

contingencies. This has resulted in a high rate of lapse, surrender and

conversion to paid-up status. Based on the findings, the study recommends
that life insurance companies should enlighten the public more on the
benefits of life insurance and evolve some incentives to avoid the negative
impact of these modes of decrement on life assurance portfolios.

B. Das, S. Mohanty & Nikhil Chandra Shil, (2008), categorized

Consumer‟s Buying Behavior in Consumer Durable Market. Consumer‟s
buying behavior is divergent and situational. Color television was used to
represent the consumer durable market. This research work finds that the
factors which influence buying decision are commonly price, quality,
advertisement, recommendation from friends and family. This study also
reveals that the consumer‟s perception on buying color TV is mostly
affected by the factors like “structural add-on, word of mouth, technical
features, durability and ground reality.”

B. Das, S. Mohanty & Nikhil Chandra Shil, (2008), examined Behavior of

Retail Investors in Mutual Fund vs. Life Insurance. 100 interviews were
made from two metros of Orissa Viz.; Cuttack and Bhubaneswar. This
research fins that, although the investment patterns provide more or less the
same services, there exist differences depending on the education level of
investors. It was also found that male investors are more compared to female
investors. Maximum investors like to invest in life insurance among which
LIC is no. 1 followed by mutual fund and government saving schemes. It
also reveals that Government servant invest more in life
insurance.

B. A. Abdul Karim, (2012), conducted the research on consumer buying

behavior of Two-
Wheelers in Tirunelveli City (Tamilnadu). The objective was to study the
brand preferences, brand loyalty and also to analyze the factors that motivate
the two-wheeler consumer‟s buying behavior. The study reveals that the
time gap between intuition and actual purchase for the majority of sample
consumer is less than one month and Comfort & Convenience is the driving
force for the purchase of two-wheeler.
 25
Timira Shukla, (2011), did an empirical investigation of customer
perception of brand LIC in Delhi. SERVQUAL scale was used to discern the
different dimensions of service quality and mean scores were used to find
out if there is any gap between customer expectations and perceptions. The
result shows that LIC is focusing on the dimensions which are not important
to customer and LIC needs to make substantial investment to improve their
score on tangibility dimension.

Subhasis Ray, Ajay Pathak, (2007), worked on Strategizing Brand

Positioning in the Context of Indian Insurance Industry. The study attempts
to find out the influence of various brand building initiatives on brand recall
and how this translates into market share. The study concluded, that for
traditional life insurance products, people look for risk cover, investment
opportunity and tax benefit the most. It also reveals that short tag line in
Hindi have gained more popularity.

Mohamed Cherchem, (2007), this paper presents a framework for

innovation in financial
services and the consequences of imitation in terms of innovations in
financial services. The study was conducted in two parts: first part focuses
on innovation in services and creative process and the implications as well
as marketing and organizational success factors and causes of failures of
new banking products and services and insurance. The study found that all
Algerian public banks are unable to estimate the cost and no bank has
system control and monitoring of new products. Almost all bank officials
interviewed, confirm the „lack of market information‟ and „lack of studies
on customer‟ considered as important as barrier that can prevent a bank or
insurance to innovate.
Affiaine Ahmad, (2008), assessed service quality in Malaysia Insurance
Industry to evaluate customer‟s general expectation and perception of
insures in terms of service offered at the insurance service counter. This
paper also examines the relationship between the demographic factors and
SERVQUAL mean score. The result shows huge gap for reliability,
responsiveness and empathy in which reliability shows highest gap between
customer‟s perception and expectation. Thus, results of this study
underscore the need for insurance provider to gear customer service and
quality improvement efforts towards component of reliability.
 26
Peong Kwee Kim and Devinga Rasiah, (2011), investigates the ethical
investment behavior which is new field of study among a General Insurance
Fund Managers in Malaysia in order to refine in an ethical behavioral scope.
Throughout this research, there were three major aspects investigated
namely personal, social and demographic factors of fund managers who
were involved in investment activities. The major finding shows that social
factors had played the biggest effect in conducting ethical investment
behavior in the insurance industry.

L. V. Rao, (2008), attempted to understand how service firms actually

innovate. It is found that all the ten private life insurance companies have a
formal New Service Development (NSD) unit and top executive and R&D
department participate in creation of new services. Although all the
companies are aware of the importance of customer involvement, the results
shows that there is potential for increasing customer involvement in NSD
process. The major limitation of this study is the small number of sample
studied.

Alinvi & Barbi, (2007), are of view that customer‟s preferences change on
a constant basis, and organizations adjust in order to meet these changes to
remain competitive and profitable.

Anna A. Merikas, Andreas G. Merikas, George S. Vozikis, Dev Prasad,

undertook an
empirical survey of the factors, which mostly influence individual investor
behavior in the Greek Stock Exchange. The results revealed from 150
respondents, that there seems to be a certain degree of correlation between
the factors that behavioral finance theory and previous empirical evidence
identify as the influencing factors for the average equity investors, and the
individual behavior of active investors in the Athens Stock Exchange.

Nidhi Walia and Ravi Kiran, (2009), presents research proposes to identify
critical gaps in the existing framework for mutual funds and further extend it
to understand realizing the need of redesigning existing mutual fund services
by acknowledging Investor Oriented Service Quality Arrangements
(IOSQA) in order to comprehend investor‟s behavior while introducing any
financial innovation. They also highlighted in their study mutual funds can
prove to be most preferred financial avenue if it is put forth to the investors
in desired form.

Sanjay Kanti Das, (2012), made an effort to study the investment habits
and preferred
 27
investment avenues of the household. This study examines the investment
attitude, their
preferences & knowledge about capital market institutions and instruments.
This study also
reveals that in most cases investors across all categories found them to be
safer in taking up the insurance policies.
Abdalelah S. Saaty & Zaid Ahmed Ansari, (2011), attempts to find out
the important factors in developing marketing strategy for insurance
companies in Saudi Arabia. It investigates the reason for buying and not
buying insurance. The result of study shows that the social and regulatory
factor played crucial role in consumer‟s purchase. It was also found that the
public at large is unaware about the benefits and types of insurance products.

D. Kandavel, (2011), presented study looking at the perception level of the

retail investors
towards investment in mutual funds. The small investor purchase behavior
does not have a high level of coherence due to the influence of different
purchase factors. The study reveals that the buying intent of a mutual fund
product by small investor can be due to multiple reasons depending upon
customer risk return trade off.

Sanjay Kanti Das, (2011), has analyzed preferred investment avenues of

the household. The study reveals that insurance products still remains the
most preferred investment avenues of the household. The results also
highlight that certain factors like education level, awareness about the
financial system, age of investors etc make significant impact while deciding
on the avenues for investment.

Mohammad Karimi & Behzad Hassannezhad Kashani, (2011), aimed to

identify reasons by which customer prefer private insurance covers to public
ones. This paper considered product, service, human and comfort factors as
antecedents of customer preference in private insurance covers. The results
showed that human and economic factors are antecedents of private
insurance preference.

Dr. Dhiraj Jain & Ruhika Kothari, (2012), attempted to identify the
awareness, preferences, problems and attitude of investors towards various
deposit schemes offered by the post office. The study reveals that
demographic factors have no significant influence over the opinion towards
post Office Deposits Schemes except monthly income and educational
qualification.
 28
Clifford Paul S., Joseph Anbarasu D. & Annette Barnabas, (2010), the
research reveals that awareness is low and needs to be improved among the
uneducated, lower age group and daily wage class. The study also shows
that real growth in life insurance will occur when customers realize the true
value of life insurance beyond tax saving.

P. Varadharajan and P. Vikkraman, (2011), the research focused to

identify the investor‟s perception towards investment decision in equity
market. The study reveals that there exists an independency between the
demographics, majority of the factors and the returns obtained. It is also
evident that investment strategies of people keep on changing as well as the
factors that influence the decision making keeps changing.
 29

CHAPTER 3
 30

RESEARCH METHODOLOGY

Methodology is a systematic way of solving a problem it includes

the research methods for solving a problem it includes the research
methods for solving the problem.
Type of research - Descriptive research
Data source -Primary and Secondary data
Data collection method -Interview and survey
Data collection tools -Questionnaires
Sampling universe - Bareilly
Sample size -80

SAMPLE DESIGN
The target population of the study consists of various respondents
of various places. This survey was done by collecting the data from the
respondents.

SAMPLE SIZE
After due consultation with the company supervisor as well as with
the college guide, also keeping in mind the requirements of the company for
the research, the sample size that was found to be appropriate for the study
was 80.

SAMPLING TECHNIQUE
The sampling technique that adapted to conduct the survey was
‘Convenient Random Sampling’ and the area of the research was
 31
concentrated in the city of Bareilly and nearby only. The survey was
conducted through google forms.

DATA SOURCE
The task of data collection begins after a research problem has been
defined. In this study data was collected through both primary and secondary
data source.

A. PRIMARY DATA
A primary data is a data, which is collected for gathering information
first time and to analyze the problem. In this study the primary data was
collected among the consumers using questionnaire.

B. SECONDARY DATA
Secondary data consist of information that already exits somewhere,
having been collected for some other purpose. In this study secondary data
was collected from company websites, magazines and brochures.

STATISTICAL TOOLS
Simple percentage analysis, ranking method and chi square analysis
are the main statistical tool used for the study.

SIMPLE PERCENTAGE ANALYSIS

Percentage refers o a special king of ratio in making comparison
between two or more data and to describe relationships. Percentage can also
be used to compare the relation terms between two or more sources of data.
 32
Percentage of respondents = Number of respondents * 100
Total respondents

RANKING METHOD (WEIGHTED AVERAGE METHOD)

This technique was used to rank out the opinion about the consumers
preference towards different investment alternatives. The order of merit
given by the respondents was converted into ranks by using the following
formula.
Weightage Score =  Wi * Xj
Where Wi = Weightage value and Xj = Ranking position value

CHI SQUARE TEST

Chi Square is a statistical measure used in the context of sampling
analysis for comparing the variance to a theoretical variance. In order to
judge the significance of association between two attributes, we make use of
chi square test by finding the values of chi square using the chi square
distribution.

SCOPE OF THE STUDY

 The result of this research would help the company to have a better
understanding about the consumer’s perception towards life insurance.
 The study helps the company by creating awareness about the
consumers of different ages and income levels.
 The study also enables the company to focus the consumer’s
preferences and expectations on the product which they offer.
 33

OBJECTIVES OF THE STUDY

a) To know about the overall perception of the consumers towards life

insurance.
b) To find out the most preferred insurance policies.
c) To find out which type of policies people prefer to Purchase.
d) To find out the awareness of details of policies of life insurance.
 34

CHAPTER 4
 35

DATA INTERPRETATION AND ANALYSIS

1.Age group

The above graphical representation shows the age category of population. In

the survey major respondents were of the age group 20-30 years which were
88.8% of the total respondents. The next age group were of 30-40 years age
group people with 5% . In rest 6.2% there were the respondents of age
group 10-20 years and 40-50 years age group. Age groups impact the
research as different age groups have their own mind set and mixture of age
group potrays good results with different opinions.

2. Marital Status

As shown in the graph shown below, Most of the respondents are unmarried
with 85% of the respondents. While 15% of the respondents are Married.
Maritial status also olays a key role on the behaviour of people who buys life
insurance. Their marial status impacts their perception accordingly.
 36

3.Place of residence

As shown in the above graphical representation, Most of the respondents are

from urban areas with 57.5% and rest of the respondents are from rural areas
With 42.5% of the total respondents. The place of respondents in which they
are living is also a key factor on the perception of consumers on investing in
life insurance.
 37

4.Educational Qualification

The above pictorial representation shows the qualification of the

respondents, and the maximum qualification is of Post graduate people
which consist around 51.2%.Then 41.3% graduated people filled the form.
Next is of Undergraduates which are around 6.3%. Rest of the respondents
are of doctorate degree holders.
Education also impacts the perception of consumers on the buying of
insurances.

5. Occupation

In the graph shown below its shows about the occupation of the
respondents. As shown in the graph, most of the respondents are
students with 76.3% , then comes the respondents who are self
employed with a percentage of 12.5, On the other hand 8.8%
respondents are of service sector. Rest of the respondents are from
other occupational sectors.
 38

6. Total number of policies Bought

As shown in thee above pictorial representation, Most of the respondents are

those who never bought any policies with a number of 60.8% of the total
respondents. While 21.5% respondents are those one are have bought one
insurance policy. And 13.9 % respondents are those who have bought two
insurance policies. On the other hand, Rest of the respondents bought more
than two insurance policies.
 39

7. Annual Income

Annual income is a major factor which influence the perception pf

the consumer while buying an insurance policy. As shown in the
above graph Most of the respondents are having annual income
below 1 Lacs with 51.9% of the respondents, 36.4% respondents are
having 1-5 Lacs of annual income. While 7.8% of the respondents
are having 5-10 lacs of annual income. Rest of the respondents are
having annual income more than 10 lacs.

8. What Kind of Investment do you prefer?

In response of this question, most of the respondents states that they prefer
both long and short term investment with 60.8% of the total respondents.
While 21.5% respondents prefers short term investment and on the other
hand 17.7 % respondents prefers long term investment.
 40

9. Are you satisfied with the services of Life insurance of India?

As shown in the above graphical representation, Most of the respondents

with 83.5% are satisfied with the Life insurance of India while 16.5%
respondents are not satisfied with the Life insurance of India.

10 .What scheme of insurance policy have you taken

 41

In the response of this question, Most of the respondents with a number of

50.6% have taken Money back insurance policy, And 22.1% of the
respondents have taken some other insurance policy, 20.8 % respondents
have taken Whole life insurance policy. On the other hand 6.5% of the
respondents have taken Pension fund scheme of insurance policy.

12. Most Likely Periodicity of Policy.

As shown in the figure below, The periodicity which most the consumers
prefers 5 years periodicity of policy with 50% of the respondents. On the
other hand 30.8% prefer 5-15 year periodicity of policy, 14.1% respondents
prefer 15-25 years of periodicity and 5.1% respondents prefer above 25

years of periodicity of time.

13. Whether you are aware of all details of policy you have from Life
insurance 
 42

As represented in the above graphical representation, 75% of the

respondents are aware of all details of policy they have from life insurance,
While 25 % of the respondents are not aware of these details.

14. Do Life insurance have complex Formalities?

 43
In the response of the given question, 53.8% of the respondents thinks that
there are complex formalities in the life insurance while 46.3% thinks that
they don’t thinks so. We can say that it is somehow a mixed opinion.

15. What do you feel after investing in Insurance Plans of Life

insurance of India?

As shown in the figure below, most of the respondents with 55% feels Good
after investing in insurance plans of Life insurance of India. While 41.3% of
the respondents feels they are averagely satisfied And rest of them feels
cheated after investing in life insurance of India.

16. Satisfaction level towards services offered by Life insurance in

India
 44

As shown in the graphical representation, most of the respondents are

partially satisfied with the services offered by Life insurance in India. While
40% of the respondents are fully satisfied and 6.3% are Not satisfied with
the services.

17. What is Overall perception about Life insurance of India

 45

In response of this question, most of the respondents perception is positive

about Life insurance of India while 8.8% of the total respondent’s perception
is negative towards the life insurance of India.

FINDINGS
 From the responses of the respondents we come to know that most of
the people prefer both long and short type of investment in life
insurance policies.

 Most likely periodicity of time is 5 years plan. Most of the people

prefer to invest in such type of investment with a time span of 5 years.

 It is clear from the study that insurance policy have complex

formalities which should be improved.

 It is clear that most of the people are partially satisfied with the
services provided by the life insurance of India.

 Most of the people feels good after investing in plans of Life

insurance of India.
 46

 The most preferred policy or scheme is money back policy which is

choosen by most of the consumers.

 The most of the people are aware of the details of the policies they
have choosen or purchased in life insurance of India.

 The overall perception of consumers toward life insurance policies is

positive.They are satisfied with the services and are aware of the
details.

CONCLUSION

From the Findings and analysis we comes to know about the perception of
consumers towards life insurance. Most of the people are satisfied with the
policies of life insurance and the perception is positive towards life
insurance of India. People are aware of the policies in which they are
investing.

Life insurance of India dominates the Indian insurance industry. In today’s

competitive world, customer satisfaction has become an important aspect to
retain the customers, not only to grow but also to serve. Increased
competition, wide range of product offerings and multiple distribution
channels cause companies to value satisfied and highly profitable customers.
Customer service is the critical success factor in a company and providing
top notch customer service differentiates great customer service from
indifferent customer service.
 47
The periodicity of time which is most preferable is 5 years as it is not that
much time which people wait for so long. It is periodicity in which most of
the people wants to invest. People also wants to invest in such a policies
which are kind of money back policies.

The money-back policy from Life Insurance of India is a popular

insurance policy. It provides life coverage during the term of the
policy and the maturity benefits are paid in installments by way of
survival benefits in every 5 years. The plan is available with 20 years
and 25 years term.

The overall perception of people towards life insurance of India is positive

and they are satisfied with the services of lfe insurance of India.

SUGGESTIONS

Despite attempts to confirm that the findings of this research are both
trustworthy and effective, a number of limitations lies. Originally this survey
had a very less number of respondents. And the study was undertaken in a
large area of state Uttar Pradesh i.e. Bareilly. It cannot be generalized to the
entire district, or implied state to the whole country. The view of 80
respondents cannot replicate the responds of the entire district or the state.
The economic well-being of the people describes their improvement in
technology. So the area which is more advanced is more likely to involve in
the internet than the less or underdeveloped area.

LIMITATIONS OF THE RESEARCH

 48
a) The sample size chosen for the questionnaire was only 80 and
that may not represent the true picture of the consumer
perception about the Life Insurance sector.

b) The research got confined to the city of Bareilly.

c) Nearly 98% of the respondent belonged to the age group of 20-

50 years and only 2% were above 50 years. So, the responses
and the opinions of the experienced and aged were not
available. So, the findings may not be correct when we think
about the opinion of the elderly people about the life insurance.

d) The selection of people for the questionnaire was done on the

basis of convenient random sampling, so, there were certain
cases in which the people selected did not have any life
insurance policy, so they could not give any positive feedback
regarding the important criteria to be considered before taking
an life insurance policy.

e) The product offered by different companies had different

options and names in them, so at the time of comparison it
became very difficult. The parameters for comparison were also
different in the selected companies.

f) One of the important criteria that was selected by the

respondents which they consider before taking an insurance
policy was ‘Company Image’, but there was no parameter
available to compare criteria like this between the companies.
 49

BIBLIOGRAPHY

 www.lic india.com
 http://licadvisor.in/wp-content/uploads/2016/05/LIC-profile-2016.pdf
 https://www.relakhs.com/lic-new-plans-list-2016-17/
 https://www.irdai.gov.in/ADMINCMS/cms/frmGeneral_NoYearList
aspx?DF=AR&mid=11.1
 https://www.irdai.gov.in/ADMINCMS/cms/frmGeneral_Layout.aspx
?page=PageNo3021&flag1
 https://www.licindia.in/getattachment/df990094-a56e-4616-b468-
12248816ebea/Empanelment-of-TPAs-for-providing-services-for-
LIC
 Ghosh Amlan (2011) Impact of reforms on Indian life insurance, The
Indian Journal of Commerce, Vol 64(4): pp 86-96, ISSN 0019-512X
 M.Selva Kumar and Vimal Priyan(2012)A comparative study of
public and private life Insurance companies in India,The Indian
 50
Journal of commerce,Vol.65(1),Jan-Mar 2012,pp81-87,ISSN 0019-
512X
 Kalani, Salunkhe and Ahirrao (2013) Comparative study of claim
settlement ratio of LIC with other insurance companies in India,
Indian Journal of Applied Research , Vol 3(5), May 2014, ISSN
2249-555X, pp 389-391
 Yadav and Mohania (2013) Claim settlement of life insurance
policies in insurance services with special reference of Life Insurance
Corporation of India, Indian Journal of Economics and
Development , Vol 1(1), Jan 2013, ISSN: 2320-9836 pp 29-37
 Piyali Chandra Khan and Mitra D(2014) Liquidity risk assessment of
Life insurance corporation of India, The Indian Journal of Commerce,
Vol 67(2), Apr-June 2014, pp 55-63, ISSN 0019-512X

APPENDIX

Questionnaire

Email address *
Your email address
Name *
Your answer
Gender
Male
Female
1.Age group
10-20
20-30
30-40
40-50
Above 50
 51
2. Marital Status
Married
Unmarried
3.Place of residence
Rural
Urban
4.Educational Qualification
Undergraduate
Graduate
Post Graduate
Doctorate
5.Occupation
Student
Service
Self employed
Others
6.Total number of policies Bought
One
Two
More than two
None
7.Annual Income
Below 1 Lac
1 Lac – 5 Lac
5 Lac – 10 Lac
Above 10
8.What Kind of Investment do you prefer?
Short Term
Long Term
Both
9.Are you satisfied with the services of Life insurance of India?
Agree
Disagree
Average
Non of these
10.What scheme of insurance policy have you taken
Whole Life
Pension Fund
Money Back
Others
12.Most Likely Periodicity of Policy
5 years
5 – 15 Years
15 – 25 Years
Above 25 Years
 52
13.Whether you are aware of all details of policy you have from Life insurance *
yes
No
14.Do Life insurance have complex Formalities? *
Yes
No
15. What do you feel after investing in Insurance Plans of Life insurance of
India? *
Good
Averagely Satisfied
Cheated
16. Satisfaction level towards services offered by Life insurance in India *
Fully Satisfied
Partially satisfied
Not satisfied
17.What is Overall perception about Life insurance of India *
Positive
Negative