SUMMARYEXECUTIVE

The service industry is one of the fastest growing sectors in India

today. The upcoming sectors which are really showing the graph
towards upwards are - Telecom, Banking, and Insurance. These
sectors really have a lot of responsibility towards the economy
above-mentioned areas insurance is one sector, which took a lot
of time in positioning itself. The insurance business of non-life
companies was not much in problems but the major problem was
with life insurance. Life Insurance Corporation of India had
monopoly for more than 45 years, but the picture then was
completely different. Previously people felt that “Insurance is
only for classes not for masses” but now the picture is vice-
versa.
RELIANCE LIFE INSURANCE COMPANY LIMITED is part of
Reliance Capital ltd. of the Reliance- Anil Dhirudhai Ambani
Group. Reliance capital is one of the India’s leading private sector
financial services companies, and ranks among the top 3 private
sector financial services and banking companies, in terms of net
worth. Reliance capital has interests in asset management and
mutual funds, stock broking, life and general insurance,
proprietary investment private equity and other activities in
financial services.
Reliance capital limited (RCL) Is a non-banking financial company
(NBFC) registered with the Reserve Bank of India(RBI)Section 45-
IA of the Reserve Bank of India Act, 1934.
Reliance capital sees immense potential in the rapidly growing
financial services sector in India and aims to become a dominant
player in this industry and offer fully integrated financial services.
Reliance life insurance is another step forward for reliance capital
limited to offer need based life insurance solutions to individuals
and corporate.
On the whole Reliance life insurance is a good place to work at. Every new recruit
is provided with extensive training on unit linked funds, financial instruments and
the products of Reliance. This training enables an advisor/sales manager to market
the policies better. The company should try to create awareness about itself in

1
India. In the global market it is already very popular. With an improvement in the
sales techniques used, a fair bit of advertising and modifications to the existing
product portfolio, Reliance would be all set to capture the insurance market in
India as it has around the globe.

INDIAN INSURANCE
INDUSTRY
“AN OVERVIEW”

2
 THE INSURANCE INDUSTRY IN INDIA

AN OVERVIEW

With the largest number of life insurance policies in force in the world, Insurance
happens to be a mega opportunity in India. According to Life Insurance Council of
India its business growing at the rate of 32-34 per cent annually and presently is of
the order of Rs 1886 billion (for the financial year 2009-2010). Together with
banking services, it adds about 7% to the country’s Gross Domestic Product
(GDP). The gross premium collection is nearly 2% of GDP and funds available
with LIC for investments are 8% of the GDP.

Even so nearly 68% of the Indian population is without life insurance cover while
health insurance and non-life insurance continues to be below international
standards. A large part of our population is also subject to weak social security and
pension systems with hardly any old age income security. This in itself is an
indicator that growth potential for the insurance sector in India is immense.

A well-developed and evolved insurance sector is needed for economic

development as it provides long term funds for infrastructure development and
strengthens the risk taking ability of individuals. It is estimated that over the next
ten years India would require investments of the order of one trillion US dollars.
(Source: www.indiacore.com)

HISTORICAL PERSPECTIVE

The history of life insurance in India dates back to 1818 when it was conceived as
a means to provide for English Widows. Interestingly in those days a higher
premium was charged for Indian lives than the non - Indian lives, as Indian lives
were considered more risky to cover. The Bombay Mutual Life Insurance Society
started its business in 1870. It was the first company to charge the same premium
for both Indian and non-Indian lives.

The Oriental Assurance Company was established in 1880. The General insurance
business in India, on the other hand, can trace its roots to Triton Insurance
Company Limited, the first general insurance company established in the year
1850 in Calcutta by the British. Till the end of the nineteenth century insurance
business was almost entirely in the hands of overseas companies. Insurance
regulation formally began in India with the passing of the Life Insurance
Companies Act of 1912 and the Provident Fund Act of 1912. Several frauds during

3
the 1920's and 1930's sullied insurance business in India. By 1938 there were 176
insurance companies.

The first comprehensive legislation was introduced with the Insurance Act of 1938
that provided strict State Control over the insurance business. The insurance
business grew at a faster pace after independence. Indian companies strengthened
their hold on this business but despite the growth that was witnessed, insurance
remained an urban phenomenon.

The Government of India in 1956, brought together over 240 private life insurers
and provident societies under one nationalized monopoly corporation and Life
Insurance Corporation (LIC) was born. Nationalization was justified on the
grounds that it would create the much needed funds for rapid industrialization. This
was in conformity with the Government's chosen path of State led planning and
development.

The non-life insurance business continued to thrive with the private sector till
1972. Their operations were restricted to organized trade and industry in large
cities. The general insurance industry was nationalized in 1972. With this, nearly
107 insurers were amalgamated and grouped into four companies- National
Insurance Company, New India Assurance Company, Oriental Insurance Company
and United India Insurance Company. These were subsidiaries of the General
Insurance Company (GIC).

KEY MILESTONES

1912: The Indian Life Assurance Companies Act enacted as the first statute to
regulate the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to
collect statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended by the Insurance Act with the
objective of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers along with provident societies were taken
over by the central government and nationalized. LIC was formed by an Act of
Parliament- LIC Act 1956- with a capital contribution of Rs. 5 crore from the
Government of India.

4
 INDUSTRY REFORMS

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in
Parliament in December 1999. The IRDA since its incorporation as a statutory
body in April 2000 has fastidiously stuck to its schedule of framing regulations and
registering the private sector insurance companies. Since being set up as an
independent statutory body the IRDA has put in a framework of globally
compatible regulations.

The other decision taken simultaneously to provide the supporting systems to the
insurance sector and in particular the life insurance companies was the launch of
the IRDA online service for issue and renewal of licenses to agents. The approval
of institutions for imparting training to agents has also ensured that the insurance
companies would have a trained workforce of insurance agents in place to sell their
products.

PRESENT SCENARIO - LIFE INSURANCE INDUSTRY IN INDIA

The life insurance industry in India grew by an impressive
47.38%, with premium income at Rs. 1886 billion during the fiscal
year 2009-2010.
The 22 private insurers increased their market share from about
22% to about 28% in a year's time. The figures for the first two
months of the fiscal year 2010-2011 also speak of the growing
share of the private insurers. The share of LIC for this period has
further come down to 65 percent, while the private players have
grabbed over 35 percent.

With the opening up of the insurance industry in India many foreign players have
entered the market. The restriction on these companies is that they are not allowed
to have more than a 26% stake in a company’s ownership.

Since the opening up of the insurance sector in 1999, foreign investments of Rs.
8.7 billion have poured into the Indian market and 22 private life insurance
companies have been granted licenses.

Innovative products, smart marketing, and aggressive distribution have enabled

fledgling private insurance companies to sign up Indian customers faster than
anyone expected. Indians, who had always seen life insurance as a tax saving

5
device, are now suddenly turning to the private sector and snapping up the new
innovative products on offer. Some of these products include investment plans
with insurance and good returns (unit linked plans), multi – purpose insurance
plans, pension plans, child plans and money back plans. (www.wikipedia.com)

IMPORTANCE OF LIFE INSURANCE

Insurance constitutes one of the major segments of the financial market.
Insurance services play predominant role in the process of the financial
intermediary. Today insurance industry is one of the most growing sectors
in India.

There are many issues, which require study. The scope of the study of
insurance industry of India would be very great as there are ongoing
developments in the industry after the opening of the sector.

The major issue right now is the hike in FDI (Foreign Direct
Investment) limit from 26% to 49% in the insurance sector.
Government may in near future allow 49% FDI in insurance. This
would lead to more capital inflow by foreign partners.
Another major issue is the effects on LIC after the entry of private
players in the market. Thought market share of LIC has been
affected, it has improved in terms of efficiency.
There are number of other hot topics like penetration of health
insurance, rural marketing of insurance, new distribution
channels, new product ranges, insurance broker’s regulation,
incentive scheme of development officers of LIC etc. so it offers
lot of scope for studying the insurance industry.
Right now the insurance industry has great opportunities in a
country like India or China which huge population. Also the
penetration of insurance in India is very low in both life and non-
life segment so there is lot potential to be tapped.

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Difference between Insurance And Assurance
Assurance is older in history and it was used to describe all types
of insurance. From 1826, the term insurance came to be used
only for risks covered by life insurance and the term insurance
was exclusively used to denote the risks covered by marine, fire,
etc.
The word assurance indicated certainty. In life insurance, there is
an assurance from the insurance company to make payment
under the policy either on the maturity or at earlier death. On the
other hand the word insurance was used to denote indemnity
type of insurance where the insurance company was liable to pay
only in case of the loss damage the property.

Features of Life Insurance

• Nomination:-
When one makes a nomination, as the policyholder you continue
to be the owner of the policy and the nominee dose not right
under the policy so long as you are alive. The nominee has only
the right to receive the policy monies in case of your death within
the term of the policy.

• Assignment:-
If your intention is that your policy monies should go only to a
particular person, you need to assign the policy in favor of that
person.

• Death Benefit:-
The primary feature of a life insurance policy is the death benefit
it provides. Permanent policies provide a death benefit that is
guaranteed to the insured, provided the premiums have paid and
the policy has not been surrendered.

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 • Cash Value:-
The cash value of the permanent life insurance policy is
accumulated throughout the life of the policy. It equals the
amount a policy owner would receive, after any application
surrender charges, it the policy were surrendered before the
insured’s death.

Benefits of Life Insurance

 Risk cover:-
Life insurance contracts allow an individual to have a risk
cover against any unfortunate event of the future.

 Tax deduction:-
Under section 80C of the Income Tax Act of 1961 one can get
tax deduction on premiums up to one lakh rupees. Life insurance
policies thus decrease the total taxable income of the individual.

 Retirement planning:-
What had provided against the financial consequences of
premature death may now be used to help them enjoy
their retirement years. Moreover the cash value can be
used as an additional income in the old age.
 Loans:-
An individual can easily access loans from different financial
institution by pledging his insurance policies.

8
RESEARCH
DESIGN

9
 RESEARCH DESIGN
INTRODUCTION
A Research Design is the framework or plan for a study which is
used as a guide in collecting and analyzing the data collected. It is
the blue print that is followed in completing the study. The basic
objective of research cannot be attained without a proper
research design. It specifies the methods and procedures for
acquiring the information needed to conduct the research
effectively. It is the overall operational pattern of the project that
stipulates what information needs to be collected, from which
sources and by what methods.
TITLE OF THE STUDY

“To compare the products of RELIANCE LIFE INSURANCE

Company Limited With the products of Tata AIG Life
Insurance Company Limited.

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 STATEMENT OF THE PROBLEM
This study was undertaken to identify which type of insurance
plans RLICL should market to beat Tata AIG LIC in India. A survey
was undertaken to understand the preferences of Indian
consumers with respect to insurance. While marketing policies the
sole duty of an advisor/ agent is to provide insurance plans as per
customer requirements.
In effect plans (insurance products) should be flexible to suit
individual requirements. This research tries to analyze some key
factors which influence the purchase of insurance like the term of
the policy, the type of company, the amount of annual premium
payable (capacity and willingness to spend), risk taking ability
and the influence of advertising. Solutions and recommendations
are made based on qualitative and quantitative analysis of the
data.
OBJECTIVES OF THE STUDY
 To analysis the product details of Reliance life Insurance
Company limited and Tata AIG life Insurance Company
Limited.

 To find ‘Points of Parity’ and ‘Points of Difference’ of Reliance

Life Insurance Company Limited and Tata AIG Life Insurance
Company Limited.

11
  To find out factors that influence customers to purchase
insurance policies and give suggestions for further
improvement.

RESEARCH METHODOLOGY
TYPE OF DATA COLLECTED
There are two types of data used. They are primary and
secondary data. Primary data is defined as data that is collected
from original sources for a specific purpose. Secondary data is
data collected from indirect sources. (Source: Research
Methodology, By C. R. Kothari)
PRIMARY SOURCES
These include the survey or questionnaire method, telephonic
interview as well as the personal interview methods of data
collection.

SECONDARY SOURCES
These include books, the internet, company brochures, product
brochures, the company website, competitor’s websites etc,
newspaper articles etc.
SAMPLING
Sampling refers to the method of selecting a sample from a given
universe with a view to draw conclusions about that universe. A
sample is a representative of the universe selected for study.

SAMPLE SIZE
The sample size for the survey conducted was 2800
respondents. This sample size was taken on 98% confidence
level and 5 significant levels. Data universe for this sample is
100000 (According to 2001) which is approx population of Tohana
excluding people below age of 18 years.

12
 PLAN OF ANALYSIS
Tables were used for the analysis of the collected data. The data
is also neatly presented with the help of statistical tools such as
graphs and pie charts. Percentages and averages have also been
used to represent data clearly and effectively.

STUDY AREA
The samples referred to were residing in TOHANA and JAKHAL.
The areas covered were Master Colony, New Anaj Mandi, Model
Town, and New Friends Colony.
OVERVIEW OF CHAPTER SCHEME
CHAPTER 1:Introduction to insurance - An overview of the
industry in India, history, key milestones, reforms in the industry,
present scenario in India.
CHAPTER 2:Research Design - Introduction, title of the study,
statement of the problem, objectives of the study, research
methodology, sampling, plan of analysis and study area
CHAPTER 3:Company profile of Reliance Life Insurance –
Introduction of reliance life insurance, products and services,
vision and core values, human resource,
organizational structure, introduction to unit linked funds, national
& international presence of the organization.
CHAPTER 4: Company profile of Tata AIG – Introduction of
Tata AIG, products and services, vision and core values. The
advantages of investing in Reliance Life Insurance compared to
other financial instruments.
CHAPTER 5: Points of Parity and Points of Difference
between Reliance Life Insurance and Tata AIG LIC –
Comparison between different plans, charges, fees, deductions
and riders available with RLICL and Tata AIG LIC

13
CHAPTER 6: Competitive analysis – Information about the
plans offered by LIC and other private insurers in India.
Comparisons between the plans to find the most popular and
beneficial plans which RLICL can incorporate into their product
portfolio.
CHAPTER 7: Marketing problems - The techniques used to
market insurance and their advantages and disadvantages along
with suggestions for improvement.
CHAPTER 8: Analysis and Interpretation – A survey on factors
that influence people to purchase Life Insurance Policy.
CHAPTER 9: Findings & Recommendation- Suggestion to
increase market share of company.
CHAPTER 10:
Conclusion
References

COMPANY PROFILE
OF
RELIANCE INSURANCE
14
COMPANY LTD.

15
About Reliance Life Insurance Company
Reliance Life Insurance Company limited is a part of the RELIANCE
CAPITAL LIMITED of the Reliance- Anil Dhirubhai Ambani Group.
Reliance capital is one of India’s leading private sector financial
services companies, and ranks among the top 3 private sector
financial services and companies, in the terms of net worth.
Reliance Capital has interests in asset management and mutual
funds, stock broking, life and general finance, proprietary
investment, private equity and other activities in financial
services.
Reliance Capital Limited (RCL) is a non- banking financial
company (NBFC) registered with the RESERVE BANK of India
under section 45-IAof the Reserve Bank of India Act, 1934.
Reliance Capital sees immense potential in the rapidly growing
financial services sector in India and aims to become a dominate
player in this
industry and offer fully integrated financial services.
Reliance Life Insurance is another step forward for Reliance
Capital Limited to offer need based Life Insurance solutions to
individuals and corporate.

16
 Founder Of Reliance Life Insurance

Few men in history have made as

dramatic a contribution to their
country’s economic fortunes as did the founder of Reliance, Shri. Dhirubhai H
Ambani. Fewer still have left behind a legacy that is more enduring and timeless.

As with all great pioneers, there is more than one unique way of describing the true
genius of Dhirubhai: The corporate visionary, the unmatched strategist, the proud
patriot, the leader of men, the architect of India’s capital markets, the champion of
shareholder interest.

But the role Dhirubhai cherished most was perhaps that of India’s greatest wealth
creator. In one lifetime, he built, starting from the proverbial scratch, India’s
largest private sector enterprise.

When Dhirubhai embarked on his first business venture, he had a seed capital of
barely US$ 300 (around Rs 14,000). Over the next three and a half decades, he
converted this fledgling enterprise into a Rs 60,000 crore colossus—an
achievement which earned Reliance a place on the global Fortune 500 list, the first
ever Indian private company to do so.

Dhirubhai is widely regarded as the father of India’s capital markets. In 1977,

when Reliance Textile Industries Limited first went public, the Indian stock market
was a place patronized by a small club of elite investors which dabbled in a
handful of stocks.

Undaunted, Dhirubhai managed to convince a large number of first-time retail

investors to participate in the unfolding Reliance story and put their hard-earned
money in the Reliance Textile IPO, promising them, in exchange for their trust,

17
substantial return on their investments. It was to be the start of one of great stories
of mutual respect and reciprocal gain in the Indian markets.

Under Dhirubhai’s extraordinary vision and leadership, Reliance scripted one of

the greatest growth stories in corporate history anywhere in the world, and went on
to become India’s largest private sector enterprise.

Through out this amazing journey, Dhirubhai always kept the interests of the
ordinary shareholder uppermost in mind, in the process making millionaires out of
many of the initial investors in the Reliance stock, and creating one of the world’s
largest shareholder families.

HISTORY
Reliance Capital Limited announced the launch of its Life
Insurance Business on February 1,2006. This was after obtaining
the required regulatory approvals from the registrar of the
companies and the Insurance Regulatory and Development
Authority (IRDA).
It was in August 2005 that the ball was set rolling when Reliance
Capital Limited, the financial arm of Reliance – Anil Dhirubhai
Ambani Group.

MISSION
The mission of the Reliance Life Insurance Company Limited is to
be the best in every sphere- Business results, customer care and
employee focus. The aim of the company is to the Think Bigger
and Think Better.

CORE VALUSE
Reliance Life Insurance Company Limited has some core
values which are listed as follows:
1. Result oriented
2. Performance driven
3. Customer focused
4. Learning and Development Oriented
5. Employee centric
6. Informal and Fun

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 PRODUCTS & SERVICES
At RELIANCE LIFE INSURANCE plans are created keeping in mind
the changing needs of family. Its life insurance plans are designed
to provide you with flexible options that meet both protection and
savings needs. It offers a full range of transparent, flexible and
value for money products. RLIC products are modern and
contemporary unitized products that offer unique customer
benefits like flexibility to choose cover levels, indexation and
partial withdrawals.

PLANS THAT ARE OFFERED BY RELIANCE LIFE

INSURANCE
Protection Plans

In today’s uncertain world, there could be calamity at every step of the life.
It is up to you to ensure that your family stays protected always.

Reliance Protection Plans helps you do exactly the same. You have a wide
range of options to choose a plan from. Right from limited period plans to
lifetime protection plans, you can opt for the one that suits your lifestyle.

While we understand that nothing can compensate for the loss of a life, we
intend to provide you the peace of mind. Investing in Reliance Protection
Plans would mean your family’s future is in safe hands.

Savings & Investment

19
In life, you have always given your family whatever they have

wanted. Yet, there are some promises you have to fulfill, such as

taking your family for a vacation, or buying that dream house.

Set aside some money to achieve these specific goals with the help of

Reliance Savings & Investment Plans. The plan allows you to

experience the joys of life and provide for your family’s needs.Enjoy

life without worrying about the promi you have madsese—we are

here to fulfill them.

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 Achievements
• 3rd largest private player in a span of just 4 years, moved from 11th
position to 3rd

• Amongst the fastest growing Companies for 4 years in a row

• Continuous increase in market share over 4 years; from 1.9% in 2005-06 to

10.26% in 2009 -10

• RLIC has achieved a growth rate of 21% while the private industry has
grown at 13%

• Fastest to reach the 5 million policy mark

• Largest private insurer in terms of policy count in 2009-10

• 1145 branches 1,95,000 Advisors and over 16,000 employees

• RLIC continues to be amongst the foremost Life Insurance companies in

India to be certified ISO 9001:2000 for all the processes.

• Awarded the Jamnalal Bajaj Uchit Vyavahar Puraskar 2007- Certificate

of Merit in the Financial Services category by Council for Fair Business
Practices (CFBP).

21
 • The Company has also won the DL Shah Quality Council of India
Commendation Award in the services category in Feb. 2008 for its work
on promoting 'self help channels for service'

FUTURE PLANS:

• Forty- four new branches to opened across the country in

the coming months and a plan India presence with 162
branches in the coming year.

• A state-of-the-art customer care center will provide

continuous, responsive services to the caller and
promptly address queries, collate feedback and
suggestions from the caller, who may be both prospective
and existing clientele and from channel partners in
Chennai and Mumbai.

• It will be launching additional products aimed at providing

unparalleled service to its valued clientele.

Reliance – Anil Dhirubhai Ambani Group also has presence

in Communication, Energy, Natural Resources, Media,
Entertainment, Healthcare and Infrastructure.

22
`

23
POINTS OF PARITY
AND
POINTS OF
DIFFERENCE
BETWEEN
RELIANCE
INSURANCE AND
TATA AIG

24
 Points of Parity
Funds available with ULIP Plans
General Risk
Nature of Investments
Description Category
Primarily invested in
company
Equity Funds stocks with the general High
aim of capital
appreciation
Invested in corporate
Income, Fixed bonds,
Interest government securities Medium
and Bond Funds and other fixed income
instruments
Sometimes known as
Money
Market Funds — invested
Cash Funds Low
in cash, bank deposits and
money market
instruments
Combining equity
investment
Balanced Funds Medium
with fixed interest
instruments

Generally all life insurance companies have three types of

fund which are Equity fund, Debt fund and Balance fund.
These fund have different risk profile. Equity fund has high
risk but it gives high return, Debt fund has low risk so it gives
low return and balanced fund is combination of both Equity

25
and Debt fund so risk is medium and return is also low.
Both HDFC SLIC and Tata AIG LIC have 7 types of funds based
on combination of Debt–Equity fund. These are liquid fund,
stable managed fund, secure managed fund, defensive
managed fund, balanced managed fund, equity managed
fund, growth fund.
Indexation
You have the option to increase your regular premiums by indexation rate at
any policy anniversary to protect the real value of your investment against
inflation.

Charges, Fees and Deductions in ULIP

• Premium Allocation Charge

This is a premium-based charge. After deducting this charge from premiums,

the remainder is invested to buy units. The Allocation charges are guaranteed
for the entire duration of policy term.

• Mortality Charge

The Mortality Charge will apply on the Sum at Risk (SAR =

Sum Assured less the Fund Value pertaining to regular
premiums). It will be deducted by monthly cancellation of
units from the accumulation unit account. The Mortality
Charge shall remain guaranteed throughout the policy term.

• Fund Management Charge

1% p.a. on With Profits Fund, 1% p.a. on Debt Fund, 1.25%

p.a. on Balanced Fund and 1.50% p.a. on Growth Fund. FMC
will be applied on the fund while calculating NAV on a daily
basis. The maximum FMC on any fund is 2% p.a. subject to

26
prior approval by the IRDA.

• Policy Administration Charge

Rs. 60 per month, which will increase by 5% p.a. on the 1st of

January each year. PAC will be deducted monthly by
cancellation of units from the accumulation unit account. If
premiums are discontinued, this charge would reduce to 60%
of the charge applicable for the premium paying policies

• Surrender Charge
• This is the charge that applies when the policy is
surrendered. It is equal to 50% of the difference between
regular premiums expected and

Points of Difference
RLIC Life Tata AIG Life
Insurance Insurance
Grace Period 15 days 31 days
Policy
Administration Rs. 60 per month Rs. 55 per month
Charge
10% on sum-
Guaranteed Bonus Does not give assured after 10
year

27
 0.25% after every
Loyalty Bonus 0.1% every year
4th year
Total 24 free
switches in a policy 4 free switches per
Fund Switching
year after this
Charge
after this Rs. 100 Rs. 250 per switch
per Switch
30% of all
50% of all premium
Guaranteed premium
paid excluding 1st
Surrender value paid excluding 1st
premium
premium
Fund Management 0.80% per annum 1.75% per annum
Charge on the fund value on the fund value
Total 12 free
First 2 Premium
Premium
Redirection in a
Redirection
Premium year is free after
in a policy after
Redirection Charge this Rs. 1000
this Rs. 250 per
per Premium
Premium
Redirection
Redirection
Last Year Return 42.70% 72%

28
COMPETITIVE

ANALYSIS

29
 COMPETITIVE ANALYSIS
LIFE INSURANCE CORPORATION OF INDIA (LIC)

LIC has an excellent money back policy which provides

for periodic payments of partial survival benefits as long
as the policy holder is alive. 20% of the sum assured is
payable after 5, 10, 15 and 20 years and the balance
40% is payable at the 20th year along with accrued bonus.
(www.lic.com)
For a 25 years term , 15% of the sum assured becomes
payable after 5,10,15 and 20 years and the balance 40%
plus the accrued bonus becomes payable at the 25th year.
An important feature of these types of policies is that in
the event of the death of the policy holder at any time
within the policy term the death claim comprises of full
sum assured without deducting any of the survival
benefit amounts which have already been paid. The
bonus is also calculated on the full sum assured.
HDFC SLIC does not have a money back policy. It could
offer a money back plan and capture some portion of this
market. While marketing insurance products I found that
many customers wanted to purchase these plans.
LIC offers 66 different plans; plans are formulated for
specific occasions – whole life plans, term assurance
plans, money back plan for women, child plans, plans for
the handicapped individuals, endowment assurance
plans, plans for high worth individuals, pension plans, unit
linked plans, special plans, social security schemes –
diversified portfolio of products. HDFC SLIC could diversify
its product portfolio. It could add more plans for high
worth individuals and women.

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BIRLA SUN LIFE
Birla Sun Life Insurance Company Limited is a joint
venture between The Aditya Birla Group, one of the
largest business houses in India and Sun Life Financial
Inc., a leading international financial services
organization. The local knowledge of the Aditya Birla
Group combined with the expertise of Sun Life Financial
Inc., offers a formidable protection for your future.
(Source: www.birlasunlife.com)
The Aditya Birla Group has a turnover close to Rs. 33000
crores with a market capitalization of Rs. 53400 crores
(as on 31st March 2007). It has over 72000 employees
across all its units worldwide. It is led by its Chairman -
Mr. Kumar Mangalam Birla. Some of the key organizations
within the group are Hindalco and Grasim.
Sun Life Financial Inc. and its partners today have
operations in key markets worldwide, including Canada,
the United States, the United Kingdom, Hong Kong, the
Philippines, Japan, Indonesia, India, China and Bermuda.
It had assets under management of over US$343 billion,
as on 31st March 2007. The company is a leading player
in the life insurance market in Canada.
Being a customer centric company, BSLI has invested
heavily in technology to build world class processing
capabilities. BSLI has covered more than a million lives
since inception and its customer base is spread across
more than 1000 towns and cities in India. All this has
assisted the company in cementing its place amongst the
leaders in the industry in terms of new business premium
income. The company has a capital base of 520 crores as
on 31st July, 2007.

31
Its Flexi Life Line Plan offers lifelong insurance cover till
the policy holder is 100 years of age. There are
guaranteed returns of 3% p.a. net of policy charges after
every 5 years from the eleventh policy year onwards.
However the charges are very high. The initial charges for
the first year are 65%. Hence the fund value is greatly
reduced.
ICICI PRUDENTIAL
ICICI Prudential is a stiff competitor for HDFC SLIC. The
company is a merger between ICICI Bank which is the
biggest private bank in India and Prudential Plc which is a
global life insurance company. The company has an
investment plan which is market related – Invest Shield
Life. In this plan even if the market falls, the premium will
be returned to investors. It is a guaranteed plan which
ensures the company carefully invests your money. The
stock market performance of ICICI Prudential is much
better than HDFC SLIC. The returns on the growth fund
were 46.28% compared to the 42.70% offered by HDFC
SLIC. Customers are attracted by higher returns and this
is a plus point for Prudential.

The company is very well advertised. The advertisements

are showcased in movies, television, newspapers,
magazines, bill boards, radio etc. The company has an
excellent brand ambassador – Mr. Amitabh Bachan. His
promotion of the company builds trust and faith in the
minds of our people.
However the charges are very high in the plans offered
by ICICI Prudential. It is 35% during the first year, 15% in
the next year and 3% from the third year onwards. Also a
higher minimum premium of Rs. 8000 is charged. Hence

32
the policies are not accessible to the lower strata of the
society. (Source: www.iciciprulife.com)

BAJAJ ALLIANZ
Bajaj Allianz is a joint venture between Allianz AG with
over 110 years of experience in over 70 countries and
Bajaj Auto, a trusted automobile manufacturer for over 55
years in the Indian market. Together they are committed
to offering you financial solutions that provide all the
security you need for your family and yourself. Bajaj
Allianz is the number one private life insurer for the year
2005 – 2006. It is leading by 78 crores. It has experienced
a whopping growth of 216% in the last financial year.
The company has sold 13, 00,000 policies and is backed
by 550 offices across India. It offers travel insurance,
motor insurance, home insurance, health and corporate
insurance. The mortality charges are lower than HDFC
SLIC. The entry age could be zero years which allow even
new born babies to be insured. (Source:
www.bajajallianz.com)

33
MARKETING

PROBLEMS

34
 MARKETING PROBLEMS
The old and out dated technique of Tele marketing is
used to prospect customers. More modern techniques
must be adopted. The company must sponsor shows and
give presentations in corporate houses. The financial
health check must be performed for every prospect to
assess his/her true financial position and needs. Some of
the advisors skip this vital step and the prospect ends up
with a plan they do not appreciate and soon surrender or
discontinue.

Some of the main problems in marketing the

policies are:

 Large amount of competition (23 players in the

market)
 Other brands are well advertised and have higher
recall value
 LIC is considered a safer option
 Face competition from banks and mutual funds
 High premium policies are difficult to market
 Incorrect perception about insurance

35
 Interested prospects might have a lack of time and
postpone investments
 Short term plans are available only at large premium

ANALYSIS

36
 &

INTERPRETATION

37
 ANALYSIS & INTERPRETATION
“A SURVEY ON THE LIFE INSURANCE
INDUSTRY IN INDIA”AGE GROUP OF
SURVEYED RESPONDENTS
TABLE 1:
Age group No. of Respondents
18 - 25 years 1316
26 - 35 years 700
36 - 49 years 476
50 - 60 years 252
More than 60 years 56

38
Analysis:
From the chart above we find that 47% of the
respondents fall in the age group of 18 – 25 years, 25%
fall in the age group of 26 – 35 years and 17% fall in the
age group of 36 – 49 years.
Therefore most of the respondents are relatively young
(below 26 years of age). These individuals could be
induced to purchase insurance plans on the basis of its
tax saving nature and as an investment opportunity with
high returns.
Individuals at this age are trying to buy a house or a car.
Insurance could help them with this and this fact has to
be conveyed to the consumer. As of now many
consumers have a false perception that insurance is only
meant for people above the age of 50. Contrary to
popular belief the younger you are the more insurance
you need as your loss will mean a great financial loss to
your family, spouse and children (in case the individual is
married) who are financially dependent on you.

39
NO. OF RESPONDENTS WHO HAVE LIFE
INSURANCE POLICY IN THEIR NAME
TABLE 2:
Person who have life insurance
policy
Yes 1064
No 1736

ANALYSIS:
This graph shows that out of total 2800 respondents only 1064 or
38% respondents have life insurance policy in their name. Rest all
don’t have a single policy in their name. So there is a very big
scope for life insurance companies to cover these people. So in
future business of life insurace will gro further.

40
 MARKET SHARE OF LIFE INSURANCE
COMPANIES
TABLE 3:
LIFE INSURER NUMBER OF POLICIES
RLIC LIFE 4
BIRLA SUN LIFE 3
AVIVA LIFE INSURANCE 4
BAJAJ ALLIANZ 4
LIC 65
TATA AIG 4
ICICI PRUDENTIAL 10
ING VYSYA 3
BHARTI AXA 2
OTHERS 1

41
 Analysis:
In India, the largest life insurance company is Life
Insurance Corporation of India. It has been in existence in
India since 1956 and is completely owned by the
Government of India. Today the organization has grown
to 2048 offices serving 18 crore policies and has a corpus
of over 340000 crore INR.

POPULAR LIFE INSURANCE PLANS

TABLE 4:
Type of Plan No. of Respondents
Term Insurance
Plans 1089
Endowment Plans 1265
Pension Plans 166
Child Plans 82

42
 Tax Saving Plans 198

POPULAR LIFE INSURANCE PLANS

Analysis:
From the chart given above we can clearly see that 45%
of the respondents hold endowment plans and 39% of the
respondents hold term insurance plans. Endowment plans

43
are very popular and serve two purposes – life cover and
savings.
If the policy holder dies during the policy term the
nominee gets the death benefit that is, sum assured and
accumulated bonus. On survival the policy holder
receives the survival benefit with a bonus.
A term plan is a pure risk cover plan wherein the insured
pays a lower premium for a higher sum assured. Term
insurance is the cheapest form of insurance and helps the
policy holder insure himself for a relatively low premium.
For the returns sensitive investor term plans do not find
favor as they do not offer a return in case the individual
does not die during the policy term.

AWARENESS OF UNIT LINKED INSURANCE

PLANS

TABLE 5:
Awareness of Unit Linked
Plans No. of Respondents
Know 1596
Don’t Know 1204

44
Analysis:
From the chart given above we find that 57% of the
respondents are aware of unit linked life insurance plans
and 43% are not aware of such plans. These plans should
be promoted through advertising. The company can
advertise through television, radio, newspapers, bill
boards and pamphlets. This would increase awareness
and arouse curiosity in the minds of the consumer which
would enable the company to market its products more
effectively.
Unit – linked plans are those where the benefits are
expressed in terms of number of units and unit price.
They can be viewed as a combination of insurance and
mutual funds. The number of units a customer would get
would depend on the unit price when they pay the
premium.
When the policy matures the individual gets his fund
value. The value of his fund is calculated by multiplying
the net asset value and number of units held by them on
that day.

45
CONSUMER WILLINGNESS TO SPEND ON LIFE
INSURANCE PREMIUM
TABLE 6:
Willingness to spend on No. of
premium respondents Percentage
Less than Rs. 6,000 420 15%
Rs. 6,001 - Rs. 10,000 756 27%
Rs. 10,001 - Rs. 25,000 1148 41%
Rs. 25,001 - Rs. 50,000 420 15%
Rs. 50,001 - Rs.
1,00,000 56 2%

CHART 9:

CONSUMER WILLINGNESS TO SPEND ON LIFE INSURANCE

PREMIUM

46
 Analysis:

From the graph above, we can clearly see that 41% of the
respondents would be willing to spend between Rs.
10001 – Rs. 25000 for life insurance. 27 % would be
willing to spend between Rs. 6001 – Rs. 10000 per
annum. Only 15% would be willing to spend more than
Rs. 25000 per annum as life insurance premium.

We could say that the maximum premium payable by

most consumers is less than Rs. 25000 p.a. This is further
reduced as most customers have already invested with
LIC, ICICI Prudential, Birla Sun Life, Bajaj Allianz etc.
HDFC SLIC is faced with a large amount of competition.
There are 23 insurance companies in India inclusive of
LIC. Hence to capture a larger part of the market the

47
company could introduce more reasonable plans with
lesser premium payable per annum.
CHART SHOWING IDEAL POLICY TERM

TABLE 7:

Ideal policy term No. of respondents

3 - 5 years 532
6 - 9 years 420
10 - 15 years 980
16 - 20 years 392
21 - 25 years 252
26 - 30 years 56
More than 30 years 28
Whole life Policy 140

CHART SHOWING IDEAL POLICY TERM

48
Analysis:
From the chart given above it can be seen that 35% of
the respondents prefer a policy term of 10 – 15 years,
19% prefer a term of 3 – 5 years and 15% prefer a term
of 6 – 9 years. This means that HDFC SLIC could introduce
more plans wherein the premium paying term is less than
15 years.The outlook of insurance as a product should be
changed from something which you pay for your whole
life (whole life policy) and do not receive any benefit (the
nominee only receives the benefit in case of your death)
to an extremely useful investment opportunity with the
prospects of good returns on savings, tax saving
opportunities as well as providing for every milestone in
your life like marriage, education, children and
retirement.

FACTORS THAT MOTIVATE RESPONDENTS TO

PURCHASE INSURANCE
TABLE 8:

49
Parameter No. of Respondents
Advertisements 364
High returns 924
Advice from friends 476
Family responsibilities 868
Others 168

50
Analysis:
From the chart above it can be seen that 31% of the
respondents purchase life insurance to secure their
families, 33% take life insurance to get high returns, 17%
purchase insurance on the advice of their friends and
13% purchase insurance because of the influence of
advertisements.
The main purpose of insurance is to cover the financial or
economic loss that occurs to the family in case of the
uncertain death of the policy holder. But now a day this
trend is changing. Along with protection (life cover), a
savings element is being added to insurance.
With the introduction of the new unit linked plans in the
market, policy holders get the option to choose where
their money will be invested. They can invest their money
in the equity market, debt market, money market or a
combination of these. The debt and money markets
usually have low risk attached whereas the equity market
is a high risk investment option.

PREFERRED COMPANY TYPE OF THE

RESPONDENTS
TABLE 9:
No. of
Type of Company Respondents Percentage

51
Government
Owned Company 1680 60%
Public Limited
Company 812 29%
Private Company 196 7%
Foreign Company 112 4%

PREFERRED COMPANY TYPE OF THE RESPONDENTS

Analysis:
From the graph above we find that 60% of the
respondents preferred to purchase insurance from a
government owned company, 29% of the respondents
preferred to purchase insurance from a public limited
company and only 4% of the respondents preferred a

52
foreign based company. Heavy advertising through
television, newspapers, magazines and radio is required.

MINIMUM EXPECTED RETURN ON INVESTMENT

TABLE 10:
Expected Returns No. of respondents
Less than 5% 56
5% - 10% 392
11% - 15% 476
16% - 20% 504
21% - 25% 476
26% - 30% 280
31% - 40% 224
41% - 50% 140
More than 50% 224

53
 Analysis:
From the chart above it can clearly been seen that 18%
of the respondents would like 16 – 20% returns, 17%
would like returns between 21 – 25% and 17% would like
returns of 11 – 15% on their investments. Therefore the
average return on investment should be at least 16 – 20
%.

Most consumers are willing to adapt to some amount of

risk but still want some guaranteed returns. Therefore the
bulk of investment should be made in the balanced fund
with 50% debt and 50% equity. The returns on the Secure
Fund are guaranteed as these involve investment is
government securities and the debt market. But the
returns on these instruments are low (8 – 10%). If the
company invests in shares, returns are higher (39%) but
correspondingly risk borne by the policy holder is also
higher. Therefore a good combination of the two
instruments is often a wise choice.

54
 FINDINGS

 Customers are less aware about the private

insurance company in market.
 LIC has created a branded image in 3-4 decades, due
to which new insurance companies are facing trouble
in capturing market share. But the shares of private
companies are increasing day by day.
 Overall the perception of respondent for insurance
sector as career opportunity is hard and profitable.
 The expenses charges by private insurance
companies are high as compare to public company.

55
 Recommendation

 Customers should be made aware of the brand name of

Insurance company through advertisement
 The fear in the customer mind should be removed by
company.
 The insurance companies should try to nurture their brand
name timely and attractive facility provide to customer.
 Company should organize the program in the society, so that
people will be aware about the company
 Customers should be made aware of the brand name of
Insurance Company through regular advertisement. Which in
turn help FC to sell policies?
 The expenses charges by RELIANCELIFE should be low as
compare to other life insurance companies
 The limit of minimum premium should be decreased further.

56
 CONCLUSION

Reliance Life Insurance Company limited is a part of the RELIANCE CAPITAL

LIMITED of the Reliance- Anil Dhirubhai Ambani Group. Reliance capital is one
of India’s leading private sector financial services companies, and ranks among the
top 3 private sector financial services and companies, in the terms of net worth.
Reliance Capital has interests in asset management and mutual funds, stock
broking, life and general finance, proprietary investment, private equity and other
activities in financial services.
Reliance Capital Limited (RCL) is a non- banking financial company (NBFC)
registered with the RESERVE BANK of India under section 45-IAof the Reserve
Bank of India Act, 1934.The company faces a large amount of competition. To
sustain itself it must promote its products through advertising and improve its
selling techniques. Consumers must be aware of the new plans available at
RELIANCE. The medium of advertising used could be television since most of its
competitors use this tool to promote their products. The company must be
promoted as an Indian company since consumers seem to have more trust in
investing in Indian firms..

RELIANCE could tap the rural markets with cheaper products and smaller policy
terms. There are individuals who are willing to pay small amounts as premium but
the plans do not accept premiums below a certain amount. It was usually found that
a large number of males were insured compared to females. Individuals below the
age of 30 (mostly male) were interested in investment plans. This was a general
conclusion drawn during prospecting clients.

57
 REFERENCES
www.reliancelife.com

www.tata-aig-life.com

www.irdaindia.com

www.lic.com

www.reliancecapital control.com

www.bajajallianz.com

www.icici.prulife.com

Magazine –

Insurance World

The Outlook Money

Secrets of Successful Insurance Sales by Mr. Jack Kinder

58
59
 A SURVEY ON ‘INSURANCE INDUSTRY’

Do you have a life insurance policy/investment plan in your name?

o Yes o No

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

o Aviva Life Insurance

o Bajaj Allianz Life Insurance
o Reliance Life Insurance o LIC
o Birla Sun Life Insurance
o Tata AIG Life Insurance o ING Vysya Life Insurance
o ICICI Prudential Life o Bharti Axa Life Insurance
Insurance
o Others (specify name)

What is the approximate premium paid by you annually (in Rupees)?

o Rs. 5,000 – Rs. 10,000 o Rs. 50,001 – Rs. 60,000

o Rs. 10,001 – Rs. 15,000 o Rs. 60,001 – Rs. 80,000
o Rs. 15,001 – Rs. 25,000 o Rs. 80,001 – Rs. 1,00,000
o Rs. 25,001 – Rs. 50,000
o More than Rs. 1,00,000 (specify premium)

What kind of insurance policy would suit you best in your current
stage of life?

o Life Insurance o Pension Plans

o Life Insurance and o Child Plans
Investment Plans
o Tax saving plans

Are you aware of the new unit linked insurance plans in the market?

Yes No

60
How much would you be willing to spend per annum if you were to
go for an investment/insurance plan?

o Less than Rs. 6,000 o Rs. 25,001 – Rs. 50,000

o Rs. 6,001 – Rs. 10,000 o Rs. 50,000 – Rs. 1,00,000
o Rs. 10,001 – Rs. 25,000 o More than Rs. 1,00,000
Which according to you is an ideal policy term? (Number of years you
would be willing to pay premium)

o 3 to 5 years o 21 to 25 years
o 6 to 9 years o 26 to 30 years
o 10 to 15 years o More than 30 years
o 16 to 20 years o Whole life policy

What motivates you to purchase insurance/investment plans?

o Advertisements o Advice from friends

o High Returns o Family responsibilities
o Others (specify)

In which kind of company would you prefer to make a purchase of

insurance?

o Government owned o Private Company

company o Foreign based company
o Public Limited Company

Typically what kind of returns would you look at from your

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

o Less than 5% o 26% - 30%

o 6% - 10 % o 31% - 40%
o 11% - 15 % o 41% - 50%
o 16% - 20 % o More than 50%
o 21% - 25%

61
Personal Details:

Name:

Address:

Age: Contact No. :

Profile of respondent:

• Student • Business
• Housewife • Self – Employed
• Working Professional • Government Service
Employee

Date:

62