TABLE OF CONTENTS

SR.NO. PARTICULARS Total no.

of pages

PART-1 GENERAL INFORMATION

1 Introduction of the Topic 1 to 12

PART- 2 PRIMARY STUDY

2 Introduction of the Study
2.1 Literature Review 13 to 21

2.2 Background of the study 22

2.3 Scope of the study 23

2.4 Problem Statement 24

2.5 Objectives of the study 24

2.6 Hypothesis 25

3 Research Methodology
3.1 Research Design 26

3.2 Sources of Data 27

3.3 Data Collection Method 28

3.4 Population 29

3.5 Sampling Method 30 to 31

3.6 Sampling Frame 32

4 Data Analysis and Interpretation 33 to 48

5 Results and Findings 49 to 53

6 Limitations of the Study 54

7 Suggestions 55

8 Conclusion 56

9 Annexure 57 to 60

10 Bibliography 61

V
SR.NO. LIST OF TABLE Page no. for
Tables

PERSONAL INFORMATION

1 Table-1 Gender 34

2 Table-2 Occupation 35

3 Table-3 Monthly Earning 36

SPECIFIC INFORMATION

1 Table-1 Where do you invest your savings? 37

2 Table-2 From which source did you come to know about Life 38
Insurance?

3(a) Table-3(a) Have you taken any Life Insurance Policy? 39

(b) Table-3(b) If "Yes" which Insurance Company? 40

4 Table-4Why People Purchase Life Insurance Policy? 41

5 Table-5 Do you agree that Tax benefits from LIC has impact on your 42
savings?

6 Table-6 From your point of view which are the special benefits from 43
LIC in Tax Relief?

7 Table-7 Have claimed any benefit till on Tax throgh Investment in 44

Insurance?

8 Table-8 Are you recall any "AD" about Life Insurance in general and 45
/ or Life Insurance product in particular?

9 Table-9 If "Yes" what in the main message that you get from the 46
"AD"?

10 Table-10 State your expectation on investment alternatives by 47

according to its importance.

11 Table-11 What would you like more in Insurance Policies of LIC of 48

India?

VI
SR.NO. LIST OF GRAPHS Page no. for
Graphs

PERSONAL INFORMATION

1 Gender 34

2 Occupation 35

3 Monthly Earning 36

SPECIFIC INFORMATION

1 Where do you invest your savings? 37

2 From which source did you come to know about Life Insurance? 38

3(a) Have you taken any Life Insurance Policy? 39

(b) If "Yes" which Insurance Company? 40

4 Why People Purchase Life Insurance Policy? 41

5 Do you agree that Tax benefits from LIC has impact on your 42
savings?

6 From your point of view which are the special benefits from LIC in 43
Tax Relief?

7 Have claimed any benefit till on Tax through Investment in 44

Insurance?

8 Are you recall any "AD" about Life Insurance in general and / or Life 45
Insurance product in particular?

9 If "Yes" what in the main message that you get from the "AD"? 46

10 State your expectation on investment alternatives by according to its 47

importance.

11 What would you like more in Insurance Policies of LIC of India? 48

VII
 EXECUTIVE SUMMARY

Finance is getting more importance in the business nowadays, because people and
their knowledge are the most importance aspects affecting the firm’s financial
condition of the company. one of the main aspects of finance is the measurement of
company. Companies have to make sure that increasing financial condition of the
organization.

This survey was conducted by Banshree modi & Swati patel as an essential, in
partial completion of the MBA course, for Sardar Patel College of Administration and
Management. The survey sought to understand the what is the benefit from the LIC
to the Tax Relief. The findings presented in this report highlights the key issues of
“Whether Taxation Is a Selling Tool for Life Insurance” with reference to LIC India
Ltd.

The survey is divided in to two parts as follows:

Part-1 General Information

Part-2 Primary Study

All the objectives have been fulfilled during the course of analysis of the survey and
preparation of final report.

VIII
 1. INTRODUCTION OF THE TOPIC:

a) Tax

A tax ―is not a voluntary payment or donation, but an enforced contribution, exacted by
legislative authority‖.

Taxation, system of raising money to finance government. All governments require

payments of money—taxes—from people. Governments use tax revenues to pay
soldiers and police, to build dams and roads, to operate schools and hospitals, to
provide food to the poor and medical care to the elderly, and for hundreds of other
purposes. Without taxes to fund its activities, government could not exist.

Throughout history, people have debated the amount and kinds of taxes that a
government should impose, as well as how it should distribute the burden of those taxes
across society. Unpopular taxes have caused public protests, riots, and even
revolutions. In political campaigns, candidates‘ views on taxation may partly determine
their popularity with voters.

Taxation is the most important source of revenues for modern governments, typically
accounting for 90 percent or more of their income. The remainder of government
revenue comes from borrowing and from charging fees for services. Countries differ
considerably in the amount of taxes they collect. In the United States, about 30 percent
of the gross domestic product (GDP), a measure of economic output, went for tax
payments in 2000. The 30 percent figure is relatively low from a historical standpoint. As
a result of a new round of tax cuts in 2003, the tax percentage share of GDP was
expected to be lower than at any time since 1959 when many major government
programs, such as Medicare and Medicaid, did not exist. In Canada about 35 percent of
the country‘s gross domestic product goes for taxes. In France the figure is 45 percent,
and in Sweden it is 51 percent.

In addition to using taxation to raise money, governments may raise or lower taxes to
achieve social and economic objectives, or to achieve political popularity with certain
groups. Taxation can redistribute a society‘s wealth by imposing a heavier tax burden on
one group in order to fund services for another. Also, some economists consider
taxation an important tool for maintaining the stability of a country‘s economy.

1
 Tax Planning

Life insurance policies can be useful tax planning tools, because the policy holder is
eligible for tax benefits under the Income Tax Act 1961 (Act). Though there are multiple
modes for saving tax, life insurance is one of the most effective tax planning instrument.
With our life insurance plans individuals can not only save tax but also look at achieving.

Life insurance plans form Kotak Mahindra Old Mutual Life Insurance Limited provides
several other benefits: life cover, wealth maximisation opportunities, child‘s future
planning options, retirement planning options and all of them coupled with effective tax
saving options.

Here are a few advantages of tax planning using life insurance policies from Kotak
Mahindra Old Mutual Life Insurance Limited:

 Deductions

 Benefit is available to individual assessee and Hindu Undivided Family assessee.

o In case of individual assessee - himself/herself, spouse, children of such

individual
o In case of HUF assessee - any member of HUF.

 Premiums paid under a life insurance policy are eligible for deduction under Section
80C* of the Act, subject to the provisions of the said section.

 Contributions to a pension plan are eligible for deduction under Section 80CCC* of
the Act, subject to the provisions of the said section.

2
 If the amount of premium paid in a financial year for a policy is in excess of 10% of
the actual capital sum assured, then deduction will be allowed only for premiums up
to 10% of the actual capital sum assured.

 Exemption

 The proceeds under a life insurance policy are exempt under Section 10(10D) of the
Act, subject to the provisions of the said section.

 Service Tax

 All premiums and charges are subject to applicable taxes including service tax,
education cess and secondary and higher education cess as applicable under the
prevailing tax laws.

 Disclaimer

This information should not be construed as expert tax, legal or investment opinion from
Kotak Mahindra Old Mutual Life Insurance Company Limited & Company would not be
responsible in any manner for decisions made on the basis of above information.

Please consult your tax advisor for specific suitability of taxation on insurance products.

The tax advantages of Permanent Life Insurance.

3
 Protecting loved ones is the main purpose of life insurance, but here are four
tax benefits to consider.

 The primary purpose of life insurance is to provide a death benefit to help replace
lost income and protect loved ones from the financial losses that could result from
the insured‘s death. But did you know that most permanent life insurance policies
accumulate cash value and potentially offers you certain tax advantages? Here are
four tax benefits:

 You pay no current federal income tax on potential cash value growth. As the cash
value accumulates, it is not subject to current taxation.

 You pay no federal income tax if you borrow cash value from the policy through
loans. As a general rule, loans are treated as debts, not taxable distributions, if
structured properly. This can give you access to cash value on a tax-advantaged
basis. After a sizable amount of cash value has built up, it can be borrowed against
to help supplement retirement income as your need for life insurance decreases and
in many cases, you‘ll not income tax on the gain. (Keep in mind that these loans are
charged interest and reduce the death benefit and cash value; if a policy lapses or is
surrendered with an outstanding loan, a portion may be taxable; and there are
certain polices that are subject to different tax laws.)

 Your beneficiaries generally pay no federal income tax on death benefits. Therefore,
a $500,000 policy delivers $500,000 in benefits with no deductions and no
withholding required.

 Avoid estate taxes on the death benefits. You can avoid potential estate taxes on life
insurance death benefits by transferring ownership of the policy to another person or
trust more than three years before your death. Your tax advisor or attorney can
explain the particulars for your circumstances.

 A policy that builds cash value is generally called permanent insurance and is
designed to provide long-term life insurance coverage, generally for the insured‘s
entire life. In the case of whole life insurance, the premium stays the same for the life
of the policy and it can accumulate cash value,

4
 Distributions including loans from a MEC are taxable to the extent of the gain in the
policy and may also be subject to a 10% additional tax if the owner is under age 59
½. This material is for informational purposes only. Neither New York Life nor its
agents provide tax, legal or accounting advice. Please consult your own tax, legal or
accounting professional before making any decisions.

 TYPES OF TAXES

Governments impose many types of taxes. In most developed countries, individuals pay
income taxes when they earn money, consumption taxes when they spend it, property
taxes when they own a home or land, and in some cases estate taxes when they die. In
the United States, federal, state, and local governments all collect taxes.

Taxes on people‘s incomes play critical roles in the revenue systems of all developed
countries. In the United States, personal income taxation is the single largest source of
revenue for the federal government. In 2002 it accounted for about 48.8 percent of all
federal revenues. Payroll taxes, which are used to finance social insurance programs
such as Social Security and Medicare, account for 36.4 percent of federal revenues.
The United States also taxes the incomes of corporations. In 2002 corporate income
taxation accounted for 10.4 percent of federal revenues.

State and local governments depend on sales taxes and property taxes as their main
sources of funding. Most U.S. states also tax the incomes of individuals and
corporations, although less heavily than the federal government. All Canadian provinces
collect income taxes from individuals and corporations.

 Individual Income Tax

An individual income tax, also called a personal income tax, is a tax on a person‘s
income. Income includes wages, salaries, and other earnings from one‘s occupation;
interest earned by savings accounts and certain types of bonds; rents (earnings from
rented properties); royalties earned on sales of patented or copyrighted items, such as
inventions and books; and dividends from stock. Income also includes capital gains,
which are profits from the sale of stock, real estate, or other investments whose value
has increased over time.

5
The national governments of the United States, Canada, and many other countries
require citizens to file an individual income tax return each year. Each taxpayer must
compute his or her tax liability—the amount of money he or she owes the government.
This computation involves four major steps.

(1) The taxpayer computes adjusted gross income—one‘s income from all taxable
sources minus certain expenses incurred in earning that income.

(2) The taxpayer converts adjusted gross income to taxable income—the amount of
income subject to tax—by subtracting various amounts called exemptions and
deductions. Some deductions exist to enhance the fairness of the tax system. For
example, the U.S. government permits a deduction for extraordinarily high medical
expenses. Other deductions are allowed to encourage certain kinds of behavior. For
example, some governments permit deductions of charitable contributions as an
incentive for individuals to give money to worthy causes.

(3) The taxpayer calculates the amount of tax due by consulting a tax table, which
shows the exact amount of tax due for most levels of taxable income. People with very
high incomes consult a rate schedule, a list of tax rates for different ranges of taxable
income, to compute the amount of tax due.

(4) The taxpayer subtracts taxes paid during the year and any allowable tax credits to
arrive at final tax liability.

After computing the amount of tax due, the taxpayer must send this information to the
government and enclose the amount due. In 2001 the average taxpayer in the United
States paid about 15 percent of his or her income in income taxes. Many taxpayers,
rather than owing money, receive a refund from the government after filing a tax return,
typically because they had too much tax withheld from their wages and salaries during
the year. Low-income workers in the United States may also receive a refund because
of the earned income tax credit, a federal government subsidy for the working poor.

Income taxation enjoys widespread support because income is considered a good

indicator of an individual‘s ability to pay. However, income taxes are hard to administer
because measuring income is often difficult. For example, some people receive part of
their income ―in-kind‖—in the form of goods and services rather than in cash. Farmers

6
provide field hands with food, and corporations may give employees access to company
cars and free parking spaces. If governments tax cash income but not in-kind
compensation, then people can avoid taxation by taking a higher proportion of their
income as in-kind compensation.

The Internal Revenue Service (IRS), an agency of the Department of the Treasury,
administers the federal income tax in the United States. Canada Customs and Revenue
Agency, which operates under the Minister of National Revenue, administers the tax in
Canada.

b) Selling tool

Selling is offering to exchange an item of value for a different item of value for a different
item. The original item of value being offered may be either tangible or intangible.

 TAXATION – A Great tool for selling insurance

A Life Insurance policy is one of the most preferred investment avenues in India as it
helps in tax planning. However, when you advise your clients to invest in a life insurance
policy, don‘t measure it in terms of ―tax benefits‖; measure it in terms of ―life benefits‖
that it has to offer.

The life of the your client is his greatest investment and his family is the biggest asset
for him. And when he invests in a life insurance policy he ensures that his loved ones
have a financially secured future. Hence, before you advise your clients to invest in
anything, remember that we are investing in their lives.

 Tax advantages of life insurance

A quick read about this strategy shows you it hinges on life insurance tax
advantages. Those tax advantages really start to play a role in 10 years,

7
 30 years, or longer. But what are those advantages and could they ever
be jeopardized?

Cash value in permanent life insurance policies grows tax-deferred. That means you
don‘t owe taxes on it now, but you probably will later. This is not the same as tax-free.
You may hear the phrase ―tax-free income,‖ but you should hear something closer to
―potentially income tax free.‖

You get money out of the policy by pulling it out. The general purpose of any investment
is to eventually pull more money out than you put in. But when you take money out
beyond your cost basis, you put yourself in a risky situation – from a tax standpoint.

If the policy ever lapses, the money you have taken beyond what you put in is
considered ordinary income in the year the policy disappears. It doesn‘t matter how long
you have been getting checks. If the policy goes away, all those checks become taxable
in the same year. And guess what – you‘re probably in a higher tax bracket because of it
too.

8
c) Life Insurance corporation of India

 What Is Life Insurance?

Life insurance is a contract that pledges payment o f an amount to the person assured
(or his nominee) on the happening of the event insured against. The contract is valid for
payment of the insured amount during The date of maturity, or Specified dates at
periodic intervals, or Unfortunate death, if it occurs earlier.

The foundation of life insurance is the recognition of the value of a human life and
possibility of indemnification for the loss of that value.

Life insurance is a contract between an insured and an insurer, where the insurer
promises to pay a designated beneficiary a sum of money in exchange for a premium,
upon the death of the insured person depending on the contact, other events such as
terminal illness or critical illness may also tigger payment.

The Life Insurance Corporation of India popularly known as ―LIC of India‖ was
incorporated on September 1, 1956 by nationalizing 245 Indian as well as foreign
companies. It was established 52 years ago with a view to provide an insurance cover
against various risk in life. The luminaries whospearheaded this move at that time
visualized an entity that will provide life insurance to Indians, especially the vast rural
people, at an economical cost and channel the savings for the betterment of the nation.
It is the largest life insurance company in India and also the countries largest investor. It
is fully owned by the Government of India and headquarter is Mumbai.

9
Today LIC function with 2048 fully computerized branch offices, 100divisional offices, 7
Zonal offices and the corporate office. LIC‘s wide area Network cover 100 divisional
offices and connects all the branches through a Metro area network. LIC has tied up
with some Banks and service providers to offer on- line premium collection facility in
selected cities. LICs ECS and ATM premium payment facility is an addition to customer
convenience. Apart from on-line kiosks and IVRS, info centers have been
commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New
Delhi, Pune and many other cities. With vision of providing easy access to its
policyholders, LIC has launched its SATELLITE SAMPARK offices. The digitalized
record of the satellite offices will facilitate anywhere to serve and other convenience in
the future.

LIC has crossed many milestones and has set unprecedented performance records in
various aspect of life insurance business. The same motives which inspired our
forefathers to bring insurance into existence in this country inspire us at LIC to take this
message of protection to light the lamps of security in as many homes as possible and
to help the people in providing security to their families.

Life insurance is a contact by which you can protect yourself against specific
uncertainties by paying a premium over a period. Since each of us during our life faces
with numerous risks-falling health, financial losses, accident and even facilities.

The Corporation invests funds in various states, industries and also in various other
countries. The LIC, while investing Its fund, has to consider various factors and forces
such as safety, liquidity and productivity of fund with various other regulatory bindings in
terms of investment norms, asset- liability management etc. In short, the LIC has to
make its investments within the ambit of these bindings as a result, the corporation is
not in apposition to pursue a prudent investment policy due to which its investment
income may come under pressure. Adding fuel to the fire, the falling interest rate would
also adversely affect the investment performance of the Corporation. Still at present LIC
continues to be the dominant life insurer even in the post-liberalization .

LIC has extended its activities in 12 countries from outside India, primarily to cater to the
insurance needs of non-resident Indians. LIC aims at strengthening its relationship with
its vast customers base by providing value- added service such as credit cards and
offering premium payment facility to the policyholders. It is the largest insurance player
in India and its objective is to channelize its funds for the benefit of the community at
large. It enjoys a near monopoly power in the solicitation and sale of life insurance
policies in India. The corporation has major business houses as clients, under the group

10
business of India. It has more than 118,000 corporate clients covering more than
3,15,00,000 members. Apart from the corporate group insurance business the pension&
group schemes is responsible for ‗Aam Aadmi Bima Yojna‘,asocial security schemes for
the rural landless households under the aegis of the Government of India. LIC has been
investing a major portion of its funds in socially-oriented sectors with a view to reach
every insurable person in the country and provide adequate financial cover against
death at a reasonable cost. Another goal is to mobilize people‘s savings adequately
attractive. LIC has recently tied up with Policybazaar.com an insurance portal that
enables the consumers to get detailed information on the policy. It is one of the leading
online non-life and life insurance aggregator to sell its policy Jeevan Aastha on the
internet.

 Objective of LIC

1) .Spread life insurance widely in particular to the rural areas to socially and
economically backward class. This is done with a view to reach all the insurable
persons in the country to provide them adequate financial cover against death at a
reasonable cost.

2) To maximize mobilization of people‘s savings by making insurance linked savings

adequately attractive.

3) Bearing in mind, the primary obligation to its policyholders, whose money hold in
trust, the investible fund to be deployed to the best advantage of the investors as
well as the national priorities and the obligations of attractive returns.

4) To conduct business with utmost economy and keeping in mind that the money
belongs to the policyholders.

5) It acts as a trustee of the insured public in its Individual and collective capacities.

6) To meet the various life insurance need of the community that would arise in the
changing social and economic environment.

7) It ensures that all people working in the corporation are involved to the best of their
capability in furthering the interests of the insured public by providing efficient
service with courtesy. Promote amongst all agents and employees of the corporation

11
a sense of participation, pride and job satisfaction through discharge of their duties
with dedication towards achievement of corporate objective Savings and
Investments. Savings and Investments Insurance is a means to Save and Invest.
Your periodic premiums are like Savings and you are assured of a lump sum amount
on maturity. A policy can come in handy at the time of your child‘s education or
marriage! Besides, it can be used as supplemental retirement income.

12
 2.1 LITERATURE REVIEW

1. Why should one invest in a life insurance product?an empirical study, Dr.
Ganesh Dash, Tulika Sood, ResearchersWorld-Journal of Arts, Science &
Commerce ■ E-ISSN 2229-4686 ■ ISSN 2231-4172, International Refereed,
Vol.–IV, Issue–1(1), January 2013[36]

Life insurance as a product is always one of the toughest to sell. Though one can
argue aboutits benefits in the long term, in this modern materialistic world,
customers are getting verycautious about their investments and the returns out of
it. In this study, an attempt was made tomake the customers aware of various
aspects of a life insurance product and their respectiveopinions regarding the
policy. Various demographic characteristics of the policy holders e.g.age, gender,
income, education, occupation etc. and their impact on the customers‘
perceptionsregarding the product were e12xplored. The various aspects involved
in a life insurance productas per their importance to the policy holders can be
outlined as:
A tax saving plan; a saving scheme with good return; financial security for the
family; Risk coverage; Save for green patch(Pension), to cover the risk of living
too long; and, to make black money in to white.

2. Taxation and economic growth eric engen & jonathan skinner, national tax
journal, vol-49, no.4, june 2001

Tax reforms are sometimes touted as having strong macroeconomic growth

effects. Using three approaches, we consider the impact of a major tax reform—a
5 percentage point cut in marginal tax rates—on long-term growth rates. The first
approach is to examine the historical record of the U.S. economy to evaluate
whether tax cuts have been associated with economic growth. The second is to
consider the evidence on taxation and growth for a large sample of countries.
And finally, we use evidence from microlevel studies of labor supply, investment
demand, and productivity growth. Our results suggest modest effects, on the
order of 0.2 to 0.3 percentage point differences in growth rates in response to a
major tax reform. Nevertheless, even such small effects can have a large
cumulative impact on living standards.

13
 This project was undertaken to examinethe following aspects: Extent of life
insurance coverage, awareness, attitudes andbeliefs of people on life insurance,
perceptions, sense of identification of employeeswith Life Insurance Company.
He concluded that LIC is a better avenue of investmentthan bank deposits. LIC
products are sold easily among the consumers on account of its.

3. The Insurance Institute of India prepared a Project Report on “Marketing of

Life Insurance”

This project was undertaken to examine the following aspects: Extent of life
insurance coverage, awareness, attitudes and beliefs of people on life insurance,
perceptions, sense of identification of employees with Life Insurance Company.
He concluded that LIC is a better avenue of investment than bank deposits. LIC
products are sold easily among the consumers on account of its.

4. The National Council of Applied Economic Research, New Delhi conducted

two surveys in 1988 and 1989.

on ―Appraisal of Quality Service inService Organizations‖ and ―Quality

Services in Life Insurance Company‖respectively. These two studies were
sponsored by the Life Insurance Company. Thepolicyholders‘ general feeling is
that the demand notice must be sent in time. Somepolicyholders rated the quality
of services was excellent. Hence, by providing promptservices, the customer
relationship is maintained for a long period of time.

5. An analysis of the growth of life insurance corporation of india

(lic),v.prabakaran,j.m.velmurugan,Volume 2, Issue 5ISSN: 2249-0558.

The history of the Indian insurance sector dates back to 1818, when the Oriental
Life Insurance Company was formed in Kolkata. A new era began in the India
insurance sector, with the passing of the Life Insurance Act of 1912. The Indian
Insurance Companies Act was passed in 1928. This act empowered the
government of India to gather necessary information about the life insurance and
non-life insurance organizations operating in the Indian financial markets. This
paper analysis the performance of LIC of India in terms of number of polices
issued, first year premium collected and the profit before tax earned.

14
6. A Research Article entitled “Housing Credit Situation in Eighties” by
Iallvinay, (1984)

He has focused attention upon ‗formal factor‘ (Permanent Construction) which

served mainly to the HIG and MIG, the loan meets only 47% of the price of the
house forcing the borrowers to make very large down payments. Also the price of
a typicalhouse was above 3 times the annual families‘ income of the borrowers.
In spite of, theentire system of housing allocation and credit the supply of
affordable funds was muchsmaller than demand. Thus, large growth in urban
population and the historically lowpriority given to housing, supply falls very short
of demand and need. Therefore, not onlythat the volume of saving and
investments should increase but also larger volumes ofcapital should flow into
housing. Also, accessibility and terms and condition of housingcredit will
determine the long term redistribution performance in housing.

7. The Research Study entitled “Housing in the New Millennium: A Home

WithoutEquity is Just a Rental with Debt” by Joshua Rosner (2001)

He studied the prospects of the U.S. housing / mortgage sector over the
nextseveral years. Based on his analysis, he believes that, there are elements in
place for thehousing sector to continue to experience growth well above GDP.
However, he believesthat there are risks that can materially distort the growth
prospects of the sector.Specifically, it appears that a large portion of the housing
sector‘s growth in the 1990‘scame from the easing of the credit underwriting.

8. A study entitled “Performance of Housing Finance Companies” by Brar,

Jasmindeep et.al. (2005)

The objectives of this study were: to study the operational performance, and
thefinancial performance of the selected institutions.The study covers three
institutions viz. HDFC, LIC & PNB. The study is based onsecondary data that
have been collected from the annual reports and web sites of theinstitutions
selected under study. It covers the period from 1990-91 to 2002-03.
Theperformance of the selected institutions has been studied by using
percentages, compoundgrowths rates and various ratios.

15
9. A Paper entitled “Retail Banking – Emerging Issue in Home Loan” by Rao
K. N.et.al. (2005)

In this paper the authors revealed that during 2002-03 housing loans by
banksgrew at a hefty growth rate of more than 100%. The factors that contributed
to thisaggressive growth in the portfolio of housing loans of banks and HFC are:
Tax intensiveson repayment of principal and interest, rising income level of
middle class, fallinginterest rate, stable real estate prices, easy availability of
housing loans, low returns onthe investment opportunities available in the
market. They also concluded that althoughthere is strong growth in housing loans
by financial situations in India, we are still behindthe developed countries in
terms of housing loans to GDP ratio. In India it is around 2.5%compared to 57%
in the UK and 54% in the US. It shows that there is a vast scope forhousing loans
in India. One economist has argued that every rupee spent on the housingsector
will increase the GDP by more than 75 paise. It also creates a labour
intensive.Despite the immense growth in housing loans there are certain
challenges that the banksmight face in the time to come, e.g. falling rate of
interest, rising mismatch in the assetsand liabilities of the bank, rising NPA in the
housing loan portfolio, etc.

10. A Research Article entitled “Housing Loan Frauds in Banks: Some

Precautionary,Measures” by Phogat M. (2006).

This article gives the measures for the housing loan frauds in banks. The author
concluded that housing for all envisaged 2 million houses every year out of which
0.7million are in the urban sector. Government provided certain relief under
Income TaxAct. It motivated many people to avail housing loan. The author thinks
that differentfrauds committed on various banks can be divided into the following
two categories. i.e.Pre sanction and Post Sanction. KYC related due weakness in
pre inspection, BenamiA/c, forged title deeds, by selling same flat to different
people, inflated salary certificate,filing of IT return for the last three years in one
lot and particularly by paying a nominalamount of tax, valuation of the property is
manipulated to manage margin money are postsanction fraud.

16
11. A Research Article entitled “Housing Finance in India – A Case Study of
LICHousing Finance Limited” by Singh Fulbag et.al. (2006).

In this paper, the authors have studied the housing finance in India. Housing,
asone of the three basic needs of life, always remains on the top priority of any
person, Economy, government and society at large. In India, majority of the
population lives inslums and shabby shelters in rural areas. From the last
decade, the Government of India has been continuously trying to strengthen the
housing sector by introducing varioushousing loan schemes for rural and urban
population. The first attempt in this regard wasthe National Housing Policy
(NHP), which was introduced in 1988. The NationalHousing Bank (NHB) was set
up in 1988 as an apex institution for housing finance and awholly-owned
subsidiary of Reserve Bank of India (RBI). The main objective of the bankis to
promote and establish the housing financial institutions in the country as well as
toprovide refinance facilities to housing finance corporations and scheduled
commercialbanks. Moreover, for the salaried section, the tax rebates on housing
loans have beenintroduced. The paper is based on the case study of LIC
Housing Finance Ltd., whichanalyzes region-wise disbursements of individual
house loans their portfolio amounts andthe defaults for the last ten years, i.e.,
from 1995-96 to 2004-05 by working out relevantratios in terms of percentage
and the compound annual growth rates.

12. A Research Article entitled “Housing Loan Frauds: Are they Avoidable?” by
Padhi, Manohar (2007).

This article addressed the key issues of housing loan frauds. Aggressive
growthin housing finance by the banks is for the reasons of Tax incentives on
repayment ofprincipal and interest, rising income level of the middle class,
affordable interest rate,completion amongst banks and housing finance
institutions, low returns on otherinvestments, low incidence of NPA, and housing
as priority sector lending for banks.Housing loans as a percentage of GDP, is
57% in UK, 54% in USA and it is only 2.5% inIndia. It shows vast scope for
housing loans in India. Increased focus of banks in housing finance is also not
free from fraud. Fraud is one of the reasons for turning the housingloan account
to NPA. The main reason for housing loan turning NPA are loss of job,closure of
the factory/company, illness of the borrower, dispute between builder
andborrower, over-finance to the borrower, agents approaches the bank for

17
 section ofhousing loans in bunches, sections of loan on fabricated documents
without properverification (Benami A/C, submission of fake title deeds of
immovable property, coloredXerox copy of the title deed, subject of fake income
certificate etc.)

13. A Research Paper entitled “Risk in Real Estate Financing” Authored by

Bagchi S.(2008).

The author has analyzed the factors affecting risk and suggests that real
estatefinancing will be the order of the day in a new age bank / Institution lending
in theinterest of the development of the country. Real estate financing is no
longer―untouchable‖ as it used to be before 1990‘s. It is also a fact that this
sector contains ahigher order risk of ―default‖ and lower order scope of eventual
recovery since the fate ofreal estate is interwoven with macro-economic
fundamentals and volatility of assetprices. The researcher has given the following
suggestions to avoid risk factors in realestate financing.

14. A Paper entitled “Whether Today’s Customers are satisfied? – A Study with
Banks”Authored by Ashok Kumar M. et.al. (2009).

Find out the problems faced by the present day customers with the banker and to
makesuggestions for better working of the banking services. The study is
restricted toCoimbatore headquarters only. Only 105 customers were considered
as sample for thestudy which was conducted during the months of May and
June, 2008. SBI and itsassociate bank were taken for the study. The findings of
the study are:

a. 42.86% of the respondents are in the age group of 31-40 years. 68-57%
aremarried, 42.86% have post-graduate education, 36.19% are
businessman, and35.24% are employed. 37.14% respondent‘s income
range between `1,000 to`15,000.

18
15. How to Surrender and Close Your LIC Unit Linked Life Insurance Policy
(ULIP)?by Vinaya HS on January 1, 2011.

It all started over three ULIP as a tax-saving tool. The premium was Rs 30,000
per year for 20 years for a basic life insurance cover of Rs 300,000 with an
additional accident cover of Rs 300,000! Since two premiums had already been
paid and the policy was way under water, I advised her that there was no choice
but to pay the third premium and wait for the third-year to get over before we
could surrender the policy and hope to get something back. Once the third-year
was up (in June, 2010) and the policy became surrender-able, we tracked it‘s
surrender value (= NAV x Number of Units Allotted) quite frequently. Our Rs
90,000 invested was even down to Rs 70,000 at one point. Luckily, our capital
markets went up and we managed to surrender the policy at a
small profit.
Thought I‘d share the procedure on how to surrender and close your LIC ULIP.
Here‘s what you need to do.years ago (even before I met D) when an insurance
agent sold LIC‘s Money Plus.

16. A Study on The Role of LIC Towards CorporateSocial Responsibility, Ms.

BabitaYadav ** Dr. VarshaRokade.

Corporate Social Responsibility (CSR) refers to the obligations and duties of

business to the society. Now a days there hasbeen growing acceptance of the
view that business should be socially responsible to all the stakeholders says
shareholders, employees, consumers, government, suppliers and society. CSR,
if implemented in true sense, helps in enhancing the qualityof stakeholders and
the society at large. This paper is the outcome of descriptive study conducted
with the purpose to assessthe various CSR initiatives undertaken by LIC such as
JanashreeBimaYojana, SwarnaJayanti Gram SwarojgarYojana,
SikshaSahayogYojana, etc., to uplift the unprivileged section of the society and
also made an attempt to study the effect ofCSR on life insurance business of LIC
and on its various stakeholders.

19
17. Why should one Invest in Life Insurance Product? By Dr. Ganesh Dash,
Assistant Professor, SBM (SIILAS Campus), Jaipur National University,
Jaipur, India.

Life insurance as a product is always one of the toughest to sell. Though one
can argue about its benefits in the long term, in this modern materialistic world,
customers are getting very cautious about their investments and the returns out
of it. In this study, an attempt was made to make the customers aware of various
aspects of a life insurance product and their respective opinions regarding the
policy. Various demographic characteristics of the policy holders e.g. age,
gender, income, education, occupation etc. and their impact on the customers‘
perceptions regarding the product were explored. The various aspects involved
in a life insurance product as per their importance to the policy holders can be
outlined as: A tax saving plan; a saving scheme with good return; financial
security for the family; Risk coverage; Save for green patch.

18. Insurance policy plus Service (p) LTD. V. Life Insurance Corporation of
India: Can Life Insurance Policies be traded?, BY Debosmita Nandy &
Avisha Gupta.

Beginning with an analysis of the 2007 Mumbai High Court ruling in Insure Policy
Plus Services (P) Ltd. v. Life Insurance Corporation of India, this paper goes on
to discuss its implications in the Indian scenario. The authors also elucidate on
the economic benefits and legality of assigning life insurance policies to third
parties without an insurable interest in the life of the policyholder. The paper also
goes on to examine life insurance policy trading in the secondary market, as
prevalent in the West, where it is a flourishing business and tries to ascertain
whether India will be receptive to the same.

19. A Paper entitled “Rural Housing in India: Problem and Prospects”

Authored by Dinesha P. et.al. (2008).

The data released by the census of India on house, households, amenities and
assets for 2001, indicate that total number of household in rural area is 138.27
million as against the availability of 135.05 millions house of which nearly 11.14
million house were non-serviceable kuchcha/temporary houses needing
replacement.

20
20. A Research Paper entitled “Prospects and Problems of Housing
Microfinance in India: Evidence from “Bhavanashree” Project in Kerala
State” Authored by Manoj, P.K. (2010).

He has examined the exact nature of housing microfinance in India, it‘s problems
and prospects and particularly deterrents to its growth, with a view to suggesting
suitable remedial strategies for its faster development; based on an empirical
study of ―Bhavanshree‖. The Objectives of this study were:

a. To make an overall study of the housing microfinance initiatives the world

over their performance track record, trends and patterns.

b. To critically study the extent and nature of housing problem in India, and to
examine the need for alternative financing models.

c. To make an empirical study of activities of ―Bhavanshree‖.

21
 2.2 BACKGROUND OF THE STUDY

Life insurance system is as much a subject of evolutionarydevelopment and change as

any other social system. There has been a vastscope of experimentation all over the
world in the area of the insurancesector. India is no exception to this. The institution of
life insurance in India,over the years, has received only a little awareness and
acceptance and hasattained only a small degree of maturity.Under such exigencies,
progressively good attention has beenharnessed and paid to the totality of the life
insurance industry keeping in viewits long-range needs and also benefit perspectives.
Consequently, when theindustry was subjected to pragmatic global examination and
tests, its deficiencies became more vivid and glaring. It was found that the
Indianinsurance system was a patch work and its procedures were piece-meal.
Theefforts made in the past proved inadequate to cope with the changingscenario
generated by the endeavours to achieve economic objectives and technological and
social imperatives.

The attempt of the policymakers to lay down foundation within whichlife insurance
system could develop effectively could not succeed. In theiranxiety to develop the
system, they created more imbalances amongstdifferent insurance players during those
days. As a result, life insurance to alarge extent had developed a sense of dependency
on the public sectororganization and also on the Government. Consequently, the LIC of
India, apublic sector giant, assumed a dominant and monopolistic role in lifeinsurance
which helped to accelerate the growth of insurance business inIndia.

 Tax Benefits

Life insurance is one of the best tax saving options today. Your tax can be saved twice
on a life insurance policy-once when you pay your premiums and once when you
receive maturity benefits. Money saved is money earned.

22
 2.3 SCOPE OF THE STUDY

The scope is going to tell a person exactly what is being discussed in the paper. It will
provide parameters for what will be talked about and what will not be talked about. This
is where some of the limitations come in since one has to eliminate what is not part of
the "scope" of the paper. It should be an elaborate section that fulfills every question
one might have in what the paper will discuss.

 Consumers‘ satisfaction is the major focus of any marketer, whether marketing

tangible products or intangible services.

 Life insurance, as a service and intangible in nature could be sold, only if the buyers
are satisfied with the service.

 How far the customers are satisfied or to what extent customers can be delighted?
These are the concerns of the insurance providers.

 By understanding the level of consumer‘s satisfaction, the marketer can take

measures, to retain the existing ones and to secure fresh customers, Hence this
study in detail way, to find out the extent of satisfaction of policyholders of Life
Insurance Corporation.

 Life Insurance is considered to be an important part of an individual‘s investment

portfolio, not necessarily to accumulate wealth, but to feel financially secure.

 Always remember Life Insurance is primarily made keeping your family and those
who are dependent on you in mind.

 Helpful in finding out the best reason for selling of Life insurance products.

 Helpful in determining marketing techniques for LIC.

23
 2.4 Problem Statement

Our Research Problem is “whether taxation is a selling tool for life insurance
products for LIC India?”

2.5 Objective Of the study

Our study has following Primary and Secondary Objectives:

Primary Objectives

 Why people purchases life insurance policy?

 On what bases LIC Selling its products to the customers?
 Is there any impact of Taxation on sales of Life Insurance Products?

Secondary objectives

 Why Life Insurance policy is important to the customer?

 What are the other factors that determine demand of life insurance products?
 Where the Life Insurance policy is helpful to us?
 What is the importance of Life Insurance policy?

24
 2.6 Hypothesis

H0: 70% People purchase insurance policy for investment purpose.

H1: less than 70% People purchase insurance policy for investment purpose.

H0: 60% agree is an impact of taxation policy on selling of LIC products.

H1: Less than 60% is no impact of taxation policy on selling of LIC products.

25
 3.1 RESEARCH DESIGN

There are three main research designs:-

1. Exploratory research
2. Descriptive research
3. Causal research

 Meaning of Exploratory research

Exploratory research is research conducted for a problem that has not been clearly
defined. It often occurs before we know enough to make conceptual distinctions or posit
an explanatory relationship.

Exploratory research helps determine the best research design, data collection method
and selection of subjects.

 Meanindg of Descriptive research

A statistical study to identify patterns or trends in a situation, but not the causal linkages
among its different elements. Descriptive studies (such as a cross-sectional study) help
in generating hypothesis on which further research may be based.

 Meaning of causal research

Causal Market research. In this form of research the marketer tries to determine if the
manipulation of one variable, called the independent variable, affects another variable,
called the dependent variable. In essence, the marketer is conducting an experiment.

Here, in this research we have selected descriptive research design.

26
 3.2 SOURCES OF DATA

There are two types of sources of data are used:-

1. Primary data
2. Secondary data

1) Primary data

Primary data are those which are collected for the first time and are always given in the
form of raw materials and originals in character. These types of data need the
application of statistics methods for the purpose of analysis and interpretation.

2) Secondary data

secondary data are those which have already been collected by someone and have
gone thought the statistical machines. They are usually refined of the raw materials
when statistical methods are applied on primary their shape and become secondary
data.

The secondary data are those which have already been collected by someone other
than the investigator himself, and as such the problems associated with the original
collection of data do not arise here. The secondary data can be collected directly either
form published or unpublished sources. The following are the sources of published at
from which secondary data can be collected.

Here, we are using the primary data as well as secondary data.

27
 3.3 DATA COLLECTION METHOD

There are many data collection methods.

1. Observation method
2. Questionnaires method

1) Observation method

Observation is data collection in which the researcher does not participate in the
inter-actions. Examples of this include observing operating room procedures or
Supreme Court proceedings. However, it should be noted that the researcher‘s very
presence may have some influence on the participants and exchanges. For
example, while the researcher is unlikely to influence a surgeon or a Supreme Court
justice, it is not difficult to imagine the researcher‘s presence influencing other
participants, such as small children at play.

2) Questionnaires method

Questionnaires are fixed sets of questions that can be administered by paper and
pencil, as a Web form, or by an interviewer who follows a strict script.

Here, we have used the Questionnaires method in the research.

28
 3.4 POPULATION

Population of Anand City

 SAMPLE
Sampling is ―the act, process, or technique of selecting a suitable sample, or a
representative part of a population for the purpose of determining parameters or
characteristics of the whole population‖

We have taken Sample of research as 200 based on following calculation:

http://www.surveysystem.com/sscalc.htm

Sample size: 200

Population: 200000

Confidence level: 95%

Confidence interval: 7

29
 3.5 SAMPLING METHOD

 Probability sampling

A sampling technique in which each unit in a population has a specifiable chance of

being selected .The motivation behind using probability sampling is to generate a
sample that is representative of the population in which it was drawn. Random sampling
does not guarantee that every random sample perfectly represents the population.
Instead, it means that most random samples will be close to the population most of the
time, and that one can calculate the probability of a particular sample being accurate.


Simple random sampling

Systematic

Stratified

1) Simple random sampling

In simple random sampling, a researcher develops an accurate sampling frame, selects

elements from the sampling frame according to a mathematically random procedure,
and then locates the exact element that was selected for inclusion in the sample.

2) Systematic

Systematic Sampling Elements are randomly selected using a sampling interval. The
sampling interval (i.e., K this some number) tells the researcher how to select elements
from a sampling frame by skipping elements in the frame before selecting one for the
sample. For example, a researcher would have a list of 1,000 elements in her or his
population.

3) Stratified

In stratified random sampling, a researcher first divides the population into

subpopulations (strata: defined as a characteristic of the population. For example,
female and male.) on the basis of supplementary information. After dividing the

30
population into strata, the researcher draws a random sample from each subpopulation.
In general, stratified sampling produces samples that are more representative of the
population than simple random sampling if the stratum information is accurate.

Non probability sampling

Non-probability sampling is a sampling technique where the samples are gathered in a

process that does not give all the individuals in the population equal chances of being
selected.


Accidental sampling

Quota sampling Purposive sampling

1) Accidental sampling

Accidental sampling is a type of non probability sampling. It involves the sample being
drawn from that part of the population that is close to hand.

2) Quota sampling Purposive sampling

Quota sampling is a non probability sampling technique where in assemble sample has
the same proportions of individuals as the entire population with respect to known
characteristics, traits or focused phenomenon.

Here we are using Systematic sampling in probability sampling method.

31
 3.6 SAMPLING FRAME

A list of the items or people forming a population from which a sample is taken.

 Life insurance Policy holders in Anand city.

32
 4 DATA ANALYSIS AND INTERPRETATION

 Hypothesis Framing

1) T Test and CI for One Proportion

T Test of p = 0.7 vs p < 0.7

Exact
Sample X N Sample p 95% Upper Bound P-Value
1 35 200 0.175000 0.225241 0.000

Rejected Hypothesis

2) T Test and CI for One Proportion

T Test of p = 0.6 vs p < 0.6

Exact
Sample X N Sample p 95% Upper Bound P-Value
1 165 200 0.825000 0.867850 1.000

Accepted Hypothesis

33
Measuring financial inclusion explaining the variation in the use of
financial services in Anand City.

PERSONAL INFORMATION

1) Gender

Table-1

Male Female Total

110 90 200

Grapgh-1.1

120

100
Responde 80
nd
60
110
40 90 Respondend

20

0
Male Female
Gender

 Interpretation
 There are 110 Male respondents and 90 Female respondents Out of 200
respondents.

34
 2) Occupation

Table-2

Occupation Responded
Doctor 25

Professor 55

Business 15

Lawyer 20

Farmer 22

Private job 50

Any other 13

Total 200

Graph-2.1

60
No.of
Respond 50
end 40
30 55 50
20
10 25 15 20 22 13 Respondend
0

Occupation

 Interpretation
There are many choices of occupation. In the graph higher number of respondents are
professor and rest of the respondents are in different field. So that more response from
the professor point of view and rest of others.

35
 3) Your Monthly Earning

Table-3

Monthly Earning Responded

Less than 2 lakhs 190

2 to 5 Lakhs 10

5 to 7 Lakhs 0

Above 7 Lakhs 0

Total 200

200
180
No.of 160
Customer 140
120
100 190
80 Respon…
60
40
20 10
0 0 0
Less 2 to 5 5 to 7 Above 7
than 2 Lakhs Lakhs Lakhs
Lakhs
Monthly Earning

 Interpretation
 More respondents monthly income is less than 2 lakhs and some of the
respondents are 2 to 5 lakhs.

36
SPECIFIC INFORMATION

1) Where do you invest your savings?

Table-1
Option for Savings Responded
Life Insurance Company 124

Post office Deposit 5

Bank Deposit 16

Gold/Share 30

Mutual Fund 10

Real Estate 10

Any other 5

Total 200

Graph-1.1

Life Insurance Company

Responded
3%
Post office Deposit
5% Bank Deposit
5%
Gold/Share
15% Mutual Fund
Real Estate
8% 62% Any other

2%

 Interpretation
In the graph many options for saving in different departments. More people
believe in life insurance policy. So they were prefer to invest in the life insurance
company. 124 respondents are prefer to invest in life Insurance company and
other customers invest in their savings in other alternatives.

37
 2) From which source did you come to know about Life Insurance?

Table-2

Sources of Information Responded

News papers / Magazine 30

Television 50

Agents 15

Internet 105

Total 200

Graph-2.1

120
Customer 100
80
60 105
40
20 30 50
15
0
Respondend

Sources of Information

 Interpretation
 Today many choices of information but more popular source of information is
internet. So that in the graph many of the respondents are aware from the
internet so the source of information come to know about life Insurance as
internet. Next source of information is television after Internet. In this case many
customers also prefer the television as a source of information. And rest of the
customers are choosing other alternatives as a source of information.

38
 3(a) Have you taken any Life Insurance Policy?

Table-3(a)

Yes No Total
80 20 200

Graph-3.1

200

150
Customer
100
160 Respondend
50
40
0
Yes No
Respondend

 Interpretation
160Out of 200 respondents taken life Insurance policy because of the investment
purpose. Life insurance is the better option for the investment for the saving
purpose so that many of the respondents are taken life insurance policy as
investment perspective. And 40 out of 200 respondents have not taken any life
insurance policy. They have no interest for the investment in the life insurance
company so that they have not taken life insurance policy as investment purpose.

39
 3(b) If "Yes" which Insurance Company?

Table-3(b)

Company Name No. of Respondend

Life Insurance Company 120

Max Life Insurance 20

SBI Life Insurance 40

Reliance Life Insurance 20

Total 200

Graph-3.2
Respondend

140
120
100
80
60 120
40 40
20 20 20
No.of

0 Respondend

Company Name

 Interpretation
We show that in the graph many investment companies are there for the investment
our savings. Customers have their own choices so that most of the customer are
selected life insurance company for the investment. Becose this is the very popular
and well knowing company for the customer. So that highest number of respondents
have taken insurance policy from the life Insurance company. Rest of the
respondents are taken different choice for life Insurance policy their point of view.

40
4) Why People Purchase Life Insurance Policy?

Table-4

Purpose Responded
Safety 20

Risk Coverage 30

Tax Relief 100

Investment 35

Future Perspective 15

Total 200

Graph-4.1

Responded
8% Safety
10% Risk Coverage

17% 15% Tax Relief

Investment

Future

50% Perspective

 Interpretation
Most of the people purchase life insurance policy for the tax benefit. There are
purchase life Insurance policy for safety, Risk coverage, investment purpose and
future perspective. But tax benefit is more important advantage of the life
Insurance policy. So highest no of respondents purchase life Insurance policy as
a tax benefit.

41
5) Do you agree that Tax benefits from LIC has impact on your
savings?

Table-5

Yes No Total
164 35 200

Graph-5.1

Responded

18%

Yes
No

82%

 Interpretation
Most of the respondents are agree with this statement that tax benefits from LIC
has impact on your savings. Tax benefit is most effective from the life insurance.
It effective than any other functions or the plans of the LIC. So that it is impact
from the life insurance for the tax benefit. Most of the customers are responding
yes for this statement.

42
6) From your point of view which are the special benefits from
LIC in Tax Relief?

Table-6

Special Benefit Responded

For standard Deduction 95

For Madiclaime 50

For Donation 20

For Premium 35

Total 200

Graph-6.1

Responded

18% For standard Deduction

For Madiclaime
10% 47%

For Donation

25% For Premium

 Interpretation
Most of customer said that deduction are the special benefits from LIC on tax
relief. Special benefits include standard deduction for the tax relief and the any
other purpose of that. Customer said that standard deduction is most important
from the life insurance side which is called as a special benefit.

43
7) Have claimed any benefit till on Tax through Investment in
Insurance?

Table-7

Yes No Total
175 25 200

Graph-7.1

200
Customer

150

100

175
Respondend
50

25
0
Yes No
Respondend

 Interpretation
Many respondents are claimed any benefits till on tax through investment in
insurance. There is a more benefit from the tax savings because of the
investment purpose. so that many customer claimed that till tax benefit through
investment side. So that many customers responding yes from this point of view.

44
 8) Are you recall any "AD" about Life Insurance in general and /
or Life Insurance product in particular?

Table-8

Yes No Total
165 35 200

Graph-8.1

200
Level
Customer
Satisfaction 150

100
165 Respondend
50
35
0
Yes No
Respondend

 Interpretation
165 customers are recall any ―AD‖ about life Insurance an general or life
Insurance products an particular. But few respondents are not agree with this
statement. so that customer satisfaction level is higher from the life insurance
products .It is based on the AD from the life insurance policy.

45
 9) If "Yes" what in the main message that you get from the "AD"?

Table-9

Messages From “AD” Responded

Risk Coverages 35

Long term 25

Tax Savings 90

Protecting 35

Any other 15

Total 200

Graph-9.1

100
80
No.of 60 90
Responden
ds 40
20 Respondend
35 25 35
15
0

Messages From "AD"

 Interpretation
Tax savings are the main message that get from the ―AD‖ said that many
respondent. Any other respondents have selected different choice. Life Insurance
covers the tax saving plans so that people can recall that message from AD for
the tax savings. Most of the people selected tax savings from the message.

46
10)State your expectation on investment alternatives by according to
its importance.
Table-10

Investment Alternatives Respondend

Safety 30
Capital Growth 20
Liquidity 30
Return 20
Tax benefit 90
Company profile and brand name 10
Total 200

Graph-10.1

Respondend
Safety
5% 15% Capital Growth

10% Liquidity
Return
45%
15% Tax benefit

10% Company profile and

brand name

 Interpretation
More respondents expectation on investment are tax benefit by according its
importance. Other respondents expectation on investment are different from their
side by according its importance. Because of there is a many choices for the
investments and customers are satisfied with that. So that tax benefit is most
important alternative.

47
 11)what would you like more in Insurance Policies of LIC of
India?
Table-11

More Benefit More Securities Total

135 65 200

Graph-11.1

Respondend

33%
More Benefit
More Securities

67%

 Interpretation
Most of the customers are like to more benefits from the LIC because of there
are many plans for the investment regarding the tax benefit and income tax. So
that generally it is more beneficial for the customers. And also there is a option
for the future perspective for the security. But most of the customers said that it is
more beneficial for the tax savings plan.

48
 5 RESULT AND FINDINGS


There are 110 Male respondents and 90 Female respondents.Out of 200
respondents.


There are more professor and rest of the respondents are in different field.


More respondents monthly income is less than 2 lakhs and some of the respondents
are 2 to 5 lakhs.


In the graph many options for saving for the different departments. More people
believe in life insurance policy.


So they were prefer to invest in the life insurance company.


124 respondents are prefer to invest in life Insurance company and other customers
invest in their savings in other alternatives.


Today many choices of information but more popular source of information is
internet.


So that in the graph many of the respondents are aware from the internet so the
source of information come to know about life Insurance as internet.


Next source of information is television after Internet. In this case many customers
also prefer the television as a source of information.

49

And rest of the customers are choosing other alternatives as a source of information.


160Out of 200 respondents taken life Insurance policy because of the investment
purpose.


Life insurance is the better option for the investment for the saving purpose so
that many of the respondents are taken life insurance policy as investment
perspective.


And 40 out of 200 respondents have not taken any life insurance policy.


They have no interest for the investment in the life insurance company so that they
have not taken life insurance policy as investment purpose.


We show that in the graph many investment companies are there for the investment
our savings.


Customers have their own choices so that most of the customer are selected life
insurance company for the investment.


Because this is the very popular and well knowing company for the customer. So
that highest number of respondents have taken insurance policy from the life
Insurance company.


Rest of the respondents are taken different choice for life Insurance policy their point
of view.


Most of the people purchase life insurance policy for the tax benefit.

50

There are purchase life Insurance policy for safety, Risk coverage, investment
purpose and future perspective.


But tax benefit is more important advantage of the life Insurance policy.


So highest no of respondents purchase life Insurance policy as a tax benefit.


Most of the respondents are agree with this statement that tax benefits from LIC has
impact on your savings.


Tax benefit is most effective from the life insurance. It effective than any other
functions or the plans of the LIC.


So that it is impact from the life insurance for the tax benefit. Most of the
customers are responding yes for this statement.


Most of customer said that deduction are the special benefits from LIC on tax
relief.


Special benefits include standard deduction for the tax relief and the any other
purpose of that.


Customer said that standard deduction is most important from the life insurance
side which is called as a special benefit.

51

Many respondents are claimed any benefits till on tax through investment in
insurance.

There is a more benefit from the tax savings because of the investment purpose.


so that many customer claimed that till tax benefit through investment side. So that
many customers responding yes from this point of view.


165 customers are recall any ―AD‖ about life Insurance an general or life
Insurance products an particular.


But few respondents are not agree with this statement.


so that customer satisfaction level is higher from the life insurance products .


It is based on the AD from the life insurance policy.


Tax savings are the main message that get from the ―AD‖ said that many respondent.


Any other respondents have selected different choice.


Life Insurance covers the tax saving plans so that people can recall that message from
AD for the tax savings.


Most of the people selected tax savings from the message.

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
More respondents expectation on investment are tax benefit by according its
importance.

Other respondents expectation on investment are different from their side by
according its importance.


Because of there is a many choices for the investments and customers are satisfied
with that. So that tax benefit is most important alternative.


Most of the customers are like to more benefits from the LIC because of there are
many plans for the investment regarding the tax benefit and income tax.


So that generally it is more beneficial for the customers.


And also there is a option for the future perspective for the security.


But most of the customers said that it is more beneficial for the tax savings plan.

53
 6 LIMITATION OF THE STUDY


Population size is limited so sufficient information is not acquire.


The Cons of a Life Insurance chosen carefully is almost negligible.


People have little clue and don‘t compare life insurance products even from the
same provider.


Period of study is too short and it is a major limitation.

Some of the respondents were hesitated to express their opinion.

54
 7 SUGGESTIONS

 From the study, we suggested that to improving their provided facilities like
benefits of investing new plans for the tax savings.

 Basis of the suggestion gives concrete step may be taken by the state as well as
by the top management of the corporation the serve the society in a better way.

 To increase the level of insurance penetration LIC may focus on bringing

products that suit to the rural customers.

 The company if possible should invest in advertising, conduct road shows, and
spend money on hoardings, so that it can better propagate awareness about its
various lesser known products.

 LIC should also tie up with several other banks apart from the existing ones to
sell its products i.e. through banc assurance

 The company has the option of tying up with local NGO‘s for selling its rural
insurance products.

 Customer friendly documentationi.e.it should be made easier and faster.

55
 8 CONCLUSION

 After completion of my project, there is no doubt that ―LIC‖ is a very good

in India that truly works for Investors who invest their savings and working
well and help to the customer.

 I have made an attempt to analyze and examine the ―LIC India‖ to

evaluate for the Tax Savings.

 Insurance is a safeguard against uncertain events that may occur in the

future. Company image is the highly important criteria that consumers
consider before taking up a life insurance. This is mainly because people
expect safety and secure for their money which they invest.

 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.

56
 9 ANNEXURE

Questionnaires

We are the student of MBA Finance doing the research on the Whether
Taxation Is a Selling Tool for Life Insurance” with reference to LIC India
Ltd in Anand city. Data under the research will be used only for study
purposes not for any other purpose.
“Whether Taxation Is a Selling Tool for Life Insurance” with reference to
LIC India Ltd in Anand city.”
Personal Information

1) What is your full name?

2) Gender
Male
Female

3) Age

20 to 35 51 to 65
36 to 50 66 to 80
4) Occupation

Doctor Lawyer Any other

Professor Farmer
Business Private job
5) Your Monthly Earning

Less than 2 lakhs

2 to 5 lakhs
57
 5 to 7 lakhs
Above 7 lakhs
Specific Information

1) Where do you invest your savings?

Life Insurance Company Post Gold / Share
office deposit Bank deposit Mutual fund
Any other Real estate

2) From which source did you come to know about Life

Insurance?
News Papers / Magazines
Television
Agents
Internet

3(a) Have you taken any Life Insurance Policy?

Yes
No

(b) If “Yes” which Insurance Company?

Life Insurance Company
Max Life Insurance
SBI Life Insurance
Reliance Life Insurance

4) Why People Purchase Life Insurance Policy?

Safety
Risk Coverage
Tax Relief
Investment Purpose
Future Perspective

58
5) Do you agree that Tax benefits from LIC has impact on your
savings?
Yes
No

6) From your point of view which are the special benefits from
LIC in Tax Relief?
For standard Deduction
For Madiclaime
For Donation
For Premium

7) Have Claimed any benefit till today in Tax through Investment

in Insurance?
Yes
No

8) Are you recall any “AD” about Life Insurance in general and /
or Life Insurance product in particular?
Yes
No

9) If “Yes” What in the main message that you get from the
“AD”?
Risk coverage
Long term savings
Tax savings
Protection for the family
Any other

59
10) State your expectation on investment alternatives by
according to its importance.
Safety
Capital growth
Liquidity
Return
Tax benefit
Company profile and brand name

11) What would you like more in Insurance policies of LIC of

India?
More benefits More Securities

60
 10 BIBLIOGRAPHY

BOOKS

1. TAXATION AND ECONOMIC GROWTH ERIC ENGEN & JONATHAN

SKINNER, National tax journals

2. The Insurance Institute of India prepared a Project Report on

―Marketing of Life Insurance‖

3 AN ANALYSIS OF THE GROWTH OF LIFE INSURANCE CORPORATION OF

INDIA ANAIYSIS

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