CHAPTER – 1

INTRODUCTION

1
1.1 HISTORY OF INSURANCE

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 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).

With the largest number of life insurance policies in force in the world, Insurance happens to
be a mega opportunity in India. It’s a business growing at the rate of 15-20 per cent annually
2
and presently is of the order of Rs 1560.41 billion (for the financial year 2006 – 2007).
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 65% 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.

1.2 OBJECTIVE OF STUDY

1. The main objective of the study is to find consumer awareness about insurance policies of
LIC.

2. To find the preference of consumers about insurance policies of LIC.

3. To understand those features which attracts peoples to buy policies of LIC?

4. To understands different policies of LIC.

5. To find perceptions of peoples about insurance policies of LIC.

6. To understand level of interest shown by peoples to buy insurance policies of LIC.

1.3 RESEARCH METHODOLOGY

 Research methodology systematically solves the research problems. It has many

dimensions & research methods constitute a part of the research methodology.

 Thus when we talk about research methodology, we do not only talk of the research
methods but also consider the logic behind the methods. We use being evaluated either
by researcher himself or by others.

 To effectively carry out in research, I would use the following research process, which
consists of series of actions or steps.

1. Formulating the research problems.

2. Research design & sample design

3. Analysis of data gathered.

3
 4. Graphics & interpret

1.3.1 FORMULATING THE RESEARCH PROBLEM

This is the first step under which the problem is stated in general way & then ambiguities that
is understanding & rephrasing the problems thoroughly & rephrasing the same into a
meaningful terms from an analysis point of view.

1.3.2 RESEARCH DESIGN

1.3.2.1 SAMPLE AREA

Sample area is Delhi.

1.3.2.2 SAMPLING SIZE

 Visited, East, West, North, South and central Delhi.
 Survey around 400 persons in Delhi.

1.3.3 DATA COLLECTION

Observational design relates to the condition under which the observations are to be made
observational design in respect to research There are several ways of collecting the
appropriate data, which differ considerably in context of money, time, cost & other resources
at the disposal of the researcher.

Data can be obtained from two important resources:

 Primary Data

 Secondary Data

1.3.3.1 PRIMARY DATA

In this project Questionnaire is used as a source of Primary Data.

Questionnaire- A questionnaire consists of a set of questions presented to respondents for

their answer. Because of its flexibility, the questionnaire is by far the most common
instrument used to collect primary data. Questionnaires need to be carefully developed, tested,
and debugged before they are administered on a large scale. In preparing a questionnaire, the
professional marketing researcher carefully chooses the questions and their form, wording,
and sequence. The form of the question asked can influence the response. Marketing
researchers distinguish between closed-end and open-end questions. Closed-end questions
4
pre-specify all the possible answer. Open end-questions provide answers that are easier to
interpret and tabulate. Open-end questions often reveal more because they do not constrain
respondents, answers.
First, a sample unit of 400 respondents was taken. Further, as per their preference about
Insurance as source of investment, only 200 respondents were selected to be analyzed. Then,
out of 200 respondents only 150 respondents were selected. This was so because 50
respondents out of 200 were not having a Insurance or there policy was already matured. At
last the study moves forward with only 100 respondents as 50 respondents out of 150 were
not having an Insurance policy of LIC.

1.3.3.2 SECONDARY DATA

The secondary data has been collected from internet, mainly from annual reports of LIC.

5
CHAPTER – 2
Company Profile

6
Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread the
message of life insurance in the country and mobilise people’s savings for nation-building
activities. LIC with its central office in Mumbai and seven zonal offices at Mumbai, Calcutta,
Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100 divisional offices in
important cities and 2,048 branch offices. LIC has 5.59 lakh active agents spread over the
country.

The Corporation also transacts business abroad and has offices in Fiji, Mauritius and United
Kingdom. LIC is associated with joint ventures abroad in the field of insurance, namely, Ken-
India Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited,
Kuala Lumpur; and Life Insurance Corporation (International), E.C. Bahrain. It has also
entered into an agreement with the Sun Life (UK) for marketing unit linked life insurance and
pension policies in U.K.

In 1995-96, LIC had a total income from premium and investments of $ 5 Billion while GIC
recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's income grew at a
healthy average of 10 per cent as against the industry's 6.7 per cent growth in the rest of Asia
(3.4 per cent in Europe, 1.4 per cent in the US).

LIC has even provided insurance cover to five million people living below the poverty line,
with 50 per cent subsidy in the premium rates. LIC's claims settlement ratio at 95 per cent and
GIC's at 74 per cent are higher than that of global average of 40 per cent. Compounded annual
growth rate for Life insurance business has been 19.22 per cent per annum

The story of insurance is probably as old as the story of mankind. The same instinct that
prompts modern businessmen today to secure themselves against loss and disaster existed in
primitive men also. They too sought to avert the evil consequences of fire and flood and loss
of life and were willing to make some sort of sacrifice in order to achieve security. Though
the concept of insurance is largely a development of the recent past, particularly after the
industrial era – past few centuries – yet its beginnings date back almost 6000 years.

Life Insurance in its modern form came to India from England in the year 1818. Oriental Life
Insurance Company started by Europeans in Calcutta was the first life insurance company on
Indian Soil. All the insurance companies established during that period were brought up with
the purpose of looking after the needs of European community and Indian natives were not
being insured by these companies. However, later with the efforts of eminent people like
7
Babu Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But
Indian lives were being treated as sub-standard lives and heavy extra premiums were being
charged on them. Bombay Mutual Life Assurance Society heralded the birth of first Indian
life insurance company in the year 1870, and covered Indian lives at normal rates. Starting as
Indian enterprise with highly patriotic motives, insurance companies came into existence to
carry the message of insurance and social security through insurance to various sectors of
society. Bharat Insurance Company (1896) was also one of such companies inspired by
nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance companies.
The United India in Madras, National Indian and National Insurance in Calcutta and the Co-
operative Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative
Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great
poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and
Swadeshi Life (later Bombay Life) were some of the companies established during the same
period. Prior to 1912 India had no legislation to regulate insurance business. In the year 1912,
the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life
Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical
valuations of companies should be certified by an actuary. But the Act discriminated between
foreign and Indian companies on many accounts, putting the Indian companies at a
disadvantage.
The first two decades of the twentieth century saw lot of growth in insurance business. From
44 companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with
total business-in-force as Rs.298 crore in 1938. During the mushrooming of insurance
companies many financially unsound concerns were also floated which failed miserably. The
Insurance Act 1938 was the first legislation governing not only life insurance but also non-life
insurance to provide strict state control over insurance business. The demand for
nationalization of life insurance industry was made repeatedly in the past but it gathered
momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the
Legislative Assembly. However, it was much later on the 19th of January, 1956, that life
insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian
companies and 75 provident were operating in India at the time of nationalization.
Nationalization was accomplished in two stages; initially the management of the companies
was taken over by means of an Ordinance, and later, the ownership too by means of a
comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the
19th of June 1956, and the Life Insurance Corporation of India was created on 1st September,
1956, with the objective of spreading life insurance much more widely and in particular to the
8
rural areas with a view to reach all insurable persons in the country, providing them adequate
financial cover at a reasonable cost.

LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate
office in the year 1956. Since life insurance contracts are long term contracts and during the
currency of the policy it requires a variety of services need was felt in the later years to
expand the operations and place a branch office at each district headquarter. Re-organization
of LIC took place and large numbers of new branch offices were opened. As a result of re-
organisation servicing functions were transferred to the branches, and branches were made
accounting units. It worked wonders with the performance of the corporation. It may be seen
that from about 200.00 crores of New Business in 1957 the corporation crossed 1000.00
crores only in the year 1969-70, and it took another 10 years for LIC to cross 2000.00 crore
mark of new business. But with re-organisation happening in the early eighties, by 1985-86
LIC had already crossed 7000.00 crore Sum Assured on new policies.

Today LIC functions with 2048 fully computerized branch offices, 109 divisional offices, 8
zonal offices, 992 satallite offices and the Corporate office. LIC’s Wide Area Network covers
109 divisional offices and connects all the branches through a Metro Area Network. LIC has
tied up with some Banks and Service providers to offer on-line premium collection facility in
selected cities. LIC’s ECS and ATM premium payment facility is an addition to customer
convenience. Apart from on-line Kiosks and IVRS, Info Centres have been commissioned at
Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and
manyother cities. With a vision of providing easy access to its policyholders, LIC has
launched its SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and
closer to the customer. The digitalized records of the satellite offices will facilitate anywhere
servicing and many other conveniences in the future.

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

From then to now, LIC has crossed many milestones and has set unprecedented performance
records in various aspects 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

9
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 in India made its debut well over 100 years ago.

In our country, which is one of the most populated in the world, the prominence of insurance
is not as widely understood, as it ought to be. What follows is an attempt to acquaint readers
with some of the concepts of life insurance, with special reference to LIC.

It should, however, be clearly understood that the following content is by no means an

exhaustive description of the terms and conditions of an LIC policy or its benefits or
privileges.

OPERATE ALL OVER INDIA

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MISSION & VISION OF LIC

MISSION:
"Explore and enhance the quality of life of people through financial security by providing
products and services of aspired attributes with competitive returns, and by rendering
resources for economic development."

VISION:

"A trans-nationally competitive financial conglomerate of significance to societies and Pride

of India."

Shri.P.Chidambaram
Union Finance Minister

“In the year 1956, 245 Indian and foreign companies were nationalized and today, the three
letters ‘LIC’, stands as a synonym for insurance, for services, for excellence in strengthening
the economic fibre of this country. I dare to say that no other three letters taken together are
more recognised to the length and breadth of India than LIC.”

“The performance figures of LIC give an indication why LIC is dear to us, why LIC is a Jewel
in our crown and why we will continue to nurture LIC and grow it into a great organization
rendering service to the people of India.”

“LIC’s footprints are now to be found in many other countries in the world. Wherever Indians
go - and they go everywhere now, wherever Indians are welcome - and they are welcome in
every part of the world, wherever Indians settle down – they have found many new homes,
wherever Indians excel – and they excel in every walk of life, they want LIC – they want LIC
to protect them, to look after their savings, and provide for protection as well as their
retirement.”

11
P. Chidambaram

Union Finance Minister

Excerpts from speeches at the inaugural function of LIC’s Golden Jubilee Celebrations.
Lucknow, September 1, 2005.

OBJECTIVE OF LIC

 Spread Life Insurance widely and in particular to the rural areas and to the socially and
economically backward classes with a view to reaching all insurable persons in the
country and providing them adequate financial cover against death at a reasonable
cost.

 Maximize mobilization of people's savings by making insurance-linked savings

adequately attractive.

 Bear in mind, in the investment of funds, the primary obligation to its policyholders,
whose money it holds in trust, without losing sight of the interest of the community as
a whole; the funds to be deployed to the best advantage of the investors as well as the
community as a whole, keeping in view national priorities and obligations of attractive
return.

 Conduct business with utmost economy and with the full realization that the moneys
belong to the policyholders.

 Act as trustees of the insured public in their individual and collective capacities.

 Meet the various life insurance needs of the community that would arise in the
changing social and economic environment.

 Involve all people working in the Corporation 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 a sense of participation,
pride and job satisfaction through discharge of their duties with dedication towards
achievement of Corporate Objective.

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DIFFERENT TYPES OF POLICIES

1) LIC JEEVAN AKSHAY

LIC Jeevan Akshay is an Immediate Annuity plan offered by Indian insurance and investment
company Life Insurance Corporation of India (LIC). It is a single premium policy and has to
be purchased by paying a lumpsum amount at once. The annuity can be paid monthly,
quarterly, biannually or annually as chosen. This pension plan has 6 options to choose from.
Once the individual chooses an option, it can’t be changed during as the payout starts
immediately with the plan.

KEY FEATURES

 It is an annuity pension plan.

 Premium has to be paid in lumpsum.
 Annuity payment- Annuity can be paid monthly, annually, biannually as chosen.
 Medical examination is not required.
 You will be entitled to special incentives if you buy the plan online.
 The policy has a cooling off period of 15 days starting from the date of receipt of the
policy.
 Loan-There is no loan facility available under this particular policy.
 Surrender value-The policy has no surrender value.
 Additional riders- There are no additional riders available under this plan.
 Paid up value- The policy does not acquire any paid up value.

BENEFITS

 Death benefit- Death benefit is paid depending on the plan option chosen by the assured.
 Maturity benefit-There is no maturity benefit under this plan.
 Income tax benefit-The plan offers tax benefits. Premiums paid under this plan are
exempted from tax under section 80C of the Income Tax Act.
 The plan offers 6 options to choose from.

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2) LIC NEW CHILDREN MONEY BACK PLAN

Children are the future of our world, and as parents, most of us strive to provide sufficient
platforms for our children to excel in life. The New Children’s Money Back Plan from LIC is
a unique plan designed to cater to multiple needs of growing children, including their
education, wedding, etc. This participating, non-linked money back scheme offers survival
benefits in addition to the risk cover for children.

BENEFITS

 Maturity Benefit – A maturity benefit equivalent to the sum assured and all bonuses
accrued during this period will be paid.
 Survival Benefit – A survival benefit, equivalent to 20% of the basic sum assured will be
paid when the life assured reaches certain age milestones.
 Death Benefit – In the unfortunate event of the life assured passing away after risk
commencement while the policy is in force, the sum assured on death and any accrued
bonuses will be paid.
 Corporation Profits – Policyholders are eligible to participate in profits earned by LIC,
earning bonuses through the same.
 Surrender Value – Individuals can surrender the policy (after completion of 3 years) to
get an assured surrender value.
 Rebates – LIC provides a rebate on high premium amounts, helping one save money.
 Loan – One can avail a loan under this policy, helping them cater to emergencies.

3) LIC JEEVAN ANDAN

LIC Jeevan Anand is a life endowment plan that comes with a multitude of benefits for the
policyholders throughout the term period. As per the plan, the insurance cover continues even
after completion of the premium payment term. In the event of death of an individual due to
an accident, the plan offers an additional cover sum which is capped at Rs.5 lakhs. But in case
the accident leaves a policyholder with permanent disability, the plan takes care of the regular
financial needs by paying the sum assured in installments. These additional benefits offered
under LIC Jeevan Anand do not impose extra charges on the premium amount.

14
FEATURES

 It’s a traditional endowment policy which offers sum assured and additional bonuses
 On survival, the maturity benefits are paid to the policyholder and the plan continues to be
in force
 In the event of policyholder’s death, the sum assured is paid to the nominee
 Additional top-up covers are available on payment of a nominal sum along with premium
 This Life Insurance Policy Provides financial protection throughout the lifetime of the
person insured
 Offers a lump sum at the end of the chosen term period
 The policy participates in the profits of the corporation

4) LIC JEEVAN SARAL

LIC Jeevan Saral is actually an endowment policy with a lot of flexibilities that is usually
available only with unit linked insurance plans. Hence it is categorized under Special Plans.
This plan offers Double Death Benefit of Sum Assured + Return of Premium.

In this plan, the premium amount is decided by the policyholder and he gets 250 times the
monthly premium as Sum Assured. If the Life Insured survives the entire term, then he would
receive Maturity Sum Assured + Loyalty Additions. The Maturity Sum Assured depends on
different entry ages and policy term and is specified at the beginning of the policy.

Now, if the Life Insured dies within the policy tenure then his nominee would receive the
Sum Assured + Return of premiums excluding extra/rider premium and first year premium +
Loyalty Addition, if any.

Thus, the Death Benefit would be the same irrespective of age of entry and policy term since
it depends only on chosen premium amount but the Maturity Benefit would differ according
to varied age of entry and policy term.

 This plan provides certain flexibilities unlike other endowment plans and hence is a
Special Plan
 The policyholder can choose his own premium amount and Sum Assured gets
determined thereafter
 The plan will allow partial surrender from 4th year onwards subject to certain terms
and conditions

15
  The policyholder is allowed to choose a flexible term for premium payment

FEATURES

 Premium is chosen by the policyholder and Sum Assured is 250 times the Monthly
Premium amount.
 Death Benefit is Sum Assured + Return of premiums excluding extra/rider premium
and first year premium + Loyalty Addition.
 Maturity Benefit is Maturity Sum Assured + Loyalty Additions, if any.
 Partial surrender of the policy is allowed after the 3rd policy year.
 Extended risk cover for one year after 3 years premium payment.
 Optional higher cover through Term Rider and Accidental Death and Disability
Benefit.
 You can choose a maximum term but can surrender at any time without any surrender
penalty or loss after 5 years.
 Loyalty Additions are provided from 10th policy year onwards

5) LIC e-TERM PLAN

The e-term plan (UIN: 512N288V01) is a non-participating pure life insurance plan which can
be bought only through the online mode without the involvement of any intermediary. Pure
life insurance cover means that only the policy holder’s life is covered.

If the policyholder happens to die during the tenure of the plan, then the beneficiaries of the
policyholder are given the sum assured. If the policy holder survives the tenure of the e term
plan, then nothing is given to the policyholder and his/her beneficiaries.

By a non-participating policy is meant that the policy does not participate in the profits
through unit-linked schemes and no dividends are paid on this policy. A participating policy,
on the other hand, participates in the profits and dividends, and bonuses are paid on the policy
whenever applicable and as decided by the board.

FEATURES

 Plan can only be purchased through online mode.

 Plan has to be purchased directly without the involvement of any intermediary.
 Proposer can only propose for self-life, not for any other life.
 Pure life cover plan.
16
  Non-participating, non-linked plan.
 Two categories of premiums.
 Only annual premium payments are accepted.
 Only death benefit, no maturity benefit.
 The e term plan does not acquire any paid-up value.
 The e term plan does not acquire any surrender value.
 All types of deaths covered including accidental death.
 Cooling period of 30 days is offered on the e term plan.
 The e term policy does not have riders.
 Loans cannot be raised against the e term policy.

BENEFITS

 Substantial life covers at nominal premium rates.

 Lower rates for non-smokers.
 Hassle free online processes.
 Assistance through phone call, toll-free, email and chat facilities.
 Tax benefits under section 80 of Income tax act.
 The name is synonymous with assurance.
 Claim settlement is their top priority.
 The company has a claim settlement ratio of 98.14 (IRDA 2016-17 Annual report
data).
 The e term policy provides cooling and grace period.

17
 CHAPTER – 3
Findings and Analysis

18
3.1 DEMOGRAPHIC PROFILE
Q. Age of respondents?

AGE NO. OF RESPONDENTS % SHARE

LESS THAN 25 20 5%
25-34 85 21.25%
35-44 100 25%
45-54 60 15%
55-64 55 13.75%
65-74 45 11.25%
ABOVE 75 35 8.75%

LESS THAN 25
25-34
35-44
45-54
55-64
65-74
ABOVE 75

INTERPRETATION
Maximum number of respondents lies in the age group of 35-44 as the responsibility of
family has just started and they want to protect it from all types of trouble.
The least number of respondents lies under the age group of Less than 25 as they have just
started working and their income is less and moreover they do not have much responsibilities
on their shoulders.

19
Q. Marital Status of respondents?

MARITAL STATUS NO. OF RESPONDENTS % SHARE

SINGLE 150 37.5%
MARRIED 250 62.5%

SINGLE
MARRIED

INTERPRETATION
The number of respondents that lies under Married group is high as compared to Single. This
is because the responsibilities of married people are much higher than that of Singles. So they
take Insurance policies in order to protect their and their family’s future.

20
Q. Employment Status of respondents?

EMPLOYEMENT NO. OF RESPONDENTS % SAHRE

STATUS
SELF-EMPLOYED 200 50%
GOVT. JOB 50 12.5%
PRIVATE JOB 85 21.25%
UNEMPLOYED 65 16.25%

SELF-EMPLOYED
GOVT. JOB
PVT JOB
UNEMPLOYED

INTERPRETATION
The number of respondents in Self-Employed category is more as there is more risk in
business than in any other job. So business man protects their and their family’s future by
taking an Insurance policy.
The minimum number of respondents lies under the category of Government Jobs as they will
get pension after their retirement. So, their future is much more secure than anybody else’s.

21
Q. Number of Dependents on the respondents?

NO. OF DEPENDENTS NO. OF RESPONDENTS % SHARE

1 70 17.5%
2 85 21.25%
3 95 23.75%
ABOVE 4 150 37.5%

1
2
3
ABOVE 4

INTERPRETATION
The number of respondents is more in the category of Above 4 as the person has to secure the
future of persons, who are dependent on him as compared to a person who have 1 dependent
person on him.

22
3.2 DATA INTERPRETATION
Q1. Which form of the investment do you prefer the most?
No of respondents share %
Fixed assets 80 20%
Bank 50 12.5%
Jewellery 60 15%
Insurance 200 50%
Other 10 2.5%

FIXED ASSETS
BANK
JEWELLERY
INSURANCE
OTHERS

INTERPRETATION

 In the above graph, 50% of the respondents are choosing Insurance as their mode of
Investment which is highest among all and this shows that Insurance plays an
important role in protecting their and their family’s future.
 20% of the population thinks that by investing their savings in fixed assets will secure
their future needs.
 60 respondents think jewellery is the best way to invest their savings as it can be a part
of assets only.
 15% of the respondent chooses Bank to keep their savivgs in order to gain interest on
it.
 The rest 10 respondents choose other as invest mode (keeping their money at home or
donating it in some social activity).

From the above data, only 50% of the sample population had opted for Insurance policies
as an investment mode. So, final data of study comprises of move 200 respondents only.

23
Q2. Do you have any insurance policy?
No of respondents share %
Yes 150 75 %
No 50 25 %

YES
NO

INTERPRETATION

 Of the sample size of 200 surveyed respondents 75% of the respondents are having
Insurance policy.
 25 % of the respondents either not having any Insurance policy at present or their
policy is already matured.

So, we will move forward with 75% of respondents that are having Insurance policy i.e. with
150 respondents.

24
Q3. Which insurance policy do you have?

No. of respondents % share

Life 61 40.6
Non life 58 38.6
Both 31 20.6

LIFE
NON LIFE
BOTH

INTERPRETATION
This means that people are unaware of the fact that non-life insurance is as relevant as life
insurance. And company should promote non-life insurance as well. In order to give benefits
to the public of non-life insurance too.

25
Q4. Which company insurance policy do you have?
No of respondents share %
LIC 100 67
ICICI PRUDENTIAL 12 8
SBI LIFE 15 10
RELIANCE LIFE 7 5
INSURANCE
NONE OF ABOVE 16 10

LIC
ICICI
SBI
RELIANCE
NONE OF ABOVE

INTERPRETATION

 100 respondents have a policy of LIC Company to protect their future, to protect their
family, or to appraise their capital.
 15 respondents invest in SBI life in order to save their taxes.
 12 respondents choose ICICI for the same.
 7 respondents have a policy of Reliance.
 16 respondents have policy of some other company like Aviva, Bajaj Allianz etc.

From the above data, 100 respondents have a policy LIC. So, only 100 respondents will be
studied further.

26
Q5. Which feature of your policy attracts you to buy it?

No. of respondents share%

Money Back Guarantee 27 27%

Larger Risk Coverance 11 11%

Easy Access to Agents 14 14%

Low Premium 15 15%

Company’s Reputation 33 33%

MONEY BACK GUARANTEE

RISK COVERAGE
EASY ACCESS TO AGENT
LOW PREMIUM
COMPANY'S REPUTATION

INTERPRETATION
 27% of peoples are attracted by money back guarantee of LIC.
 11% of people like the risk coverance of LIC.
 14% of them like easy access to agents.
 15% of people like low premium.
 33% buy policy because of company reputation.

27
Q6. What is your perception about insurance in LIC?
No of respondents share %
A saving tool 16 16%

A tax saving device 7 7%

A tool to protect your family 77 77%

SAVING TOOL
TAX SAVING TOOL
FAMILY PROTECTION TOOL

INTERPRETATION

 16% of the respondents have perception of Insurance being a saving tool.

 And 7% of the respondents have perception of Insurance being a tax saving device.
 But 77% of the respondents are with the view that Insurance is a tool to protect your
family.

28
Q7. What is your opinion about insurance plans of LIC?

No. of respondent share%

Rigid plans 5 5%

Non user friendly 9 9%

Satisfactory 72 72%

Good 10 10%

Very good 4 4%

RIGID PLAN
NON-USER FRIENDLY
SATISFACTORY
GOOD
VERY GOOD

INTERPRETATION

 5% of the respondents have the opinion that Companies have rigid plans.

 9% feel that Indian Insurance companies are Non-user friendly.

 72% of the respondents feel that products and services of Indian Insurance companies
is Satisfactory.

 Whereas only 10% feel that it is good enough.

 And according to the data, only 4% of person has felt that it is very good.

29
Q8. Are you satisfied with your insurance policy of LIC?

No of respondents share %
Yes 71 71%

No 29 29%

YES
NO

INTERPRETATION
 71 % of peoples are satisfied with insurance policy of LIC.

 29% of peoples are not satisfied with insurance policy of LIC.

This shows people are satisfied with company and all benefits that are provided by company.

30
Q9. From where do you buy your LIC insurance policy?

No of respondents share %
Customer approached 45 45%
Insurance company/Agent

Company/agent approached 55 55%

customer

CUSTOMER APPROACHES
COMPANY
CCOMPANY APPROACHES
CUSTOMER

INTERPRETATION

 45% of the respondents approached the Insurance Company / Agents.

 55% of the respondents were approached by the Company /Agent.

From the above, response the company should make the consumer more aware about the need
of insurance. In order to increase the number or percentage of approaches from the side of
customer.

31
Q10. Have your policy lapsed any time due to non-payment of Insurance Premium?

No. of respondents Share%

Yes 65 65%

No 35 35%

YES NO

INTERPRETATION
 Policy of 65% people have Lapsed because of non-payment of Insurance Premium.
 Policy of 35% people have not Lapsed due to non-payment of the Insurance Premium.
So, the company should give more time to the people to pay the premium and should also
give reminder call or message to the customer 3 to 4 days before.

32
Q11. Are you aware about accident insurance claim?

Yes 65 65%

No 35 35%

YES NO

INTERPRETATION

 65% of people are aware about Accidental Insurance claim.

 35% of people are not aware about it.

So, the company issue or tell their agent to tell the customer about the accidental insurance
claim in detail. In order to make more and more people known about it.

33
3.3 STRENGHT, WEAKNESS, OPPOURTUNITY AND THREATS
ANALYSIS (SWOT ANALYSIS)

STRENGTHS OF LIC

Strengths are defined as what each business does best in its gamut of operations which can
give it an upper hand over its competitors. The following are the strengths of LIC are:

 India’s largest Insurance service provider:

LIC currently has pan India operations with 2048 fully computerized branch offices,
8 zonal offices, around 113 divisional offices, 2,048 branches and 1381 satellite
offices and corporate offices. The entire country is classified under 54 customer
zones and 25 metro-area service hubs based across various cities and towns of India.
Currently, LIC has 1,337,064 individual agents, 242 Corporate Agents, 89 Referral
Agents, 98 Brokers and 42 Banks for selling life insurance to the general public.

 Brand Image:

LIC has a strong branding in India. Its tagline Yogakshemam Mahamyaham which
means welfare for all is well recognized. The Economic Time Brand Equity Survey
of the year 2015 voted LIC as the most trusted Insurance provider in India.

 Fund Base:

LIC has a huge found base of around 150 billion USD and is also India’s biggest
investor making it immensely powerful in the domain of finance in India.

 A network of Agents:

LIC has around 1,337,064 individual agents, 242 Corporate Agents, 89 Referral
Agents, 98 Brokers and 42 Banks across India who cover each nook and corner of
the country.

34
WEAKNESS OF LIC
Weaknesses are used to refer to areas where the business or the brand needs improvement.
Some of the key weaknesses of LIC are:

 Culture:

LIC has been strongly associated with the government and thus follows a very slack
and slow paced work culture. This works as a weakness when compared to modern-
day private insurance players who are adept at strategy.

 Poor advertisement strategy:

In comparison to its private counterparts LIC does not spend too much on
advertisement and this shows in the quality of ads that they release.

 Too many restrictions:

The Company has a lot of restriction imposed on ti being a government entity and
there is always red tape challenges. This makes makings low at LIC.

 Labour overheads:

LIC has a huge employees strength and most of them work from their own setups.
Paying their salaries and managing theme is often a huge challenge for the company.

35
 OPPOURTUNITIES OF LIC

Opportunities refer to those avenues in the environment that surrounds the business on which
it can capitalize to increase its returns. Some of the opportunities include:

 Cyber security:

There are many cases of information threats and breaches in security systems. Thus
at an age where cyber security is a threat Insurance policies against this can prove to
be a huge opportunity.

 Online Services:

As online services grown people have started looking more into options like
insurance and the awareness levels are also higher than the earlier days. This presents
an opportunity for providers like LIC which are labor intensive to cut down costs by
replacing people with technology.

 Shift from protection to prevention:

There is a general shift of trend from protection to prevention which is a pointer for
insurance companies who should now be focusing on risk prevention than risk
mitigation policies.

 More disposable income:

Insurance today is seen not as a protection but also as a form of investment. By

capitalizing on this new approach insurance companies can design new products.

36
 THREATS OF LIC

Threats are those factors in the environment which can be detrimental to the growth of the
business. Some of the threats include:

 Competition:

With privatization of insurance LIC has lost its older glory and today faces stiff
competition from private insurance players who have brought in more glamour into
the industry.

 Change of governments:

With every new government the fiscal and monetary policies change with the
result that policies need to be reworked accordingly. This creates a lot of hassles.

 Technology:

Today most financial services make technology an integral; part of their business
through online banking and financial broking services online. However, LIC still
has a lot to achieve in terms of staying abreast with technology.

37
3.4 FINDINGS

1. Respondent take an Insurance Policy as a tool to protect their family from

uncertainties of the future.
2. 50% of the selected population chooses Insurance as a mode of investment (i.e. 200
respondents out of 400).
3. 75% of the population has an Insurance policy (I.e. 150 respondents out of 200) i.e.
more than half of the population.
4. Most of the selected population have adopt life insurance, in order to protect their
future as well as their family.
5. Reputation of LIC attracts the respondents to buy its Insurance police and second
most likely feature is the Money Back Guarantee.
6. Respondents satisfied with their Insurance policy of LIC.

7. Customers are more aware about the importance of Insurance policy so they take the
first step and contact the company’s agent to buy it.
8. More than half of the population is aware about accidental insurance claim.

9. The strengths that LIC possess as a company are India’s largest Insurance service
provider, Brand Image, Fund Base, A network of Agents.
10. Opportunities that are available to LIC in its field are Cyber security, Online Services,
Shift from protection to prevention, more disposable income.

38
 CHAPTER-4
SUGGESTIONS

39
From the data that has been collected by the Questionnaire and from SWOT Analysis
following suggestion can be given:
1. To make public aware about the importance of Insurance as 25% of the sampled
population does not have any kind of Insurance policy.
2. To make the public aware about other type of Insurance policy that are present in the
company expect of Life Insurance policy as 30% respondent are having the benefits of
them.
3. To shift the focus of people from Money back guarantee feature to Risk coverage
feature as the main purpose of insurance is to cover the risk associated with the life of
people.
4. To make the policy of the company more flexible so that customer can have more
satisfaction from the insurance policy.
5. The company should give more time to the people to pay the premium and should also
give reminder call or message to the customer 3 to 4 days before so that their do not
laps because of non-payment of premium.
6. The company issue or tell their agent to tell the customer about the accidental
insurance claim in detail. In order to make more and more people known about it and
take full benefit of it.

40
CHAPTER - 5
CONCLUSION

41
Respondent take an Insurance Policy as a tool to protect their family from uncertainties of the
future. More than half of the population chooses Insurance as a mode of investment. more
than half of the population has an Insurance policy. Most of the selected population have
adopt life insurance, in order to protect their future as well as their family. Reputation of LIC
attracts the respondents to buy its Insurance police and second most likely feature is the
Money Back Guarantee. Respondents satisfied with their Insurance policy of LIC. Customers
are more aware about the importance of Insurance policy so they take the first step and
contact the company’s agent to buy it. More than half of the population is aware about
accidental insurance claim. The strengths that LIC possess as a company are India’s largest
Insurance service provider, Brand Image, Fund Base, A network of Agents. Opportunities that
are available to LIC in its field are Cyber security, Online Services, Shift from protection to
prevention, More disposable income.
But as every company LIC has some draw back which has rectified. Some of them are: To
make public aware about the importance of Insurance. To make the public aware about other
type of Insurance policy that are present in the company expect of Life Insurance policy. To
shift the focus of people from Money back guarantee feature to Risk coverage feature.To
make the policy of the company more flexible so that customer can have more satisfaction
from the insurance policy. The company should give more time to the people to pay the
premium and should also give reminder call or message to the customer 3 to 4 days before so
that their do not laps because of nonpayment of premium. The company issue or tell their
agent to tell the customer about the accidental insurance claim in detail. In order to make
more and more people known about it and take full benefit of it.

42
 BIBLOGRAPHY

Internet Portal

 http://www.licindia.in/Products/Insurance-Plan

 en.wikipedia.org/wiki/Life_Insurance_Corporation

 https://www.marketing91.com/swot-analysis-lic/
Releases:

 Annual Performance Report (2017-18, 2016-17)

News Paper and Magazines:

 Business World (April – June Editions.).

 ANNEXURE

QUESTIONNAIRE

NAME:

AGE:

MARITAL STATUS:

EMPLOYEMENT STATUS:

NO. OF DEPENDENTS:

Q1. Which form of the investment do you prefer the most?

A) FIXED ASSETS
B) BANK
C) JEWELLERY
D) INSURANCE
E) OTHER

Q2. Do you have any insurance policy?

A) YES

B) NO

Q3. Which insurance policy do you have?

A) LIFE
B) NON-LIFE
C) BOTH

Q4. Which company insurance policy do you have ?

A) LIC
B) ICICI PRUDENTIAL
C) SBI LIFE
D) RELIANCE
E) NONE OF ABOVE
Q5. Which feature of your policy attract you to buy it?
A) MONEY BACK GUARANTEE
B) LARGER RISK COVERENCE
C) EASY ACCESS TO AGENTS
D) LOW PREMIUM
E) COMPANY REPUTATION

Q6. What is your perception about insurance in LIC?

A) A SAVING TOOL
B) TAX SAVING DEVICE
C) TO PROTECT FAMILY

Q7. What is your opinion about insurance plans of LIC?

D) RIGID PLANS
E) NON USER FRIENDLY
F) SATISFACTORY
G) GOOD
H) VERY GOOD

Q8. Are you satisfied with your insurance policy of LIC?

A) YES
B) NO

Q9. From where do you buy your LIC insurance policy?

A) CUSTOMER APPROACH INSURANCE COMPANY/AGENTS
B) COMPANY AGENT APPROACH CUSTOMER

Q10. Have your policy lapsed any time due to non-payment of Insurance Premium?

A) YES

B) NO

Q11. Are you aware about accident insurance claim?

A) YES

B) NO