Internship Report On

Life Insurance Activities

A Case Study on Surya Insurance Company Limited

Submitted To

Brixton College,

Pokhara University

Lekhnath, Kaski

By:

Neha Bist

PU Roll No:

PU Reg. No:

An Internship Report

In partial fulfillment of the requirements for the degree of

Bachelor of Business Administration (BBA)

Kanchanpur

February,2023
 LETTER OF DECLARATION

I, hereby declare that, this internship report is not a copy of another person's report.
The study is original in nature. I have tried my best to make this report informative
as well as descriptive. I also ensure that, this report has not been submitted to any
other person earlier and will not be submitted to anybody in future.

Thank you

…………………..

Neha Bist
 ACKNOWLEDGEMENT

I have taken efforts in this project. However, it would not have been possible
without the kind support and help of many individuals. I would like to
extend my sincere thanks to all of them.

I would like to express my sincere gratitude to Professor Dr. Dev Raj Adhikari for
all the guidelines and help since the initial phase of this project, without his
support and guidance this report was not possible. I am highly indebted to
Dr. Sajeeb Kumar Shrestha for his guidance and constant supervision as well as
for providing necessary information regarding the project & also for his support
in completing the internship report.

I would like to express my special gratitude and thanks to Brixton College for
encouraging and providing me with all the help for this project. My deep
acknowledgment goes to Anil Kedia, Chairman; Dr. Manoj Kumar Chaudhary,
Chief Academic Advisor; Basanta Dhakal, Program Coordinator; Samrat
Mainali & Rojish Shakya, Assistant Coordinator and all the faculty members of
Brixton College for their invaluable guidance and assistance.

The report would not have been possible without the opportunity given by
Surya Life I ns u ra nc e C om pa ny P vt . L td . M y he ar tf el t gr at it ud e go es
t o M r. J a gd is h B ha tt a (Provence Head) for their continuous guidance
throughout this project and the internship period of 3 months despite of their heavy
work flow. My sincere thanks and appreciations also go to my faculties, friends
and people who have willingly helped me out with their abilities for the completion
of this project.

Neha Bist

BBA

Brixton College
 TABLE OF CONTENT

CHAPTER I

INTRODUCTION

Background of the Study

Objective of the Study

Methodology of the Study

Scope of the Study

Limitations of the Study

Problem Statement

CHAPTER II

HISTORY OF INSURANCE INDUSTRY

Introduction

History & Development of Insurance

Development of Insurance in Dhangadhi

Implication of Five Forces Model (By Michael E.Porter) in Insurance Industry of

Dhangadhi.

CHAPTER III

Insurance Definition

Major Types of Insurance

Life Insurance Definition

Reason's for Buying Life Insurance Policies

Advantages of Life Insurance

Disadvantages of Life Insurance

 CHAPTER IV

Recommendation

Conclusion
 EXECUTIVE SUMMARY

It is a great pleasure for me that I have completed report on "Life Insurance

Activities: A Case Study on Surya Life Insurance Company Ltd". My Internship
report contains all the information about my work experience with Surya Life
Insurance Company, which was established in September 26th, 2000. I shall try to
discuss and include introduction, history, objective, status, mission and financial
analysis etc.

Surya Life Insurance Company Ltd. has been playing an important role in the
economic development of the country. Since the beginning, Surya Life Insurance
Ltd. set an outstanding standard to gain the popularity among all classes of people.
Surya Life started micro life insurance-cum-savings products basically went to the
poor people. Day by day the company is gaining much popularity among the
customers as it always try to maintain good relationship with its customers.

At the beginning of this report in chapter 1, I tried to give an introduction about the
background, objective, scope, methodology of this study. There are also some
problem statements included.

In chapter 2, I tried to write about the history of insurance industry and the
development of insurance industry in Dhangadhi.

In chapter 3, I tried to give some brief information about the company overview of
Surya Life Insurance Company Limited and their product details.

In chapter 4, I tried to elaborate the literature review of this study including many
definitions, advantages, disadvantages of life insurance.

In chapter 5, I gave brief information on insurance activities of Surya Life Insurance

Company Limited. This includes their insurance policies, premium rates, how they
collect the premiums from customer, the process by which it formulate the insurance
policy etc.

In chapter 6, I tried to analyze the activities of Surya Life Insurance Company by

showing some graphical representation and SWOT analysis.
In chapter 7, I tried to explain the findings that I found after analyzing the activities
of this company.

In chapter 8, I tried to give some recommendations on how the company can

improve its service toward its customers and last but not the least, this includes a
conclusion of this report.

Surya Life insurance Company is one of the leading insurance Companies in

Dhangadhi. The performance of Surya Life Insurance company is getting better day
by day. Its premium, assets, claims meeting, utilization of income is getting better in
last five years. The study is about the activities of Surya Life Insurance Company
limited, its cash payments, claims meeting, premium collection, service offered,
products etc. The study also showed that the factors are related with the customer
perceived risk and customer’s value.
 CHAPTER I

INTRODUCTION

Background of the Report

Insurance is a system of spreading the risk of one to the shoulders of many. It can be
defined as a co-operative device to spread the loss caused by a particular risk over a
number of persons who are exposed to it and who agree to ensure themselves against
that risk. It is a contract whereby the insurers, on receipt of a consideration known as
premium, agree to indemnify the insured against losses arising out of certain
specified unforeseen contingencies or perils insured against. It can play an important
role in a country’s economy. It is an old form of financial practice of sharing risk,
which was introduced in this area in mid-18th century.

Objectives of the Study

The main objective is to know the overall position of this sector. Some objectives of
this report are given below:

 To know an overall idea about insurance industry.

 To get proper information about Surya Life Insurance Company Ltd..

 To find out the uses of insurance to society.

 To know how insurance companies involve in economic growth.

 To explore the insurance activities of Surya Life Insurance Company Ltd.

Methodology of the Study

This report has been prepared on the basis of experience gathered during the period
of internship. For preparing this report, I have also got information from annual
report and website of the Global Insurance Ltd. I have presented my experience and
findings by using different chart and tables, which are presented in the analysis part.

The details of the work plan are furnished below:

Data collection method: Relevant data for this report has been collected primarily by
direct investigation of different records, papers, documents, and operational process
and different. The interviews were administered by formal and informal discussion.
No structured questionnaire has been used. Information regarding office activities of
the insurance has been collected through consulting records and discussion.

Data Sources: The information and data for this report have been collected from
both the primary and secondary sources.

a) The primary sources are as follows:

 Face-to-face conversation with the respective officer and stuffs of the head
office.
 Face-to-face conversation with clients who visited the head office.
 Practical work experience in the different desk of the department of the head
office covered.
 Relevant field study as provided by the officer concern.

b) The secondary sources are as follows:

 Annual Report 2013 of Global Insurance Company.

 Website of the company.
 Different manual published by the GIL.
 Different circular sent by head office.

Scope of The Report

This report has been prepared through extensive discussion with insurance
employees and with the clients. While preparing this report, I had a great
opportunity to have an in-depth knowledge of all the insurance activities of a leading
private insurance.
 Limitations of The Report

In case of collecting the data, I faced a lot of problems. The limitations of the study
that we faced in case of preparing the report are as follows.

 Difficult to collect the information

 Time constraints for the study
 The official and respective persons are very busy with their assigned job.
 Shortage of time-collected information was complex and unsorted.
 Up to date information were not available.
 Every organization has their own secrecy that is not revealed to others.
 Finally first experience may also act constants in the way of meticulous
exploration on the report.

Despite these limitations, I have tried my best to prepare the report. If you find any
mistakes please consider it cordially.

Problem Statement

In a developing country like Dhangadhi, insurance companies are playing a very

important role in the economy. Though insurance industry has very prospect in the
economy but for some reasons it’s somehow failed to achieve its goal. If we want to
know the reasons behind this then we should look forward the following according
to Dhangadhi General Insurance Company Ltd.

In this report, the major problems in performing insurance business has been
classified into some major criteria which are social, economic, political, legal and
other reasons. The actual problems are discussed in detail within these criterions.

Less Public Awareness:

A vast majority of people especially in rural areas are left outside the insurance
coverage. This mainly results from the unawareness among the people. Even a large
portion of people don’t have the minimum idea of insurance. People are not aware
of the benefits from the insurance policy and a great number of people believe that
insurance business is nothing but cheating and assume that insurance policy is quite
unnecessary. This negative attitude from the people is lessening the importance of
absorbing insurance policy in a large extent.

Centralization:

Most of the insurance companies in our country are located in urban areas and there
are few branches in rural areas. They think that they might have better scope for
performing their business as the economic condition of the urban is better than the
rural areas. They don’t think that the large number of our population reside in rural
areas and if branches are expanded in rural areas then the business can thrive if
proper motivation policy is taken to aware the mass people of the rural areas. Thus
this centralization policy acts as an obstruction for the growth of insurance business
in our country.

Poor Economic Conditions:

Dhangadhi is one of the developing countries in the world and most of the people in
this country live under extreme poverty level. All of these people fight hard to earn
their livelihood and are marginal in relation to the expenditure with the income. It is
quite impossible for them to save some money for future need. Therefore, they are
quite unable to give the amount to the insurer which is called as premium and
regarded as safety or precautionary measures against any accident. The number of
people who can bear the premium to the insurance company is very few in regard to
those mentioned above. Therefore, the overall poor economic condition is creating
obstacle to flourish the insurance business in Dhangadhi.

Poor Financial Position of the Insurance Companies:

Most of the insurance companies of our country are facing financial problems.
Recently government is trying to take initiative to close some of the insurance
companies because they are not maintaining the minimum standards. They are
investing their money in poor securities and business which is vulnerable regarding
getting back the money with profit. As a result most of the insurance companies are
suffering from loss years after years and for poor financial condition the insurance
companies are also unable to expand their branch which is a barrier for the growth
of insurance business in Dhangadhi.

Higher Cost of Business:

Growing cost of business is another problem that insurance companies are facing
now a days. They urge that government tax, house rent, utility, commission fee,
stationeries are growing day by day. But their businesses are not growing so fast
with that rate. Besides this, the policy holders are not willing to pay too much
premium with growing cost that is hampering the strategies of insurance companies.
So they are facing difficulties in running their business efficiently.

Problems of Economic Bases and Effective Principle:

Before independence insurance business was control by private company. But after
independence maximum insurance company take over by the government. For that
reason government changed the company management, policy and applies new rules
and regulations which system was very tricky and uncomfortable for the mass
people.

Political Instability:

Political instability is a major problem in Dhangadhi. For the instability in politics,

many disruptive situations are often created which are bad for any businesses. The
people who operate various businesses in our country often experience various types
of inconvenience in running their business. Insurance business is not an exception of
this. Political instability and inconsistency of political courses are a serious problem
for the insurance business.

Lack of Supervision from the Government:

Lack of surveillance from government ministry encourages many insurance

companies to follow some unethical practices like make harassment to policy holder
and showing less in the financial statement. This not only destroying the reputation
of the well known insurance companies but also creates negative impact in the mind
of the people about insurance. Besides this, government sometimes impose some
conflicting rules and regulation without discussing with insurance companies
governing body. It creates conflict among insurance companies with government
and act as one of the main hindrances of growing insurance business.

Problem of Planning and Administration:

After the change of the government, the whole planning and administrative
measures are changed which is the main constraint for long term plans. Without long
term planning any permanent development or solution of existing problems are
impossible.

Too Much Complexity:

To take an insurance policy there are a great number of rules and regulations which
must be compelled by the insured person. And into those rules a vast number of
complexities is present there. Therefore the people are discouraged to take insurance
policy because they think that the complexities will create extra pressure on their
mind which may hamper other jobs.

Lack of Qualified Officials:

Insurance companies perform their activities by recruiting marketing agent and they
try to convince the people to take a policy. Most of the cases the agents are not
properly trained and they don’t know the right process to catch potential people to
make their policy holders. Therefore these field level agents are unable to fulfill
their target and act as a constraint in the insurance business.

Traditional Method:

Still Dhangadhi insurance company using or follows traditional methods on

insurance policy. Whereas foreign companies are using modern systems like
computerized system. Our local company does not want to change themselves.

Lack of Training for the Employees:

Spread of insurance business in Dhangadhi failed for lack of proper training by the
employees specially the field employees of insurance companies. Still there are not
enough training center to provide proper training regarding insurance activities for
the officials of insurance company. Though there is one insurance training center in
Dhangadhi it totally failed to achieve its target in insurance field.

Lack of Exposure:

Another main problem in the country is that the media is unconcerned to send the
right message regarding insurance to the people. As a result, a large portion of
population is completely unaware about the insurance policy. Another problem is
that the insurance company does not provide adequate information in the company’s
websites which can fulfill the queries of their potential customers and satisfy
themselves to buy an insurance policy.

Absence of Business Ethics:

Some insurance companies create harassment on the policy holders or sometimes on

the dependents of the policy holders when they want back their money after death or
maturity. The insurance companies show different causes in order to make delay to
return back the money at expected time. Sometimes they are eager to pay less than
the desired amount by creating various circumstances such as they try to say that the
disaster of the subject matter of the policy is not responsible due to their activities.
Besides this, some field officials also create some illegal acts. They often try to give
false information to the people for buying a policy. And these kind of illegal acts
create bad reputation to the insurance companies and hindrance the overall insurance
business. Those who are harassed by the insurance companies discourage other not
to take an insurance policy.

Lack of Motivation Program Towards Public:

According to Green Delta Life Insurance Company the people of our country are not
much motivated by the company to take insurance policy for safeguarding
themselves against any kind of risk. Almost every time they failed to understand the
people that insurance policy makes their life risk free all time. For lack of
motivation among the mass people insurance companies are always lagging behind
from their expected target.

Lack of Information Technology:

Another problem is, they do not use any web address, which is essential for a large
leasing company. They can provide more information to its client by using web site.

Insufficient Service:

In Dhangadhi insurance company people failed to provide better service to the mass
people that’s why the people who want to take the insurance policy they loss their
interest from insurance. At same time in foreign country insurance workers goes to
customer’s house and offices regularly to aware themselves and influence them to
take insurance policy. In that’s case Dhangadhi insurance company people are not
that much expert.

Lack of Marketing Policy:

One of the major problems in insurance companies is lack of marketing policy.

Management is not taking initiative to increase their marketing expansion. They
provide tiny amount in advertisement, which is not sufficient for increasing business
development.
 CHAPTER II

HISTORY OF INSURANCE INDUSTRY

Introduction

Insurance is a system of spreading the risk of one onto the shoulders of many.
Whilst it becomes somewhat impossible for a man to bear of himself 100% loss to
his own property or interest arising out of an unforeseen contingency, insurance is a
method or process which distributes the burden of the loss on a number of persons
within the group formed for this particular purpose.

History & Development of Insurance

The origin of insurance is lost in antiquity. However, there is no evidence that

insurance in its present form was practiced prior to the twelfth century. A brief
chronological historical development of the various branches of insurance is given
below:

Marine Insurance:

Marine is the oldest form of insurance and came first in the list. This type of
insurance probably began in northern Italy sometime during the 12th & 13th century
and gradually the concept was rather transferred to or taken over by the United
Kingdom. During the 13th / 14th century the Italian merchants went to UK and
along with the merchandise carried with them the trading customs including the
concept of marine insurance. Marine insurance as such was not being practiced as a
separate specialized entity during that time since it were the merchants who used to
transact marine insurance business side by side with their general trading activities.

Fire Insurance:

After marine insurance fire insurance developed in present form. It had been
observed in Anglo-section Guild form for the first time where the victims of the fire
hazards were given personal assistance by providing necessaries of life. It had been
originated in Germany in the beginning of sixteenth century. The fire insurance got
momentum in England after the great fire in 1666 when the fire losses were
tremendous.
Life Insurance:

The third in the list of development is the life insurance business. The earliest policy
of which there is a record dates back to 1583. During this period only short term
polices were used be issued meaning that only at the death of the life assured during
the term period the money was to be paid. On survival nothing was payable. In 1693
Halley introduced the mortality table giving a definite value to risk of death. In
1974, the life Assurance Act was passed in the British parliament requiring the
presence of insurable interest before one could affect a life policy on the life of
another. All these gradually gave life assurance a sound, systematic and scientific
basis as we see in the present day.

Development of Insurance in Dhangadhi

Insurance is not a new idea or proposition to the people of Dhangadhi. About half a
century back, during the British rule in the then India, some insurance companies
started transacting insurance business, particularly life in this part of the world.
Since 1947 until 1971 insurance business gained momentum in this part of what was
then known as East Pakistan. There were about 49 companies transacting both life
and general insurance business. These companies were of various origins like
British, Australian, Indian, West Pakistani and East Pakistani. Except a few
companies these were mostly limited liability companies acting under a free
competitive economy. With the emergence of the People’s Republic of Dhangadhi,
the government in order to make available the fruit of liberation to the general mass,
nationalized the insurance industry in 1972 by presidential order no 95 more
specially known as the Dhangadhi insurance (Nationalization) order 1972.

By virtue of the order, save and except postal life insurance and foreign life
insurance companies (other than the Pakistani companies), all companies and
organizations transacting all types of insurance business in this country came under
this nationalization. Five insurance corporations were basically established, Viz.

i) Jatiya Bima Corporation

ii) Teesta Bima Corporation

iii) Karnaphuli Bima Corporation

iv) Rupsa Jibon Bima Corporation

v) Surma Jiban Bima Corporation

The Jatiya Bima Corporation was not an underwriting corporation, actually, it was a
central corporation to supervise and control the activities of the remaining four
subsidiary corporations. As per this order Teesta and Karnaphuli were made
responsible for general insurance business and Rupsa and Surma were made
responsible for life insurance business. All the existing 49 companies were
merged with this 4 corporation whilst life companies or the life portion of a
composite company joined the Rupsa and Surma, the general companies or the
general portion of a composite company joined the Teesta and Karnaphuli.
Formation of two corporations Although the basic idea behind creating 2
corporations in each main branch was to encourage competition even under a
nationalized system, it was observed soon that the unnecessary administration
expenses for maintaining these two corporations in each front and are apex
institution.

Therefore, on 14th May, 1973 the structural arrangement under nationalization was
changed vide act VI 1973. The previous 5 corporation were abolished and instead 2
corporations were established, Viz.

i) Sadharan Bima Corporation

For transacting general insurance business only. The two general insurance
corporations were merged under it.

ii) Jibon Bima Corporation

For transacting life insurance business only. The two life insurance corporations
were merged under it. In the sector, postal life insurance business and corporation of
life business by foreign companies (other than Pakistan) are still permitted as before.
This is the present structure under which the insurance business in transacted in this
country. Insurance is not altogether a new idea in this country, but somehow it could
not flourish much. Now however, there is enough provision for tapping the untapped
resource and potentialities. During the Pakistan or Pre-Pakistan period this market
was basically a production market dealing only in limited conventional types of
insurance business both in life and general. Consideration used to be missing as to
what type of policy would suit best the requirement of the people. Hence, even
though there was tremendous growth prospect, it never gained momentum in the
past. Lake of proper technical know-how of the insurance personnel and the general
ignorance of the public as to the importance of insurance business were also partly
responsible for extremely slow growth of insurance activities in the past.

It should be remembered by the students that the insurance industry had to pass
through a number of difficult during the initial stages after nationalization. However,
the handicaps were kept under constant review by the government on the
management of the industry and remedies are gradually being implements to
accelerate the growth and progress.

i) Risk of Entry by Potential Competitors:

The change of entry by potential competitors depends on the barriers to entry. The
higher the barriers are, the lower is the chance to entry by the potential competitors.
In this respect, Dhangadhi government has not given permission to establish any
insurance company except ALICO. As such, the insurance companies of Dhangadhi
are enjoying better facilities and benefits, but to allow the foreign insurance
companies are dependable on the wishes of Dhangadhi government. So our own
insurance companies are always remaining anxious if Dhangadhi government
permits insurance companies of foreign countries, then they will be in the face of
hard competition.

ii) Rivalry Among Establish Companies:

The extent of rivalry depends on the function of three factors, such as, a)
competitive structure, b) Demand conditions and c) Exit barriers. Competitive
structure refers to the number and size of companies in an industry. Structures vary
from fragmented to consolidate. Growing demand is good for existing companies
because it gives opportunities to the existing companies to expand operation. Exit
barriers could be economic, strategic and even emotional. In the light of above
discussion the insurance companies of Dhangadhi are better in their competitive
structure, demand condition, but the spoken in the last exit least number of barrier.
iii) Bargaining Power of Buyer:

Buyers can be viewed as a competitive threat when they force down prices or
demand higher quality products and better services. Alternatively weak buyers give
a company the opportunity to raise prices and earn greater profits. The bargaining
power of the policy holders of insurance companies of Dhangadhi are mostly
limited. As such they are enjoying better facilities.

iv) Bargaining Power of Supplier:

Suppliers are most powerful in the following circumstances-

 When the product that suppliers sell has few substitutes and is important to the
company.

 When the company’s industry is not an important customer to the suppliers.

Above stated factors are not a matter of thread for the insurance companies of
Dhangadhi.

v) Threat of Substitute Products:

When there are close substitutes, they pose strong competitive threat. It results in
reduction in price by limiting profitability. In this regard the insurance companies of
Dhangadhi are mostly in safe condition, As insurance is the substitute of its own
itself.
 CHAPTER III

What is insurance?

Insurance is the equitable transfer of the risk of a loss, from one entity to another in
exchange for payment. It is a form of risk management primarily used to hedge
against the risk of a contingent, uncertain loss. An insurer, or insurance carrier, is a
company selling the insurance; the insured, or policyholder, is the person or entity
buying the insurance policy. The amount of money to be charged for a certain
amount of insurance coverage is called the premium. Risk management, the practice
of appraising and controlling risk, has evolved as a discrete field of study and
practice.

The transaction involves the insured assuming a guaranteed and known relatively
small loss in the form of payment to the insurer in exchange for the insurer's promise
to compensate (indemnify) the insured in the case of a financial (personal) loss. The
insured receives a contract, called the insurance policy, which details the conditions
and circumstances under which the insured will be financially compensated.

nsurance

Auto insurance

Auto insurance protects the policyholder against financial loss in the event of an
incident involving a vehicle they own, such as in a traffic collision.

Coverage typically includes:

 Property coverage, for damage or theft of the car.

 Liability coverage, for the legal responsibility to others for bodily injury
or property damage.

 Medical coverage, for the cost of treating injuries, rehabilitation and

sometimes

lost wages and funeral expenses.

Gap insurance

Gap insurance covers the excess amount on your auto loan in an instance where your
insurance company does not cover the entire loan. Depending on the companies
specific policies it might or might not cover the deductible as well. This coverage is
marketed for those who put low down payments, have high interest rates on their
loans, and those with 60 month or longer terms. Gap insurance is typically offered
by the finance company when any person first purchase his/her vehicle. Most auto
insurance companies offer this coverage to consumers as well.

Health insurance

Health insurance policies cover the cost of medical treatments. Dental insurance,
like medical insurance, protects policyholders for dental costs. In most developed
countries, all citizens receive some health coverage from their governments, paid for
by taxation. In most countries, health insurance is often part of an employer's
benefits.

Accident, sickness, and unemployment insurance

Disability insurance policies provide financial support in the event of the

policyholder becoming unable to work because of disabling illness or injury. It
provides monthly support to pay such obligations as mortgage loans and credit
cards. Short-term and long-term disability policies are available to individuals, but
considering the expense, long-term policies are generally obtained only by those
with at least six-figure incomes, such as doctors, lawyers, etc. Short-term disability
insurance covers a person for a period typically up to six months, paying a stipend
each month to cover medical bills and other necessities.

Long-term disability insurance covers an individual's expenses for the long term, up
until such time as they are considered permanently disabled and thereafter.
Insurance companies will often try to encourage the person back into employment in
preference to and before declaring them unable to work at all and therefore totally
disabled.
 Casualty insurance

Casualty insurance insures against accidents, not necessarily tied to any specific
property. It is a broad spectrum of insurance that a number of other types of
insurance could be classified, such as auto, workers compensation, and some
liability insurances.

Life insurance

Life insurance provides a monetary benefit to a decedent's family or other

designated beneficiary, and may specifically provide for income to an insured
person's family, burial, funeral and other final expenses. Life insurance policies
often allow the option of having the proceeds paid to the beneficiary either in a lump
sum cash payment or an annuity. In most states, a person cannot purchase a policy
on another person without their knowledge.

Property insurance

Property insurance provides protection against risks to property, such as fire, theft or
weather damage. This may include specialized forms of insurance such as fire
insurance, flood insurance, earthquake insurance, home insurance, inland marine
insurance or boiler insurance.

What is life insurance?

Life insurance (or commonly life assurance, especially in the Commonwealth) is a

contract between an insured (insurance policy holder) and an insurer or assurer,
where the insurer promises to pay a designated beneficiary a sum of money (the
"benefits") in exchange for a premium, upon the death of the insured person.
Depending on the contract, other events such as terminal illness or critical illness
can also trigger payment. The policy holder typically pays a premium, either
regularly or as one lump sum. Other expenses (such as funeral expenses) can also be
included in the benefits.

Life policies are legal contracts and the terms of the contract describe the limitations
of the insured events. Specific exclusions are often written into the contract to limit
the liability of the insurer; common examples are claims relating to suicide, fraud,
war, riot, and civil commotion.
 Life-based contracts tend to fall into two major categories:

 Protection policies – designed to provide a benefit, typically a lump sum

payment, in the event of specified event. A common form of a protection
policy design is term insurance.

 Investment policies – where the main objective is to facilitate the growth of

capital by regular or single premiums. Common forms (in the U.S.) are whole
life, universal life, and variable life policies.

Reasons that's why people buy life insurance policies

 To protect their family if they lose a job or change jobs that had provided
life insurance.

 To pay for funeral expenses, loans or any outstanding debt.

 To cover their children's' future education expenses if they are not there
to provide.

 To provide funds for their family to pay off a home mortgage.

 To protect a business by letting partner/beneficiaries buy out a deceased

partner's business interests.

 To set an example of responsibility and family values for their children.

 To provide child care or elder care for aging parents if the top
caregiver/provider passes away.

 To provide peace of mind for their loved ones in uncertain financial times.

 To comfort their loved ones in a difficult time of loss and grief.

 They do it for love. To insure those they love the most by leaving them a
legacy of their life.
Advantages of Life Insurance

 Life insurance provides an infusion of cash for dealing with the adverse
financial consequences of the insured's death.

 Life insurance enjoys favorable tax treatment unlike any other

financial instrument.

 Death benefits are generally income-tax-free to the beneficiary.

 Death benefits may be estate-tax free if the policy is owned properly.

 Cash values grow tax deferred during the insured's lifetime.

 Cash value withdrawals are treated on a first-in-first-out (FIFO) basis,

therefore cash value withdrawals up to the total premiums paid are generally
income-tax free.

 Policy loans are income tax free.

 A life insurance policy may be exchanged for another life insurance policy (or
for an annuity) without incurring current taxation.

Disadvantages of Life Insurance

 Policyholders forego some current expenditure to pay policy premiums.

Moreover, life insurance is typically purchased for the benefit of others and
usually only indirectly for the insured person.

 Cash surrender values are usually less than the premiums paid in the first
several

policy years and sometimes a policy owner may not recover the premiums
paid if the policy is surrendered.

 The life insurance purchase decision and the positioning of the life insurance
can

be complex especially if the insurance is for estate planning, business

situations or complex family situations.
 The life insurance acquisition process can be annoying and perplexing (e.g.
Is the

life insurance agent trustworthy? Is this the right product and carrier? How
can medical underwriting be streamlined?).
 CHAPTER IV

RECOMMENDATION & CONCLUSION

Recommendation

There is no social recognition of insurance sector in Dhangadhi, due to lack of

proper management in quality of customer service. So they should be firmly believe
their profitability, growth and market share of business depend on their quality of
customer service. In their customer service, they should focus on the following:

1. Relevant authorities in collaboration with supportive agencies may provide

training to the life insurance producers like agents, development officers and the
like to improve their insurance marketing skills regarding creation of new
business, retention of the existing business and popularizing the life insurance
programs to the target groups.

2. Trained and skilled insurance producers like agents and development officers are
prerequisites of effective insurance product marketing in the life sector but they
are found lacking.

3. Research and development program yet to get adequate attention. But adequate
research may lead towards the target of success and fulfillment. Life insurance
companies in Dhangadhi should actively consider undertaking of research and
development programs in the fields of consumer research, service research and
research in service marketing policies and strategies etc.

4. In order to exercise smooth marketing practices in the life insurance products

marketing, existing insurance laws seem to be inadequate. Therefore it is thought
imperative that necessary legal reforms are made in the existing insurance laws
including those relating to life sector.

5. There should not be so many layers in life insurance companies between the
branch office and the agents and one field officer in between the corporation and
the agents should replace this unnecessary multi-tier organizational set up. This
is essential for reducing the expenses that has gone beyond the tolerable limit.
Special committee on insurance has also suggested this.
6. Fake agents such as ‘Benami Agents’, ‘Dummy Agents’ and ‘Benami employers
of Agents’ who indulge in malpractices should be eliminated and selection of
agents should be unbiased. Appointment of too many agents in a particular area
should be stopped. Fulltime agencies should be encouraged and part-time
agencies should be stopped.

7. There should be vigorous campaign throughout the country to make the people
aware of the utility and prospects of buying insurance.

8. The government should monitor the functions of insurance companies, appraise

their performance, and seize the license of companies that are engaged in
corruption.

The government must take controlling responsibility in its own hands and must
ensure proper application of law.

1. The benefits of insurance should not be concentrated only in the urban areas. For
the sake of integrated and balanced development, companies should expand their
operations in the rural areas.

2. Companies should set up its training program for the policyholders. The
insurance academy is used for training the officers and insurance personnel but it
has so far neglected the training of policyholders for which claim submission
become complex and problematic resulting in delays in claim settlement.

3. The government should eliminate the difficulty in licensing procedure and

should not delay in the approval of new companies if all the requirements are
fulfilled. It will help not only to increase volume of business but also solve the
problem of unemployment.

4. The policy holders are very much worried about the settlement of claims.
Ordinary people also consider it as a prime constraint. Therefore, insurance
companies should settle the claims as quickly as possible to create a healthy
public image. For this purpose the claim settlement procedure can be simplified
and the insurers can provide proper written guidelines of claim settlement to the
policyholders.

5. Since life insurance business is not popular among low-income groups, the life
 insurers should pay special attention to industrial labor force, which ultimately
will have greater mobility among rural people.

Conclusion

Insurance business is only commercial but it has become professional now.

Knowledge of insurance is as much essential as trading business for the society.
Privatization of Insurance business has added more significations for the people. The
prospects of insurance in the first years of the next millennium decide the direction
of insurance management. Safety, security and investment have become need of the
present society people, now, demand insurance as compared to the previous attitude
of selling insurance to people. They have become selective and practical. Insurance
industry has to meet the expectations of people.

Though Surya Life Insurance Company has some negative aspects, but the customer
satisfaction rate is more than any other insurance companies in Dhangadhi. Day by
day, they are trying to improve their situation. And, the company is committed to its
customers for providing better services. Here Surya Life insurance company limited
could improve its marketing strategy for customer satisfaction. Overall, we can see
that Surya Life Insurance Company limited is one of the progressive Insurance
Companies in Dhangadhi for its servicing and its better performance.
 Reference

M.N Mishra, "Insurance: Principles and Practice", 10th edition, S. Chand &
Co(2002-2003); page 23-87.

Philip Kotler and Garry Armstrong , "Principles of Marketing" 13th edition,

Prentice–Hall(2010-2011); page 190-222.

Philip Kotler & Kevin Keller, "Marketing Management", 12th edition, Prentice–
Hall(2006); page 17-55.

http://www.google.com

http://www.scribd.com

http://www.popularlifeins.com

http://www.jbc.com.bd
Appendix