A RESEARCH PAPER

ON

STUDY ON CONSUMER PERCEPTION TOWARDS

LIFE INSURANCE POLICIES

NAME OF THE RESEARCH STUDENT: ANISH BHIVA AVHAD

ROLL NO: 63

CLASS: SYBMS ( B)

Abstract
INDIA INSURANCE is flourishing industry, with several national and international players
competing and growing at rapid rates. Thanks to reform and the easing of policy regulations,
the Indian sector been allowed to flourish, and as Indians become more familiar with
different insurance products, this growth can only increase, with period from 2010-2015
projected to be the ‘‘Golden Age’’ for the Indian insurance industry. Together with banking
service, it contributes to about 7% to the country’s GDP. This lifted entry restrictions for
private players and allowed foreign partners to enter the market with some limits on direct
foreign ownership. There was 26% equity capital for foreign partners in an insurance
company and now itincrease to this limit 49%. The opening up of the insurance sector has led
to the rapid growth of the sector.The potential for growth of insurance industry in India is
immense as nearly 70% of Indian population is without life insurance cover while health
insurance and non-life insurance continues to be well below international standards. The
insurance sector in India has come up with a full circle from being an open competitive
market to nationalization back to a liberalized market again.

Review of literature

of LIC An Appraisal', opines "there appears to be considerable force behind the argument for
splitting up the Corporation. The setting up of five autonomous corporations cannot be

considered as going back on nationalization because the nature of competition prevailing in

the pre-nationalizations period is very much different from the type of healthy competitive
spirit that would develop if several independent corporations are set up." Establishment of
autonomous
corporations would promote healthy competition among them with regard to procurement of
new business, competitive premium rates, attractive bonus payments and effective after sales
service.

Era Sezhiyan Committee (1980) recommended splitting of LIC into five The Administrative
Reforms Committee (1968), which considered the issue of breaking up of LIC into
autonomous corporations, expressed preference for a single corporation with delegation of
more powers to branch offices. The report stated that the Corporation has taken a definite
shape and it is better to make improvements in the Corporation in stead of splitting it with the
expectation of increase in efficiency.

The Morarla Committee (1969) favored retention of the unitary structure but recommended
decentralization of powers. The Government accepted these recommendations and LIC
continued as a monopoly.

Dr. B.S.R. Rao [1976], in his book titled 'Functioning independent noncompeting
corporations. The committee was convinced that "the present unitary structure had been a
major factor inhibiting the progress".

The Finance Minister R. Venkatraman, in the budget speech (1981) announced the
Government's intention to split LIC into five independent units. The Finance insister said,
"We have decided to undertake a major reorganization of LIC of India in order to strengthen
its ability to meet challenges in future. The Corporation has an impressive record of
extending insurance service to the community. In the process, it has grown considerably in
size. It has, therefore, become desirable to restructure the Corporation into more manageable
units in the interest of operational efficiency and also to allow an element of healthy
competition." Due to vociferous opposition in the Parliament, the Bill for this purpose was
referred in December 1983 to Joint Select Committee of the House. The Joint Select
Committee stated, "in light of historical background, the stage has come when this idea of
setting up manageable units has to be implemented and given practical shape".

On the constitution of 10th Lol Sabha (1991), the Government of India declared it was not
proceeding with the Bill. Thus, in spite of recommendations from various segments for the
introduction of competition, LIC continued with its monopoly in the life insurance sector.
The phased globalization of Indian economy, started in nineties, began having its impact on
the monolithic structure of the LIC. In furtherance of the initiatives in the area of financial
sector reforms covering banking system and financial markets, it was considered desirable to
introduce reforms in the insurance sector also. The Government of India appointed a
committee on Reforms in the Insurance Sector (Malhotra Committee) in April, 1993, under
the chairmanship of Shri R. N. Malhotra. This may be called a first step towards liberalization
of the life insurance sector. Malhotra Committee Report submitted in 1994 starts wilt the
historical perspective of the insurance sector. It goes through nationalization of life insurance
and establishment of Life Insurance Corporation of India. Further it has a review of the
performance of LIC of India and finally the recommendation for liberalization of the
insurance sector. The Committee in its report clearly wanted monopoly of public sector to go
with the opening of insurance sector for private players. The objective being "introduction of
competition should result in better customer services, and help improve the variety and price
of insurance products.

Alinvi and Babri (2007):- The study was specifically conducted on young consumers from
18-27 years. In their article tried to find answer to question how could insurance company
enhance their ability of constant changes in customer preference in an increasingly
competitive environment. In this theory they found income flow, age, family size as
significant determinant, information about product and services also affect consumer
preference, options of products and services i.e. customer choice along with time play
important role. Through this study it was concluded that price is a decisive factor for young
customers of insurance services. We also concluded that there exists unawareness among
young people about the services provided by insurance companies, as well as afraid of being
fooled or tricked by telemarketers representing insurance companies. Thus they demand more
of information. While internet is their primarysource of awareness but they prefer personal
contacts too while taking the decision. However, it was concluded that most respondents
showed a tendency to change their preferences over their life-time, as their life circumstances
would change.

Statement of problem
The study will help us to understand the consumer’s perception about life insurance policies
and it will also help the companies to understand, How consumer selects, what they looks for
and organizes the product/plan offered by life insurance companies. The problem tries to
identify the Investors perception and their preferred attributes while investing or purchasing a
life insurance policy.

Objectives
1. To study the awareness level of customers towards life insurance policies.
2. To know the attributes that customers prefer while purchasing a life insurance policy.
3. To study the perception and satisfaction level of customers with respect to private and
public insurers.

Scope of the study

The study is based on the survey and is confined to South Mumbai only

The study covers the information about,

a) The awareness level about insurance policies.
Research hypothesis
1.To study the awareness level of customers towards life insurance policies.
H1) Maximum people are aware about the life insurance policies.
a) H2) Maximum The preferences and perception of customers
regarding life insurance.
b) It also includes the satisfaction level of customers with their current insurance company’s
product and services.

Limitations
● The time is not sufficient to meet all the investors.
● Respondent’s suggestions may or may not be correct.
● Researchers don’t have experience.
● Factors considered in the questionnaire may or may not be sufficient. ● Sample size
is too low to get the proper information.

people are not aware about the life insurance policies.

2.To know the attributes that customers prefer while purchasing a life insurance policy.
(H1) There are significant attributes that customers prefer.
(H0) There are no significant attributes that customers prefer.

3.To study the perception and satisfaction level of customers with respect to private and
public insurers.
(H1) Maximum people are highly satisfied with product or service offered by their insurers.
(H0) Maximum people are not highly satisfied with product or service offered by their
insurers.

Research methodology

SAMPLE SIZE:- Large sample give more reliable result than smalls sample, so far this
reason I had taken around 50 peoples with whom the survey was conducted to get and
understanding of the respondents satisfaction level towards the different insurance brands.

Methods of data collection

DESCRIPTION OF RESEARCH
Marketing Research design specify the procedure for conducting a research project. The
survey is conducted with the objective to know the Customer Awareness, Perception and
Attitude towards Life Insurance policies.
In this two types of research are
used:1.DESCRIPTIVE RESEARCH
Descriptive research is used to collect various information from customer to study the
Awareness, Perception and Attitude, Opinion with Life Insurance.

2.EXPLORATORY RESEARCH
Exploratory research is concerned with discovering the general nature of the problem and the
bo
Result and dicussion
Conclusion
From past two decades it has been seen that service sector is the highest growing sector in
India and projected to have high growth in future. A major contributor in this emerging
service sector is the insurance sector which plays an important role in improving financial
intermediation, creating liquidity and mobilizing savings in the country. LIC has been
maintained its monopoly in insurance sector from past many years but after the liberalisation
many new insurance companies have entered this business.Majority of policy holder’s most
preferred attributes while purchasing a life insurance is the maturity of the policy and the
annual premium amount. Thus study also showed that brand/company image is also the
important attributes that consumers consider while purchasing a life insurance.
After conducting the whole study it has been concluded that 100 % respondents are aware of
about life insurance, and majority of respondents are satisfied towards services offered by
their respective life insurers.Of those who are dissatisfied with services the major reason may
be the large amount of premiums paid.After conducting the whole study have been found that
ULIP plans are not popular among the respondents, almost all respondents are not aware of
ULIP plans. People must invest more in these plans to get the benefit of investment along
with insurance.
Even after privatisation the share of private sector is very low thus private sector should try to
win the trust of investors. They must offer new and innovative products to build better
customer relationships.

References

● https://www.wikipedia.org

● ttps://ww w.policybazaar.com

● www.irda.com