TABLE OF CONTENT

(I)Executive Summary 1. Introduction Overview of industry as a whole Profile of the company SWOT Analysis of the organization

2. Research methodology Objective & Scope of study Type of Research and Research Design Data Collection Method

3. Data Analysis Method and Techniques of data analysis Primary Data Analysis Secondary Data Analysis

4. Findings and Suggestions.

Bibliography Appendix Questionnaires

EXECUTIVE SUMMARY
The objective of the Research project Empirical Study on Growth of Life Insurance Industry in India were to find the Reasons for the growth of insurance market and identify those reasons resulting in the lapse of the insurance policies. Further to find Reasons of the lapsation of the policies we have fulfilled this objective with the help of the questionnaire and data interpretation.

Based on the data lack of knowledge and agents non-response to the customers with respect to mis-selling of insurance products without considering the requirement of the customers are the main reasons for the lapsation of the policies. This analysis satisfies our last objective where comparison of public and private was done by us to analyse on the basis of Number of policies issued and premium collection.

Public players are issuing less number of policy then those of the private players whereas they are collecting more premium then those of the private sector life insurance players. The reason for which Public players are growing & also holding a major portion of the total market is just because it is owned by the government of India, people rely & trust it. The past studies & future projections reveals that the INDIAN LIFE INSURANCE SECTOR has a growth potential of 30 % each year.

The main reasons of the lapse occurrence of the life insurance is because of the lack of financial resources, agent did not turned up once after selling the product to customer and as well the Company also did not reminded of the life insurance premium to be paid by the 2

customer. The awareness regarding the consequences of lapse of life insurance products is more in males then those of females.

Further also the customers are overcharged with the commission charges leading to the dissatisfaction in them. There is inverse relationship between the performance of public & private players of Life Insurance Industry in INDIA. Agents miss-selling attitude is leading towards the increment in the lapsation of Life Insurance Industry / Product.

CHAPTER - 1 INTRODUCTION
Overview of industry as a whole Profile of the company SWOT Analysis of the organization

INTRODUCTION
Life insurance is a contract for the payment of a sum of money to a person assured on happening of the event ensured against. Usually the contracts provide for the payment of the amount on a date of maturity or at a specified date at periodic intervals or at unfortunate death, if it occurs earlier. Life insurance is universally acknowledged to be an institution, which eliminates 'risk', substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of death of breadwinner. Life insurance is civilizations partial solution to the problems that caused by death. In short, life insurance is concerned with two hazards that stand across the life-path of every person:1. That of dying prematurely is leaving a dependent family to fend for itself 2. That of living till old age without visible means of support.

OVERVIEW OF INDUSTRY AS A WHOLE

Indias life insurance market has grown rapidly over the past six years, with new business premiums growing at over 40% per year. The premium income of Indias life insurance market is set to double by 2012 on better penetration and higher incomes. Insurance penetration in India is currently about 4% of its GDP, much lower than the developed market level of 6-9%. In several segments of the population, the penetration is lower than potential. For example, in urban areas, the penetration of life insurance in the mass market is about 65%, and its considerably less in the low-income unbanked segment. In rural areas, life 4

insurance penetration in the banked segment is estimated to be about 40%, while it is marginal at best in the unbanked segment. The total premium could go up to $80-100 billion by 2012 from the present $40 billion as higher per capita income increases per capita insurance intensity. The average household premium will rise to Rs 3,000-4,100 from the current Rs 1,300 as will penetration by the existing and new players. Indias ratio of life insurance premium to its GDP is around 4 per cent against 6-9 per cent in the developed world. It could rise to 5.1-6.2 by 2012 in tandem with the countrys demographic profile. India has 17 life insurers and the state owned Life Insurance Corp. of India dominates the industry with over 70 percent market share, though private players have been growing aggressively. Considering the worlds largest population and an annual growth rate of nearly 7 per cent, India offers great opportunities for insurers. US based online insurance company ebix.com plans to enter the Indian market following deregulation of its insurance sector. Online insurer ebix.coms expansion into India is a major step for the company to become a global supplier of internet-based insurance tools for consumers and insurance professionals. Characteristics Sharing of risks Cooperative device Evaluation of risk Payment on happening of a special event The amount of payment depends on the nature of losses incurred. The success of insurance business depends on the large number of people insured against similar risk. Insurance is a plan, which spreads the risk and losses of few people among a large number of people. The insurance is a plan in which the insured transfers his risk on the insurer. Insurance is a legal contract which is based upon certain principles of insurance which includes utmost good faith, insurable interest, contribution, indemnity, causes proxima, subrogation, etc. The scope of insurance is much wider and extensive.

HISTORY 5

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. 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 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 as a disadvantage.

PROFILE OF THE COMPANY

HISTORY The origins Life Company back group to of of Metropolitan Insurance (MetLife) go 1863, when a New York City raised $100,000 National Union Limb Company. The

businessmen to found the Life and Insurance

new company insured Civil War sailors and soldiers against disabilities due to wartime wounds, accidents, and sickness. In 1868, after several reorganizations and five difficult years, the company decided to focus on the life insurance business. A new company was chartered to sell "ordinary" insurance to the middle class.

1868 March 25, one day after the Company opened its books, the first policy carrying the name of the Metropolitan Life Insurance Company was issued. Dr. James R. Dow, a retired physician from Brooklyn, NY, was named Metropolitan Lifes first President. He held this position until 1871. The Companys office consisted of two and a half rooms; it was located at 243 Broadway in Lower Manhattan. By the close of business in 1868, the Company had issued 1,477 policies for $4,340,000.

METLIFE (INDIA) MetLife India Insurance Company Limited (MetLife) is an affiliate of MetLife, Inc. and was incorporated as a joint venture between MetLife International Holdings, Inc., The Jammu and Kashmir Bank, M. Pallonji and Co. Private Limited and other private investors. MetLife is one of the fastest growing life insurance companies in the country. It serves its customers by offering a range of innovative products to individuals and group customers at more than 600 locations through its bank partners and company-owned offices. MetLife has more than 50,000 Financial Advisors, who help customers achieve peace of mind across the length and breadth of the country. MetLife, Inc., through its affiliates, reaches more than 70 million customers in the Americas, Asia Pacific and Europe. Affiliated companies, outside of India, include the number one life insurer in the United States (based on life insurance inforce), with over 140 years of experience and relationships with more than 90 of the top one hundred FORTUNE 500 companies. The MetLife companies offer life insurance, annuities, automobile and home insurance, retail banking and other financial services to individuals, as well as group 8

insurance, reinsurance and retirement and savings products and services to corporations and other institutions. The MetLife companies offer life insurance, annuities, auto and home insurance, retail banking and other financial services to individuals, as well as group insurance and retirement & savings products and services to corporations and other institutions. Vision and Mission Build financial freedom for all through leadership in providing financial advice and building long-term relationships through innovative protection, accumulation and retirement products, robust underwriting processes and creating world-class customer service experience for our customers. We want to provide customers in India with world-class solutions for financial security, and in the process add significant value to our shareholders, associates and society.

Functions of insurance: Primary functions: 1. Provide protection: - Insurance cannot check the happening of the risk, but can provide for the losses of risk. 2. Collective bearing of risk: - Insurance is a device to share the financial losses of few among many others. 3. Assessment of risk: - Insurance determines the probable volume of risk by evaluating various factors that give rise to risk. 4. Provide certainty: - Insurance is a device, which helps to change from uncertainty to certainty.

Secondary functions: 9

1. Prevention of losses: - Insurance cautions businessman and individuals to adopt suitable device to prevent unfortunate consequences of risk by observing safety instructions. 2. Small capital to cover large risks: - Insurance relives the businessman from security investment, by paying small amount of insurance against larger risks and uncertainty. 3. Contributes towards development of larger industries. Other Function: Means of savings and investment: Insurance companies are business houses. The product they sell is financial protection. To succeed and survive, they must cover their costs, which include payments to cover the losses of policyholders, as well as sales and administrative expenses, taxes and dividends.

SWOT ANALYSIS
STRENGTHS 1. With over 139 years of experience MetLife have approximately US $ 3.3 trillion of life insurance in force. 2. Brand Image, Business Experience and Innovative products... 3. Large number of young workforce .The 40K agents which are very selectively chosen 4. Service quality which is the crux of their mission. 5. Has tie up with banks like Axis, J&K, Barclays, Karnataka Bank and Dhanalakshmi bank. 6. Very less charge on ULIP plans as compare to other insurance players. WEAKNESS 1. Many competitors in the market of same products by the title and difference in premium and offerings.

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2. Very less network branches due to which its difficult for customer to make payment easily. 3. Not focusing on consumer awareness mainly concentrating on personal selling. 4. More focusing in urban areas not touching rural area which has a very good potential market for insurance sector. 5. Lacking in advertisement due to which they are not able to cover a large area or large no of customer. OPPORTUNITY 1. Huge market is literally untapped. Out of estimated 320 million insurable markets only 20% of the population is insured. 2. Health insurance and pension schemes, an estimated market potential of approximately $ 15 billion. 3. Nearly 70% of the Indian population is without Life, Health, and Non-Life insurance. 4. Per Capita life insurance premium in India in 2004 was $16 as compared to the world average of $ 292. 5. Strong economic growth with increase in affluence and rising risk awareness leading to rapid growth in the Insurance sector. THREATS 1. Players like Bajaj and Birla sun life offer same plans with low premiums. 2. Entry of many other private companies with equally strong experience and financial strength of foreign partners making the competition difficult and saturating the urban markets (example; idbi fortis insurance, Bharti axa insurance and more.) 3. Current govt. policies do not encourage gross domestic savings. If the tax liability of the service class rises, the customer will have little money to invest. 4. Lic has woken up from sleep and is following competitive strategies. Its huge surplus in life fund gives a capability to lodge price war.

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CHAPTER - 2 RESEARCH METHODOLOGY

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Objective & Scope of study Managerial usefulness of study Type of Research and Research Design Data Collection Method

OBJECTIVES & SCOPE OF THE STUDY

OBJECTIVE: The Notion behind carrying out this study is to gain insight in Life Insurance Industry. The major objectives behind carrying out this study were: 1. To identify reasons resulting in lapse occurrence in the life insurance sector. 2. To examine the reasons resulting in growing market for life insurance industry. 3. To compare the performance of public vs. private sector on the basis of premium collection and new policies issued. SCOPE: 1. The scope of the study is confined to the public and the private players of life insurance industry. The study is emphasizing on the growth of life insurance market.

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It will help in identifying the factors resulting in changes in the industry leading to significant and continuous growth of life insurance industry.

MANAGERIAL USEFULLNESS OF THE STUDY:

The study would cater to the needs of the customer, company as well as the residents of the society as to know the factors resulting in the success/ failure of the company in terms of the accomplishment of the promises made to the customers, and in letting the general public of society know whether the companies are performing on the standard established by them.

TYPE OF RESEARCH AND RESEARCH DESIGN

Research Methodology The research is based upon descriptive research. Primary as well as Secondary sources of data collection have been adopted for the study. The relevant and required data are collected from the text books, national articles, RBI Bulletin (various issues) as well as annual reports of IRDA.

Type of Research
The nature of data which are collected and used for this research article is primary and secondary in nature. The research instruments used were personal interviews and response sheets. Research Design

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The research design which has been formed for this research is descriptive research design. DATA COLLECTION METHOD
Primary Data We gave some respondents to fill up the response sheets and some others response sheets were filled by asking questions by telephonic conversations. Secondary Data In our case secondary data were collected from: Information Brochures. On the job training Pamphlets. Textbooks. National articles

Sampling Design
We will prefer non probability sampling technique for our research as the choice of the companies is solely dependent on the reliability of the data source. Sample Unit For the purpose of primary data collection our sample unit comprises of the individuals whose insurance policies have lapsed. And for the purpose of secondary data our sample unit comprises of Public and Private Players in the life insurance industry Sample Size

15

For the purpose of primary data collection, the sample size constitutes 200 respondents. We distributed 200 questionnaires whereas we received back just 181 therefore after filtering those entire questionnaire we just had 161 questionnaires available with us.

LIMITATIONS OF STUDY
The limitation or the problem we faced during the project are Restrictive analysis is conducted due to the shortage of the time allotted to the study period. Lack of experience may lead to some mistakes. Response Error that can be committed by the biased respondent or in-accurate responses by the respondents which may lead to misinterpretation of data. Study confined to the state of Delhi in identifying reasons of lapse occurrence might not give overall and accurate results that can lead to generalization for the whole country. 16

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Chapter - 3 DATA ANALYSIS

ASSESSMENT OF VARIABLES CAUSING LAPSE OCCURRENCE TABLE 3.1:-CATEGORISATION OF NUMBER OF RESPONDENTS ON THE BASIS OF THEIR INCOME LEVEL income <2,50,000 2,50,0005,00,000 no. of 92 45 5,00,0007,50,000 19 7,50,00010,00,000 1 3 >10,00,000

respondents 18

INTERPRETATION:-According to the data it is analysed that the respondents who have income between 5, 00,000-7, and 50,000 have more lapse cases. It amounts to 57% of the total respondents. Very less people whose income is between 7, 50,000-10, 00,000 have lapse of their policies i.e. 28%.This reflects that financial constraint cant not affect much there are many other reason for lapsation of policies. TABLE 3.2:- CATEGORISATION OF RESPONDENTS ON THE BASIS OF THEIR OCCUPATION. Occupation no. respondents service of 38 business 33 self employed 17 Other 72

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INTERPRETATION:-According to the above data is analysed that service and business class people have less policy lapse than people belonging to other class i.e. 72 respondents out of 161 are from others group. Self-employed includes lesser people of lapsation of policies. Lack of knowledge and awareness or lacks of time can one of the reasons for policy lapse. TABLE 3.3:- CATEGORISATION OF NUMBER OF RESPONDENTS ON THE BASIS OF THEIR AGE. Age no. of respondents 18-30 73 31-40 59 41-50 26 >50 2

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INTERPRETATION:-From the data above it is analysed that most of the people are from the age group 18-30 who have lapse insurance policy. Very few people take life insurance policy at the age of 50 or above as there is a criterion for getting insured at an appropriate age. 73 out of 161 respondents are from 1st category and only 2 are from 4th category.

TABLE 3.4:- CATEGORISATION OF NUMBER OF RESPONDENTS ON THE BASIS OF THEIR GENDER. male Female 90 70

From the data above it is analysed that out of 161 respondents 56% of the people are male and 44% is female respondent i.e. 90 people are male which shows male plays a dominant role in this and they affect the life insurance industry to great extent. GRAPHICAL ANALYSIS OF QUESTIONNAIRE RESPONSES Q1) with which company have you insured your life?

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Public 68

Private 92

INTERPRETATION: - From the figure above we can analyse that out of 161 respondents 92 are from private sector and 68 are from public sector i.e. there is higher proportion in private sector as compared to public sector but if we go company wise distribution of insurance then LIC is at the top where alone 68 respondents have their insurance policies rest respondents are from different insurance companies like MetLife, Bajaj Alliance, Birla Sun Life etc. So from the above data it can be analyzed that public sector plays important role even after the emergence of new private companies. Q2) which type of policy have you taken? Term insurance Money Back Life Insurance Endowment Insurance Policy Whole Life Insurance Policy 31 44 25 29 22

ULIP

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INTERPRETATION: - According to the data analysed 28% of the respondents have taken money back life insurance policy taking into consideration that they will get their money back in future period.19% of the respondents go for term insurance and ULIP Plans as in term insurance there is fixed period of policy after that period one does have to pay the premium to the insurance company. There is less investment in endowment plans i.e. only 16% go for this plan. So we can say that people have their preferences according to their needs and taste. TABLE 3.5:- THE RELATIONSHIP BETWEEN GENDER & THE VARIABLES OF QUESTION NO. 2 Term MONEY ENDOWMENT WHOLE LIFE POLICY 16 13 29 UNIT LINKED POLICY 19 12 31

insurance BACK LIFE LIFE INSURANCE INSURANCE gender Total Male Female 17 14 31 25 20 45 13 12 25

INSURANCE INSURANCE

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INTERPRETATION:-The data above shows that higher degree of lapsation of policies is among the males rather than females. As we can see in money back life insurance policy there 25 male and 20 female who have lapsed policy. So we can say that males have dominant role in identifying the main reasons of lapse of policies and the growth of insurance industry. TABLE 3.6:- THE RELATIONSHIP BETWEEN THE AGE AND THE VARIABLES OF QUESTION NO .2 Term MONEY ENDOWMENT WHOLE LIFE POLICY 13 13 3 0 29 UNIT LINKED POLICY 16 10 4 1 31

insurance BACK LIFE LIFE INSURANCE INSURANCE age 18-30 31-40 41-50 >50 14 9 7 1 31 23 17 5 0 45 8 10 7 0 25

INSURANCE INSURANCE

Total

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INTERPRETATION: - This table shows the relationship between the age and the products in consideration to the lapse of policy. From the data above we can analyse that respondents from the age group between 18-30 have higher lapsation rate and more over money back life insurance product has highest lapse rate. Ignoring the age group of 50 above age group between 41-50 shows less lapsation of the policies it can be due to the reason of individuals turning mature and think all premiums are paid then why to lapse policy or may be highly satisfied. Q3) on whose reference did you take the policy? Relatives Agents On your own risk Others 35 69 47 9

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INTERPRETATION: - From the data it is very well cleared that most of the people take insurance policies on the faith and recommendation of the insurance agents i.e. 43% of the respondent are from this category. Less importance is given to others as this decision involves investment of money with risk which every individual can't take so only 6% of the respondent has gone for this option.29% of the respondents are those whose themselves want to go for insurance policies so they prefer their own judgement and analysis rather than others opinion and out of the sample size 22% respondents are those who rely on the relatives and take their suggestion for going on for any policy. Q4) what is the tenure of the policy taken? 5 years 10 years 20 years 30 years Above 30 years 21 61 55 13 10

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INTERPRETATION: - Most of the people have taken insurance policies for the period of 10-20 years so that their risk factor is covered up and they dont have to wait too long to the policy amount on the future date. Out of 161 respondents 61 respondents have taken 10 years policy and 55 have taken 20 years policy. This shows how much people are inclined towards this period; very less people prefer tenure of 30 years or above 30 years like for 5 years plans less people have preference.

Q5) which premium frequency option did you choose? Yearly Quarterly Half yearly Monthly 54 44 55 6

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INTERPRETATION: - From the data it is analysed that people prefer to pay premium halfyearly and yearly rather than monthly. It shows that people don't prefer to pay premium out of their monthly income rather wish to give premium out of their savings. Very few people go for monthly premium payment i.e. only 6 people out of 160 people go for this.44 people go for quarterly premium payment. Q6) Yes No is the product offered to you in accordance with the promise made by the 101 59

agent/company?

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INTERPRETATION; - Most of the people are satisfied with the product offered to them by the insurance companies. This shows that companies want to make clear dealing with their customers on fairground whatever product offering is made its up to the mark with the promise made by the company.101 out of 161 respondents are satisfied and 59 respondents are unsatisfied it can be due to some reasons as considered inappropriate to the requirements and actual promise made by the company. One of the reasons can be changing behaviour of the customer. Q7) how would you rate the solvency position of the company under which you are insured? Very low Low Neutral High Very high 4 24 63 57 12

INTERPRETATION: - From the data it is analysed that the respondents are satisfied with the solvency position of the companies.63 respondents have neutral views regarding the 29

position of the company with which they are insured.57 respondents give high rating to their insurance company. Only 4 respondents are not satisfied with the solvency position of the company. So companies should provide accurate data on the basis of which true position of the company can be judged. Q8) Why was a default in paying premium? No given 36 reminder agent turn up 36 did not financial problem 49 35 5 victim of mis-selling Others

INTERPRETATION: Thus from the above diagram it can be clearly seen and analyzed that as per the response of the 161 respondents the main reason that can be identified as the cause of default in making premium comprises of financial problems i.e., 31% respondents were undergoing some kind of personal financial crises, thereby having an effect that their policy lapsed. The second reason seems to be that the agents fall into practice of mis-selling which is later on identified by the customers and so they make a default in making premiums. Actually the other two reasons have also received an equal number of responses i.e., no reminder was given and the agent did not turn up. 30

Q9) To what degree are the expenses/commission charges in accordance with the disclosure made at the time of issuing the policy? Very high High Moderate Low Very low 12 73 55 16 5

INTERPRETATION: From the above diagram the inference can be easily drawn that out of 161 respondents whose policy have lapsed, 45% rate that the accordance level between the commissions and expenses charged and the disclosures made as high. Whereas 34% of them rate it as moderate and 10% are of the view that the level is low, 8% are of the view that this level of accordance is very high and last but not the least 3% feel that the degree of accordance level is very low. TABLE 4.7:- THE RELATIONSHIP BETWEEN THE QUESTION1 & QUESTION 9. Q1 LIC

BIRL

SBI

MetLife OTHERS

A SUN LIFE 31

LIFE Q9 VERY HIGH HIGH MODERATE LOW VERY LOW 3 32 28 4 1 68 2 12 4 3 1 22 2 8 9 2 1 22 5 13 11 3 2 34 0 8 3 4 0 15

Total

INTERPRETATION:If we go by the above chart we see that very high solvency ratio is rated for Bajaj alliance by maximum respondents. High rating is given to LIC by majority of respondents. Again majority of respondents feel that LIC solvency position is moderate n this number is even more than those rating it as high. Low rating is given maximum to other private companies. Finally Vey low rating is again given to Bajaj alliance. The trend shows that respondents have a mixed response but if we go by the rule of majority very high rating is given by them. Q10) Are you aware of the consequences of policy lapse? options Yes No No. of respondents 83 77

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INTERPRETATION: The above graph clearly shows that maximum number i.e., 83 out of 161 of respondents is aware of the consequences of lapsation of a policy. Otherwise this lead would lead to creation of an alarming situation for the insurance companies and their agents as it is their obligation to make all the clauses along with the consequences they might have to face in case they default in paying the premium, the grace period which will be allotted or what all penalties they would have to suffer in case of lapse of policy. Only 77 respondents are unaware of the consequences which are also a significant number and cannot be ignored. TABLE 4.8:- The relationship of the variables of question no. 10 with that of the gender. Q10 YES 53 30 83

gender Total

Male Female

NO 37 40 77

3 0 1 1

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INTERPRETATION: The chart clearly shows that male have more awareness regarding the consequences of lapse occurrence as compared to males. This shows the need for the companies to concentrate on the female market segment even so that both the groups are equally informed about ill effects of policy lapse and the rate of lapse can be lowered. Q 11) How long does it take to renew your lapsed policy? Time taken one month 2 months 3 months more than months No. of respondents 30 71 32 3 28

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INTERPRETATION: From the above diagram the inference can be easily drawn that out of 161 respondents whose policy have lapsed, 44% say that it takes 2 months for getting the lapsed policy renewed. 20% of the respondents are of the opinion rather they have experienced a time frame of 3 months for getting their lapsed policies renewed. Another 19% had the experience of being on a hold for only 1 month and the remaining 17% had to wait for more than 3 months for the procedure to get completed. Q12) Did you take up another policy after your previous policy lapsed? Option yes no No. of respondents 66 95

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INTERPRETATION: The above pie chart gives us a clear idea that the maximum percentage of respondents did not take up any new policy after their previous policy lapsed. This may be the reason because we have earlier identified that the most likely reason of lapsation was the personal financial crisis so the reason is obvious for not undergoing for another policy. Remaining 41% have gone up for other policies after their previous policy lapsed. Q13) is there any awareness activity being conducted by the insurance company for your benefit? Option yes no No. of respondents 113 48

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INTERPRETATION: From the above pie chart the response is obvious that 70% respondents have favoured the insurance companies by saying that yes the awareness activity is conducted by the companies. Only 30% respondents are not having a positive feedback in this regard.

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CHAPTER 4 FINDINGS, CONCLUSION AND SUGGESTIONS

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FINDINGS

From the analysis we can conclude the following Most of the customers are been sold the life insurance product which was either not required by them or was not catering to their need. Agents just because of their greediness to get more of commission have been cheating over customer. The mis-selling of insurance products has directed the customer perception of life insurance towards a bit of negative way. Maximum of the Life Insurance products are been sold with the recommendations of the agents. Most of the people had personal financial problems because of which their life insurance policy is lapsed therefore to increase the sale along with the spreading of consumer awareness towards life insurance and its offerings; companies should also focus on to educating the customer that how they can best manage their personal finance. INDIA is having a huge potential when talking of life insurance sector; its because of the untapped areas in INDIA i.e. most of the rural areas are still unaware of the concept of life insurance business. Those people having income of more than RS. 7 lakh and above have no impact on their financial position when their policy is lapsed whereas talking of retired or a service class person is very much affected by such lapses . Through the analysis its clear; that the males are more aware of the consequences of the lapse policy then those of the females. People falling under the age bracket of 18 30 & 31 40 years the maximum policy which are lapsed are the money back life insurance policy. The male customers have more of lapsed money back life insurance policy then that of females. Despite of the fact , that number of private players in the country the Indian Life Insurance Industry is leaded by the sole Public company i.e. LIC . Majority of the respondents are satisfied with the product which they are getting however a good proportion of sample does not agree with it.

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Most of the customers are overcharged the interest / commission which leads to customer dissatisfaction.

CONCLUSION
Insurance is a big industry and will certainly grow. The regulatory experience in developed countries shows a trend towards a conglomerate line to the pillars approach. In the recent years, the Life Insurance Industry of India witnessed a marvellous growth and touched its historical height. So many factors have collectively contributed for this remarkable achievement. In this tenure, the LIC of India introduced many phenomenal business strategies by way of offering colourful schemes and products. The reason for these kinds of extraordinary effect was only because of the stiff competition emerging by the private insurance players. The private insurance companies are offering plenty of new attractive schemes and products to get meaningful share in the insurance market. However, the LIC of India has the powerful network and it is launching attractive advertisements in the regular interval to create great awareness among the general public. Simultaneously, the private life insurance companies are also taking much pain to cover-up the major populations (inventors) under their boundary, for that they are sponsoring series of effective awareness programmes through many attractive advertisements. This healthy competition motivated the general public to go in favour of more investments in insurance. While comparing the efficiency and progressiveness of life insurance business in pre and post LPG arena, the Indian Life Insurance Industries are achieving a magnificent growth.

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RECOMMENDATIONS

Some of the key recommendations are suggested as follow Companies should inform about the policies to customers from time to time whether it be new policies or old ones. Company should disclose all the facts regarding the policies at the time of providing the policy. Agents should disclose the primary policy in detail and should work in ethical

manner. Companies should make customer aware of the policy changes. Companies should provide online help to the customer so that it save their time and make process faster. Companies should go for awareness activities for the benefit of the customer like they should go for awareness camps etc. Companies should have more educational drives to educate or make customer up to date of policies.

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Companies should give reminder to the customers regarding the due date of premium payment.

Companies should not only focus only on the urban customers rather they should pay attention to rural customers. They should educate more rural people so that they can take policies which benefit and this will reduce lapsation rate also.

Companies should use channels of communications like radio to make people aware rather than only going for television advertisements.

Companies should identify reasons why customers are going for their policy lapse. Companies should maintain transparency in their operations so that customers develop good relationship with the insurance companies.

Agents should have more comprehensive knowledge of the policy they are selling so that they provide customers with the product according to their requirement. They should visit regularly to the customers to resolve any query if it exist.

Companies should give frequent reminders to customers and agents regarding fresh notices, so that customers can be saved from being befooled.

Message alerts for the due date should be send to the customer

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APPENDIX: QUESTIONNAIRE Name: Age: 18-30 Male Service Business < 2,50,000 31-40 41-50 Female Self Employed 2,50,000-5,00,000 7,50,000-10,00,000 > 10,00,000 Other >50

Gender: Occupation:

Income (per annum):

5,00,000-7,50,000

Q1) with which company have you insured your life? 43

LIC MetLife

BIRLA SUN LIFE

SBI LIFE

OTHERS...(please specify)

Q2) which type of policy have you taken? Term insurance Endowment Insurance Policy Unit Linked Insurance Policy(ULIP) Money Back Life Insurance Whole Life Insurance Policy

Q3) On Whose recommendation did you take the policy? Relatives Agents On your own wish

Others(please specify) Q4) what is the tenure of the policy taken? 5 years 10 years 20 years 30 years above 30 years

Q5) which premium frequency option did you choose? Q6) Yearly Quarterly Half yearly Monthly

is the product offered to you in accordance with the promise made by the Yes No

agent/company?

Q7) how would you rate the solvency position of the company under which you are insured?

Very Low________low_______neutral_________high________Very High 1 2 3 4 5

Q8) Why was a default in paying premium? No reminder was given Due to some financial problem Agent did not turn up You found that you were a victim of mis-selling 44

Others..(please specify) Q9) to what degree are the expenses/commission charges in accordance with the disclosure made at the time of issuing the policy? Very high Very low Q10) Are you aware of the consequences of policy lapse? Yes One month Two months No Three months Q11) how long does it take to renew your lapsed policy? High Moderate Low

More than three months Q12) did you take up another policy after your previous policy lapsed? Yes No

Q13) is there any awareness activity being conducted by the insurance company for your benefit? Yes No

Q14) If No, then please specify as to what do you expect from the company in this regard?

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REFERENCES
Adhikari, A.(2005) India's private sector insurance firms have changed the industry's complexion in a mere five years, ProQuest document ID: [available at &clientId=129893&RQT=309&VName=PQD] Balasubramaniam, S. (2002) Development in insurance sector and challenges posed by the operations of the sector, Journal of insurance, vol-3, pg 66, [available athttp://www.pdfqueen.com/html/aHR0cDovL3d3dy5tbWJnaW1zLmNvbS9uYXRpb25hbC 1zZW1pbmFyL2RvY3MvMl9DU19CYWxhc3VicmFtYW5pdW0ucGRm] Bhattacharya, A. (2004) Nationalisation of Insurance in India, The Journal of Insurance Institute of India, vol-4 pg-67-87, [available at http://www.pdfqueen.com/html/aHR0cDovL3d3dy5jY3NpbmRpYS5vcmcvaW50ZXJuczIw MDMvY2hhcDMyLnBkZg] 948502691, pg. 110, http://proquest.umi.com/pqdweb?did=948502691&sid=5&Fmt=3

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Drucker, P. (1999) Innovate or Die, Journal of Economist,

[available at

http://www.google.co.in/search?hl=en&q=%E2%80%9CInnovate+or+Die%E2%80%9D %2CPeter+Drucker+%281999%29&btnG=Search&meta=&aq=f&aqi=&aql=&oq=&gs_rfai] Franois, J. (2002) Whole-life insurance lapse rates and the emergency fund hypothesis Journal of Insurance: Mathematics and Economics ,vole 9, Issue 4, Pg- 249-255 ,[available at http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V8N-45823VN2&_user=10&_coverDate=12/31/1990&_rdoc=1&_fmt=high&_orig=search&_sort=d&_doc anchor=&view=c&_searchStrId=1253437304&_rerunOrigin=google&_acct=C000050221&_ version=1&_urlVersion=0&_userid=10&md5=f81780b622909ac84ad02a5f7573ac7d]

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