A

PROJECT REPORT
ON

KNOWLEDGE OF PEOPLE TOWARDS LIFE

INSURANCE COMPANIES

Submitted To: Submitted By:

Mr. Rohit Verma Name- Kamlesh

University Roll No:(5114MJUY430010)
BBA 5TH SEMESTER

AKNOWLEDGEMENT
This is to declare that the project report entitled KNOWLEDGE OF PEOPLE TOWARDS LIFE
INSURANCE COMPANIES submitted to my project guide Mr. Rohit Verma, it is a bonfire piece of
work conducted under direct supervision.

No part of this research has been under submitted for any other degree of any university .It may be
considered for evaluation in partial fulfillment of the degree of BBA.

CONTENTS

2
S.No Topic Page No
1 Introduction to insurance 1 to 4
Importance Profile and vision 5 to 18
Market share of LIC of INDIA
Product of LIC of INDIA

Information technology and LIC

We operate all over India

Help us to serve you batter

2 Review of Literature 19 , 20
3 Objectives & scope of the study 21
4 Research Methodology
4.1 Research 22,23
4.2 Research Process
4.3Research Design 23,24
4.4 Limitation
S25
26
5 Data Analysis & interpretation 27 to38
6 Finding Process 39,40
6.1Conclusion
6.2Recommendation 42,43
44to45

Bibliography 46,48
Archive
Questionnaire
49 to50

3
INTRODUCTION OF INSURANCE
Insurance is the outcome of mans security & for finding out way and means of ameliorating the
consequences of sudden calamities .Insurance is a co-operative venture whereby risk and loss are
shared by man .The modern step of industrialization has rendered man his property most valuable if
different types of risk and uncertainties of life .The uncertainties are like death ,unemployment
,sickness and are constantly at the force of a man and also his properties and exposed to risk which may
rise from fire ,water, accident, wind-storm , sea perils , earth quacks and flood etc.

Definitions:-

Insurance has been defined as a plan of which large number of people associate themselves and
transfer to the shoulder of all ,risk attack to individual

Insurance is a device is for the transfer to an insure of certain risk, loss of economic that would
otherwise be borne by the insured.

Insurance is a contract by which one part of a compensation called the premium assumes particular risk
of the other party and promises to pay to him nominee a certain or ascertained sum of money on a
specified contingency E.W. Patterson. Life insurance has come a long way from the earlier day when it
was originally 4conceived as risk covering medium for short periods of time, covering temporary risk
situation ,such as sea voyages .As life insurance became more establish it was realized what useful too
it was for a number of situation including :

Temporary needs / threats

The original purpose of life insurance remain an important element, namely providing for replacement
of income on death act.

Regular Savings:

Providing for ones family and oneself , as medium to term exercise through a series of regular payment
of premiums .This has become more relevant in recent time as people seek financial independent for
their family .

Investment

Put simple, the building up saving product ,investment product are traditionally lump sum investment.
where the individual makes a one off payment

Feature of investment:

-Maximization of return

-Maximization of risk

4
-Hedge of inflation

Investment alternation :

Investment Bank deposit, post office

Government Provident fund

Mutual fund Derivation

In simple word ,insurance protects against untimely losses :

Insurance has been found useful in the lives of personal both in short and long term needs like marriage
expensive can be met with using life insurance.

1. Insurance is a contract for compensating losses.

2. Premium is charged for insurance contract.

3. The payment to insured as per term of agreement in the event of loss.

4. Insurance is a contract for good faith.

5. Insurance is contract for mural benefits.

6. Insurance is a future contract for compensating.

7. Insurance is an instrument of distributing the loss of few among many.

8. The occurrence of the loss be accidental.

9. Insurance must be consistent with public policy.

IMPORTANCE OF INSURANCE :

A. Beneficial to an individual :

1. Insurance provide security and safety .In case of life insurance payment is made when death
occurs or the terms of insurance is expired.
2. Insurance affords peace of mind. A sense of security removes all tensions and fears. It stimulates
to more and better work. By means of insurance much of the uncertainly that centered round the
modern life may be eliminated
3. Insurances eliminated dependency. The insurance provides adequate amount to the dependents
at the early death of the property owner to pay off the unpaid loan.

5
 4. Insurance eliminate dependency .In the event of death dread winner of the family or destruction
of property ,the insurance assists the family and provide adequate amount at the time of need.
5. Life insurance encourages savings .systematic savings is possible because regular premium
cannot be withdrawn. Life insurance is the best media of saving.
6. Life insurance provides profitable investment. The elements of investment i.e. regular savings
capital formation and return of capital are observed in life insurance. In india in insurance
policies carry the exemption from the income tax and estate duty.
7. Life insurance fulfills the needs of persons. The needs of a person may be divided in to :

a. Family needs
b. Old age needs
c. Re-adjustment needs.
d. Special needs including needs for educations, marriage settlements of children etc.
e. Clean up funds for ritual ceremonies, payments of taxes etc.
f. Insurance comes to help for meeting requirements.

B. Beneficial to business:
Insurance has been useful to the business society in more than one way:

It reduces uncertainty to business losses:

As a huge number of properties are employed in commerce and industry equally great risks are
involved in day ti day functioning . the owner of the business might foresee contingencies that
would bring great loss . By purchasing a policy he can be sured of his earnings .

Business efficiency is increased with insurances:

A business gets free from unnecessary botherations can devoted more care and energy to
minimize his profits .

Key man indemnification:

Persons having expertise,experience, ability to control the business are most important for the
employers .Death of such persons proves a more serious loss then that by fire . The compensation to the
dependents of such employers requires adequate provision which can be met by purchasing life
policies.

6
Additions in credit

The business can be obtained loan by pledging the policy as collateral security for the loan. As the
assets are insured therefore , in the event of loss the compensation can be paid.

Business Continuation:

The partnership business may be discontinued at the death of partner .The insurance policy provide
adequate funds at the time of death therefore, the legal representative can be paid easily.

Employee Welfare:

Provision for welfare for employee can be made by the life insurance in case of accident or sickness
benefits and pensions .

C. Beneficial to Society:
wealth of society is protected

Insurance provide loss of human wealth loss of damage of property can be indemnified by the
insurance company.

Economic growth of the company:

As insurance provides protection against loss of property thus if any such damage arise the assets can
be replace without loss of production thus, economic development of the country is not effect.

Accelerate the production growth :

Adequate capital form insurance company can accelerate production circle in the country .Economic
growth of the country is not only assure but the process of growth is accelerate which is more essential
in a country like India where the population is increasing very fast .

Reduction in inflation :

The insurance company in the form of premium gets lot of money supply from the public which
insurance corporation put in to product thus the money which would have come into circulate might
have gone for productive purpose .

COMPANY PROFILE

7
 Life Insurance Corporation of India

Life Insurance Corporation of India

Type Government-owned corporation

Industry Insurance

Founded 1 September 1956

Headquarters Mumbai, India

Key people
D. K. Mehrotra, T.S.Vijayan(Chairman), Thomas
Mathew, Ashok Chawla, R Gopalan, Yogesh Lohia, S.
Sridhar, and A.K.Dasgupta (MD)

Products Life insurance

Tensions
Mutual funds

Revenue Rs.100.0

Oerating Rs.0.1
income

Profit Rs.1.0

Total assets 13.25 trillion (USp$295.48 billion)

Owner(s) Government of India

Employees 115,966 (2010)

8
History

The Oriental Life Insurance Company, the first corporate entity in India offering life insurance
coverage, was established in colctta .In 1818 by Bipin Bernard Dasgupta and others. Europeans in India
were its primary target market, and it charged Indians heftier premiums. The Bombay Mutual Life
Assurance Society, formed in 1870, was the first native insurance provider. Other insurance companies
established in the pre-independence era included.

Bharat Insurance Company (1896)

United India (1906)

National Indian (1906)

National Insurance (1906)

Co-operative Assurance (1906)

Hindustan Co-operatives (1907)

Indian Mercantile

General Assurance

Swadeshi Life (later Bombay Life)

The first 150 years were marked mostly by turbulent economic conditions. It witnessed, Indias First
War of Independence, adverse effects of the World War I and World War II on the economy of India,
and in between them the period of worldwide economic crises triggered by the .Great depression. The
first half of the 20th century also saw a heightened struggle for India's independence. The aggregate
effect of these events led to a high rate of bankruptcies companies in India. This had adversely affected
the faith.

Brief History of Insurance

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.

9
Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance
Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. All the
insurance companies established during that period were brought up with the purpose of looking after
the needs of European community and Indian natives were not being insured by these companies.
However, later with the efforts of eminent people like BabuMuttylal Seal, the foreign life insurance
companies started insuring Indian lives. But Indian lives were being treated as sub-standard lives and
heavy extra premiums were being charged on them. Bombay Mutual Life Assurance Society heralded
the birth of first Indian life insurance company in the year 1870, and covered Indian lives at normal
rates. Starting as Indian enterprise with highly patriotic motives, insurance companies came into
existence to carry the message of insurance and social security through insurance to various sectors of
society. Bharat Insurance Company (1896) was also one of such companies inspired by nationalism.

The Swadeshi movement of 1905-1907 gave rise to more insurance companies. The United India in
Madras, National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore
were established in 1906. In 1907, Hindustan Co-operative Insurance Company took its birth in one of
the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian
Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the companies
established during the same period. Prior to 1912 India had no legislation to regulate insurance
business. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed.
The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical
valuations of companies should be certified by an actuary. But the Act discriminated between foreign
and Indian companies on many accounts, putting the Indian companies at a disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance business. From 44
companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total business-
in-force as Rs.298 crore in 1938. During the mushrooming of insurance companies many financially
unsound concerns were also floated which failed miserably. The Insurance Act 1938 was the first
legislation governing not only life insurance but also non-life insurance to provide strict state control
over insurance business. The demand for nationalization of life insurance industry was made repeatedly
in the past but it gathered momentum in 1944 when a bill to amend the Life Insurance Act 1938 was
introduced in the Legislative Assembly. However, it was much later on the 19th of January, 1956, that
life insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian
companies and 75 provident were operating in India at the time of nationalization. Nationalization was
accomplished in two stages; initially the management of the companies was taken over by means of an
Ordinance, and later, the ownership too by means of a comprehensive bill. The Parliament of India
passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance
Corporation of India was created on 1st September, 1956, with the objective of spreading life insurance
much more widely and in particular to the rural areas with a view to reach all insurable persons in the
country, providing them adequate financial cover at a reasonable cost.

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

Today LIC functions with 2048 fully computerized branch offices, 113 divisional offices, 8 zonal
offices, 1381 satellite offices and the corporate office. LICs Wide Area Network covers 113divisional
offices and connects all the branches through a Metro Area Network. LIC has tied up with some Banks
and Service providers to offer on-line premium collection facility in selected cities. LICs ECS and
ATM premium payment facility is an addition to customer convenience. Apart from on-line Kiosks and
IVRS, Info Centers have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad,
Kolkata, New Delhi, Pune and many other cities. With a vision of providing easy access to its
policyholders, LIC has launched its SATELLITE SAMPARK offices. The satellite offices are smaller,
leaner and closer to the customer. The digitalized records of the satellite offices will facilitate anywhere
servicing and many other conveniences in the future.

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

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

Some of the important milestones in the life insurance business in India are:

1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started
functioning.

11
1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its
business.

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical
information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies are taken over by the central government
and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution
of Rs. 5 core from the Government of India.

The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance
Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the
British.

Some of the important milestones in the general insurance business in India are:

1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general
insurance business.

1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of
conduct for ensuring fair conduct and sound business practices.

1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the
Tariff Advisory Committee set up.

12
1972: The General Insurance Business (Nationalisation) Act, 1972 nationalised the general insurance
business in India with effect from 1st January 1973.

107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd.,
the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India
Insurance Company Ltd. GIC incorporated as a company.

Market Share of LIC of India and other Insurance companies

Table :

Column1
0.5

0.4

0.3

0.2
Column1
0.1

13
 .
LIC 48.10%
ICICI 13.17%
ALLIANCE
BAJAJ 16.30%
SBI 6.20%
HDFC 4.10%
BIRLA SONLIFE 3.40%
RELIANCE 3.40%
MAX NER
YORK 2.40%
OM KOTKA 1.90%
AVIVA 1.80%
TATA AIG 1.50%
Products Of LIC
METLIFE 1.40%
ING V any PR campaign
Before 1.20%is started or planned it is necessary to know the products of that
organization.
SHRIRAM LIFE 0.30%
LIC hasAXA
BHARTI a variety of insurance plans to choose from. These plans cater to all categories of people
and to their diverse 0.20%
LIFE needs. The plans are simply unmatched in reliability, benefits and in providing
happiness and security.

WHOLE LIFE SCHEMES

ENDOWMENT SCHEMES

TERM ASSURANCE PLAN

PERIODIC MONEY-BACK PLANS

PLAN FOR HIGH-WORTH INDIVIDUALS & KEYMEN

MEDICAL BENEFITS LINKED INSURANCE

14
PLANS FOR THE BENEFIT OF HANDICAPPED

PLANS TO COVER HOUSING LOANS

JOINT LIFE PLAN

PLANS FOR CHILDREN NEEDS

INVESTMENT PLANS

Group Insurance Scheme:

Group term Insurance Scheme

Group insurance scheme in lieu of EDLI

Group gratuity scheme

Group super annotation scheme

Group savings linked insurance scheme

Group leave encashment scheme

Voluntary retirement scheme

Social Security Scheme

Janshree Bima Yojana.

Swaranajyoti Gram Swarojgar Yojana.

Information Technology And LIC

LIC has been one of the pioneering organizations in India who introduced the leverage of
Information Technology in servicing and in their business. Data pertaining to almost 10 crore
policies is being held on computers in LIC. We have gone in for relevant and appropriate technology
over the years.

1964 saw the introduction of computers in LIC. Unit Record Machines introduced in late 1950s
were phased out in 1980s and replaced by Microprocessors based computers in Branch and
Divisional Offices for Back Office Computerization. Standardization of Hardware and Software
commenced in 1990s. Standard Computer Packages were developed and implemented for Ordinary
and Salary Savings Scheme (SSS) Policies.

15
FRONT END OPERATIONS

With a view to enhancing customer responsiveness and services , in July 1995, LIC started a drive of
On Line Service to Policyholders and Agents through Computer. This on line service enabled
policyholders to receive immediate policy status report , prompt acceptance of their premium and
get Revival Quotation, Loan Quotation on demand. Incorporating change of address can be done on
line. Quicker completion of proposals and dispatch of policy documents have become a reality. All
our 2048 branches across the country have been covered under front-end operations. Thus all our
100 divisional offices have achieved the distinction of 100% branch computerisation. New payment
related Modules pertaining to both ordinary & SSS policies have been added to the Front End
Package catering to Loan, Claims and Development Officers Appraisal. All these modules help to
reduce time-lag and ensure accuracy.

METRO AREA NETWORK

A Metropolitan Area Network, connecting 74 branches in Mumbai was commissioned in November,

1997, enabling policyholders in Mumbai to pay their Premium or get their Status Report, Surrender
Value Quotation, Loan Quotation etc. from ANY Branch in the city. The System has been working
successfully. More than 10,000 transactions are carried out over this Network on any given working
day. Such Networks have been implemented in other cities also.

WIDE AREA NETWORK

All 7 Zonal Offices and all the MAN centers are connected through a Wide Area Network (WAN).
This will enable a customer to view his policy data and pay premium from any branch of any MAN
city. As at November 2005, we have 91 centers in India with more than 2035 branches networked
under WAN.

INTERACTIVE VOICE RESPONSE SYSTEMS (IVRS)

IVRS has already been made functional in 59 centers all over the country. This would enable
customers to ring up LIC and receive information (e.g. next premium due, Status, Loan Amount, and
Maturity payment due, Accumulated Bonus etc.) about their policies on the telephone. This
information could also be fixed on demand to the customer.

LIC ON THE INTERNET

Our Internet site is an information bank. We have displayed information about LIC & its
offices. Efforts are on to upgrade our web site to make it dynamic and interactive.The addresses/e-
mail Ids of ur Zonal Offices, Zonal Training Centers, Management Development Center, Overseas

16
Branches, Divisional Offices and also all Branch Offices with a view to speed up the communication
process.

PAYMENT OF PREMIUM AND POLICY STATUS ON INTERNET

(You have to register for these services)

LIC has given its policyholders a unique facility to pay premiums through Internet absolutely free
and also view their policy details on Internet premium payments.There are 11 service providers with
whom LIC has signed the agreement to provide this service.

INFORMATION KIOSKS

We have set up 150 Interactive Touch screen based Multimedia KIOSKS in prime locations in
metros and some major cities for dissemination information to general public on our products and
services. These KIOSKS are unable to provide policy details and accept premium payments.

INFO CENTRES

We have also set up 8 call centers, manned by skilled employees to provide you with information
about our Products, Policy Services, Branch addresses and other organizational information.

LIC Operates all over India

17
Know About Your Life Insurance

Life insurance in India made its debut well over 100 years ago.

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

It should, however, be clearly understood that the following content is by no means an exhaustive
description of the terms and conditions of an LIC policy or its benefits or privileges.

For more details, please contact our branch or divisional office. Any LIC Agent will be glad to help

18
you choose the life insurance plan to meet your needs and render policy servicing.

What Is Life Insurance?

Life insurance is a contract that pledges payment of an amount to the person assured (or his
nominee) on the happening of the event insured against.

The contract is valid for payment of the insured amount during:

The date of maturity, or

Specified dates at periodic intervals, or

Unfortunate death, if it occurs earlier.

Among other things, the contract also provides for the payment of premium periodically to the
Corporation by the policyholder. 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 the breadwinner.

By and large, life insurance is civilisation's partial solution to the problems caused by death. Life
insurance, in short, is concerned with two hazards that stand across the life-path of every person:

1.That of dying prematurely leaving a dependent family to fend for itself.

2.That of living till old age without visible means of support.

Life Insurance Vs. Other Savings

Contract Of Insurance:

19
A contract of insurance is a contract of utmost good faith technically known as uberrima fides. The
doctrine of disclosing all material facts is embodied in this important principle, which applies to all
forms of insurance.

At the time of taking a policy, policyholder should ensure that all questions in the proposal form are
correctly answered. Any misrepresentation, non-disclosure or fraud in any document leading to the
acceptance of the risk would render the insurance contract null and void.

Protection:
Savings through life insurance guarantee full protection against risk of death of the saver. Also, in
case of demise, life insurance assures payment of the entire amount assured (with bonuses wherever
applicable) whereas in other savings schemes, only the amount saved (with interest) is payable.

Aid To Thrift:

Life insurance encourages 'thrift'. It allows long-term savings since payments can be made
effortlessly because of the 'easy instalment' facility built into the scheme. (Premium payment for
insurance is either monthly, quarterly, half yearly or yearly).

For example: The Salary Saving Scheme popularly known as SSS, provides a convenient method of
paying premium each month by deduction from one's salary.

In this case the employer directly pays the deducted premium to LIC. The Salary Saving Scheme is
ideal for any institution or establishment subject to specified terms and conditions.

Liquidity:
In case of insurance, it is easy to acquire loans on the sole security of any policy that has acquired
loan value. Besides, a life insurance policy is also generally accepted as security, even for a
commercial loan.

Tax Relief:

Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax. This is
available for amounts paid by way of premium for life insurance subject to income tax rates in force.
Assessees can also avail of provisions in the law for tax relief. In such cases the assured in effect

20
pays a lower premium for insurance than otherwise.

Money When You Need It:

A policy that has a suitable insurance plan or a combination of different plans can be effectively
used to meet certain monetary needs that may arise from time-to-time.

Children's education, start-in-life or marriage provision or even periodical needs for cash over a
stretch of time can be less stressful with the help of these policies.

Alternatively, policy money can be made available at the time of one's retirement from service and
used for any specific purpose, such as, purchase of a house or for other investments. Also, loans are
granted to policyholders for house building or for purchase of flats (subject to certain conditions).

Who Can Buy A Policy?

Any person who has attained majority and is eligible to enter into a valid contract can insure
himself/herself and those in whom he/she has insurable interest.

Policies can also be taken, subject to certain conditions, on the life of one's spouse or children.
While underwriting proposals, certain factors such as the policyholders state of health, the
proponent's income and other relevant factors are considered by the Corporation.

Insurance For Women

Prior to nationalization (1956), many private insurance companies would offer insurance to female
lives with some extra premium or on restrictive conditions. However, after nationalisation of life
insurance, the terms under which life insurance is granted to female lives have been reviewed from
time-to-time.

At present, women who work and earn an income are treated at par with men. In other cases, a
restrictive clause is imposed, only if the age of the female is up to 30 years and if she does not have
an income attracting Income Tax.

Medical Schemes

Life insurance is normally offered after a medical examination of the life to be assured. However, to
facilitate greater spread of insurance and also to avoid inconvenience, LIC has been extending

21
 insurance cover without any medical examination, subject to certain conditions.

With Profit And Without Profit Plans

An insurance policy can be 'with' or 'without' profit. In the former, bonuses disclosed, if any, after
periodical valuations are allotted to the policy and are payable along with the contracted amount.

In 'without' profit plan the contracted amount is paid without any addition. The premium rate
charged for a 'with' profit policy is therefore higher than for a 'without' profit policy.

Keyman Insurance

Keyman insurance is taken by a business firm on the life of key employee(s) to protect the firm
against financial losses, which may occur due to the premature demise of the Keyman.

REVIEW OF LITERTATURE

Marketing take a day to learn unfortunately it take a life time to master (Kotler,1967). With
globalization and liberalization of the economy growing awareness among consumer and greater
emphasis in customer centric activates ,market management has assumed asses importance .

Market must know when to cultivate large market and when to nice when to lunch new brand and when
push product the domestic market and when to penetrate aggressively into foreign market .

Traditionally exchange is considered the central concept in marketing(Bagozzi 1975, Hunt, 1976). In
these more recent approaches it has been suggested that exchanges, although still important of course,
are facilitated through interactions between suppliers and customers, and hence interaction becomes a
central marketing concept ( Gronroos, 1990, Gummersson, 1987, hakasoon, 1982). Considering the
importance to customer relationship management, present day emphasis of the top executive are the
retention and maintaining the customer and building relationship with the customer Gartner, 2008).

Glen L urban (2004) views that in response to growing expectation of customer and consequently
shifting emphasis from customer relationship management to become full proponents of the customer
agenda. Presently companies are following new different approach: they are providing customers with

22
open, honest and complete information and then finding the best products for them, even if those
offerings are from competitors. In short they are truly representing their customer best interest,
essentially becoming advocates for them If a company advocates for its customers, they will reciprocate
with their trust, loyalty and purchase, either now or in the future.

Andrew smith and Leigh Sparks(2009) investigate customer motivations in retail loyalty scheme
points redemption, through a qualitative study of participants in a major UK retail loyalty scheme. They
point out that academic research tends to neglect investigation of points redemption, despite its
probable significance to consumers and certain value to businesses. Redemption activities have positive
implications for consumer perceptions of the scheme and the retailer and appear to enhance future
purchasing behavior.

OBJECTIVES OF STUDY

To know the Market potentials of the LIC Of INDIA .

To suggest the ways to enhance the market potentials of the LIC of India.

To check the awareness of the customers regarding the LIC companies of the life insurance sector.

To check the interest of the customers in buying the Life Insurance policy .

23
RESEARCH METHDOLOGY

Research Design

The survey done for this project conveys regional information but that can be generalized for national
level also. Scope of survey is limited to H.P.

Type of Research

This is descriptive type of research in which clients or policy holders have been surveyed for check
their awareness regarding the private of Life Insurance Sector.

Method of Data Collection

Generally there are 2 methods of data collection:

Primary Data

For collecting primary data I used questionnaire.

Under this questionnaire, the questions, which were related to check customers awareness regarding
the private players in Life Insurance Sector, were included. Besides this there were questions to find
that what factors affect policy purchase decision and how many people are willing to buy Life
Insurance Policy from Life Insurance companies.

Secondary Data

These types of data are available in, Internet.

For this project I have taken help from textbooks (LIC 2011).

24
Secondary sources used are:

Text books

Journals like insurance post, business world, market research journal and journal of marketing.

Internet sites on Insurance.

THE RESEARCH PROCESS

Define the research problem and its objectives

Research design including sample designing

Collections of Data Survey

Analysis of Data

Interpretation and report writing

25
RESEARCH DESIGN

Data source :

The study is based on both primary and secondary data.

Research instrument:

Questionnaire.

Research approach:

Survey, Observation

Sampling unit:

Customers

Sample size:

100 customers

Sampling procedure:

Judge mental non random method

LIMITATIONS

26
Data Collection error may be there due to wrong response from respondents as some time they are not
right person who takes actual decisions.

Due to cost and human element is involved, project area was limited.

Sometime people dont have time to fulfill questionnaire, so they give only few information.

As per knowledge data was collected and analyzed, error may be there.

ANALYSIS AND INTERPERETATION

1 Do you have any knowledge about the concept of insurance?

Table 1

Knowledge of life No of respondents Percentage

Insurance
Yes. 95 95%
No. 5 5%

Graph1

KNOWLEDGE OF CONCEPT OF LIFE INSURANCE

Yes
No

27
2 Do you have any Policy Life insurance ?

Table 2

People who have life insurance No of respondents Percentage

Yes 68 68%
No 32 32%

Series 1

Yes No

As per analysis 68% of the respondent are already insured by one company or the other whereas rest
32% do not insurance of any kind.

3 What pattern do you follow for marking saving?

Table 3

Saving Pattern if People No of respondent Percentage

FD 35 35%
RD 40 40%
NSC 15 15%
P.O 10 10%
Graph 3

28
 FD RD NSC P.O

Most people out of the sample consider bank to be more safeguarding for their money with no risk in it
so recurring deposits and fixed deposits have the higher percentage.

4 What pattern do follow in regarding if investment?

Table 4

Investment Pattern No of respondents Percentage

Stock 10 10%
Mutual fund 25 25%
PPF 27 27%
EPF 18 18%
Bonds 20 20%
Graph 4

29
 Investment Pattren

20% 10%
Stock Mutual Fund PPF 25% EPF Bonds
18%
27%

Most chunk of the sample invest in PPF and mutual fund

25%and27% .Near to the equal % age is being investment in

EPF and bonds.

5 How do focus for saving and investment?

Table 5

Focus of Saving Investment No of respondents Percentage

Social 25 25%
Financial 56 65%
Material 21 21%

Graph 5

Focus of saving /Inveatment

19% 25%
Social Financial Material

56%

Most of the responses prefer finance as the major focus saving and investment .social and materialist
thing follow it.

30
 6 From which company currently do you have Insurance Policy

Table 6

Companies form which people No of respondents Percentage

have life insurance
LIC India 60 60%
ICICI PRU 22 22%
HDFCSL 10 10%
MAXNY 9 65%
AVIVA 5 5%
BAJAJ ALINZE 5 5%
TATA AIG 3 5%
OM KOTAK 3 3%
BIRLA 2 2%
ING VYASA 2 2%
Graph 6

70

60

50

40

30

20

10

0
LIC INDIA HDFCSL MAXNY BAJAJ ALIZE ICICIPUL TATA AIG

7 Do you have knowledge about following companies?

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Knowledge of people No if respondents(%)
LIC 99
HDFC 70
MAXNY 34
BAJAJ ALINZE 30
ICICI PRU 75
TATA AIG 32
BIRLA 36
AVIVA 32
ING VYASA 25
OM KOTAKA 24
Graph7

100

80

60

40 Column2
Column1
20

0
LIC INDIA
HDFCSL
MAZNY
BAJAB
TATA AIG
BIRLA

The survey result show that 99% people know about LIC.82% of respondent aware of ICICI and 69%
aware of HDFCSL.MAX,TATA,BIRLA,ALIANCE

8 What factor do you considered while buying the Insurance Policy?

Table 8

Factor that Effect the buying of LIC Policies No of respondents

Premium Payment 33
Tax benefits 56
Return 60
Saving 54
Graph 8

32
 80
70
60
50
40
30
20
10
0
Premuim Payment Tax benefits Return Saving

Factor htat effect the buying of LIC Policys

Series 2
Series 3

60% of the respondent take LIC to get good return .56% people take LIC Polices Tax benefits .
54%saving and 33% consider premium as one of the influencing factor .

9 What are the reason behind the preference for a particular company?

Table 9

People prefer for a particular company No of respondent

Good products 19
Customer care 15
Good returns 30
Agents 10
Good will 40
Money 30
Graph 9

33
Why people prefer for a particular company
40
35
30
25
20
15
10
5
0

10 Do you know knowledge about the various polices of the companies?

Table 10

Knowledge of people No of respondent Percentage

regarding polices of various
companies
Yes 20 20%
No 30 27%
Not in detail 50 50%
Graph 10

34
Knowledge of people regarding polices of various companies

Yes No Not in Detail

Out of a set 100 respodent20% are dont know about policy offered by various company whereas 30%
of them fully aware & 50%are not aware to various LIC com. Policies.

11 Do you have plane for buying Insurance Policy in this Year?

Table 11

People are willing to insurance No of respodents Percentage

in coming future
Yes 10 10%
No 90 90%

Table 11

35
Wether are willing to buy Insutance in comimg yer

Yes
No

Out the set of 100 respondents 90%of them do not have plans of buying Insurance within a year 10%
have plane within a year.

12 Are you aware about the LIC if India insurance plans(policies)?

Table 12

Awareness towards LIC of No. of respondent %age

india Insurance plans
Awareness 55 55%
Not Aware 45 45%

36
Graph 12

Pople Awareness about LIC of India plans

Awareness
Not aware

In this question an attempt has been made to find out the awareness of LIC India plans(policies) where
out of 100 people 55% were aware & 45 %were not aware.

FINDING & SUGGESTION

I find in this study that Ever since the government and privatization of Insurance sector, the sector has
witness an eve rising rate of growth .Companies are making their annual target and at the target and at
the end of the year see them way beyond their expectation.

I think that the insurance sector has grown not only in size but in maturity as well , in the sense that
form very simple product , which were available earlier on to the present.

What has been done is that Insurance Industry placed the costumer in center and development product
& development services around the costumer .

I also find that most of consumer lick to adopt LIC India polices because its a government insurance
company .

Insurance in India is still conceder a tax saving device of its longer financial benefits .India people are
accustomed to invest in Gold,Real estate & bank Deposit . Only4-5% of Indians invest in shares. Even
to this day LIC is considered an ICON. Because of its monopoly for more than four decades and
Government Backing. Indian insurance market has become very vibrant. Smashing all the doubts over
the decision to liberalize the Indian insurance sector, the overwhelming two years performance of
Indian insurance sector is test case of massive story of private players entering into erstwhile state

37
monopoly. The portfolio game has shifted and the average size of policies ought has increased. buying a
risk cover has People are to buying cover for sake of tax breaks. They are safeguarding themselves
from the risk of dying too early to living too long. Whole life and term Insurance policies are
increasingly becoming popular.

I suggest that spending has not simply increased the awareness level of insurance but also brought
about certain amount of selling and market discipline. This is reflected to the fact that selling is to
skewed to March pressure.

More and more people understand the right amount of insurance cover to take care of their
responsibilities. People know when they are underinsured and go for the right choice of insurance cover
for themselves. Three years since the privatization of Indian Insurance Sector and entry of first Private
Insurance Companies a high level of awareness about privatization among people is observed. People
have started demanding the easy access of right and true information. Insurance companies are also
stepping up their work for providing more, easy and frequent access to information and recent
developments if insurance products.

38
Archive

Awards Received in 2015-16

Awards Received in 2014-15

39
Awards Received in 2013-14

Awards Received in 2012-13

40
Awards Received in 2010-11

CONCLUSION

Insurance in India is still conceder a tax saving device of its longer financial benefits .India people are
accustomed to invest in Gold , Real estate & bank Deposit . Only4-5% of Indians invest in shares. Even
to this day LIC is considered an ICON. Because of its monopoly for more than four decades and
Government Backing. It has occupied a high position and trust in market and minds of Indian people.
After few scams by private companies, which used to spring up over nightly and after collection huge
amounts from people used to disappear in darkness of night, has made the names of private companies
very untrustworthy to put their money in for long terms. Private companies do not have any
government security, so they are at disadvantage in current light of situation particularly in insurance
sector. The only way they can win trust is by continuously and flawlessly showing better results. And
that is what the new private entrants are doing right now.

Indian insurance market has become very vibrant. Smashing all the doubts over the decision to
liberalize the Indian insurance sector, the overwhelming two years performance of Indian insurance
sector is test case of massive story of private players entering into erstwhile state monopoly. The

41
insurance penetration level has considerably increased from 1.6% to about 2.75%. Now whether that
growth is enough in three year period, we can always counter that. In the last 3years private insurance
companies have grown at 200-300% levels. But if you look at a longer time horizon says at 10 years the
insurance companies would grow at 13-14% rate that would make it one of the fastest growing sectors.

Recommendations

After analyzing the findings from my survey I am giving some recommendations to LIC of India,, by
applying these suggestions company can get some benefit.

By objectives.

Classification of customer as profitable and least profitable and aligning all business processes and
strategies along customer links.

Improved service quality and individualized attention to customer.

Emphasis on Agents training. The agents should be provided comprehensive training so that thy can go
in the markt and fetch business for company. Partial and incomplete knowledge will bring bad name to
company and brings brand dilution for the company.

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Classify maintain customer database and send them Birthday wishes clients birthday and providing
customized policy with conversion option in terms of payment schedule, premium terms, money back
clauses etc.

Due to pressure on markings and LICs strong customer and agent base in all over India, requires LIC
to come up with new innovative products.

Enhance focus on rural sector

Professionalism

Publicity and Public Relations.

Management their customers on basis of profitability and revenue generation

Complaints by clients should be tried to remove as soon as possible.

More commission and other benefit should be given to the more profitable agent.

Classifies its most profitable staff on basis of number of complaints handled.

Under social benefits company should initiate positive phone calls and should provide service
suggestions with getting to problems.

Maintain database of existing customers for future contact.

Provide net advice and net selling facilities.

Product information via mass media sources.

Insurance advertisement sent in mail.

Tangible offering like gifts etc, financial information, and investment advice after policy purchase
decision.

Company media advertising: Companys sponsored magazine and paper advertisement got higher
points TV Commercial.

A monthly payment of premiums can be start of with housewives. So that they can be at ease.

REFERENCES

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BOOKS

Kotler Philip, Marketing Management, Thirteenth Edition, Prentice Hall Publisher.

Kothari, Research Methodology, Fourth Edition, Kalyani Publisher, New Delhi.

Malhotra Naresh, Marketing Research, Fourth Edition, Kalyani Publishers, New Delhi.

WEBSITES

http://www.licofindia.com/public/Group -Plans.htm

http://www.hdfclife.com/Products/SavingsPlans/SavingsAssurance.aspx

http://www.insuranceplan4u.com/india-insurance-companies/icici-pru

http://www.iciciprulife.com/public/Life-plans/Life-Insurance.html

QUESTIONNAIRE

NAME:

AGE:

1. Do you have any knowledge about the concept of Life Insurance?

( )Yes

( )No

2. Do you have Life Insurance Policy?

( )Yes

44
 ( )No

3. What pattern do you follow for making saving?

( )FD

( )RD

( )NSC

( )P.O

4. What pattern do you follow in regarding of investment?

( )Stock

( )Mutual fund

( )PPF

( )EPF

( )Bonds

5. How do you focus for saving and investment?

( )Social

( )Financial

( )Material

6. From which company currently do you have Life Insurance policy?

( )LIC

( )HDFCSL

( )MAXY

( )BAJAJ ALLIANZ

( )ICICI PRU

( )BIRLA

( )INGVASYA

45
( )OM KOTAK

7. Do you have knowledge about following companies?

( )LIC

( )HDFCSL

( )MAXY

( )BAJAJ ALLIANZ

( )ICICI PRU

( )BIRLA

( )INGVASYA

( )OM KOTAK

8. What factors do you considered while buying the Insurance Policy?

( )Premium Payment

( )Tax Benefits

( )Returns

( )Savings

46