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A

Project Report

On

“A study of Life Insurance plan as


a part of financial planning at LIC”

Submitted In Partial Fulfillment For The

Award of degree of

Master of Business Administration

Submitted by: Submitted to:

Shubham Khandelwal Dr. Gurpreet Kaur

MBA 4th SEM Asst. Professor

Arya College of Engineering & Information Technology


SP-42, RIICO Industrial Area, Kukas, Jaipur-302028
BATCH 2015-2017

1
PREFACE

The Life Insurance Corporation (L.I.C.) of India plays a formidable role in the development of
our economy by strength-ening the individuals propensity to save and in making the
resource available for long-term investment. It also performs the useful functions of capital
formation both in public and the private sectors by making huge investments. In the developed
countries of the West.
Life insurance business is anexpanding phenomenon where the per capita growth in national
income and life insurance are positively correlated. In an underdeveloped country like that of
our also the usefulness of this institution can not be over-emphasised.It is one of the major
institutional investors of India. In the process of providing life insurance cover it has
accumulated crores of rupees in capital funds. The funds have been directed into numerous
channels where they play an important role in strengthening the country's productive capacity
and building nation's defence potential.

2
Executive Summary

The topic, “A study of Life Insurance plan as a part of financial planning” demanded an
elaborate study of the presently followed financial planning process of life insurance
corporation of india , make suggestions regarding betterment of the whole system if any,
and finally base all the above on solid research work.

I first tracked down A study of Life Insurance plan as a part of financial planning.

I also took a sample size of 100 and asked them regarding the various factors responsible
for their perception towards a loan provider and suggestions for improvement.

I tabulated all the data, analyzed finally made the interpretation of the observation.

At the end, I made some of my own suggestions.

3
DECLARATION

I, Shubham khandelwal hereby declare that this project report is completely done
by me and the project has not been submitted anywhere by anyone else for any purpose.

I declare that study conducted during this project is valid and true to my knowledge.

Shubham khandelwal

MBA 4TH SEM

4
ACKNOWLEDGEMENT

I express my warm thanks and deep sense of gratitude to the individuals for their generous help
in discussing the project and giving their valuable time in successful completion of this summer
training .Time to time I got constructive suggestions, guidance and encouragement during the
training period.

With much pride I would like to express my heartily thanks to Dr. Gurpreet Kaur for her
wonderful support and for giving me an opportunity to present summer training report
on “A study of Life Insurance plan as a part of financial planning at LIC”

I also want to give my regards to Mrs.Kirti Kalra , Mrs.Deepti Hariramani, Mrs.Rashi


Saxena and Ms. Amandeep Kaur for their valuable support .Without their sustained interest
and encouragement ,this work could not have been possible to reach the state of completion .

I am also thankful to all the supporting staff of LIFE INSURANCE CORPORATION OF


INDIA for their help and cooperation throughout the Training.
I regret for any inadvertent omissions.

Shubham khandelwal

MBA 4TH SEM

5
Table of Contents

SR. NO. TOPIC PAGE NO.

1. INTRODUCTION TOTHE INDUSTRY 8-15

2. INTRODUCTION TOTHE COMPANY 17-24

3. RESEARCH METHOLOGY 26-28

3.1 TITLE OF THE STUDY

3.2 OBJECTIVE OF STUDYY

3.3 TYPE OF THE STUDY

3.4 SAMPLE SIZE

3.5 SCOPE OF THE STUDY

3.6 LIMITATION OF THE PROJECT

4. ANALYSIS AND INTERPRETATION 30-39

5. FACTS AND FINDINGS 41

6. CONCLUSION 43

7. SUGGESTIONS 45

8. SWOT ANALYSIS 47

9. APPENDIX 49-50

10. BIBLIOGRAPHY 52

6
INTRODUCTION
TO
THE INDUSTRY

7
WHAT IS INSURANCE?

Insurance is defined as a co-operative device to spread the loss caused by a particular risk over a number
of persons who are exposed to it and who agree to ensure themselves against that risk. Risk uncertainty
of a financial loss.

Insurance is a policy from large financial institutions that offers a person, company, or other entity
reimbursement or financial protection against possible future losses or damages.

MEANING OF INSURANCE:-

Themeaning ofinsurance is important to understand for anybody that is considering buying an insurance
policy simply understanding the basics of finance. Insurance is a hedging instrument used
asprecautionary measure against future contingent losses. This instrument is used for managing the
possible risks of the future.

Insurance is bought in order to hedge the possible risks of the future which may or may not take place.
This is a mode of financially insuring that if such a incident happens then the loss does not affect the
present well-being of the person or the property insured. Thus, through insurance, a person buys security
and protection.

A simple example will make the meaning of insurance easy to understand. A biker is always subjected
to the risk of head injury. But it is not certain that the accident causing him the head injury would
definitely occur. Still, people riding bikes cover their heads with helmets. This helmet in such cases acts
as insurance by protecting him/her from any possible danger. The price paid was the possible
inconvenience or act of wearing the helmet; this is equivalent to the insurance premiums paid.Though
loss of life or injuries incurred cannot be measured in financial terms, insurance attempts to quantify
such losses financially. Insurance can be defined as the process of reimbursing or protecting a person
from contingent risk of losses through financial means, in return for relatively small, regular payments
to the insuring body or insurance company.

8
TYPES OF INSURANCE:-

Insurance

Non-Life
Life Insurance
Insurance

General Miscellaneous
Insurance Insurance

WHAT IS LIFE INSURANCE?

Life insurance may be defined as a contract in which the insurer in consideration of a certain premium
either in lump sum or other periodical payments, agrees to pay to the assured or to the person for whose
benefits the policy is taken, a stated sum of money on the happening of a particular event contingent on
the duration of human life. Thus, under a whole-life assurance, the policy is payable at the of the assured
and under an endowment policy, the money is payable on the assureds’ surviving a stated period of
years.

9
MEANING OF LIFE INSURANCE:-

According to sec (2) (11) of the Insurance Act, Life insurance business means “the business effecting
contracts upon human life”. It includes:-

a. Any contracts whereby the payment of money is assured upon death (except death by accident only) or
the happening of any contingency dependent on human life.
b. Any contract which is subject to the payment of premium for a term dependent on human life.
c. Any contract which include the granting of disability and double or triple indemnity, accident benefits,
the granting of annuities upon human life, and the granting of super-annuation allowances.

FDI in Insurance & Market share

Life Insurance is the fastest growing sector in India since 2000 as Government allowed Private players
and FDI up to 26% and recently Cabinet approved a proposal to increase it to 49%. Life Insurance in
India was nationalized by incorporating Life Insurance Corporation (LIC) in 1956. All private life
insurance companies at that time were taken over by LIC.

In 1993, the Government of India appointed RN Malhotra Committee to lay down a road map for
privatization of the life insurance sector.

While the committee submitted its report in 1994, it took another six years before the enabling
legislation was passed in the year 2000, legislation amending the Insurance Act of 1938 and legislating
the Insurance Regulatory and Development Authority Act of 2000. The same year the newly appointed
insurance regulator - Insurance Regulatory and Development Authority IRDA—started issuing licenses
to private life insurers.

Foreign Direct Investment (FDI) Policy in Insurance Sector:-

s per the current (March 2006) FDI norms, foreign participation in an Indian insurance company is
restricted to 26.0% of its equity / ordinary share capital. The Insurance Regulator has stipulated that
foreign investment in Indian Insurance companies be limited to 26% of total equity issued (FDI limit)
with the balance being funded by Indian promoter entities. The significant lobbying by foreign
insurance companies for a change in regulations to increase the FDI limit to 49% of equity issued.The
Indian government has supported an increase in the FDI limit, which requires a change in the Insurance
Act. The Union Budget for fiscal 2005 had recommended that the ceiling on foreign holding be
increased to 49.0%.

10
A change in the Insurance Act requires a passage of the bill in both houses of Parliament. The Indian
government has tabled the bill in the Upper House of Parliament in August 2010.

Initial Public Offer (IPO) rules for Indian Life Insurance Companies:-

A key piece of legislation impacting on the Life Insurance industries capital raising abilities is the
lock-n period of 10 years for investment to be limited to promoter group equity investments. Under the
Insurance Guidelines, Indian Life Insurance companies can opt for a public issue of equity through an
Initial Public Offer (IPO) after 10 years of operations.

In October 2010, the securities market regulator, Securities and Exchange Board of India (SEBI),
issued disclosure norms for Indian Life Insurance Companies seeking to make an initial public offer
for sale of equity shares to the public

 Birla Sun Life Insurance Company: -


Birla Sun Life Insurance Company is a 74:26 joint venture between Birla group and Sun Life
Financial. It is a private sector company. The company was registered on 31/1/2001. The market share
for FY 2015-2016was 1.72%.

 HDFC – Standard: -
HDFC standard is a 74:26 joint venture between HDFC and Standard Life. It is a private sector
company. The company was registered on 23/10/2000. The market share for FY 2015-2016was 1.66%.

 ICICI Prudential Life Insurance: -


ICICI Prudential Life is a 74:26 joint venture between ICICI and Prudential. It is a private sector
company. The company was registered on 24/11/2000. The market share for FY 2015-2016was 6.91%.

 Life Insurance Corporation of India (LIC): -


Life Insurance Corporation of India is a 100% government held Public Sector Company. Being the
first to be established LIC is the forerunner in the Life Insurance sector.The market share for FY
2015-16was 76.07%.

11
 Kotak Mahindra OLD Mutual:
Kotak Mahindra OLD Mutual is a 74:26 joint venture between Kotak Mahindra bank and Old
Mutual. It is a private sector company. The company was registered on 10/1/2001. The market
share for FY 2015-16was 0.71%.

 Max New York Life: -


Max New York Life is a 74:26 joint venture between Max Life Insurance & New York Life
Insurance. It is a private sector company. The company was registered on 6/8/2001. The market
share for FY 2015-2016was 1.28%.

 Aviva Life Insurance India: -


Aviva Life insurance is a 74:26 joint venture between Aviva and Dabur. It is a private sector
company. The company was registered on 14/5/2002. The market share for FY 2016-17 was 1.08%.

 ING Vysya Life insurance: -


ING Vysya Life Insurance is joint venture between Exide (50%), Gujarat Cements (14.87%), Enam
(9.13%) and ING (26 %). It is a private sector company. The company was registered on 2/8/2001.
The market share for FY 2015-16 is 0.54%.

 PNB Met Life India: -


Met Life India is a 74:26 joint venture between 74:26 JV between J &K Bank, PNB Bank and
MetLife M. Pallonji& Company. It is a private sector company. The company was registered on
6/8/2001. The market share for FY 2015-2016was 0.37%.

 Bajaj Allianz Life Insurance Co.: -


Bajaj Allianz Life Insurance Company is a 74: 26 Joint venture between Bajaj Auto limited and
Allianz AIG. The company was registered on 3/8/2001. The market share for FY 2015-2016was
4.75%.

12
 SBI Life Insurance Company Ltd: -
SBI Life Insurance Company is a 74: 26 Joint venture between SBI and Cardiff S.A. The company
was registered on 31/3/2001.It is a private sector company. The market share for FY 2015-2016was
2.98%.

 The TATA AIG Group: -


TATA AIG group is a 74:26 JV between Tata Group and AIG. It belongs to the private sector. The
company was registered on 12/2/2001. The market share for FY 2015-2016was 1.46%.

 Sahara India Life Insurance Company Ltd.: -


First Wholly Indian Owned Private Life Insurance Company. The Company commenced operations
from 30th October 2004. The market share for FY 2015-2016was 0.03 %.

 Shriram life insurance company Ltd: -


shiram Life is a recent entrant into the life insurance sector It is a 74:26 joint venture between the
Shriram group through its Shriram Financial Holdings and Sanlam Life Insurance Limited, South
Africa. The company expects to start operations soon.

 Reliance Life Insurance Co. :-


Reliance Life has acquired AMP SANMAR in 2001.Reliance Life is a subsidiary of Reliance
Capital. From 2011 Nippon Life Insurance has taken joint venture, it has 74:26 holding.

 SAHARA Life :-
Sahara life is a private player in insurance market in India. It is purely Indian company operating in
India without any foreign collaboration.

13
Market share of insurance company

Name of the company Market share(%)


Life Ins urance Corporation of India 76.07 %

ICICI Prudential Life Insurance Co 6. 91 %

Allianz Bajaj Life Insurance Co 4. 75%

SBI Life Insurance Co 2.98%

Birla Sun Life Insurance Co 1.72 %

HDFC Standard Life Insurance Co 1.66 %

TATA- AIG Life Insurance Company 1.46 %

Max New York Life Insurance Co. 1.28 %

Aviva Life Insurance 1.08 %

Om Kotak Mahindra Life Insurance 0.71 %

ING Vysya Life Insurance Co. 0.54 %

PNB MetLife Insurance Co. 0.37 %

Reliance Life Insurance Co. 0.46%

SAHARA LIFE 0.03%

14
Life Insurance Corporation of

1.08
0.71 Market Share India
ICICI Prudential Life Insurance Co
1.28 0.54
1.46 Allianz Bajaj Life Insurance Co
1.66 0.37 SBI Life Insurance Co
1.72 0.46 0.03
Birla Sun Life Insurance Co
2.98
4.75
HDFC Standard Life Insurance Co

6.91 TATA- AIG Life Insurance


Company
Max New York Life Insurance Co.

76.07 Aviva Life Insurance

Om Kotak Mahindra Life


Insurance
ING Vysya Life Insurance Co.

PNB MetLife Insurance Co.

Reliance Life Insurance Co.

SAHARA LIFE

15
INTRODUCTION
TO
THE COMPANY

16
LIC Of India .LTD:-

The Life Insurance Corporation of India has been a national-builder since its formation in1956.
The performance of LIC has been exemplary and has been growing from strength be it customer
base, agency network, branch office network, new business premium and the like. It has played a
significant role in spreading life insurance widely across the country. True to objectives of
nationalization, the LIC has invested the funds mobilized from policyholders for the benefit of the
community at large.

The other subsidiary companies under LIC are:


 Life Insurance Corporation (LIC) of India International – A joint venture offshore company
promoted by LIC which commenced its operations in July, 1989 with the objective of offering
policies denominated in US $ to NRIs residing in the Gulf.
 LIC Nepal – Formed in 2001 in joint venture with Vishal Group of Industries, Nepal.
 LIC Lanka – Formed in 2003 in joint venture with Bartlett Group of Companies, Sri Lanka
 LIC Housing Finance – Established in 19th June, 1989 in Dubai with the objective of providing
long term finance for construction of houses or apartments.
 LIC Housing Finance Limited Care Homes – A wholly owned subsidiary of LIC Housing Finance
which builds “Assisted Community Living Canters” for senior citizens

Channels of Distribution:-

Individual Agent: The individual agent has been the bedrock and the lynchpin in the marketing of
insurance, especially life insurance. The professional agent has been the strongest link between the
life insurer and the customer.
The professional agent has the onerous role of explaining the concepts, terms and conditions,
benefits and privileges of
the insurance contract.

He has to analyse the financial requirements and risks faced by thecustomers and market insurance
plans suited to the needs and means of the customers. All insurance companies and life insurance
companies in particular, have recognized the paramount importance of this channel.
The number of agents has grown at a spectacular rate. The total number of agents on they roll is
11,03,047as on 31.03.2007 as against 10,52,283 as on 31.03.2006.

 Corporate Agents: The number of corporate agents has grown in recent years. Corporate agent is a
concept introduced with a view to taking advantage of the presence of a large number of entities
with a sizeable client base, contacts andgoodwill already operating in the market. With multi
locations and a network of peopleassisting them, these entities have a different structure and

17
purpose. Hence their existing network could be utilized to market insurance. The corporate agent
could thusbedefined as a person – meaning a firm or company formed under the Companies
Act, 1956 or a banking company or a Bank/RRB or a co-operative society registered under theCo-
operative societies Act, 1912 or a panchayat or a NGO/MFI covered under the CoopSocieties Act
or a NBFC registered with RBI or any other institution. They assist greatly in the spread of
insurance through the greater reach of the institutions.

 Brokers: Brokers are permitted to sell products of more than one insurer. Brokers have been very
predominant in the non-life arena. Large risks require quite sophisticated expertise. Brokers have
played a very key role in this area both in selling products and in servicing of Insurance claims.
Brokers have now also entered the Life Insurance market.

 Banc assurance: Banc assurance is developing as an important channel in India. Thisissue to the
large reach and customer base of banks in both urban and rural areas in India. The persistency rate
in Banc assurance, due to the continuous contact with the client is better than in other channels.
The ease of payment of premium and the facility of maturity/claim payments through the bank
account make it a customer friendly channel.

 Referrals: This is a new concept very similar to getting a prospecting list and leads toaffect sales
with customers. It is evident that in addition to banks, there could be various other entities which
could act as a referral provider due to the large databaseof members/clients, like credit cardholders
association members, society members etc. In short, such institutions could share or market their
database to provide leads to the intermediaries to sell insurance products. The referral provider is
not a licensed intermediary, but can be regulated by the insurance Regulator, through
approvalofthe terms of the agreement, between the insurer and the referral provider.

 Direct Marketing: In the new technological environment, new innovative marketing systems have
evolved. The use of inter-net, web based sales, e- marketing, talecalling, mobile SMS have made
giant strides in reaching out to customers. This is an emerging channel which in future may grow
in size and proportion of sales. Thischannel requires active regulation which should be on issues of
transparency, disclosure, privacy, contract, TRAI guidelines etc. It would be necessary to give full
completeinformation through soft copies of proposal forms, schedules, policies etc.100 divisional
officesand connects all the branches through a Metro Area Network. LIC has tied up with
somebanks and service providers to offer on-line premium collection facility in selected
cities.LIC’s ECS and ATM premium payment facility is an addition to customer
convenience.Apart from on-line kiosks and IVRS, Info Centres have been commissioned at
Mumbai, Ahmadabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many
othercities. With a vision of providing easy access to its policy holders, LIC has launched

 SATELLITE SAMPARK OFFICES. The Satellite offices are smaller, leaner and closer tothe
customer. The digitalized records of the satellite offices will facilitate anywhere servicing and
many other conveniences in the future.

18
Awards Won
Some of the recent awards received by LIC are
 LIC has been ranked :” Number One Trusted Service Brand” in the Economic Times Brand Equity
Survey for the year 2008 for the 5th consecutive year, with overall ranking across all categories
going up from 27th to 12th.
 Readers Digest “Trusted Brand”2008 in the platinum category.
 SKOCH Challengers Award 2008 for our Micro Insurance Product JeevesMaher.
 Customer & Brand Loyalty Award 2008 in the Life Insurance category from India times
Mindscape.
 Rated as the “Most Preferred Life Insurance Company of the year” at the CNBC Ahwaz Consumer
Awards 2007 third time in a row.
 “Conferred Peacock Award “ for Excellence in Corporate Governance
 Conferred Outlook Money NDTV profit-“Best Life Insurer Award 2007”
 “Web 18- Genius of the Web award -2007 “For the best website in Insurance Category.
 Adjusted the” Best Life Insurance Company of the year”- at the Second NDTV Profit Business
Leadership Awards-2007.

Comparison of products

Life insurance products are designed to suit the requirements of customers. Fundamentally the
product provide for:
 Risk cover
 Investment
 Health cover
 Group plans
In every product, to a certain degree, risk cover is imperative for it to fall under the category of
insurance. Based on the coverage of the product, the premiums are calculated and the customer
pays accordingly. In order to suggest the right product, it is essential for an agent to understand the
requirements of the customer well.
Reliance Life Insurance Company Limited & LIC has offering different products which ,but for
the study some of the insurance are taken for comparison basically they are traditional plans
Traditional plans of Reliance life insurance & LIC of India which are listed as follows for
comparison:

The Life Insurance Corporation of India has been a national-builder since its formation
in1956. The performance of LIC has been exemplary and has been growing from strength be it customer

19
base, agency network, branch office network, new business premium and the like. It has played a
significantrole in spreading life insurance widely across the country. True to objectives of nationalization,
the LIChas invested the funds mobilized from policyholders for the benefit of the community at large.

The other subsidiary companies under LIC are:-


 Life Insurance Corporation (LIC) of India
International – A joint venture offshore company promoted by LIC which commenced its operations in July,
1989 with the objective of offering policies denominated in US $ to NRIs residing in the Gulf.
 LIC Nepal – Formed in 2001 in joint venture with Vishal Group of Industries, Nepal.
 LIC Lanka – Formed in 2003 in joint venture with Bartlett Group of Companies, Sri Lanka
 LIC Housing Finance – Established in 19th June, 1989 in Dubai with the objective of providing long term
finance for construction of houses or apartments.
 LIC Housing Finance Limited Care Homes – A wholly owned subsidiary of LIC Housing Finance which
builds “Assisted Community Living Canters” for senior citizens

Channels of Distribution:-

 Individual Agent: The individual agent has been the bedrock and the lynchpin in the marketing of
insurance, especially life insurance. The professional agent has been the strongest link between the life
insurer and the customer. The professional agent has the onerous role of explaining the concepts, terms
and conditions, benefits and privileges of the insurance contract. He has to analyse the financial
requirements and risks faced by the customers and market insurance plans suited to the needs and
means of the customers. All insurance companies and life insurance companies in particular, have
recognized the paramount importance of this channel. The number of agents has grown at a spectacular
rate. The total number of agents on they roll is 11,03,047as on 31.03.2007 as against 10,52,283 as on
31.03.2006.

 Corporate Agents: The number of corporate agents has grown in recent years. Corporate agent is a
concept introduced with a view to taking advantage of the presence of a large number of entities with a
sizeable client base, contacts and goodwill already operating in the market. With multi locations and a
network of peopleassistingthem, these entities have a different structure and purpose. Hence their
existing network could be utilized to market insurance. The corporate agent could thusbedefined as a

20
person - meaning a firm or company formed under the Companies Act, 1956 or a banking company or a
Bank/RRB or a co-operative society registered under theca-operative societies Act, 1912 or a panchayat
or a NGO/MFI covered under the Coop Societies Act or a NBFC registered with RBI or any other
institution. They assistgreatly in the spread of insurance through the greater reach of the institutions.

 Brokers: Brokers are permitted to sell products of more than one insurer. Brokers have been very
predominant in the non-life arena. Large risks require quite sophisticated expertise. Brokers have played
a very key role in this area both in selling products and in servicing of Insurance claims. Brokers have
now also entered the Life Insurance market.

 Banc assurance: Banc assurance is developing as an important channel in India. This issue to the large
reach and customer base of banks in both urban and rural areas in India. The persistency rate in Banc
assurance, due to the continuous contact with the client is better than in other channels. The ease of
payment of premium and the facility of maturity/claim payments through the bank account make it a
customer friendly channel.

 Referrals: This is a new concept very similar to getting a prospecting list and leads to affect sales with
customers. It is evident that in addition to banks, there could be various other entities which could act as
a referral provider due to the large database of members/clients, like credit cardholders association
members, society members etc. In short, such institutions could share or market their database to
provide leads to the intermediaries to sell insurance products. The referral provider is not a licensed
intermediary, but can be regulated by the insurance Regulator, through approval of the terms of the
agreement, between the insurer and the referral provider.

 Direct Marketing: In the new technological environment, new innovative marketing systems have
evolved. The use of inter-net, web based sales, e- marketing, talecalling, mobile SMS have made giant
strides in reaching out to customers. This isan emerging channel which in future may grow in size and
proportion of sales. This channel requires active regulation which should be on issues of transparency,
disclosure, privacy, contract, TRAI guidelines etc. It would be necessary to give full complete
information through soft copies of proposal forms, schedules, policies etc.100 divisional offices and
connects all the branches through a Metro Area Network. LIC has tied up with some banks and service
providers to offer on-line premium collection facility in selected cities.LIC’s ECS and ATM premium
payment facility is an addition to customer convenience.Apart from on-line kiosks and IVRS, Info
Centres have been commissioned at Mumbai, Ahmadabad, Bangalore, Chennai, Hyderabad, Kolkata,

21
New Delhi, Pune and many othercities. With a vision of providing easy access to its policy holders, LIC
has launchedSATELLITE SAMPARK OFFICES. The Satellite offices are smaller, leaner and closer
tothe customer. The digitalized records of the satellite offices will facilitate anywhereservicing and
many other conveniences in the future.

Awards Won:-
Some of the recent awards received by LIC are LIC has been ranked :” Number One
Trusted Service Brand” in the Economic Times Brand Equity Survey for the year 2008 for the 5th
consecutive year, with overall ranking across all categories going up from 27th to 12th.Readers Digest
“Trusted Brand”2008 in the platinum category.SKOCH Challengers Award 2008 for our Micro Insurance
Product JeevesMaher.Customer & Brand Loyalty Award 2008 in the Life Insurance category from India
times Mindscape.
 Rated as the “Most Preferred Life Insurance Company of the year” at the CNBC Ahwaz Consumer Awards
2007 third time in a row.
 “Conferred Peacock Award “ for Excellence in Corporate Governance
 Conferred Outlook Money NDTV profit-“Best Life Insurer Award 2007”
 “Web 18- Genius of the Web award -2007 “For the best website in Insurance Category.
 Adjusted the” Best Life Insurance Company of the year”- at the Second NDTV Profit Business Leadership
Awards-2007.

Comparison of products:-

Life insurance products are designed to suit the requirements of customers.


Fundamentally the product provide for:
 Risk cover
 Investment
 Health cover
 Group plans
In every product, to a certain degree, risk cover is imperative for it to fall under the
category of insurance. Based on the coverage of the product, the premiums are calculated and the customer
pays accordingly. In order to suggest the right product, it is essential for an agent to understand
the requirements of the customer well.

22
Reliance Life Insurance Company Limited & LIC has offering different products which ,but for study
some of the insurance are taken for comparison basically they are traditional plans Traditional plans of
Reliance life insurance & LIC of India which are listed as follows for comparison:

LIC Group Term Insurance Scheme:-

Group (term) Insurance Scheme is meant to provide life insurance protection


to groups of people. Administration of the scheme is on group basis and cost is low. Under Group
(Term)Insurance Scheme, life insurance cover is allowed to all the members of a group subject to
some insurability conditions without insisting upon any medical evidence. Scheme offers covers only
on death and
there is no maturity value at the end of the term.
Group (Term) Insurance Scheme is at present offered under One Year Renewable Group term
assurance plan (OYRGTA). Every year on Annual Renewal date LIC charges the premium depending
upon the changes in size and age distribution of the age group
Features:-
a)Group (term) Insurance Scheme has a number of varieties . The Scheme may provide for a uniform
cover to all members of the group or graded covers for different categories of members, cover for all
amounts of outstanding housing loans or vehicle advances, or some other benefits (e.g., life cover to
supplement pension or PF benefits in case of death). The schemes may have add-ons like Double
Accident Benefit,Critical Illness Benefit, Disability benefit etc.
b)The premium under such scheme may be wholly paid by the employer or the Nodal Agency.
However, the scheme may be contributory i.e. the members may also contribute
c)Double Accident Benefit, i.e. payment of double the sum assured on death due to accident (without
permanent disability benefit), may be allowed under Group Insurance Schemes for an extra premium.
d)For Group Insurance Scheme in lieu of EDLIS the insurability condition is that should be a member
of the Provident Fund Scheme of the employer. For other GI Schemes of employer-employee groups
the insurability condition is that the member should not be absent on ground of sickness on the entry
date. For all non-employer-employee Group Schemes the basic insurability condition is that the
member should be in good health on the date of entry.

23
e)At the commencement and thereafter on each Annual Renewal Date, the Group Policyholder will
have to send all the member's data (and particulars of the new entrants from time to time) to the P &
GS unit of LIC. Detailed OYRGTA premium calculation will be made on each Annual Renewal Date.

Modes allowed:-
Premiums can be paid regularly at yearly, half-yearly, quarterly or monthly intervals (through ECS
only or through salary deductions) over the Policy Term.
However, a grace period of one calendar month but not less than 30 days will be allowed for payment
of yearly or half-yearly or quarterly premiums and 15 days for monthly premiums

Reliance Group Term Assurance Plan:-


A non-linked, non-participating, one year renewable group term assurance plan Staying competitive in
this market requires a steady focus on your core business. Reliance Life Insurance Company Limited
takes on the responsibility of providing a customized protection solution to support and strengthen
your core business functions, which, if handled poorly or inefficiently, can undermine your
profitability
Features:-
a)Helps the employer to provide comprehensive financial security to the employees at a minimal cost
b)Flexibility for new members to join in and existing ones to leave the group
c)Simplified procedures for insurability – limited or no medical tests
d)Insured members can benefit from free cover limits
e)In case of surrender of the Master Policy, individual members of the group have an option to
purchase death cover with Reliance Life Insurance Company Limited.
f) In case of death full amount of sum assured is payable to nominee
g)In case of surrenderof the Master Policy, individual members of the group have an option to
purchase death cover with Reliance Life Insurance Company Limited, under an individual term,
individual endowment or whole of life policy, subject to our premium rates, terms, conditions and
availability at that time.

24
RESEARCH
METHODOLOGY

25
3.1 Title of the study
A study of Life Insurance plan as a part of financial planning at LIC
3.2 Duration of the project:-
The total duration of the project was 10 days.

3.3 Objective of the project:-

The objectives of the study are as follows:

1. To understand the conceptand mechanism of insurance.


2. To compare and analyze the financial performance of private sector lifeinsurance companies andLife
Insurance Corporation of India.
3. To predict the volume of new business and total premium of life insurance companies in India.
4. To compare the cost efficiency of life insurance companies in India.

3.4Type of research :-

 Descriptive: Description of the conditions as it exists presently. Includes survey & fact-finding
enquiries of different kinds.
Descriptive Research: -Descriptive research includes surveys and fact finding enquires
of different kinds. The major purpose of descriptive research is description of the state of
affairs as it exists at present. Researcher has no control over the variables of this type of
research.

Exploratory Research:-

 Involves exploring a general aspect.


 Includes studying of a problem, about which nothing or a very little is known.
 Helps in exploring new ideas.
 Helps in knowing the feasibility in attempting a study.

26
Applied research:-

 Based on the concept of the pure research.


 Is prolem oriented.
 Helps in finding results or solutions for real life problem.
 Provide evidences of usefulness to society.

Research Design
 The descriptive research has been used for my project work

Primary data:- Survey methods:


This method was adopted because it helps to procuring data and detail information from the
respondents. Here I collected data by filling questionnaires, directly talking to the respondents
.
Secondary data:
I have also used the secondary data which include various written documents and other related
information about the life insurance industry in India.

3.5 Sample size:-

sample size of the project is 100 peoples

3.6Scope of the study:-

The scope of present study is confined only to Public and all Private life insurance companies in India
from 2000-01 to 2016-17.The study mainly involves analyzing the financial performance and cost
efficiency of public and all private life insurance companies in India. Similar studies on this line may
be conducted to compare performance ofpublic and private insurance companies in other countries.

27
3.7 limitation of the study:-

The limitation of the study are as follows:-


1. The research is conducted only in five districts based on per capita income therefore people from low
capita income were not surveyed.
2. The study was limited to the insured population of rajastahn district only.
3. The researcher approached respondents with the help of insurance agents and personal contacts
therefore the sample respondents were approached from limited area.
4. The sample size was large and data was selected randomly therefore easily available policyholders
were approached by the researcher.

28
DATA
ANALYSIS

29
Q.1Doesdata gives information of the insured respondents of
insurer company?

SECTOR NO. OF RESPONDENTS SHARE


(%)

PUBLIC SECTOR LIFE 14 70


INSURER

PRIVATE SECTOR LIFE 6 30


INSURER

Sector

0 0

30%

Public sector

70% Private sector

Interpretation:-

In this study 70% of respondents like take insurance from public life insurer &
only 30% of respondents take insurer from private life insurer. This shows
respondents are more prone to take life insurance from public life insurer. It indicates
that public life insurer has better goodwill than private life insurer.

30
Q.2 Data gives information of the insured respondents about
prefrence of insurer?

PREFRENCE NO. OF RESPONDENTS SHARE


(%)

REPUTATION 8 40

PRICE OF PREMIUM 4 20

BENEFIT 3 15

FLEXIBLE PREMIUM 5 25
PAYMENT

Preference

25%
40%
Reputation
Price of Premium
15%
Benefits

20% Flexible Premium Payment

Interpretation:-This study shows that respondents prefer to take insurance depends


on individual’s preference. Respondents prefer reputation than any other factors.
Reputation has 40% share & Flexible premium payment has 25% share. These are the
two measure factors that are taken into consideration.

31
Q.3 What is the insured response about premium?

PREMIUM NO. OF RESPONDENTS SHARE


(%)

YES 11 55

NO 9 45

Column1
0 0

45%

55% Yes
No

Interpretation:-
This study shows that respondents are more concern with premium of policy.
55% of respondents are satisfied with the payment of insurance premium & 45% of
respondents are not satisfied with the payment of insurance premium.

32
Q.4 Data gives information of the insured respondents about period
selected?

PREMIUM PERIOD NO. OF RESPONDENTS SHARE


(%)

0-10 YEARS 3 15

10-15 YEARS 4 20

15-20 YEARS 5 25

20 YEARS OR MORE 8 40

Premium Payment Period

15%

40%
20% 0-10 Years
10-15 Years
15-20 Years
20 Years Or More
25%

Interpretation:-
This study shows that respondents while taking life insurance take into
consideration payment premium period. Respondents prefer 20 years or more for
taking life insurance & 0-10 years are less preferred. 20 years or more,15-20 years,10-
15 years & 0-10 years has 40%,25%,20% & 15% respectivel

33
Q.5 Data gives information of the insured respondents about mode of
premium?

MODE OF PREMIUM NO. OF RESPONDENTS SHARE


(%)

SINGLE PREMIUM 3 15

REGULAR PREMIUM 17 85

Mode Of Premium
0 0

15%

Single Premium
Regular Premium
85%

Interpretation:-
This study shows that respondents think more about the mode of premium.
Respondents are majorly pays the premium on regular basis that can be monthly
,quarterly ,half-yearly ,yearly basis.85% of respondents pays premium on regular
basis on the other hand only 15% respondents pays single premium on their life
insurance.

34
Q.6 Data gives information of the insured respondents about best
option for investment?

INVESTMENT OPTION NO. OF RESPONDENTS SHARE


(%)

POST OFFICE 3 15

LIFE INSURANCE 4 20

MUTUAL FUND 3 15

SHARE MARKET 4 20

BANK DEPOSITS 6 30

Investment Option

15%
30%
Post Office
20% Life Insurance
Mutual Fund
20% Share Market
15%
Bank Deposits

Interpretation:-
This study shows that respondents investment option for investing there
valuable resources. Most of the respondents are risk averse.30% respondents invests
there funds in bank deposit because they have less risk appetite & they are older.
Which gives them fixed & regular return .Respondents invest there fund in share
markets are 20% because they have high risk appetite & they are younger.

35
Q.7 Data gives information of the insured respondents about
promotional media of insurer?

PROMOTIONAL MEDIA NO. OF RESPONDENTS SHARE


(%)
TV ADVERTISEMENT 6 30

HOARDINGS 2 10
PAPER ADVERTISEMENT 3 15

BANNERS 1 5
AGENTS 8 40

Promotional Media

30%
40%
TV Advertisement
Hoardings
Paper Advertisement
10%
Banners
5%
15% Agents

Interpretation:-
This study shows that respondent while taking insurance consider the promotional
strategies of companies. Respondents prefer the olden ways like agents for taking
insurance because it gives better details of insurance product & helps in further
investment related education.

36
Q.8 Data gives information of the insured respondents about
suggetion?

SUGGETION NO. OF RESPONDENTS SHARE


(%)

YES 9 45

NO 11 55

Suggetion
0 0

45%

55% Yes
No

Interpretation:-
This study shows that respondents suggests about insurance product and the best
company which gives you better services.45% of respondents suggests about product
& service offered by insurer, they suggests details to their friends , families .55% of
respondents do not suggest to take insurance from any specific company

37
Q.9 How many people look towards inurance as an intrument for
future after 5 years?

No. Of respondents

Saving 10

Protection for family 20

Investment 50

Health care 20

10
20

saving
20
protection for family
investment
health care

50

INTERPRETATION:- the study shows that out of 100 among 10 persons are think
that the policy is purchased by them is as saving and 20 of them think as protection for
family and 50 of them think as investment and rest of them think as health care.

38
Q.10 What do you think while investing in private life insurance
companies will be?

No. Of respondents

As safe as lic 60

Not safe 35

Lesser safe than lic 5

60

50

40

30 Series1

20

10

0
as safe as lic not safe lesser safe than
LIC

INTERPRETATION:- in this chart the 60% of people thinks the policy is investing is
safe as lic but this is wrong tthinking of them and 35% of think as not safe to invest in
private insurance companies and 5% of them think as the policy is lesser safe than
comaprisio with lic.

39
FACTS
AND
FINDINGS

40
1.As the people think that insurance is a tool to protect their family & a tax saving device. They are
aware of the fact & realizing its, importance. The companies should try to expand & build up its
infrastructure because there is a large potential for insurance in India.

2.Company should come up with more branches in with the objective and goals to meet the demands
& expectations of the public. Because the entrance of private players will increase the competition and
it would be a tough task to secure a good position in market.

3.Since , LIC of India & Reliance Life Insuranceis leading with several companies’ policies it should
be easy for them to penetrate into the market and secure a good position if they pay greater attention to
the service part provided to their customer and thereby forming a long and trusted relationship.

4.As seen from the survey that at present 70% of the customer are having insurance policy out of
which 87.5% of the customer are planning for new investments. So it can be a good potential for the
company and they should make an attempt to trap these customers.

5. 43% of the customer is even ready to go for insurance if a service provider away from their home is
providing it. But intend they should provide good products and services. The company should try to
convince these customers and get them in its favor.

41
Swot analysis

42
Swot analysis :-
Strengths:- 1. Largest state-owned life insurance company in India, and also the
Country largest investor

2. Has over 2000 branches across all parts of India and more than 10,00,000 agents.

3. With Largest fund base it is the biggest investor in India

4. Has over 115,000 employees across India

5. According to The Brand Trust Report, LIC is the 8th most trusted brand of India

6. LIC has subsidiaries like LIC Housing Finance Limited, LIC Cards Services Limited, LIC Nomura
Mutual Fund, LIC(Nepal)Ltd, LIC(Lanka)Ltd, LIC(International)BSC(C)

Weakness:-

1. It has an image of a Government agency and hence lacks innovation

2. Being a Government agency, red tape and bureaucracy causes problems

3. Managing a huge workforce during economic crisis meant overburdened due to salaries

Opportunity:-

1. Use of Technology to provide effective services to cater to urban population.

2. Government Schemes implementation

Threats :-

1. Economic crisis

2. Entry of new NBFCs in the sector

3. Varying Govt policies

43
Conclusion

44
From the project analysis and interpretation the conclusions are::-

 Most untapped insurance market in India contains mostly middle class and lower class people.

 The customers give preference more to Brand name and flexible payment. Premium of policy
and benefits of the policy options are given less importance.

 Even though the premium price is not within the customer budget, if the benefits offered by
policy are good customers is ready to take the policy.

 The customers want the premium price to be within the budget, with good benefits.

 The private insurance companies are unable to tap the untapped insurance market certain
strategies should be formulated to grab the market.
 Most customers feel that setting up of stalls at appropriate locations and providing information
regarding various policies and benefits offered by the insurance company and create awareness
about the insurance company.

45
SUGGESTIONS

46
There is huge potential market for LIFE INSURANCE companies in India as out of 110 crore
population only 8 crore people are insured. The insurance companies should educate people about
insurance, its importance, different policies, and benefits of policies.
The people opt for policy by taking into consideration price of premium of policy, benefits of policy
and least importance is given to brand name. So the life insurance companies should look over the
price of premium, benefits of policy and even flexible payment options from the point of untapped
potential market in India.
The price of premium of a policy must be within the budget of common man and life insurance
companies should provide flexible payment options. By doing so, the private insurance companies can
surely capture the untapped market along with creating brand name.
LIC of India & Reliance life insurance, it has huge past experience around the world. But coming to
Indian perspective its positioning is not properly done in the customers mind. The advertisement of
LIC of India & Reliance life insurance in TV should contain briefly relevant message about its policy
and benefits of a policy. It should formulate strategies for attracting customers though promotional
activities and informative ads, so that common man can have an idea of what Reliance life insurance is
offering in a policy.
Though people generally to do the savings by various means, like Post Office, Fixed Deposit, Mutual
Fund, Gold, Real Estate, and Share Market etc.

47
APPENDIX

48
1. In which company you have Life Insurance Policy?
a) Public Life Insurance [ ]
b) Private Life Insurance [ ]

2. Among various insurance companies why did you chose the above mentioned
company?
a) Due to reputation of the company [ ]
b) Due to Price of premium of policy [ ]
c) Due to benefit of the policy [ ]
d) Flexible premium payment options [ ]

3. Is the premium within your budget?


a) Yes [ ]
b) No [ ]

4. Period of plans selected?


a) 0-10 years [ ]
b) 10-15 years [ ]
c) 15-20 years [ ]
d) 20 or more [ ]

5. Mode of premium?
a) Single premium [ ]
b) Regular premium [ ]

6. What is the best option of investment?


a) Post Office schemes [ ]
b) Life Insurance [ ]
c) Mutual Fund [ ]
d) Share Market [ ]

49
7. Which promotional media do you think is the best one to make people educate
about an insurance policy
a) TV advertisement [ ]
b) Hoardings [ ]
c) Paper advertisement [ ]
d) Banners [ ]
e) Agents [ ]

8. Did you suggest your colleagues, relatives or any of your friends about which is
the best company to opt for an insurance policy
a) Yes [ ]
b) No [ ]

9. How many people look towards inurance as an intrument for future after 5 years?

a) Saving

b) Protection for family

c) Health care

d) Investment

10. What do you think while investing in private life insurance companies will be?

a) As safe as lic
b) Not safe
c) Lesser safe than lic

50
BIBLIOGRAPHY

51
1.BOOKS/MAGAZINES REFFERED:

 Study guide –principles and practices of life /general insurance by AIMA

 Books published by insurance institute of India

 Life-insurance by Mc hill

 Insurance watch

 money outlook.

 Wikipedia.

 CR Kothari

2.WEBSITES REFERRED:

 WWW.LICINDIA.COM

 WWW.CIFAINSURANCE.COM

 WWW.MONEYOUTLOOK.COM

 WWW.INSURANCE.IND.COM

52

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