CHAPTER 1

INTRODUCTION

1.1. WHAT IS INSURANCE ?

The Insurance Sector Is Made Up Of The Companies Which Offer Risk Management In The
Form Of Insurance Contracts. The Basic Concept Of Insurance Is One Party I.E. The Insurer
Will Guarantee Payment For An Uncertain Event In Future. On The Other Hand Another
Party Policyholder Pays Smaller Premium To The Insurer In Exchange For The Protection
On The Uncertain Occurrence In The Future.

Insurance Is Contract Between Two Parties. One Party Is The Insured

And The Other Party Is The Insurer. Insured Is The Person Whose Life Or Property Is
Insured With The Insurer I.E. the Person Whose Risks Are Insured Is Called Insured. Insurer
Is The Insurance Company To Whom The Risk Is Transferred By The Insured I.E. The
Person Who Insures The Risk Of Insured Is Called Insurer. Therefore Insurance Is The
Contract Between Insurer And Insured. It Is The Contract In Which The Insurance Company
Undertakes To Indemnify The Insured On The Happening Of Certain Event For A Payment
Of Consideration. It Is A Contract Between The Insurer And Insured Under Which The
Insurer Undertakes To Compensate The Insured For The Loss Arising From The Risk
Insured. Insurance Is A Legal Agreement Between Two Parties I.E. The Insurance Company
(Insurer) And The Individual (Insured). In This, The Insurance Company Promises To Make
Good The Losses Of The Insured On Happening Of The Insured Contingency. It Is An
Arrangement By Which A Company Or The State Undertakes To Provide A Guarantee Of
Compensation For Specified Loss, Damage, Illness, Or Death In Return For Payment Of A
Specified Premium.
The Contingency Is The Event Which Causes A Loss. It Can Be The Death Of The
Policyholder Or Damage/Destruction Of The Property. It’s Called A Contingency Because
There’s An Uncertainty Regarding Happening Of The Event. The Insured Pays A Premium
In Return For The Promise Made By The Insurer.

The Insurance Industry Of India Consists Of 57 Insurance Companies Of Which 24 Are In

Life Insurance Business And 33 Are Non-Life Insurers. Among The Life Insurers, Life
Insurance Corporation (LIC) Is The Sole Public Sector Company. Apart From That, Among
The Non-Life Insurers There Are Six Public Sector Insurers. In Addition To These, There Is
Sole National Re-Insurer, Namely, General Insurance Corporation Of India (GIC Re). Other
Stakeholders In Indian Insurance Market Include Agents (Individual andcorporate), Brokers,
Surveyors And Third Party Administrators Servicing Health Insurance Claims.

India Is The Fifth-Largest Country In Asia In Terms Of Total Insurance Premium. The
Premium Income In The Country Increased To 4.7 Per Cent Of GDP In Fiscal 2006-07 From
3.3 Per Cent In The Fiscal 2002-03. Total Premium In The Insurance Industry Grew At A
CAGR Of 28.1 Per Cent During The Same Period. The Life Insurance Sector Grew At A
CAGR Of 29.3 Per Cent Outsmarting The General Insurance Sector’s CAGR Of 21.3per
Cent. The Indian Insurance Sector Has A Turnover Of Around Rs26,287 Crore. The Current
FDI In This Sector Stands At Around Rs2500 Crore And Market Experts Expects FDI To
Zoom By About 2.5 Times Once The FDI Cap Is Raised By Another 23 Per Cent To 49 Per
Cent.

By Nature Insurance Is A Devise Of Sharing Risk By Large Number Of People Among The
Few Who Are Exposed To Risk By One Or The Other Reason. However It Depends On The
Value Of Insurance For Which Payment Is Made In Case Of Contingency. This Provides
Basis Of The Amount To Be Paid. Most Insurance Contracts Are Expressed In Terms Of
Money, Although Some Compensate Insured’s By Providing A Service. A Life Insurance
Contract Obligates The Insurer To Pay A Specified Sum Of Money Upon The Death Of The
Person Whose Life Is Insured. Insurance Enables To Mitigate Loss, Financial Stability And
Promotes Trade And Commerce Activities Those Results Into Economic Growth And
Development. Thus, Insurance Plays A Crucial Role In Sustainable Growth Of An Economy.
 1.2. DEFINITION OF INSURANCE

Insurance Is Defined As A Contract, Which Is Called A Policy, In Which An Individual Or

Organisation Receives Financial Protection And Reimbursement Of Damages From The
Insurer Or The Insurance Company. At A Very Basic Level, It Is Some Form Of Protection
From Any Possible Financial Losses.

1.3. HISTORY OF INSURANCE

Insurance In Some Form Is As Old As Historical Society. So-Called Bottomry Contracts

Were Known To Merchants Of Babylon As Early As 4000–3000 BC. BottomryWas Also
Practiced By The Hindus In 600 Bce And Was Well Understood In Ancient Greece As Early
As The 4th Century Bce. The Insurance Contract Also Developed Early. The First American
Insurance Company Was Organized By Benjamin Franklin In 1752 As The Philadelphia
Contribution Ship. Property Insurance Was Certainly Not An Unknown Concept In The 18th
Century: England's Famed Insurer Lloyd's Of London Had Been Born In 1686. But It Took
Until The Mid-1700s For The American Colonies To Become Prosperous And Sophisticated
Enough To Develop The Concept. It Happened In Philadelphia, At The Time One Of The
Largest Cities In North America, With 15,000 Residents.

In India, Insurance Has A Deep Rooted History. It Finds Mention In The Writings Of Manu
(Manusmrithi), Yagnavalkya(Dharmasastra), And Kautilya(Arthasastra). The Writings Talk
In The Terms Of Pooling Of Resources That Could Be Re-Distributed In Times Of
Calamities. This Was Probably A Pre-Cursor To Modern Day Insurance. Ancient Indian
History Has Preserved The Earliest Traces Of Insurance In The Form Of Marine Trade Loans
And Carriers Contracts. Insurance In India Has Evolved Over Time Heavily Drawing From
Other Countries, England In Particular.

Marine Is The Oldest Form Of Insurance And Came First On The List. This Type Of
Insurance Probably Began In Northern Italy Sometime During The 12th & 13th Century And
Gradually The Concept Was Rather Transferred To Or Taken Over By The United Kingdom.
Marine Insurance As Such Was Not Being Practiced As A Separate Specialized Entity
During That Time Since It Was The Merchants Who Used To Transact Marine Insurance
Business Side By Side With Their General Trading Activities. However, Problems Used To
Arise As There Were No Set Rules Or Regulations For SettlingDisputes Arising Out Of
Marine Policies And It Was The Lombard Street Customs That Used To Influence The
Settlement Of Such Disputes. Marine Insurance Is The Oldest Branch Of Modern Insurance,
Originating With The Lombard Merchants In 13t H Century Italy, From Whence It Spread
To The Continent And Then To England. The British Dominated Maritime Trade And Also
Marine Insurance Throughout The 1800s And Well Into The 1900s. Fire Insurance Came
Second In The List Of Development. The Insurers Who Had Hitherto Been Doing Marine
Were Contemplating About Starting The Fire Insurance Business Also. About 7 Insurance
Companies Came Forward To Provide Fire Insurance Protection. But Due To The
Introduction Of Newer Types Of Hazards Arising Out Of Industrial Revolution Of The 19th
Century And Because Of The Increased Demand For Such Type Of Insurance, Some More
Companies Had To Come Into The Picture. The 1s T Modern Life Insurance Company Was
A Stock Company Called The Corporation For Relief Of Poor And Distressed Presbyterian
Ministers And The Poor And Distressed Widows And Children Of Presbyterian Ministers
Formed In 1759, But, At1st , The Life Insurance Is Only Offered To Its Members.

Early Life Insurance Companies Were Unable To Accurately Calculate How MuchReserves
They Had To Hold To Pay Claims. Additionally, Many People Who Bought Life Insurance
Could Not Continue The Payments, So They Sold Their Policy To Others For Money, Thus
Creating A Moral Hazard, As It Could Incentivize Some Buyers Of The Policies To Kill The
Insured, Especially Premiums Became Expensive Or The Insured Continued To Live Long
Afterwards. One Of The Major Components Of Insurance Regulation Was Regulating The
Solvency Of The Insurance Companies, Since Their Insolvency Could Ruin Many Businesses
And Individuals Who Depended On The Insurance. By The1800s And 1900s, Society And
Industry Were Becoming Far More Complex, Thus Giving Rise ToMany Other Forms Of
Insurance. For Instance, The First Auto Insurance Was Sold In 1897. During The 1920s, The
Sales Of Auto Insurance Greatly Increased As The Number Of Vehicles Increased.
 1.4. LIFE INSURANCE.

Insurance Has Become An Integral Aspect In Everyone’s Life Today. It Is A Written

Contract Of Insurance That Offers Protection Against Future Loss. The Life Insurance
Generally Helps To Insure The Life Of People. A Definite Compensation Is Provided By The
Insurer To The Insured Person. The Non-Life Insurance Provides Financial Support To
People Or Companies And Helps Them To Overcome The Losses. The Basic Human Trait Is
To Be Averse To The Idea Of Taking Risks. There Is Always An Urge To Minimize The
Risks And Provide Protection Against Possible Failure. The Risk Includes Fire, The Perils Of
Sea, Death, Accidents And Burglary. Any Risk May Be Insured Against At A Premium
Commensurate With The Risk Involved. Thus Collective Bearing Of Risk Is Insurance That
Provides Reasonable Degree Of Security And Assurance That Insured Will Be Protected In
The Event Of A Calamity Or Failure Of Any Sort. There Are Number Of Forces Driving The
Service Sector Today. Five Environmental Variables Universally Affect All Industries Are;
Buyer, Competitors, Government, Technology And Globalization. In Addition, There Are
Four Factors Of Particular Importance To Service Providers- Change In How Quality Is
Perceived, Cost Control, Customer Services And The New Definitions Of The Customer.
Services Are Relatively Intangible, Produced And Consumed Simultaneously And Often
Less Standardized Than Goods. These Heterogeneous Characteristics Of Servicespresent
Special Challenges And Strategic Marketing Opportunities To The Service Marketers.
TherealCompetition Between The Service Marketers Is Set On After Globalization, Financial
Reforms And Information Technology Progression. The Service Marketing Organization Has
To Adopt Professional Management Approach And Its Marketers Have To Imbibe The
Qualities Of Professionalism In Order To Meet The Expectation Of The Policyholders.
Hence, In This Study An Attempt Has Been Made To Discuss The Status Of Insurance In
Economy, Penetration Of Insurance Industry, Key Issues In Insurance, Behavior Of
Policyholders, Regulations And Legislations Insurance Industry And Other Such Emerging
Areas Of Marketing Of Insurance, Which Is One Of The Leading Services In Our
Country.1The Life Insurance Market Was Underdeveloped In The Developing Counties And
Started To Open Up New Vistas And Increase Its Cover With The Entry Of Private Players
Under The Supervision Of Regulatory Bodies. Initially The Life Insurance Was Seen More
As A Tax Saving Instrument Than A Life Insurance Product. The Pace Of Coverage
Extension Was Found To Be Awfully Inadequate. In Recent Times, There Has Been
Growing Awareness About Life Insurance Products And The Various Associated Benefits
Among The Policyholders. The Private Players Customized The Insurance Products And
Introduced Innovations In Annuity, Health, Education And Pension Plans. Offerings Like
Unit Linked Insurance Plans (Ulips) Have Done Their Bit To Draw Attention Of Individuals
Towards The Insurance Segment. Tax Benefits Have Also Contributed To Their Allure And
Helped In Popularizing Insurance Products. Conversely, There Are Products Like Medical
Insurance Or Mediclaim As It Is Commonly Referred To, Which Can Add Value To An
Individual‟S Insurance Portfolio, But Are Relatively Lesser Known. People Started Thinking
That Life Insurance Also Caters To The Increased Savings From The Households Thus
Increasing The Much Needed Domestic Savings. Awareness In The Benefit Of Life
Insurance As Such And Also As A Secondary Investment Instrument Had To The Increased
Interest In The Life Insurance Products. The Advertisement, Promotional Activities,
Ecommerce, M-Commerce And Viable Strategic Planning By The New Entrants In The
Insurance Market Have Also Helped In Spreading The Consumer Awareness And Policy
Benefits. The Distribution Of Life Insurance In Innovative Methods Apart From The
Standard Agent Based Model Has Also Helped In Creating Awareness And Interest Among
People. On-Line Insurance, Kiosks For Mallsurance, Bankasurance And Other Emarketing
Activities Are Insisting Marketers To Cater Varying Needs Of Intellectual, Rational And
Busy Policyholders As A Faster Mode Of Communication Approached By A Mass All Over
The World.AnInsurance Policy Is Primarily Meant To Protect The Income Of The Family’s
Breadwinners. The Idea Is If The Insured Die, Dependents May Hereto Continue To Live
Comfortably. The Circle Of Life Begins At Birth, Followed By Education, Marriage And
Eventually, After A Lifetime Of Work, People Look Forward To A Life Of Retirement.
Finances Too Tend To Change As People Go Through The Various Phases Of Our Life. In
The First Twenty Years Of Our Life, They Are Financially And Emotionally Dependent On
Parents And There Are No Financial Commitments To Be Met. In The Next Forthcoming
Years, They Gain Financial Independence And Provide Support To Their Families. This Is
Also The Stage When The Income May Be Insufficient To Meet The Growing Expenses Of
A Young Household. In The Following Twenty Years, As The Children Grow And Become
Financially Independent, People See Their Savings Grow, A Nest Egg Put Away For Life
After Retirement. The Final Twenty Years Of Life, Post Retirement Is The Time To Reap
The Rewards Of Hard Work. Life Insurance Is Also Being Promoted As A Vehicle For
Investment. The Unique Feature Of Insurance Is; It Covers The Risk Of Life And Provides
Better Return For Investment. Most People Would Like To Invest In Insurance For Risk
Hedging And Tax Saving Potential. The Government Provides Tax Saving Benefits For
Insurance. This Is Encouraging People To Save Their Money. The Other Options Of
Investment Are Mutual Funds, Share Market, Gold, Government Bonds/Securities, Bank And
Post Office Deposits. The Fluctuations And Financial Crisis In Stock Market Is Also
Changing Attitude Of Consumers For Exploring New Pattern Of Investments. Some Of The
Government Investments Plans Provides Return And Benefits After Certain Periods At
Limited Time Only. Life Insurance Provides Returns And Risk Coverage For Whole Life.
The Return May Come To The Policyholders On Monthly, Quarterly, Half Yearly And
Annual Basis. This Feature Is Possible In Money Back Policy And In Some Other Life
Insurance Prowhile Ducts.
 1.5. HISTORY OF LIFE INSURANCE SECTOR

In Today’s Day And Age, Life Insurance Is Something That Most People Are Aware Of And
Value As Part Of A Sound Financial Plan. It Offers A Way For A Parent To Help Ensure
Their Spouse And/Or Children Will Be Cared For Financially In The Event Of The Insured’s
Death. In Addition To Providing Additional Financial Protection For Its Beneficiaries,
Certain Types Of Life Insurance Can Even Serve As A Vehicle For Cash Accumulation. The
Options For Life Insurance Coverage Often Seem Endless – With Different Policy
TermsEndorsements, Product Structures And A Variety Of Underwriting Processes.
However, This Evolution And Progression In The Variety And Complexity Of Life Insurance
Products Over The Years Has Resulted In Consumers Having More Access Cost-Effective
Coverage To Meet Their Individual Need– When Life Insurance Was Born Ancient Romans
Believed That Anyone Who Was Not Given A Proper Burial (Regardless Of Social Stature)
Would Return As An Unhappy Ghost, So It Was Imperative To Ensure That Every Single
Person Who Died Was Buried In The Correct Manner. Just As They Do Today, Funerals
Cost Money In Ancient Rome. And In Order To Ensure That Cost Would Not Be A Barrier
To Following Proper Burial Protocol; Caius Marius (A Roman Military Leader) Started A
“Burial.

According To An Article Written In Life Health Pro About The History Of Life Insurance,
Caius Marius’s Scheme Worked As Follows: Should One Member Die Or Be Killed, The
Remaining Members Would Pool Together To Pay For His Funeral Expenses. Over Time,
This Practice Even Evolved To Provide A Sum Of Money To Any Survivors Of The
Deceased.ModernEvolution Of Life Insurance ThisAncient Attempt At Formalizing Life
Insurance Eventually Faded Away After The Fall Of The Roman Empire. But The Concept
Of Putting A Value On Human Life Was Revisited Again In The Early 18th Century When
The Amicable Society For A Perpetual Assurance Office Was Formed In London. Members
Each Made A Yearly Payment For Each Share They Owned. At The End Of The Year, A
Portion Of This Group Contribution Was Divided Up Among The Wives And Children Of
Any Member Who Had Died During The Year. The Payment Was Proportionate To The
Amount Of Shares Owned By The Member.2 The Idea That A Human Life Had Value And
That It Was Possible To Provide For Beneficiaries And Cover Funeral-Related Expenses
With Insurance Was Becoming More Evident. In The United States, Life Insurance Came
Into Being In 1759, Through The Presbyterian Synods In Philadelphia And New York City.
The Widows And Children Of Presbyterian Ministers Were The Beneficiaries In The Event
Of The Death Of A Presbyterian Minister.1Toward The Late 19th Century, The Concept Of
Sharing Risk And Reward Was Revisited When “Tontines” Became Available Through The
Equilife Assurance Society. They Were Developed Primarily To Allow Equilife To Compete
In The Market And They Revolutionized The Insurance Industry At The Time Because They
Offered An Investment Option To Middle-Class Americans.

1.6. CURRENT SCENARIO.

Global Integration Of Financial Markets Resulted From Deregulating Measures,

Technological Information Explosion And Financial Innovations. LiberalizationAnd
GlobalizationHave Allowed The Entry Of Foreign Players In The Insurance Sector. With The
Entry Of Private And Foreign Players In The Insurance Business, People Have Got A Lot Of
Options To Choose From. Radical Changes Are Taking Place In Customer Profile Due To
The Changing Life Style And Social Perception, Resulting In Erosion Of Brand Loyalty. To
Survive, The Focus Of The Modern Insurers Shifted To A Customer-Centric Relationship.
 1.7. NEED FOR LIFE INSURANCE

 Temporary Needs/ Threats-The Original Purpose Of Life Insurance Remains An

Important Element, Namely Providing For Replacement Of Income On Death Etc.
Typically In The Case Of The Breadwinner Dying An Early Death.
 Regular Savings-Providing For Ones Family And Oneself, As A Medium To Long
Term Exercise (Through A Series Of Regular Payment Of Premiums). This Has
Become More Relevant In Recent Times As People Seek Financial Independence
From Their Family.
 Investment- Insurance Also Helps In Building Up Of Savings While Safeguarding It
From The Ravages Of Inflation. Unlike Regular Saving Products, Investment
Products Are Traditionally Lump Sum Investment, Where The Individual Makes A
One-Time Payment.
 Retirement-Provision For One’s Own Later Years Becomes Increasingly Necessary,
Especially In A Changing Cultural And Social Environment. Therefore, A Suitable
Insurance Policy Can Provide Periodical Payments In One’s Old Age.
 Minimizing Risk- Life Cannot Be Compensated By Anything But Financial Help In
Hard Time Can Support Anyone. An Earning Member In Family Wants To Secure
His Family Who Are Financially Dependent And Need Life Insurance. Nevertheless,
The Question Is „How Much Life Insurance Is Required‟ At A Time. ThereAre Many
Factors That Are Relevant In Determining The Amount Of Life Cover One Should
Buy At A Time. It Is Essential That A Particular Level Of Income Should Be
Maintained For The Family Even When Its Breadwinner Is Not Around.
 Social Security- Insurance Also Provide Some Social Security That Insured Expects
In Future Such As A Particular Sum Of Money For The Education And Wedding Of
Children. One May Like To Buy An Insurance Policy For A Specific Sum To Meet
Such A Lump Sum Commitment.
 Transfer Of Risk- Payment Of Insurance Premium Results In An Outflow Of
Disposable Income. Insurance May Solve Future Cash Inflow Problems That Will
Occur During Ones Lifespan. Therefore, Provide A Cover And Transfer The Risk.
 Diffusion Of Risk- The Amount And Mode Of Payment Spend On Insurance Is As
Per The Option Picked By One According To His Own Choice. Therefore One Can
Park Funds According To Their Choice Of Risk And Return.
 Profitable Opportunity- Our Present Age Is A Critical Factor In Deciding The
Quantum Of Insurance That One Can Afford. The Rates Of Premium Go Up With
The Advancing Age Of The Life Assured. Hence, One Can Buy More Insurance For
The Same Premium At A Younger Age Than At An Older Age. The Final Decision
Rests Upon A Careful Consideration And Balance Of All The Above Factors. The
Need For Minimum Protection May Be Quite High, But The Current Need For
Disposable Income May Not Immediately Permit Buying Adequate Insurance.
 Tax Savings- If People Have An Option Of Risk Coverage With Guaranteed Return
And Tax Saving They Will Surely Prefer It. Generally Policyholders Take Into
Account The Tax Benefit Under Section 80C.
1.8. ADVANTAGES AND FEATURES OF LIFE INSURANCE

 Insurance Products Are Better Than A Traditional Saving Instrument: As Well

As Providing A Secure Vehicle To Build Up Savings. In The Event Of
Premature Death, Of Say The Main Earner In The Family, The Policy Will
Pay Out The Guaranteed Sum Assured, Which Is Likely To Be Significantly
More Than The Total Premiums Paid. With More Traditional Savings
Vehicles, Such As Fixed Deposits, The Only Return Would Be The Amount
Invested Plus Any Interest Accrued.
 Insurance Provides Easy Settlement And Protection Against Creditors: Once
A Person Is Appointed For Receiving The Benefits (Nomination) Or A
Transfer Of Rights Is Made (Assignment), A Claim Under The Life Insurance
Contract Can Be Settled Easily. In Addition, Creditors Have No Rights To
Any Monies Paid Out By The Insurer, Where The Policy Is Written Under
Trust. Under The Married Women’s Property Act (M.W.P Act), The Money
Available From The Policy Forms A Kind Of Trust Which Cannot Be
Attached By Judgment Creditors.
 Insurance Helps To Achieve The Purpose Of The Life Assured:If Someone
Receives A Large Sum Of Money, It Is Possible That They May Spend The
Money Unwisely Or In A Speculative Way. To Overcome This, The Person
Taking The Policy Can Instruct The Insurer That The Claim Amount Is Given
In Installment
 Insurance Can Be Enchased And Facilitates Quick Borrowing: Some
Contracts May Allow The Policy To Be Surrendered For A Cash Amount, If
A Policyholder Is Not In A Position To Pay The Premium. A Loan, From
Certain Policies, Can Be Taken For A Temporary Period To Tide Over The
Difficult. Some Lending Institutions Will Accept A Life Insurance Policy As
Collateral For A Personal Or Commercial Loan.
 Disability Benefits:Death Is Only The Hazard That Is Insured. Many Policies
Also Include Disability Benefits. These Provide For Waiver Of Future
 Premiums And Payments Of Monthly Installments Spread Over Certain Time
Period.
 Tax Relief And Savings: The Policyholder Obtains Income Tax Rebated By
Paying The Insurance Premium. The Specified Forms Of Saving Which Enjoy
A Tax Rebate, Under Section 88 Of The Income Tax Act, Include Life
Insurance Premiums And Contributions To A Recognized Provident Fund
Etc., Section 10 (10D) And Other Sub-Sections Of Section 80 Of The Income
Tax Act.
2. PROFILE OF LIFE INSURANCE CORPORATION

Life Insurance Corporation Of India Is An Autonomous Body. It Is Authorized To Run The

Life Insurance Business In India With Its Head Office In Mumbai. The Parliament Of India
Passed The Life Insurance Corporation Act On The 19th Of June 1956, And The Life
Insurance Corporation Of India Came Into Existence On 1st September, 1956, With The
Objective Of Spreading Life Insurance Extensively And In Particular To The Rural Areas
With A View To Reach All Insurable Persons In The Country And Providing Them Adequate
Financial Cover At A Reasonable Cost. There Were 154 Indian Insurance Companies, 16
Non-Indian Companies And 75 Provident Fund Societies Operating In India At The Time Of
Nationalization. The Nationalization Process Took Place In Two Stages; Initially The
Management Of The Companies Was Taken Over By Means Of An Ordinance, And Later,
The Ownership Was Accomplished By Means Of A Comprehensive Bill. From The
Establishmentto Present Day, LIC Has Crossed Many Milestones And Has Set
Unprecedented Performance Records In Various Aspects Of Life Insurance Business.

The Visionary People Who Spearheaded This Move At That Time And Incorporated An
Entity By An Act Passed By The Parliament That Will Provide Life Insurance To Indians,
Especially The Vast Rural People, At An Economical Cost And Channel The Domestic
Savings For The Betterment Of The Nation. It Is The Largest Life Insurance Company In
India And Also The Country’s Largest Investor. It Is Fully Owned By The Government Of
India LIC Continues To Be The Dominant Life Insurer Even After Liberalization Scenario In
Indian Life Insurance Industry And Is Moving Fast On A New Growth Trajectory Surpassing
Its Own Past Records. Today LIC Function With 2048 Fully Computerized Branch Offices,
113 Divisional Offices, 8 Zonal Offices And The Corporate Office. LIC’s Wide Area
Network Covers 113 Divisional Offices And Connects All The Branches Through A Metro
Area Network. LIC Has Tied Up With Several Banks And Service Providers To Offer On-
Line Premium Collection Facility In Selected Cities.

In January 2016, LIC Has Launched E-Services To Access, Manage And Track The Policy
Details From Anywhere At Any Time. The Electronic Clearance Systemecs) And ATM
Premium Payment Facility Is An Additional Benefit Provided By LIC For Better
Convenience To Its Customer. Apart From On-Line Kiosks And Interactive Voice Response
System (IVRS), Info Centers Have Been Commissioned At Major Cities Like Mumbai,
Ahmadabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune Etc. With The
Vision Of Providing Easy Access To Its Policyholders, LIC Has Launched Its SATELLITE
SAMPARK Offices Across The Nation. The Digitalized Record Of The Satellite Offices Will
Facilitate Policyholder’s Records Anywhere And At Any Time To Serve Conveniently In
The Future. LIC Has Crossed Several Milestones And Has Set Unprecedented Performance
Records By Insuring Large Numbers Of People In Life Insurance Business.

2.1. MISSION AND VISION OF LIFE INSURANCE CORPORATION

MISSION

"Explore And Enhance The Quality Of Life Of People Through Financial Security By
Providing Products And Services Of Aspired Attributes With Competitive Returns, And By
Rendering Resources For Economic Development."

VISION

"A Trans-Nationally Competitive Financial Conglomerate Of Significance To Societies And

Pride Of India
3. PROFILE OF ICICI PRUDENTIAL CO.

ICICI Prudential Life Insurance Company (ICICI Prudential Life) Is A Joint Venture
Between ICICI Bank Ltd., India's Largest Successful Private Sector Bank, And Prudential
Plc, A Leading International Financial Services Group Headquartered In The United
Kingdom. ICICI Prudential Life Was Amongst The First Private Sector Life Insurance
Companies To Begin Its Operations In December 2000 After Receiving Approval From
Insurance Regulatory Development Authority Of India (IRDAI). Earlier The ICICI Bank
Holds 74 Percent And Prudential Plc Is Having 26 Percent Stake In The Joint Venture
According To The Government Rules. ICICI Bank On November 15 2015 Approved A 6
Percent Sale In ICICI Prudential Life Insurance And After The Deal, The Bank Will Hold 68
Percent Stake, While The Prudential PLC (The Joint Venture Partner) Will Hold 26 Percent.
The Remaining 6 Percent Stake Will Be Sold To Pemjii Investment And Compassvale
Investment. The Company Innovative Initiatives Is Purely Committed To Customers At The
Core Of Every Aspect, Be It Product Development, Distribution, The Sales Process Or
Servicing And Claims Settlement. The Product Development Is Undertaken With Thorough
Research And Understanding Of The Needs Of Customers. For Over A Decade, ICICI
Prudential Life Insurance Has Maintained Its Focus On Offering A Wide Range Of Flexible
And Innovative Products That Meet The Needs Of The Indian Customer At Every Stage In
Life. The Customer Centric Approach Of The Company Has Ensured That The Various
Products Offered By The Company Strategically Fit Into The Financial Plan Of The
Customers And Helps Them In Achieving Their Various Long Term Financial Goals. In
Addition, ICICI Prudential Life Also Has A Comprehensive Multichannel Distribution
Network Across Various Geographic And Income Segments To Ensure That Its Products
And Services Are Accessible To Every Customer. ICICI Prudential Life Insurance Has Been
Helping Customers Meet Their Long Term Financial Goals By Adopting An Investment
Philosophy That Aims To Achieve Risk Adjusted Returns Over The Long Term. The
Customer Centric Approach And Focus On Upgraded Technology And Innovation In Product
Development Has Enabled The Company To Acquire The Abundant Support Of Its
Customers And Creating A Trusted Brand In The Indian Life Insurance Sector. The
Company Is Continuously Focused On Profitable Growth Opportunities In The Market With
Customisedregional Strategy To Strengthen Relative Position In Key Micro Markets In The
Country. With 547 Branches And Over 5000 Partner Points Of Presence, The Company Is
Able To Cover 527 Districts In Country. ICICI Prudential Life's Capital Infused Stands At
Rs. 48.16 Billion (As On 31st March, 2015). For The FY 2014-15, The Company Garnered A
Total Premium Of Rs. 153.07 Billion. The Company Has Assets Under Management Of Rs.
1001.83 Billion As On 31st March 31, 2015. There Has Been A 4.3% Growth In Profit After
Tax (PAT) For The Company And Increased To Rs. 16.34 Billion In FY2015 Compared To
Rs. 15.67 Billion In FY2014. The Financial Position Of The Company Remained Strong And
Stable With A Solvency Margin Of 336.9% In FY2015 Compared To 372.3% For FY2014
Againstregulatory Requirement Of 150%. This Strong Financial Position Will Surely Help
The ICICI Prudential In Acquiring More Market Share And Attracting The Potential
Customer While Retaining The Existing Customers.
3.1. PROMOTERS OF ICICI PRUDENTIAL

(A) ICICI BANK

ICICI Bank Private Limited Is India's Leading Private Sector Bank, With Consolidated Total
Assets Of Rs. 8260.79 Billion As On 31st March 2015. ICICI Bank's Subsidiaries Include
India's Leading Private Sector Life Insurance Companies, The Largest Online Retail
Brokerage And Among Its Largest Mutual Funds And Private Equity Firms. ICICI Bank Is
Having Wide Network Of Operation And Currently Doing Business In 17 Countries,
Including India.

(B) PRUDENTIAL PLC

Prudential Plc Is A Company Incorporated With Its Principal Place Of Business In England,
And Its Affiliated Companies Constitute Leading Financial Services Groups In The World. It
Provides Insurance And Financial Services Through Its Subsidiaries And Affiliates
Throughout The World. It Has Been In Existence For More Than 166 Years And Has
Rs.3628.38 Billion In Assets Under Management (As On 31st December 2014). Prudential
Plc Is Not Affiliated In Any Manner With Prudential Financial, Inc., A Company Whose
Principal Place Of Business Is In The United States Of America.
 3.2. VISION AND VALUES OF ICICI PRUDENTIAL COMPANY

VISION:

To Be The Dominant Life, Health And Pensions Player Built On Trust By World-Class
People And Service.

This We Hope To Achieve By:

 Understanding The Needs Of Customers And Offering Them Superior Products And
Service
 Leveraging Technology To Service Customers Quickly, Efficiently And Conveniently
 Developing And Implementing Superior Risk Management And Investment Strategies
To Offer Sustainable And Stable Returns To Our Policyholders
 Providing An Enabling Environment To Foster Growth And Learning For Our
Employees
 And Above All, Building Transparency In All Our Dealings.

OUR VALUES:

The Success Of The Company Will Be Founded In Its Unflinching Commitment To 5 Core
Values -- Integrity, Customer First, Boundary-Less, Humility And Passion. Each Of The
Values Describes What The Company Stands For, The Qualities Of Our People And The
Way We Work. Every Member Of The ICICI Prudential Team Is Committed To The 5 Core
Values And These Values Shine Forth In All We Do.
Boundary Less – I Will Treat Organization Agenda As Paramount

Integrity – What I Do When Nobody Is Watching Me

Humility – Openness To Learn A Change

Customer First – Service Excellence Towards Internal And External Customers

Passion – Demonstrates Infectious Energy And Enthusiasm

We Do Believe That We Are On The Threshold Of An Exciting New Opportunity, Where

We Can Play A Significant Role In Redefining And Reshaping The Sector. Given The
Quality Of

Our Parentage And The Commitment Of Our Team, There Are No Limits To Our Growth.
4. LIC- AHEAD OF ALL

LIC Of India Has Mobilized ` 12,361 Crore Of New Business Premiums In March, 2007 The
Highest Recorded By The Corporation In Any Single Month. This Has Enabled The
Corporation Post New Business Premium Of ` 55,934 Crore In 06-07, A 118 Percent Growth
Over The Previous Year. LIC‟S Premium Collection In March ‟07 Was Higher Than The
Premium Collected In The Whole Of Whole Of ‟03-04. LIC‟S Has Been The Growth Driver
For The Entire Life Insurance Industry Which Grew 110.7 Percent To ` 75,406 Crore From `
35,897 Crore During The Current Financial Year. The Rise In Premium Gives LIC A Market
Share Of Over 74 Percent Of The Total New Business Premium Mobilized In India, Which Is
Substantially Higher Than The 72 Percent As On March 106. The Rise In Premium Is On
The Back Of Unit-Linked Policies Which Account For Nearly 70 Percent Of The Total
Individual Premium. The Surge In Sales In March Attributed To Higher Sales Of Unit Linked
Insurance And Group Insurance Business. In March The Corporation Booked Over ` 4,826
Crore In Group Insurance, Which Accounted For Nearly 30 Percent Of Total Collections.
Collection From Single Premium Plans Amount To ` 24,927 Crore, Which Is Nearly 44
Percent Of The Premium Raised By The Corporation During The Current Fiscal. Single
Premium Plans Are A Demand Of The Market. There Are A Large Section Of People Who
Do Not Want To Commit Premium Payments For Every Year. Meanwhile, The Private Life
Insurance Industry Has Recorded A Growth Of 89 Percent With Total New Business
Premium For The Year Standing At ` 19,471 Crore As Against ` 10,252 Crore In The
Corresponding Period Last Year.

ICICI Prudential Continues To Be The Largest Private Life Insurance Player With A Market
Share Of 7 Percent Followed By Bajaj Allianz Life Insurance Which Has A Market Share Of
5.7 Percent. The Companies That Have Recorded The Fastest Growth In The Current Year
Include Reliance Life Insurance, Which Grew 381 Percent Recording New Business
Premium Of ` 931 Crore, Followed By SBI Life Insurance Which Grew 209 Percent To`
2,566 Crore. The High Growth Has Enabled SBI Life To Move Into The Number Three
Positions After Bajaj Allianz Life Insurance.

Life Insurance Corporation Of India, Under The Act (LIC Act 31 Of 1956 Dated June 18,
1956) Was Constituted In The Year 1956. At The Time Of The Nationalisation, The
Corporation Took Over The Assets And Liabilities Of 245 Private Insurance Companies. The
Total Life Business Taken Over A\Was Around ` 1,128.06 Crores, Under 47.82 Lakh
Policies; Of Which, The Share Of Indian Insurance Was Around 87.25 Percent And That Of
The Non-Indian Insurance Was 12.28 Percent. From The Time Of Nationalisation Of The
Life Insurance Business In India In 1956 Until The End Of 1999, Life Insurance Corporation
Of India Was The Only Body Authorised To Transact Life Insurance Business In India.
 CHAPTER 2

RESEARCH METHODOLOGY

2.1.OBJECTIVE

 To Compare And Rate Public And Private Life Insurance Company By

AnalysingCertain Variables

 To Measure The Customer Perception, Purchase Behaviour Consume Awareness

Regarding The Life Insurance Industry

 To Create A Basic Awareness About The Policies And The Other Benefits Of Life
Insurance Company Among The Public

 To Examine The Preference Of The Policyholder Towards Various Types Of Policies

Of Insurance

 To Study About The Profitability Index Earned By LIC And ICICI Prudential Co.

 To Know The Whether The Customer Are Satisfied With The Service Provided By
Their Company

 To Know About The Various Services Provided By The Company To It’s Customer
2.2 HYPOTHESIS

 H0 :INSURANCE POLICIES DO NOT PROVIDE EFFICIENT SERVICE TO THE

POLICYHOLDER

 H1:INSURANCE POLICIES PROVIDE EFFICIENT SERVICE TO THE

POLICYHOLDER

 H0: AGE IS NOT AN FACTOR FOR OPTING AN INSURANCE POLICY

 H1: AGE IS AN FACTOR FOR OPTING AN INSURANCE POLICY

2.3 LIMITATION OF STUDY

 DUE TO SOME TECHNICAL GLITCH SOME OF THE RESPONDENTS WERE

UNABLE TO ACCESS THE GOOGLE FORMS.
 SOME OF THE RESPONDENTS DID NOT RESPOND TO THE GOOGLE
FORMS SENT TO THEM
 WHILE COLLECTING THE DATA THE REQUIRED INFORMATION WAS
UNABLE TO FIND
 THERE WAS NO ACCESS TO SOME OF THE WEBSITES SO THERE WAS A
DIFFCULTY IN FINDING THE REQUIRED DATA
2.4 TYPES OF INSURANCE PRODUCTS PROVIDED BY LIC

 TERM INSURANCE

Term Insurance Pays A Death Benefit To The Legal Heirs If The Person Insured Dies During
The Term Of The Policy. SuchA Policy Provides Cover For A Specified Period Only And
May Be Described As Temporary Insurance. Term'Insurance Plans' Offer Pure Risk Cover
Without Any Element Of Saving. Hence, They Are The Most Inexpensive. The Sum Assured
Is Payable Only If The Insured Dies During The Selected Period. In Case The Insured Does
Not Die During The Tenure Of Insurance, Nothing Is Payable.

Term Insurance Plans Could Be Of The Following Different Types.

1. Level Term Insurance-Under This Plan, There Is A Uniform Premium And Benefit
Throughout The Term Of The Policy. In The Event Of Death Anytime During The
Term, The Same Sum Assured Is Payable. Where The Term Is For Over A Year, The
Renewal Premium Is The Same Each Year.ThisPolicy Plan Is The Most Popular Term
'Insurance Plan Mainly' Because Of Its Simplicity. It Is An Answer To A Temporary
Need Which Neither Increases Nor Decreases Over That Period Of Time. For
Example, A Lump Sum Amount Which Is Due At A Certain Point Of Time.

2. Decreasing Term Insurance-Under This Plan, The Premium Is Constant

Throughout The Term, But The Benefit Decreases Over A Period Of Time. Hence,
The Amount Payable On Death Depends On The Timing Of The Death, Even Though
The Premium Being Paid Is Constant. ThisPlan Is Suited To Cases Where There Is A
Temporary Need, Which Is Reducing. ForExample, Where A Mortgage Loan Has To
Be Repaid, Which Reduces On A Monthly Or Annual Basis.

3. Increasing Term Insurance-Under This Plan, The Premium As Well As The

Benefit Amount Increases Periodically, As Agreed. The Increases Could Be At A
Fixed Percentage Or In Line With An Agreed Insurance ThisPlan Is Helpful In
 Keeping The Benefits In Line With The Time Value Of Money, So That Inflation
Does Not Erode The Value Of The Benefits Received.

4. Renewable Term Insurance-Though Term 'Insurance' Is For A Fixed Period, A

Renewable Term Policy Gives The Right To Renew The Policy Without Submitting
Fresh Evidence Of Health. The New Premium, However, Is Increased To Reflect The
Increased Age Of The Life Insured.

5. Convertible Term Insurance-Such A Plan Includes A Conversion Privilege,

Which Gives The Proposer The Right To Convert The Policy To A Permanent Plan
(Endowment) Without Evidence Of Health. If Such An Option Is Exercised, The
Premium For The New Plan Must Be The Standard Rate For Such A Plan And The
Actual Age Of The Life Insured On The Date Of Conversion Of Policy.
ConvertiblePolicies Are Useful For People Who Have Low Income Today And
Hence Cannot Afford To Pay High Premium In The Initial Years.

 WHOLE LIFE INSURANCE

Whole Life Insurance Guarantees A Death Benefit Cover Throughout The Course Of Life,
Provided The Required Premiums Are Paid.The Advantage Of Whole Life Insurance Is That
The Policy, If Kept Current, Covers You Over Your Entire Life, As Opposed To Term
Insurance' That Covers You Only For A Certain Term Of Years. Whole Life Insurance
Policies Pay Out On The Death Of The Assured, Whenever It Occurs. Premiums May Need
To Be Paid Throughout The Life Of The Assured, Or A Lesser Limited Period.

 ENDOWMENT INSURANCE

Pure Endowment Is A Plan Where The Benefit Is Payable To The Insured Only On Survival
Of The Specified Term. Combining The Features Of Term Assurance And Pure Endowment
Are Endowment Policies Which Pay Out Either On The Death Of The Assured, Whenever It
Occurs, Or After A Fixed Number Of Years.ShouldThe Insured Person Survive The Term Of
The Policy, The Policy Is Said To Mature. Hence, The Claim, Under An Endowment Policy,
May Arise Either By Death Or By Maturity.

 ANNUITIES

Annuities Are A Form Of Pension Is Which An Insurance Company Makes A Series Of

Periodic Payments To A Person (Annuitant) Or His Her Dependents Over A Number Of
Years (Term), In Return For The Money Paid To The Insurance Company Either In A Lump
Sum Or In Installments.Annuities Start Where Life Insurance Ends. It Is Called The Reverse
Of Life Insurance. Annuity Stops On Death Of A Person, Whereas Theoretically, Life
Insurance Starts On The Death Of The Assured.Immediate Annuity-Immediate Annuity
Begins At Once Are Immediately On Expiry Of The Designated Period. Immediate Annuity
Is Purchased With A Single Premium Called Purchase Price. This Type Of Annuity Is
Typically Purchased When Person Reaches Retirements Age And Has A Lump Sum To
Invest.If The Person Buying The Annuity Dies During The Term, His/Her Legal Heirs Or
Nominees Get The Remaining Instalments Of The Annuity.

1. Deferred Annuity-

Under A Deferred Annuity Plan, The Annuity Payments To The Annuitant

Commence At Some Specified Time Or Specified Age Of The Annuitant. This Type Of
Annuity Can Be Funded Either By A Single Payment Or A Series Of Regular Payments. The
Annuity Payment Starts After The Lapse Of A Selected Period Called The Deferment Period.
Other Than The Above, The Following Two Types Of Policies Are Also Popular In India:-

 UNIT LINKED POLICIES

A Unit Linked Policy Is A Life Insurance Policy In Which The Benefits Depend On The
Performance Of A Portfolio Of Shres.Each Premium Paid By The Insured Person Is Split. A
Part Is Used To Provide Life Insurance Cover, While The Balance Is Used To Buyunits In
Unit Of Mutual Fund After Deduction Of Costs, Expenses, Etc. In This Way, A Small
Investor Can Benefit From Investment In A Managed Fund Without Making A Large
Financial Commitment. The Unit-Linked Policies Can Go Up Or Down In Value As They
Are Linked To The Value Of The Shares.

 TERM INSURANCE WITH RETURN OF PREMIUMS

Under Pure Term Assurance Plans, It Death Of The Life Assured Does Not Take Place
Within The Selected Term, The Policy Comes To An End On Completion Of Term And
Premiums Collected Already Are Not Refunded. However, A Variation Of This Plan Has
Been Devised Whereby All The Premiums Collected Are Refunded, If The Life Assured
Survived The Term. In Effect, It Means That The Interest Earned On The Premiums Is
Utilized To Keep The Policy In Force As Well As To Grant A Free Term Cover For A Few
Years Beyond Completion Of The Term, Even Though The Premiums Collected Are
Refunded.

 WITH PROFITS AND WITHOUT PROFITS

The Insurance Company Charges Premiums Based On Mortality Rates, Interest Earned On
Investments And Expenses. If These Factors Are Favorable To The Life Insurance
Companies, Then They Can Earn A Profit Or Surplus. The Surplus Generated Has To Be
Retained. A Major Portion Of The Surplus, However, Is Distributed To The Policyholders.
ALife Insurance Policy, That Has Additional Amounts Added To The Sum Assured, Or Paid
Separately As Cash Bonuses, As A Result Of A Surplus Or Profit Made On The Investment
Of The Fund By The Life Insurance Company, Is Called A WITH PROFITS POLICY.
TheSurplus Generated By The Insurance Company Which Is Distributed To The
Policyholders Is Known As BONUS.Policies That Are Not Entitled To Bonus Are Known As
WITHOUT PROFIT POLICIES.
 2. HEALTH INSURANCE

Under The Insurance Act, 1938, Insurance Against Sickness And Medical Treatment Is Not
Part Of The Life Insurance Business. It Is Covered Under The Miscellaneous Insurance
Business, Which Is A Part Of The General Insurance Business. In Many Other Countries,
This Is Not The Case. They Consider Health Insurance As Part Of The Life Insurance
Business.On A Trial Basis, LIC Of India Covered Health Related Risks Along With
Traditional Life Insurance Policy When They Floated ‘Asha Deep’. This Was A Close-Ended
Scheme From 7.9.93 To 30.11.93. This Plan Offered Certain Fixed Payments To The Life
Assured In Case They Suffered From Any Of The Specified Four Major Diseases, Namely
Cancer, Kidney Trouble Requiring Transplantation, Heart Problems Needing By-Pass
Surgery Or Paralysis.The Payment To The Life Assured Is Not In The Nature Of
Reimbursement Of Medical Expenses. The Basic Life Cover Is Not Affected By These
Payments There Are Addition. ThisExperiment Was A Grand Success. Encouraged By This,
LIC Has Introduced Other Schemes Like ‘Asha Deep II’ And Jeevan Asha II Etc.After
Deregulation Of The Insurance Sector, New Entrants Have Entered Into The Indian Market
With Innovative Plans, To Help Policy-Holders Cover

Some Examples Of These Riders Are As Follows-

1. Critical Illness Rider

2. Dreaded Disease Rider

3. Major Surgical Assistance Benefit Rider.

4. Accident Disability Benefit Rider

In This Cases, Payment Is Made To The Life Assured On Diagnosis Ofa Terminal Illness Or
When A Major Surgery Requires To Be Undertaken Or When There Is Disability Due To An
Accident. These Riders Are Additions To The Life Insurance Policies And Cannot Be Issued
As A Separate Policy.Also, The Rider Benefits Attached With Life Insurance Policies Cannot
Exceed The Basic Sum Assured.
2.5. TYPES OF INSURANCE PRODUCT PROVIDE BY ICICI
PRUDUENTIAL COMPANY

FOLLOWING ARE SOME OF THE PRODUCTS PROVIDED –

 Saving Plans
 Child Plan
 Protection Plan
 Retirement Plan
 Investment Plan
 Protection Plan
 Group Plan
 Rural Plan
 Plans Fir Nris
 Keyman Plan
 Riders

 ICICI Prudential Life Insurance Offers A Range Of Innovative Customer- Centric

Products That Meet The Ends Of Customer At Every Life Stage. Its 20 Products Can
Be Enhanced With Up To 6 Riders, To Create A Customized Solution For Each
Policyholder.

 Savings Solutions
 Secure Plus Is A Transparent And Feature – Packed Savings Plan That Offers 3
Levels Of Production.
 Cash Plus Is A Transparent, Feature- Packed Savings Plan That Offer 3 Legs Of
Protection As Well As Liquidity Options.
  Save And Protect Is A Traditional Endowment Savings Plan That Offers Life
Protection Along With Adequate Returns.
 Invest Shield Gold Us A Market Linked Plan That Provides Capital Guarantee On
The Invested Premiums And Declared Bonus Interest Along With Limited Premium
Payment Terms.

 Protection Plan:

We All Hope To Live A Full Life Till A Ripe Old Age…To Ensure Our Children’s
Sustenance And Healthy Growth. But If A Sudden Disability Or Illness Strikes? Besides The
Grief And The Plan,Such An Event Also Completely Disrupts Life For All The People Who
Are Financially Dependents On Us. Our Life Insurance Policies Offer A Comprehensive
Range Of Protection Benefits.

 Life Guard-A Low Cost Of High Protection Plan That Offers Protection Over A
Specified Period.
 Riders- Additional Benefits That One Can Add On To The Policy. The Rider Can Be
Opted For At The Time Of Talking The Basic Policy. Additional Premium Is Charged
For Each Rider.

An Insurance Policy Can Be Tailor Made To Provide Protection To You Loved Ones. If
Something Were To Happen To You, It Can Help:

Safeguard Your Better Half: Ensure Life’s Continuity For You Loved One.

Dear And Near Ones:Ensure Your Children’s Education Continues Undisrupted.

Un For Seen Circumstances: Bear The Cost Of Fighting An Illness,Disability,Etc

Child Plan:

 As A Responsible Parent, You Will Always Ensure A Hassle- Free Successful Life
For Child.However,Life Is Full Of Uncertainties And Even The Best Laid Plans Go
Wrong. Here’s How You Give Your Child A 100% Safe And Assured Tomorrow,
Whatever The U
Uncertainties. Smart Kid Child Plans Are Designed To Provide Flexibility And To Safeguard
Your Child’s Future Education And Lifestyle,Taking All Possibilities Into A Account.

Presenting Smart Kid Child Plans. Leave Nothing To Chance Smart Kid Child Plans Offers
Three Products:

 Unit-Linked Regular Premium II

 Unit Linked Single Premium II
 Regular Premium Smart Kid.

Retirement Plan:

Most Of You Picture Yourselves Enjoying The Fruits Of Lab Our After Retirement ,Going
On Your Dream Vacation, Or Helping Your Children’s Career Take Wing. But Do You
Realize That Financing All This Will Most Likely Depend Partly On Your Personal Saving?
Because Personal Savings And Investment Represent A Significant Source Of Retirement
Income For Many People,You Can Never Save Too Much.

Currently You Are At A Stage Where You Are Juggling Many Roles,As Nurturing Parents,
Dutiful Caregivers To Elders, Supportive Life Partners, While Trying To Maintain A Career.
It Is Too Easy To Get Carried Away Handling And Solving The Day- To- Day Problems To
Not Look Into Your Retirement Need. It May Also Seem Too Far Away To Be Of Concern.
But A Look At The Issues Below Will Make The Need Fir Some Strategic Planning At This
Stage Amply Clear.

Today, Thanks To Healthier Lifestyle And Advances In Medicine,The Average Indian Lives
Longer.This Make The Challenge Of Accumulating Enough Money For Retirement Even
More Difficult,Since It Mayhave To Last Longer. Also,With The Falling Interest Rate
Scenarioand The Raising Costs Of Medici Expenses Retirement Means Monetary
Uncertainty For Most Of Us. More So, Because There Is Also The Ever Persistentevil Of
Inflation, Which Erodes Your Purchasing Power.
 CHAPTER 3

REVIEW OF LITERATURE

A Thriving Insurance Sector Is Of Vital Importance To Every Modern Economy. It

Encourages The Savings Habit, It Also Provides A Safety Net To Rural And Urban
Enterprises And Productive Individuals, Most Importantly It Generates Long-Term Invest-
Able Funds For Infrastructure Building. The Nature Of The Insurance Business Is Such That
The Cash Inflow Of Insurance Companies Is Constant While The Payout Is Deferred And
Contingency Related (Kumar, 2010).During Middle Of 20th Century Life Insurance
Companies Started To Operate The Evil Play Natural To All Business Had Its Sway. Number
Of Competitors Were Entered And Abolished While Profiteering. On 1st September
1956,Life Insurance Corporation Of India Came Into Existence After Nationalisation Of All
245 Insurance Providing Companies. Malhotra Committee Was Constituted By The
Government In 1993 To Examine The Various Aspects Of The Insurance Industry. The Key
Element Of The Reform Process Was Participation Of Overseas Insurance Companies With
26% Capital. Creating A More Efficient And Competitive Financial System Suitable For The
Requirements Of The Economy Was The Main Idea Behind This Reform (Kannan, 2010). In
1999, Insurance Regulatory And Development Authority (IRDA) Has Been Established To
Regulate The Insurance Business In The Country (Chaudhary And Kiran, 2011).

Sinha (2005) In His Paper Highlights The Phenomenal Growth Experienced Recently In
Connection With Improvements In Economic Fundamentals. With Comparison In Growth,
Penetration, Density And Other Insurance Variables It Can Be Said That Still India Is An
Underdeveloped Insurance Market With Huge Catch -Up Potential. It Is Found That There Is
Potential For Expansion Of Insurance Into Rural Areas, Growth Has Remained Slow.

Chandrasekhar (2009) In His Article “Learning Nothing, Forgetting Everything” Observes

That The Government Has Been Pushing Ahead With Privatization Despite There Being No
Evidence Of The Nationalized Insurance Industry Failing To Meet Its Obligation To Insurers
Or To The Government Has Not Only Put At The Government’sDisposal Lames Of Capital
For Investment But Also Addressed The Problems Of Insurance For The Poor.
Krishnaswami (2009) In His Book “Principles And Practice Of Life Insurance” Explains
Clearly The History Of Insurance, Advantages Of Insurance And The Role Of Insurance In
The Economy And Also In The Society. The Life Insurance Products, The Concepts Of
Premium, Investment Management And Solvency Margin Are Also Discussed At Length In
The Book.

Kannan(2010) That India, Being Rich In Population And Most Of The Area Is Untapped,
Has Tremendous Scope For GrowthahIn Insurance Sector. Today Insurance Business Is
Growing At The Rate Of 15-20% Annually. Together With Banking Services, It Adds About
7% To The Country’s GDP. In Spite Of All This Growth The Statistics Of The Penetration
Of The Insurance In The Country Is Very Poor. Nearly 80% Of Indian Populations Are
Without Life Insurance Cover And The Health Insurance. This Is An Indicator That Growth
Potential For The Insurance Sector Is Immense In India.

Imam (2011) Analysed Customer Behaviors In Life Insurance Industry. Researcher Opined
That The Sale Of Life Insurance Policies In India Is Less Than Many Western And Asian
Countries. As Second Largest Populateselvakumar Ad Country In World, The Indian
Insurance Market Is Looking Very Prospective To Many Multinational And Indian Insurance
Companies For Expanding Their Business And Market Share. With Their World Market
Experience And Network, These Companies Have Offered Many Good Schemes To Lure All
Type Of Indian Consumers, But Unfortunately Failed To Get The Major Share Of Market.
Still The LIC Is The Biggest Player In The Life Insurance Market With Approx. 65% Market
Share.

Piyan (2012) Analysed The Performance Of Public And Private Life Insurance Companies In
India. Researcher Opined That Toady’s Market Is Customer Centric, And Customer Is
Supposed To Be King Of Market. To Satisfy Customers Innovations Are Taking Place With
Distinct Features To Attract The Customers.
Tiwari &Yadav (2012) Conducted A Analytical Study On Indian Life Insurance Industry In
Post Liberalization. ResearchersConcluded That Indian Market Is Untapped Market And
Found Good Opportunity. After 1991, The Indian Life Insurance Industry Has Geared Up In
All Respects And Able To Avail Healthy Competition From In -House And Abroad Players.

Motwani And Anchliaa (2013) Conducted And Study In Udaipur City To Study
Comparative Behaviour Between Public And Private Insurance Companies. The Was Based
On Descriptive Research Design, In Which A Close Ended Questionnaire Was Used To
Collect The Primary Data From Customers Of Various Insurance Companies. Conclusions Of
Study Reveal The Impact Of Customers‟ Demography On Their Choice Between Public
&Private Insurance Companies.

Sharma And Cowhand(2013) In The Research Paper "A Comparative Study Of Public
&Private Life Insurance", Made An Attempt To Analyses The Performance Of Public And
Private Life Insurance Companies In India. Researches Concluded That With The Entry Of
Private Players, The Competition Is Becoming Intense. In Order To Satisfy The Customers,
Every Company Is Trying To Implement New Creations And Innovative Product
Characteristics To Attract Customers

T Hymavathi Kamari(2013) Made Performance Evaluation Of Indian Life Insurance

Industry In Post Liberalization By Using Various Ratios. The Study Concluded That Since
Opening Up Of Indian Insurance Sector For Private Players, India Has Reported Increase In
Both Insurance Penetration And Density. There Is Huge Scope For Life Insurance In India.
The Total Assets To Earned Premium Ratio, Investment Income To Earned Premium Ratio
And Investment Income To Total Investment Ratio Expresses The Financial Solidity Of An
Insurer And Discloses The Efficiency In Investment Decisions.

Krishna (2015) Made A Comparative Study Of Public And Private Life Insurance
Companies In India. For The Purpose Market Share, Fresh Business Premium, Number Of
New Policies Issued And Total Life Insurance Premium Compared. In Terms Of All
Insurance Market. Parameters LIC Is Dominating. The Study Concluded That The Insurance
Companies Have To Ensure Quality Products At A Competitive Price, Companies Can
Lower The Price Of The Product By Reducing The Cost.Their Survival Depends Upon Their
Performance In Profitability, Productivity, Efficiency And Service Quality.

Dr.Parmasivan (2015) Made A Comparative Study Of Public And Private Life Insurance
Companies In India. To Measure Financial Performance Solvency Ratio, Current Ratio And
Debt Equity Ratio Have Been Calculated. The Study Indicates That LIC Continues To
Dominate The Sector. Private Sector Insurance Companies Used The New Business Channels
Of Marketing When Compared With LIC. Selling More Unit-Linked Plans Helps Private
Insurers Grab Market Share From LIC. Solvency Ratio And Lapsation Ratio Of Private
Insurers Was Much Better Than LIC. Servicing Of Death Claims Was Better In Case Of LIC
As Compared To Private Life Insurers.

Dr. Vikas Gairola (2016) Compared Public And Private Life Insurance Companies In Post
Liberalization Era. The Study Compares Public And Private Sector Life Insurance
Companies In Terms Of New Policies Issued, Total Premium Income And Market Share. The
Study Shows That Private Life Insurers Put Efforts To Improve Its Performance Year After
Year And Affected The LIC In Many Ways. To Overcome And Compete With This Situation
LIC Introduced New And Attractive Insurance Plans, Put Efforts For Better Customer
Relationship Management And Effective Advertising. There Is Very Huge Potential In Life
Insurance Sector
Sumit (2017) Analysed Profitability Performance Of Life Insurance Companies In India
Using Seven Variables. Net Premium, Income From Investments, Underwriting Income,
Return On Assets, Combined Ratio, Solvency Ratio And Profit After Tax Were Taken As
Variables.ANOVA Was Used To Test The Significance Of Variance In Profitability Of
Various Insurers. The Study Found That Among The Private Sector Life Insurance
Companies, The Average Net Premium For The Last 5 Years Was Found Highest In Case Of
ICICI Prudential .The CAGR Of Investment Income Was Found The Highest In Case Of
ICICI
 CHAPTER 4
DATA ANALYSIS AND INTERPRETATION OF DATA

PRIMARY DATA

The primary data collected with the help of Google forms and it has 60
respondents to the survey conducted for the topic “A comparative study of performance of
life insurance corporation And ICICI prudential Life insurance company.”

SECONDARY DATA

The secondary data is collected through various articles, journals and through various
websites.
INTERPRETATION
As the above data shows that there are 40 % male that hold an Insurance policy and
there are 60% female that hold an Insurance policy as per the survey of 60
respondents. According to the survey conducted the number of females holding
insurance policy is more as compared to males. Hence it can be said that there is gender
equality for holding an Insurance policy to have a security against one’s life
INTERPRETATION
The data regarding the age groups of people in the survey refers to 15% people are from the
age group of Less then 20 years,58.3%people are from the age group of 20 to 40, and 21.7%
people are from the age group of 40 to 60 and there are 6.7% people are there above 60 years
of age . This shows that there are more people in the age group of 20to 40who are aware
about insurance policies. There are less people in the age group of above 60 years of age that
are have taken insurance policies.
INTERPRETATION
From the above data the responses of students, professionals, business persons and

salaried people are recorded from the survey conducted on insurance policy. The

responses of the students recorded were 50%, the responses of professionals recorded

were 15%, the responses of business recorded were 6.7%, and the responses of salaried

people recorded were 28.3%. From among the responses the student respondents were

more as compared to professionals, business and salaried. Hence there is awareness

among students regarding insurance policies as compared to others.

INTERPRETATION
From the above graph we can interpretate that public preference towards public life insurance
policy is more as compared to other private players .Through the survey it was interpretated
that 50% of respondent have opted for life insurance policy through public life insurer i.e
LIC,from other private life insurer namely icici pruedential is 28.3%, and 10%from sbi and
remaining have opted from other life insurer.
INTERPERTATION
From the above data ,we interpretate that people undertake policies for various purpose but
among various purpose for opting insurance life risk coverage is one of the important reasons
for undertaking policy from the survey of 60 respondent 61.7% of of them main purpose is
getting there life insured through various uncertinity,30% people have taken policy as a form
of investment and 18.3% people for getting tax concession and remaining for 11.7% for other
personal interest.
INTERPRETATION

From 60 respondent, 6.7% of people have undertaken policy starting from 50000 to
100000,40% of people have been insured for upto 200000, 43.3% have been insured for
amount of 200000 to 500000 and remaining 10% have been insured for an amount above
500000
INTERPRETATION
Of the total population of 60 respondent 21.7%of people are attracted
towards the policy due to it’s more awareness , 31%of people are attracted
towards the policy due to it’s less premium providing , 18.3%of people are
attracted towards the policy due to various policy provided by the company ,
28.3%of people are attracted towards the policy as it provides more benefits ,
16.7%of people are attracted towards the policy as it provides more returns ,
6.7%of people are attracted towards the policy due to it’s advertising .
INTERPRETATION
From the respondents of the survey 66.7% of the people are satisfied with the services
provided by their insurance company, 8.3% of the people are not satisfied with the
services provided by their insurance company and 25% of the people are not sure
about the services provided by their insurance company. Therefore it can be interpreted
that people are satisfied with their insurance company but some of them are not satisfied
INTERPRETATION
From the about data it is interpreted that 55% of total population feels that public life

insurance companies are more reliable than private players and 45% thinks private life

insurance company are reliable

INTERPRETATION

Of the total population of 60 respondent,30%people have monthly periodicity of premium,

25%people have quarterly periodicity of premium, 28.3%people have half yearly periodicity
of premium,16.7%people have yearly periodicity of premium
INTERPRETATION
From the above data,71.7% of people are aware of some of the policies provided by the
company, 10% of people know all types of policy provided by the company ,5% of people
are not aware about any of the policies and remaining 13.3% are not sure whether they know
all the policies or some of the policies provided by the company
INTERPRETATION
The data above shows people view about the premium rate of icici pruedential with that of
lic 16.7% people think that the rate of premium of icici prudential is very expensive than
that of lic,30% of people thinks it to be an expensive ,40% respondent think it to be at par
when compared with lic and 13.3% people think it to be cheaper
INTERPRETATION
From the above data the people have rated the service of premium depondent mode of
company .the total respondent of 60 people 15% of people consider service provided have an
excellent depondent,56.7% of respondent rated it to be good service provider and 25% of
people think there service provided and not that good they and satisfying at same they find it
to be anaverage one and remaining have a worse depondent service provided by there
company
 CHAPTER 5

CONCLUSION & SUGGESTIONS

CONCLUSION

The Introduction Of Liberalization In Insurance Sectors Of India Has Consequently

Introduced Positive And Negative Feedback Of Globalization In The Economic Processes.
The Insurance Sectors Continuously Facing Many Changes Which Lead To Make Fresh
Opportunities To Meet The Dynamic Challenges. The Competition Between LIC And ICICI
Prudential Insurance Sectors Made Policyholders To Attain Maximum Benefits. The Increase
Of The Phase In Insurance Companies Have Been Seen The Entry To Private Insurance
Sectors In Indian Markets. Many Challenge And Changes Was Falls On The Insurer When
The Liberalization Was Introduced In Insurance Sectors. Furious Changes In Indian Markets
Are The Primary Challenges To Insurer.

The Second Challenge Comes From The Side Of The Customers As Awareness Of The
Policy, Satisfaction Level And Expectation Towards The Insurance Companies. The
Organisational Constraints Were Comes Next In Challenges. Theses Make The Firms To
Widen Their Offering Policies Accordance With The Policyholders To Serve Them In Better
Manner. Now-A-Days Policyholders Are Seeking Policies Which Are Not Just As A Product
But It Should Be An Integrated Financial Solution That Can Offer Stability Of Returns Along
With Total Protection. To Fulfil This Condition Of Customers The Insurance Sectors Should
Analyses The Needs Of Policyholders And Provide Policies As Risk Coverage As Well As
Rigid Investment. The Awareness Of Insurance Sectors Found Very Poor Among The Public
Before The Entry Of Private Insurers. Private Sector Played Important Roles In Making The
Awareness Of Insurance To The Customers. The Private Sector Has Done Its Best To Canvas
The People By Door To Door And Village To Village Campaigns. Though The Private Life
Insurance Companies Put Its Efforts, It Becomes The Boon For The LIC To Increase Its
Business In The Indian Market. It Is Seen That Most Of The Customers Preferred To Opt
LIC Over The Other Private Insurer. It Is Due To LIC Being The Onlylife Insurance
Company Started Before The Year 2000. Being Trusted With Lots Of People It Has A Big
Share In The Corporate Sector. While Selecting An Insurance Company The Customer
Organizes And Interprets The Service Quality And The Product Quality Of Different Life
Insurance Policies, Offered By Various Life Insurance Companies. The Customers
Satisfaction Is The Most Important Strategy Of Life Insurance Companies. The Extremely
Satisfied Customers Of A Life Insurance Company Will Act As A Loyal Apostle Of That
Company, Buy Their Policies From That Company Alone, Retain Over There And Spread
Positive Comments About The Company To Others. On The Other Hand If The Customers
Are Dissatisfied With The Company, Withdrawal Or Surrender Of Policy And Behavioural
Problems Will Be Found From Policyholders. The Success Of Promoting Insurance Depends
On Understanding Social And Cultural Desires Of The Target Population And Matching The
Marketing Section With The Acceptable Intermediate Segment.
SUGGESTIONS OF THE STUDY

To The Insurance Company

1. Insurance Company Should Approach The Employers And Banks To Create Sources Of
The Customers To Meet Their Convenience In Premium Payment Through Employers And
Banks For Both LIC And ICICI Prudential.

2. The Company Should Create Awareness To The Customers Through Media, By Issuing
Pamphlets And Providing Information Through Agent/Adviser In Person On The Importance
Of Life Insurance. This Will Help To Reach The Insurance Company Deep Root Of The
Society.

3. Apart From Health Policies The Insurance Companies Both LIC And ICICI Prudential Can
Introduce A Policy Which Insures Two Or More Life Together.

4. The Insurers Should Impart The Belief From Policyholders By Their Soft Approach.

5. A Separate Department Of Customer Care And Feedback Service Can Be Provided By

LIC And ICICI Prudential To Rectify The Queries And Complaints From The Policyholders.

6. The Policies Should Be Framed And Implemented By ICICI Prudential In Such A Way
That It Should Suit Even To The Low Income Groups.

7. A Survey Should Be Conducted By The Insurance Company’s At Least Once In A Year

About The Policyholders In Their Companies To Find The Declination Of Policy Rate.

8. Motivational Programmers And Increase In Incentives To The Agent / Advisor Can

Stimulate Them To Serve In Better Manner.
 CHAPTER 6

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