A

Summer Training Report

On

“INSURANCE AND CONSUMER BUYING BEHAVIOUR TOWARDS LIFE

INSURANCE”

At

“KOTAK LIFE INSURANCE”

SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

2017-19

TO THE DEPARTMENT OF MANAGEMENT,

CENTRAL UNIVERSITY OF RAJASTHAN, BANDARSINDRI (DISTRICT AJMER)

SUBMITTED BY

VISHAL DUTT SHARMA

SPECIALIZATION: FINANCE

ENROLMENT NO.: 2017MBA020

Department of Management

CENTRAL UNIVERSITY OF RAJASTHAN,

BANDARSINDRI, DISTRICT AJMER

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 Declaration

I hereby certify that the Summer Training Report on CONSUMER BUYING BEHAVIOUR
TOWARDS LIFE INSURANCE at KOTAK MAHINDRA LIFE INSURANCE, submitted in
partial fulfilment for the award of Master of Business Administration at the Department of
Management, Central University of Rajasthan, Bandar Sindri, District Ajmer, is an authentic
record of work carried out by me. The matter embodied in this Summer Training Report has not been
submitted for the award of any other degree or diploma.

Date: Signature of the Student

VISHAL DUTT SHARMA

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3
 ACKNOWLEDGEMENT

While conducting this report, I got support in many ways from many people. First of all, I am deeply
grateful to my project mentor, Mr. Gaurav Sinha (Area Sales Manager), Kotak Mahindra Life
Insurance, Jaipur, Rajasthan, who helped me with full devotion and always supported me earnestly
whenever it was needed. This report was not possible without his guidance and support.

I would also like to thank my project guide at Central University of Rajasthan Dr. Sanjay Garg who
has been very helpful in completion of this project

I express my thanks to entire team of Kotak Mahindra Life Insurance ltd. Jaipur Branch, for their support
and encouragement in completing the project.

My friends and family also helped me out directly and indirectly to complete this research. I am thankful
to them for their immense support and great belief in me.

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 EXECUTIVE SUMMARY

The objective of the project was to finding consumer buying behaviour for Kotak Mahindra
Life Insurance for that we have to understand the customer needs, Income, constraints,
response and emotions So that they can Become customer of the Company.

It was essential to know the feedback of customers in order to formulate effective marketing
and sales strategies in future and improve the quality of service to achieve better consumer
satisfaction and finding the consumers buying behaviour.

The site visits and comparing made us possible to measure the satisfaction of consumer by
identifying the attributes, which gave consumer-varying degrees of satisfaction.

Questionnaire based on company format some attributes like requirement of customer and sales
services offered by company were identified as critical (motivational) factors for providing
satisfaction to consumers,

For this a questionnaire was prepared which gave a vague idea about the people who were
really interested and wanted to know about various schemes in the insurance sector.

Go through questionnaire in different area and people in the Jaipur city. The researchers were
given first 15 days for collection of data and scanning the data.

The questionnaire contains various aspects like there. Address, their present age, profession,
number of dependents, Goals and also planning for old age (Retirement) etc. After that usually
meeting the persons and tell them about the company. Most important part is analysing the
information.

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 TABLE OF CONTENTS

S. No. CONTENTS Page No.

Declaration
1 2

2 Acknowledgement 4

3 Executive Summary 5

4 Introduction 7

5 History Of Insurance Sector In India 12

6. IRDA 15

7 Company Profile 17

8 Analysis Report On Term Insurance 23

Consumer Buying Behaviour Towards Life Insurance An

9 27
Analytical Study

10 Research Methodology 28

11 Data Analysis And Interpretation 35

12 Conclusion 39

13 Reference 40

14 Questionnaire For Customers 41

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 INTRODUCTION

Wherever there is uncertainty there is risk. The risk cannot be averted. The risk is uncertainty
of the financial loss. We don t have any command on uncertainties. This makes it essential that
we think in favour of a device that becomes instrumental in spreading the loss. It is in this
context that we think about insurance.
Protection against the possible chances of generating uncertain losses. It eliminates
worries and miseries of losses or destruction of property and death.
Buying INSURANCE is extremely useful if you are the principal earning member in the
family unfortunate premature demise, your family can remain financially secure because of the
life that you have purchased.
The primary purpose of life insurance is therefore protection of the family in the even insurance
is also seen as a tool to plan effectively for your future years. Your retire children s future
needs. Today, the market offers insurance plans that not just cover your same time grow your
wealth too. If you have dependents and financial responsibilities toward them, then you
certainly need.
Having a family means dependant, which in turn means financial commitments. Finance comes
in the form of loans, children education, medical expenses etc. Imagine what would happen if
you were to lose your life suddenly or become disabled being insured in a situation like this is
a necessity.
When you insured your life, in effect what you are doing insuring your earning capacity that
your dependents will be able to continue living without financial hardships even in case
Most insurance plans available today come with a savings element built into it. These policies
not only for a financially independents future, which were have a comfortable retirement. For
example. Kotak preferred Retirement plans such as income plan and Kotak Multiplier plan.
Most insurance plans available today have a built in saving elements. Kotak preferred
Retirement Plans meet your dual financial goals of life cover and savings for the future
Collateral security.
Life was t designed to be risk free. The key is not to eliminate risk, but to estimate it accurately
and manage it wisely.
Insurance sector have characteristic that give can boost to the growth of any economy .it is due
to the savings done at the individual level and at micro level it generates funds for infrastructure
building as the cash flow is constant while the payout is differed, so that the insurance

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companies are becoming biggest investors in long gestation infrastructure development
projects and hence have a great Importance to the developing economy like India.
Insurance sector with an annual growth rate of 15-20% and the largest number of life insurance
policies in force, the potential of the Indian insurance industry is huge.

Characteristics of Insurance:-
The insurance has the following characteristics which are, generally, observed in case of life,
marine, fire and general insurances.

1. Sharing of Risk: Insurance is a device to share the financial losses which might
befall on an individual or his family on the happening of a specified event. The event may be
death of a bread-winner to the family in the case of life insurance, marine-perils in marine
insurance, fire in fire insurance and other certain events in general insurance, e.g., theft in
burglary insurance, accident in motor insurance, etc. The loss arising nom these events if
insured are shared by all the insured in the form of premium.

2. Co-operative Device: The most important feature of every insurance plan is the
cooperation of large number of persons who, in effect, agree to share the financial loss arising
due to a particular risk which is insured. Such a group of persons may be brought together
voluntarily or through publicity or through solicitation of the agents.

3. Value of Risk: The risk is evaluated before insuring to charge the amount of share
of an insured, herein called, consideration or premium. There are several methods of evaluation
of risks. If there is expectation of more loss, higher premium may be charged. So, the
probability of loss is calculated at the time of insurance.

4. Payment at Contingency: The payment is made at a certain contingency

insured. If the contingency occurs, payment is made. Since the life insurance contract is a
contract of certainty, because the contingency, the death or the expiry of term, will certainly
occur, the payment is certain. In other insurance contracts, the contingency is the fire or the
marine perils etc., may or may not occur. So, if the contingency occurs, payment is made,
otherwise no amount is given to the policy-holder.

5. Amount of Payment: The amount of payment depends upon the value of loss
occurred due to the particular insured risk provided insurance is there up to that amount. In life
insurance, the purpose is not to make good the financial loss suffered. The insurer promises to
pay a fixed sum on the happening of an event.
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 6. Large Number of Insured Persons: To spread the loss immediately,
smoothly and cheaply, large number of persons should be insured. The co-operation of a small
number of persons may also be insurance but it will be limited to smaller area. The cost of
insurance to each member may be higher. So, it may be unmarketable.

7. Insurance is not a gambling: The insurance serves indirectly to increase the

productivity of the community by eliminating worry and increasing initiative. The uncertainty
is changed into certainty by insuring property and life because the insurer promises to pay a
definite sum at damage or death.

8. Insurance is not Charity: Charity is given without consideration but insurance

is not possible without premium. It provides security and safety to an individual and to the
society although it is a kind of business because in consideration of premium it guarantees the
payment of loss. It is a profession because it provides adequate sources at the time of disasters
only by charging a nominal premium for the service.

Role and Importance of Insurance:-

Insurance has evolved as a process of safeguarding the interest of people from loss and
uncertainty. It may be described as a social device to reduce or eliminate risk of loss to life and
property.
Insurance contributes a lot to the general economic growth of the society by provides stability
to the functioning of process. The insurance industries develop financial institutions and reduce
uncertainties by improving financial resources.

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 1. Provide safety and security: Insurance provide financial support and reduce
uncertainties in business and human life. It provides safety and security against particular event.
There is always a fear of sudden loss. Insurance provides a cover against any sudden loss. For
example, in case of life insurance financial assistance is provided to the family of the insured
on his death. In case of other insurance security is provided against the loss due to fire, marine,
accidents etc.

2. Generates financial resources: Insurance generate funds by collecting premium.

These funds are invested in government securities and stock. These funds are gainfully
employed in industrial development of a country for generating more funds and utilized for the
economic development of the country. Employment opportunities are increased by big
investments leading to capital formation.

3. Life insurance encourages savings: Insurance does not only protect against risks
and uncertainties, but also provides an investment channel too. Life insurance enables
systematic savings due to payment of regular premium. Life insurance provides a mode of
investment. It develops a habit of saving money by paying premium. The insured get the lump
sum amount at the maturity of the contract. Thus life insurance encourages savings.

4. Promotes economic growth: Insurance generates significant impact on the economy

by mobilizing domestic savings. Insurance turn accumulated capital into productive
investments. 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.

5. Medical support: A medical insurance considered essential in managing risk in

health. Anyone can be a victim of critical illness unexpectedly. And rising medical expense is
of great concern. Medical Insurance is one of the insurance policies that cater for different type
of health risks. The insured gets a medical support in case of medical insurance policy.

6. Spreading of risk: Insurance facilitates spreading of risk from the insured to the
insurer. The basic principle of insurance is to spread risk among a large number of people. A
large number of persons get insurance policies and pay premium to the insurer. Whenever a
loss occurs, it is compensated out of funds of the insurer.

7. Source of collecting funds: Large funds are collected by the way of premium. These
funds are utilized in the industrial development of a country, which accelerates the economic

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growth. Employment opportunities are increased by such big investments. Thus, insurance has
become an important source of capital formation.
Life Insurance Companies in India

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 Brief History of the Insurance Sector in India

The business of life insurance in India in its existing form started in India in the year 1818 with
the establishment of the Oriental Life Insurance Company in Calcutta.

The story of insurance is probably as old as the story of mankind. The same instinct that
prompts modern businessmen today to secure themselves against loss and disaster existed in
primitive men also. They too sought to avert the evil consequences of fire and flood and loss
of life and were willing to make some sort of sacrifice in order to achieve security. Though the
concept of insurance is largely a development of the recent past, particularly after the industrial
era – past few centuries – yet its beginnings date back almost 6000 years.

Life Insurance in its modern form came to India from England in the year 1818. Oriental Life
Insurance Company started by Europeans in Calcutta was the first life insurance company on
Indian Soil. All the insurance companies established during that period were brought up with
the purpose of looking after the needs of European community and these companies were not
insuring Indian natives. However, later with the efforts of eminent people like Babu Muttylal
Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were
being treated as sub-standard lives and heavy extra premiums were being charged on them.
Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance
company in the year 1870, and covered Indian lives at normal rates.

Starting as Indian enterprise with highly patriotic motives, insurance companies came into
existence to carry the message of insurance and social security through insurance to various
sectors of society. Bharat Insurance Company (1896) was also one of such companies inspired
by nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance companies.
The United India in Madras, National Indian and National Insurance in Calcutta and the Co-
operative Assurance at Lahore were established in 1906.

In 1907, Hindustan Co-operative Insurance Company took its birth in one of the rooms of the
Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile,
General Assurance and Swadeshi Life (later Bombay Life) were some of the companies
established during the same period. Prior to 1912 India had no legislation to regulate insurance
business.

In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed.
The Life Insurance Companies Act 1912 made it necessary that the premium rate tables and
periodical valuations of companies should be certified by an actuary. But the Act discriminated

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between foreign and Indian companies on many accounts, putting the Indian companies at a
disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance business. From
44 companies with total business-in- force as Rs.22.44 crore, it rose to 176 companies with
total business-in-force as Rs.298 crore in 1938. During the mushrooming of insurance
companies many financially unsound concerns were also floated which failed miserably.

The Insurance Act 1938 was the first legislation governing not only life insurance but also non-
life insurance to provide strict state control over insurance business. The demand for
nationalization of life insurance industry was made repeatedly in the past but it gathered
momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the
Legislative Assembly.

However, it was much later on the 19th of January 1956 that life insurance in India was
nationalized. About 154 Indian insurance companies, 16 non- Indian companies and 75
provident were operating in India at the time of nationalization. Nationalization was
accomplished in two stages; initially the management of the companies was taken over by
means of an Ordinance, and later, the ownership too by means of a comprehensive bill.

The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956,
and the Life Insurance Corporation of India was created on 1st September, 1956, with the
objective of spreading life insurance much more widely and in particular to the rural areas with
a view to reach all insurable persons in the country, providing them adequate financial cover
at a reasonable cost.

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

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Today LIC functions with 2048 fully computerized branch offices, 100 divisional offices, 7
zonal offices and the corporate office. LIC’s Wide Area Network covers 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, Ahmedabad,
Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a
vision of providing easy access to its policyholders, LIC has launched its SATELLITE
SAMPARK offices. The satellite offices are smaller, leaner and closer to the customer. The
digitalized records of the satellite offices will facilitate anywhere servicing and many other
conveniences in the future. From then to now, LIC has crossed many milestones and has set
unprecedented performance records in various aspects of life insurance business. The same
motives which inspired our forefathers to bring insurance into existence in this country inspire
us at LIC to take this message of protection to light the lamps of security in as many homes as
possible and to help the people in providing security to their families

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 The Insurance Regulatory and Development Authority (IRDA)

The Insurance Act, 1938 had provided for setting up of the Controller of Insurance to act as a
strong and powerful supervisory and regulatory authority for insurance. Post nationalization,
the role of Controller of Insurance diminished considerably in significance since the
Government owned the insurance companies.

But the scenario changed with the private and foreign companies foraying in to the insurance
sector. This necessitated the need for a strong, independent and autonomous Insurance
Regulatory Authority was felt. As the enacting of legislation would have taken time, the then
Government constituted through a Government resolution an Interim Insurance Regulatory
Authority pending the enactment of a comprehensive legislation.

The Insurance Regulatory and Development Authority Act, 1999 is an act to provide for the
establishment of an Authority to protect the interests of holders of insurance policies, to
regulate, promote and ensure orderly growth of the insurance industry and for matters
connected therewith or incidental thereto and further to amend the Insurance Act, 1938, the
Life Insurance Corporation Act, 1956 and the General insurance Business (Nationalization)
Act, 1972 to end the monopoly of the Life Insurance Corporation of India (for life insurance
business) and General Insurance Corporation and its subsidiaries (for general insurance
business).

The act extends to the whole of India and will come into force on such date as the Central
Government may, by notification in the Official Gazette specify. Different dates may be
appointed for different provisions of this Act.

The Act has defined certain terms; some of the most important ones are as follows appointed
day means the date on which the Authority is established under the act. Authority means the
established under this Act. Interim Insurance Regulatory Authority means the Insurance
Regulatory Authority set up by the Central Government through Resolution No. 17(2)/ 94-lns-
V dated the 23rd January, 1996. Words and expressions used and not defined in this Act but
defined in the Insurance Act, 1938 or the Life Insurance Corporation Act, 1956 or the General
Insurance Business (Nationalization) Act, 1972 shall have the meanings respectively assigned
to them in those Acts

A new definition of "Indian Insurance Company" has been inserted. "Indian insurance
company" means any insurer being a company

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a. which is formed and registered under the Companies Act, 1956
b. in which the aggregate holdings of equity shares by a foreign company, either by itself
or through its subsidiary companies or its nominees, do not exceed twenty-six per cent.
Paid up capital in such Indian insurance company
c. whose sole purpose is to carry on life insurance business, general insurance business or
re- insurance business.

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 Corporate Identity of Kotak Mahindra Group

Some facts about Old Mutual Fund

Old Mutual was established more than 150 years ago and has developed into an International
financial services group whose activities are focused on asset gathering and asset management.
The Old Mutual Group offers a diverse range of financial services in three principal
geographies: South Africa, the United States and the United Kingdom. The company is listed
on the London Stock Exchange with a market capitalization of approximately $6 billion and is
a member of the elite FTSE 100 index. In the 2003 rankings of the World's 500 largest
corporations by Fortune magazine, Old Mutual climbed 87 places to position number 366 and
was also listed as the 14th largest insurance company in the world

Old Mutual is the largest financial services business in South Africa, through its life insurance,
asset management, banking and general insurance operations. The company serves 4 million
life insurance policyholders and employs over 13 000 South Africans in its local operations.

In the USA, Old Mutual is one of the top ten fixed annuity businesses offering an array of
specialist asset management skills through its 23 asset management businesses.

Operations in the United Kingdom are focused on wealth management, through Gerrard as one
of the leading private client stock broking businesses in the UK.

The Old Mutual Group has the ability to cater for a variety of consumer segments and offers a
comprehensive and innovative range of products for all income groups.

Old Mutual has introduced innovative products in South Africa. It has vast experience customer
service and superior training skills for life agents to get high productivity

Group Companies of Kotak and International Subsidiaries

 Kotak Mahindra Bank Ltd.

 Kotak Mahindra Capital Company Ltd.
 Kotak Mahindra Prime Ltd.
 Kotak Securities Ltd.
 Kotak Mahindra Asset Management Company

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1. Kotak Mahindra Bank Ltd.

The Kotak Mahindra Group's flagship company, Kotak Mahindra Finance Ltd which was
established in 1985, was converted into a bank - Kotak Mahindra Bank Ltd in March 2003
becoming the first Indian company to convert into a Bank. It's banking operations offers a
central platform for customer relationships across the group's various businesses. The bank has
a presence in the Commercial Vehicles, Retail Finance, Corporate Banking, Treasury and
Housing Finance.

Kotak Investment Bank is a full service Investment Bank bringing to its clients the global reach
and the local knowledge and skills of Kotak Mahindra. As a full service Investment Bank,
Kotak Investment Banking's core business areas include Equity Issuances, Mergers &
Acquisitions, Advisory Services and Fixed Income Securities and Principal Business.

Its strength lies in understanding the clients' businesses backed by a strong research team and
an extensive distribution network, which spans a wide variety of investors across the country.
It is also the first Indian Investment Bank to be registered with the Securities & Futures
Authority in the UK (through our wholly owned subsidiary) and the National Association of
Securities and Dealers in the USA.

Its the first Indian Investment Bank to be appointed by the Government of India as a Co-lead
Manager in their international divestment of Gas Authority of India Ltd through a GDR
offering.

Kotak Investment Bank today well positioned in an increasing globalize environment to

provide full service to its clients based either in India or overseas.

Head office address: Bakhtawar, 1st floor, 229, Nariman Point, Mumbai 400021, Tel no.: (022)
56341100, Website: www.kmcc.co.in

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 International Subsidiaries

Kotak Mahindra International Limited (KMIL) is the international arm of the Kotak Mahindra
Group and was incorporated in 1994 in Mauritius, with a branch in Dubai. Today the
international operations also cover the United Kingdom, through Kotak Mahindra U.K.
Limited and in the USA, through Kotak Mahindra Inc. USA. These companies are subsidiaries
of Kotak Mahindra Capital Company (KMCC) – the Investment Banking Division of the
Group. Services offered include GDR and ADR trading and broking, debt syndication,
placement of Indian securities and advisory services. Kotak Mahindra was the first Indian
group to be registered with the Securities and Futures Authority, U.K. Also, Kotak Mahindra
is the first Indian group registered in the US providing service to both Institutional investors
and High Net worth Clients in the US for their investments into Indian markets.

2. Kotak Life Insurance

Kotak life insurance old mutual fund is the joint venture of Kotak Mahindra and Mutual fund
with a ratio of 76:24.kotak Mahindra is in Indian companies running by Mr. Uday Kotak and
old Mutual Fund is a South Africa based company. Now company has various advantages over
its competitor.

 Well trained and quality advisors

 Consultative selling process
 Complete product range
 High technology support
 Superior customer service

As shown in the company profile company is growing at a rapid rate. The growth of company
can be seen with the help of these points.

 65 Branches in 40 cities and going to open 20 new branches in different states.

 10000 + Life Advisors
 1500 + Employees
 Ranks 2nd in terms of Average Premium per Policy
 Ranks 4th in Total Advertising Awareness

Company has various plans for its customer as per the need of its customer. It has individual
plans, group plans and other many more plans with very low premium to attract its customer
from its competitive companies. The plans of Kotak life insurance old mutual fund is:

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PLANS:

 For Individuals
 Kotak Term Plan
 Kotak Preferred Term Plan
 Kotak Money Back Plan
 Kotak Child Advantage Plan
 Kotak Endowment Plan
 Kotak Capital Multiplier Plan
 Kotak Retirement Income Plan
 Kotak Retirement Income Plan (unit linked)
 Kotak Safe Investment Plan II
 Kotak Flexi Plan
 Kotak Easy Growth Plan
 Kotak Premium Return Plan

 For Group
 Employee Benefit
 Kotak Term Group Plan
 Kotak Credit Term Plan
 Kotak Complete Cover Group Plan
 Kotak Superannuation Group Plan

Above shown are the various plans of Kotak life insurance old mutual fund. But the major
plans of company are Kotak Head start child plan, Kotak safe investment plan-II, Kotak Flexi
plan, and Kotak Easy growth plan. In these plans there is various funds which are performing
in better way and giving the better return to its customers.

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 Benefits of Kotak Mahindra Life Insurance:

Headquartered in Mumbai the J.V between Kotak Mahindra. It is one of the fastest growing
insurance company in India that has a 4 million trusted policyholder nationwide. Keeping their
customers in high priority the company provides a much affordable range of term plan, ULIP
plan, child plan, saving plan, investment plan, protection plan and retirement plan. The
company has much gained name in the market for delivering outstanding value to its customer
through customized products and excellent service. The Kotak Mahindra Life Insurance
provide plans with a maximum tenure of 30 years and eligibility criteria with minimum 18
years to maximum 65 years. Kotak Mahindra is one of India's leading financial institutions was
born in 1985 as Kotak Capital Management Finance Limited. This company was promoted by
Mr. Uday Kotak, Mr. Sidney A. A. Pinto and Kotak & Company. Industrialists Mr. Harish
Mahindra and Mr. Anand Mahindra took a stake in 1986, and that's when the company changed
its name to Kotak Mahindra Finance Limited.

It's been a steady and confident journey to growth and success.

Kotak Mahindra is one of India's leading financial institutions, offering complete financial
solutions that encompass every sphere of life. From commercial banking, to stock broking, to
mutual funds, to life insurance, to investment banking, the group caters to the financial needs
of individuals and corporate.

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The group has a net worth of over Rs. 2,500 crore, employs around 6,700 people in its various
businesses and has a distribution network of branches, franchisees, representative offices and
satellite offices across 250 cities and towns in India and offices in New York, London, Dubai
and Mauritius. The Group services over 1.6 million customer accounts.

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 ANALYSIS REPORT ON TERM INSURANCE

What do you mean by Term Insurance?

Term plans are the purest form of insurance products and they are very affordable with their
low cost and high coverage. Term plans are not attached with any savings or investment
product. In a pure term plan product, if the policy holder dies the nominees will get the money
that has been promised by the insurance company as the Death Benefit for the policy holder.
In a pure term policy there is no maturity or surrender benefit. In the market, many variations
of Term Plan are available, which provide maturity and surrender benefit.

Insurance Premium would usually consist of 3 parts, namely Mortality Charge,

Administrative Expenses and Investments. Mortality Charge is the charge paid to the insurance
company by the policyholder for providing him with the assurance of the Death Benefit.
Expenses are administrative costs for documentation and investments are the amount invested
for providing the Maturity Benefit, if any, to the customer.

Since Maturity Benefit is usually zero in Pure Term Insurance Plans, there is no requirement
for Investment. Hence Term Plans are the cheapest plans in the industry with the highest
possible cover. Thus, any person will be able to take a high cover for the protection of his
family at a very nominal cost if he opts for a Term Plan.

Who has to buy it?

The usual customers for this plan would be someone who is the only earning member of the
family and has a number of dependents or someone who has taken a loan. It is also beneficial
for high net worth individual, who needs a very high cover.
In certain plans the coverage can be increased after taking the policy and hence can be availed
by young individuals who do not have much liability now.

What is the use of Term Plan?

It helps to provide income to the family in case of the policy holder’s death. The family remains
protected in financial terms even after death of the policy holder.
Types of Term Plans

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  Level Term Plans: The life coverage remains the same throughout the policy tenure
 Increasing Cover Term Plan: The life coverage increases steadily at a certain fixed rate
of about 5% every year
 Decreasing Cover Term Plan: The life coverage decreases steadily at a fixed rate till it
reaches the threshold limit.
 Home loan Cover Term Plan: The plan is used for covering the home loan liability
 Income Plan Term Plan: The plan provide monthly income for the family post the death
of policy holder

Analysis:
In this assignment we analysed the term plans available in the Indian Market.
Presently there are 24 companies in Life Insurance Business in India
The parameters we used while analysing the term plan are
 Type of term plan.
 Type of premium paying term:
There are 3 ways in which you can your premium
a) Regular. b) Single. c) Limited.
 Entry Age: The age at which you can enter the policy
 Sum Assured: The amount of premium assured in the policy
 Maturity Benefit: Maturity benefit for the policy
 Surrender Benefit: The benefit available on surrender of the policy
 Accessibility: How to buy the policy?
 Additional Rider Benefit: The rider available along with the policy
 Alteration to Premium: Is there possibility to increase or decrease the premium?

How to choose a term insurance plan

1. Looking for the old fashioned, no-frill insurance-If you want plain vanilla
insurance, choose a plan with single premium options that offers your family the assured lump
sum amount after your death. The policy's sum assured should be at least 15-20 times your
current annual income.

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2. Accident cover would be a plus: If you are willing to go a little bit extra, get
Accidental Death Benefit. Accident cover can add a large benefit at a low cost and can protect
you against a range of uncertainties such as road accidents, by offering stretched-out benefits
to your family in addition to lump sum payment.

3. Family has a history of critical illnesses, want to be insured against: Contrary

to what you may have heard, health Insurance only compensates you for hospitalization
expenses based on actuals; it doesn't secure you against major illnesses which cost a lot to deal
with as soon as they're diagnosed. Thus, if you have a family medical history of critical diseases
such as Cancer, it's important you get financial protection in the form of a Critical Illness rider
on a term plan.

4. An income even after your death: It would be ideal for your family to get monthly
income in addition to a portion of sum assured, in your absence. This will ensure they are able
to maintain the lifestyle you worked so hard to give them. However, before opting for such a
policy, ensure that this income is tax free.

5. Able to choose how to receive the pay-out: Having recognized that squandering
the lump-sum pay-out can lead to disastrous financial consequences, certain insurers have
started offering policy holders multiple pay-out options, including a combination of lump sum
death benefit payment and fixed or increasing monthly payments. Before you zero down on
the right plan, make sure it offers you the flexibility to choose the option that suits your
priorities best.

6. Peanuts are for monkeys: When spoiled for choice, we are often drawn to buy a term
plan that has the lowest premium. But that is not the right criteria to buy a product. While it is
prudent to opt for a product that is competitively priced, one must remember that cheap does
not mean best.

7. Why should I pay high premium when I near my retirement age : Since we
are talking money, it is practical to guard your savings as your retirement age draws closer. If
you think your healthy life will take you safely across the shore, look for a plan that will allow
you adjust your premiums as you age. If you are a young and unmarried person opting for old
fashioned life insurance, it is always advisable to pick a term plan that also allows you to
increase your coverage when your spouse or your child come into your life. Similarly, there

25
the ideal plan would allow you to lower your premium when your dependents cease to depend
on you.

8. How should you choose an insurer? Fundamentally, every insurance transaction is

a promise- that your family will be secure and protected no matter what happens. The insurer
you choose must have the credibility and integrity to fulfil this promise. Choose a plan that
comes from highly credible company. The first way to identify this, is to have a look at the
Claim Settlement Ratio, as announced by IRDAI. However, since the Insurance Act prohibits
denial of claims after three years except in cases of fraud involving material facts, it is advisable
to look beyond this number and also consider factors such as corporate governance record,
solvency ratio, assets under management (AUM) and instances of violations of IRDAI norms.

9. Ease of buying: Convenience is the clincher. In keeping with the times, you need a plan
that you can access wherever you are, on whichever device you prefer. Just as you compare
fares before buying your plane ticket, scan all online term insurance plans and pick a policy
that offers pure life insurance at a bargain and is available across India.

26
 CONSUMER BUYING BEHAVIOUR TOWARDS LIFE INSURANCE:
AN ANALYTICAL STUDY

Introduction
As a human being every person have the risk from one or other source. At the same time, being
individual he has the responsibilities to discharge. Indian consumers are influenced by
emotional factors. But the same time their purchase behavior is influenced by rational factors.
A Typical Indian believes in future and try to have better and secured life for his family in
future. A rupee earned by the person will be spent towards leading the family in present and
for the better life in future. Life insurance covers both the components viz., risk coverage and
saving. As the economy comprises of people in which majority of them are middle classed and
salaried, Insurance has emerging as the best option for saving and risk coverage.
But in India insurance is frequently well thought-out as a tax saving tool instead of its additional
implied long term financial benefits. Indian people are predisposed to invest in property and
gold followed by bank deposits. They selectively invest in shares also but the percentage is
extremely small

ANALYSING CONSUMER DECISION MAKING PROCESS IN LIFE INSURANCE

SERVICES
“A Consumer behaviour” has been defined as “a process a consumer uses to make purchase
decisions as well as to use and dispose of purchased goods or services, also includes factors
that influence purchase decisions and product use.” Life of social human being is full of risk,
responsibilities, and uncertainties; and life insurance substitutes the uncertainty by certainty.
Insurance sector plays a very important role in the development of any economy also, as it
provides long term funds for infrastructure development and at the same time strengthens the
risk taking ability. Indian consumers have big influence of emotions and rationality on their
buying decisions. They believe in future rather than the present and desire to have a better and
secured future, in this direction life insurance services have its own value in terms of
minimizing risk and uncertainties.

27
 Research Methodology
Secondary data has been collected from research papers, articles, and websites. The author has
used descriptive research method in the research paper to understand the consumer behaviour
in the life insurance industry.

Statement of Problem
The main objective of this paper is
 To study the consumer decision making process while buying life insurance;
 To study the special considerations to the attributes of consumers pertaining to life
insurance industry;
 The strategies that can be adopted to combat the conflicts in life insurance purchase
decision.

Theoretical interpretations:
Consumer orientation lies at the heart of the marketing concept. As marketers, we are required
to understand our consumers and to build our organization around them. This requirement is
particularly important for insurance services, which in many instances still tend to be
operations dominated rather than customer oriented. Nowadays, it is rather more important to
understand consumers how they choose among choice of services offered to them and how
they evaluated these insurance services once they have received them. To market insurance
services effectively, marketing manager needs to understand the thought process of consumers
during the stages of purchase decision. When buying an insurance policy or services, new or
high premium policy, the consumer decision making process go through following five stages:

a) Need recognition
b) Search for alternatives
c) Evaluation of alternatives
d) Purchase decision
e) Post purchase evaluation.

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 1. Pre Purchase Stage
a. Stimulus: It has been observed that an individual receives a stimulus that may incite
him to consider a purchase. This stimulus may be commercial cue, social cue or a physical cue.
 Commercial cues are the result of promotional efforts by advertisers.
Social cues are obtained from the individual peer groups or from a
significant other e.g. friends are opting for term insurance or Mutual
funds / ULIP / SIP instead of traditional life insurance plans/ NSC/
KVP/FDR.
 This stimulus may also result in physical cue such as biological cue.
E.g. fear to die from accident, critical illness, physical disablement,
unemployment, etc. which can create tension or worry about family
members. How will they manage the expenses if any mishap occurred?

b. Problem awareness / Need recognition: During this phase, the consumer examines whether
they are really facing with an imbalance between actual and desired states that arouses and
activates them to purchase risk coverage.

- Internal stimuli are the occurrences you experience such desire for security / saving for family
or self for future financial planning. –

External stimuli are the influences from outside source such as someone has recommended a
new investment plan, whose features, flexibility, benefits, illustrations, charges, liquidity
options, switching options, types of funds, guaranteed returns, etc. under a brand name
mentioned by a friend or colleague or by a family member seems attractive. It is the main
objective of a marketing manager to recognize the imbalance between present and preferred
status of consumer.

29
The Need for Life Insurance is Permanent . . . Not Temporary.

 When is the best time to buy life insurance?

 How much will you need?
 How long will you need it?
 How much will it cost?

*Unfortunately, death or disability could occur at any time

 What do you want to accomplish with your life?

 Why are you here?
 What is your purpose?
 What is your overall financial and investment strategy or game plan?
 What do you want to accomplish with your money?
 What is your family financial philosophy?
 What’s important about money to you?
 What are your goals?
 How do you want to be remembered by your children, your grandchildren, and your
community or society?
 Where do you want your money to go?

Indemnify foremost that which you can least afford to lose…your income, your health, and
your life. Make sure you have adequate health insurance, disability income insurance, and life
insurance. When it comes to life insurance, buy as much as you can get and afford. For most
people, a combination of term and cash value insurance is the best approach. Assess your
overall planning annually with your advisors.

c. Information Search: The need recognition stage of a problem demands a solution from the
individual and it usually implies that a potential purchase will ensue. During this phase the
individual will collect information regarding possible alternatives available to satisfy the need.
An information search can be internal or external or both.

- Internal search: with family, friends, funds available and tax bracket, etc.

- External search: it can be market controlled as it seeks information from the outside
environment i.e. Banks, websites of various insurance companies (www.irdaindia.org,
www.policybazaar,com, www.bimaonline.com, www.licindia.com, www.iciciprulife.com,
www.kotaklife.com, etc.), mutual funds, ELSS, PPF, EPF, NSC, Post office savings scheme,

30
KVP, etc. different insurance products (Term, Endowment, Money back, Whole life, Pension
plans, single premium, etc.)

Around 67% of web-user’s in India use online review before making purchase decision. Thus
consumer’s information search should yield a group of brands called evoked set. From this set,
the buyer will further evaluate the alternatives and make a choice. Having too many choices
can in fact confuse consumer and cause them to delay the decision to buy or in some instances
not to buy at all.

 When should you buy life insurance?

 From whom should you buy life insurance?
 How do you select an insurance advisor?
 The wimp factor.
 Who should be involved in your meetings?
 When and where should you meet with your insurance advisor?
 What should you expect from your advisor

How do you select a company? There are almost 24 life insurance companies doing business
in the India. How do you choose one?

Where do you get the ratings information? What do I recommend? What Is Your Philosophy
Regarding Life Insurance?

d. Evaluation of alternatives: After getting information and constructing an evoked set of

alternative products the consumer is ready to make a decision, a consumer will use the
information stored in memory and obtained from outside sources to develop a set of criteria.
The environment internal information and external information help consumers evaluate and
compare alternatives. One may have to begin narrowing the number of choices in the evoked
set to pick a set that don‟t have the attribute.

A final way to narrow the choices is to rank the attributes under consideration in order of
importance and evaluate the products based on how well each performs on the most important
attributes. In a different way consumers can evaluate a product is according to the
categorization process. The evaluation of alternatives depends upon the particular category to
which it is assigned. The attributes identify cover a wide range of concerns related to consumer
multi attribute models as under

31
A. A list of alternatives

B. A list of criteria for purchase

C. Importance weight-age attached to each criterion.

D. Performance, beliefs connected with a particular firm (in newspaper, articles, etc.)

E. Performance, beliefs, connects with other insurance companies or their products.

2. The consumption stage: Ultimately, the consumer has to decide whether to buy
or not to buy the long term investment plan with insurance company many questions come into
mind; it has to be often a fully planned purchase based upon a lot of information. During this
stage, the consumer may make a decision which is accompanied by a set of expectations about
the service, the activities of buying; using and experiencing are grouped together.

3. Post purchase stage: While purchasing / choosing a service firm the consumers
expect certain outcomes from the purchase. How will these expectations are met determines
whether the consumer is satisfied or dissatisfied with the purchase. During this stage the
consumer may experience varying levels of disturbances called cognitive dissonance (a doubt
that the correct product has been purchased). Marketers, often, attempt to minimize the
consumer’s cognitive dissonance by reassuring the customers that the correct decision has been
made. Customer satisfaction is achieved when consumer’s perceptions met or exceed their
expectation.

Special Considerations Pertaining To Insurance Industry

a) Perceived Risk: consumers of services tend to perceive a higher level of risk

during the pre-purchase decision stage. The perceived risk is proposed to consist of two
dimensions as consequences and uncertainty.

 Financial fear of losing funds

 Fear of Performance of funds
 Physical fear to hurt my financial planning
 Psychological risk of self esteem
 Social fear of friends / family

b) Risk and standardization: In the concept of homogeneity no two policies of

investments are similar as they are dependent upon premium, funds opted, risk covered, term
of the policy, fund management charges, health of the policy holder, how often the funds

32
switched, timely premium payment, withdrawals, liquidity, etc. Hence, homogeneity is not
possible.

c) Risk and Information: Many researchers have argued that the higher level of
risks is associated with service purchase are due to the limited information i.e. readily available
before the purchase decision is made.

Choice Criteria when selecting the Insurance Service Provider

33
 Importance Scale 1 least important 10 most Important
10
9
8
7
6
5
4
3
2
1
0

Importance Scale 1 least important 10 most Important

FIG: Scale of Importance attached to various factors when selecting the Insurance
Service Provider

34
DATAANALYSIS & INTERPRETATION

1) Personal detail:

Age No. Of Respondents

18-24 4
24-35 19
35-45 16
45-55 8
55-65 1

No of Respondents
20
18
16
14
12
10
8
6
4
2
0
18-24 24-35 35-45 45-55 55-65

No of Respondents

ANALYSIS
Above diagram consist five classes of different age groups.
Here customer 19 customer belongs to 25-35 age groups, 16 customers fall in the age group
35-45 years. Other 8 customer comes are in the class 45-55 years the age group of 18-24
Consists four customer reaming customer is in age group 55-65 years. Here majority of
customer belong to the group 25-35 years.

35
(2) Do you think is it essential to have life insurance?
YES__________ NO_______

Total Yes No Total

No of respondents 45 5 50

% of respondents 90 10 100

(3) Which are the companies you invested your money for life insurance?
Companies No of Respondents % of Respondents
Lic 50 37.04
Kotak Mahindra life 30 22.22
insurance
Bajaj Allianz - -
Tata AIG 10 7041
Max new York life insurance 5 3.70
HDFC Life Insurance 10 7.41
ICICI Prudential insurance 25 18.52
SBI 5 3.70

(4) Why did you choose Kotak life insurance?

No of respondents % of respondents
ROI 18 36
Peer pressure 15 30
Tax benefit 10 20
Security / safety 2 24
Low premium 5 10
Total 50 100

36
(5) Which of the following planed you is insured?
No of respondents % of respondents

Kotak Flexi plan 20 40

Kotak retirement plan 15 30

Kotak endowment plan 3 6
Kotak capital multiplier plan 5 10
Child advantage plan 7 14
Total 50 100

(6) What kind of service you expect from insurance provides?

No of respondents % of respondents

Easy access ability to deposit centre 20 31

Time to time premium collection 12 19

Provision in case of dues 8 13

Bonus and other schemes 24 37

Total 64 100

(7) How will you rate the service given by Kotak Mahindra Life Insurance?
No of respondents % of respondents

Poor - -
Average 16 32

Good 28 56
Excellent 6 12

Total 50 100

37
8) What difference you find between Kotak and your previous insurance provider?
No of respondents % of respondents
Good Return 11 22
Effective Service / liquidity 7 14
Tax Planning 18 36
Security / Safety Benefit 14 28
Total 50 100

(9) Do you have any suggestion for Kotak Mahindra Life Insurance?
Yes__________ NO______________
YES NO TOTAL
No of respondents 39 11 50
% of respondents 78 22 100

10) In future, will you purchase policies from Kotak Mahindra Life
Insurance?
YES__________ NO_______
YES NO TOTAL
No of respondents 32 18 50
% of respondents 64 36 100

38
 Conclusion:

“A Consumer behaviour” has been defined as “a process a consumer uses to make

purchase decisions as well as to use and dispose of purchased goods or services,
Find out about consumer behaviour about the insurance.

Study about Kotak Mahindra life insurance plans.

Study about various factors when selecting the Insurance Service Provider

If the all information about insurance is given to customers than they can attract towards the
taking insurance.

Need to educate the people about the insurance

After conducting market research for Kotak Mahindra Life Insurance Company
we came to know different needs of consumers, their valuable suggestions,
responses to the different questions.

With this information we can conclude that there is good market awareness about
Kotak Mahindra Life Insurance Company in the market.

Customer satisfaction level of most respondents is higher for Kotak Mahindra

Life Insurance Company, which is provided by survey

39
 REFERENCE

Websites

https://insurance.kotak.com/

https://www.myinsuranceclub.com/life-insurance/companies/kotak

https://www.bloomberg.com

Reference Books

Principles of Insurance

Life Insurance in India

Guidance Reference

Mr. Gaurav Sinha

40
 QUESTIONNAIRE FOR CUSTOMERS

Dear Sir/Madam,

This survey is conducted for Kotak Mahindra Life Insurance entitled “To Study about
Market Research, Customer Behaviour And Customer Satisfaction” Please give your
valuable information, your information will be kept confidential and will be used only for
academic purpose.

NAME: -…………………………………………………………………….

Address:-…………………………………………………………………….

Occupation:-………………………………………………………………...

1. Do you think is it essential to have life insurance?

YES__________ NO_______

2. Which are the companies you invested your money for life insurance?
 Kotak Mahindra life insurance
 Bajaj Allianz
 Tata AIG
 Max new York life insurance
 ICICI Prudential insurance
 SBI

3. Why did you choose Kotak life insurance?

 ROI
 Peer pressure
 Tax benefit
 Security / safety
 Low premium

41
4. Which of the following planed you is insured?
 Kotak Flexi plan
 Kotak retirement plan
 Kotak endowment plan
 Kotak capital multiplier plan
 Child advantage plan

5. What kind of service you expect from insurance provides?

 Easy access ability to deposit centre
 Time to time premium collection
 Provision in case of dues
 Bonus and other schemes

6. How will you rate the service given by Kotak Mahindra Life Insurance?
 Poor
 Average
 Good
 Excellent

7. What difference you find between Kotak and your previous insurance provider?
 Good Return
 Effective Service / liquidity
 Tax Planning
 Security / Safety Benefit

8. Do you have any suggestion for Kotak Mahindra Life Insurance?

Yes__________ NO______________
If yes ……………………………………………………………………………
…………………………………………………………………………………..
…………………………………………………………………………………..

9. In future, will you purchase policies from Kotak Mahindra life

Insurance?
YES__________ NO_______

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