POTENTIAL OF LIFE

INSURANCE INDUSTRY

IN INDIA SUBMITTED BY: PRIYA AGGARWAL B.COM(H)III YR SEC-1,ROLL NO-96

HANSRAJ COLLEGE (DELHI UNIVERSITY) UNDER GUIDANCE OF Mrs. NEERA CHOPRA Dept. of Commerce HANSRAJ COLLEGE

Certificate
This is to certify that the project report titled Potential of Life Insurance Industry in India-Case study on LIC of India has been carried out by Priya Aggarwal, Roll No. 96,Batch 2009-2012 for the partial fulfilment of the Bachelor of Commerce (Honours).

Priya Aggarwal B. Com (H) III Year College Roll No.96 Hans Raj College

Mrs. Neera Chopra Department of Commerce Hans Raj College

Declaration
I, Priya Aggarwal, hereby declare that the project report titled Potential of Life Insurance Industry in India-Case study on LIC of India. is my original piece of work and is based on my understanding of the subject. It has not been copied from any published source or website.

Priya Aggarwal B. Com (H) III Year College Roll No. 96 Hans Raj College

ACKNOWLEDGEMENT
It gives me immense pleasure to express my sincere gratitude to my respected mentor,Mrs. Neera Chopra,Dept. of Commerece,Hansraj College,D.U. for providing me the required inspiration by way of expert guidance and ceaseless encouragement throughout my research work.Without her constant support and visionary approach,the present research work would not have materialized. I would like to place on records my thanks to Delhi University for encouraging me to exhibit my skills through which I got an opportunity to express myself on the subject of Potential of Life Insurance Industry in India.

Mrs. NEERA CHOPRA (Mentor)

PRIYA AGGARWAL B.Com(Hons.),III Roll no.-96

OBJECTIVES A big boom has been witnessed in Insurance Industry in recent times.A large number of new players have entered the market and are trying to gain market share in this rapidly improving market.The study deals with reliance in focus and the various segments that it caters to.The study then goes to evaluate and analyse the findings so as to present a clear picture of trends in the Insurance Sector. Main Objectives of the research is to have an analysis of Life Insurance Industry in India and to show that how it is preferred by most of the people in recent times. Main Objectives are as follows: History of Indian Insurance Industry Need and Importance of Insurance Types of Insurance Major Players in Indian Insurance Industry Case study on LIC Products offered by LIC Comparative Study on LIC & ICICI policies To know the most preferred policy

INTRODUCTION
INSURANCE
Insurance is one of life's necessities and probably the least-understood financial product. Insurance reimburses people for covered losses in the event of an unfortunate occurrence such as an illness, accident, or death. At the same time, it can encourage prevention and safety measures, provide investment capital, lend money, and help to reduce anxiety for society at large. As a mechanism against loss of income and a means of safeguarding assets, many Indians have insurance in one form or another. These coverages may include public coverage, such as disability insurance, a health care policy from an employer, or personal insurance to protect property such as homes, computers and cars. Understanding life insurance becomes easier when one realizes that insurance was a concept developed to transfer a person's risks to another party, thereby protecting the insured person in the event of any calamity. Until something happens, such as a car accident, an illness, or the death of a loved one, paying for insurance may seem like buying something you'll never use. But even if you never submit a claim, insurance is an investment in your future, as important as pensions and personal investments. Indeed, many financial planners argue that you should have an adequate insurance safety net in place before considering investment strategies.

THE HISTORY OF INDIAN INSURANCE INDUSTRY

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 centuriesyet its beginnings date back almost 6000 years. 1.1. Insurance: A background Historians believe that insurance first developed in summer and Babylonia. The merchants and traders of these societies transferred and pooled their money to protect themselves and pirates. In the 18th Century BC, Babylonian king Samurai developed a code of law, known as the code of specific rules governing the practices of early risk sharing activities. Insurance also developed during the 1700s in the North American colonies. In 1730 Benjamin Frank contributed for the Insurance of Houses from Loss by fire. Early development of insurance was unorganized. It was mainly insuring commercial risks. The insurance inhuman life started in England in 1583AD for term Assurance for 12 months, which was issued for the first time. In 1705 amicable society started paying assurance on death a tern carried on unto 1757. In 1762 equitable society was the first co. to start charging premium on scientific basis. In India the references to insurance history relates to the East India Co. when some policies where issued on the life of Bruisers in foreign currency. In 1870- Bombay Mutual Insurance Limited

In 1874- Oriental Govt. Security life Assurance Co Limited In 1896 Bart Insurance Co. and 1897 empire of India. In 1905 no of insurance company life Hindustan co-op United India, Bombay Life National Asian were set up during the above period. After 2nd world war several new companies were established, most important being New India Assurance Co. others were Jupiter, Lame, Andhra, Industrial Metropolitan and New Asiatic. The government started to exercise control with the passing of insurance act 1912 there was a marked increase in the volume of insurance business and other form of Business. More companies were floated. With a view to have a closer watch on the matter of investment of funds and expenditure and general management of business govt. enacted the insurance act in 1938 and also the Dept of Insurance under the authority of the superintendent of Insurance was established. This act was further amended in 1950. Before nationalization there were 97 operating centers almost all urban. There were 245 different insurance companies then. Nationalization off the Insurance business in 19 Jan 1956. LIC act of 1956 was passed by the parliament and received presidential assent on 18th June 1956 and act come into force on 1st July 1956-LIC came into existence on the 1st September 1956.

Life Insurance
In 1818 the British established the first insurance company in India in Calcutta,The Oriental Life Insurance Company.First attempts at regulation of the industry were made with the introduction of Indian Life Assurance Companies Act in 1912.A number of amendments to this Act were made until the Insurance Act was drawn up in 1938.Noteworthy features in the Act were the power given to the Government to collect statistical information about the insured and the high level of protection the Act gave to the Public through regulation and control. The enactment of the Indian Regulatory and Development Authority Act, 1999 (IRDA) has effected vast changes in the whole scenario of Indian insurance sector. It gave the customers a chance to get a better deal from the insurers.

It can be seen that in most of the countries, in view of the large sum of public funds commanded by them, insurance industry was kept as a state monopoly. Although the monopoly has lent financial strength and ownership of the Government, they failed in the area of customer service. As it enters the 21st century, the insurance industry finds itself offering customized products to increasingly diverse markets through a wider range of distribution channels..

Some of the important milestones in the life insurance business in India are:
1912 : The Indian Life Assurance Companies Act enacted as the first statue to regulate the life insurance business. 1928 : The Indian Insurance Companies Act enacted to enable the government to collect statistical information abou t both life nad non-life insurance businesses. 1938 : Earlier legislation consolidated and amended by the Insurance Act with the objective of protecting the interests of the insuring public. 1956 :The market contained 154 Indian and 16 foreign life insurance companies.

WHAT IS INSURANCE??
Insurance is a protection against financial loss arising on the happening of unexpected event/accidents.Insurer collects premium to provide for this protection from various people. Insurance is a legal contract that protects people from the financial costs that result from Loss of life, loss of health, lawsuits, or property damage. Insurance provides a means for individuals and societies to cope with some of the risks faced in everyday life. People purchase contracts of insurance, called policies, from a variety of insurance organizations. Insurance is conceived as a method of sharing of these losses, embodying the principle of co-operation existed in the early civilization. There is evidence that during the Aryan civilizations, loss of profits in industry was insured by the village co-operative in India. Almost everyone living in modern, industrialized countries buys insurance, for instance, laws in most states require people who own a car to buy insurance before driving it on public roads. Lenders require anyone who finances the purchase of a home or car with

borrowed money to insure that property. Business partners take out life insurance on each other to make sure that business will succeed even if one of the partners die. INSURANCE TERMINOLOGY Policy Contract between an insurer and an insured Proposer Person who signs the contract on behalf of life insured Life Insured Person on whom the contract has been taken out Nominee Person who is defined as the beneficiary of the policy

Insurance Plan Specific type of policy that a customer wants to take from an insurer Policyholder The proposer in the contract Premium The consideration paid by the proposer for the contract Sum Assured Benefit for which the policy has been taken out Death Benefit Sum Assured on death

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Term of Policy Length of Insurance Due Date Date on which renewal premium is to be paid Grace Period Period beyond grace period that a renewal premium can be paid without any financial charges.

1.2. Need of Insurance Since beginning of the world, man has always felt insecurity for his assets and even life. There is uncertainty in every aspect of life. It is an old saying that only death and tax are certain, however even the time of death and rate jog tax is not certain. Uncertainties expose our assets to losses and consequently endless problems. A fire in a factory may burn everything and owners only source of earning with investment of huge capital is finished but insurance will come to ones rescue if insurance is taken, all the operations can be started again. Insurance does not only provide reimbursement at the time of loss but at the time of taking the policy, insurer provides suggestive measures to reduce the effect of hazards and losses. Earthquake, flood, riot, strike, theft, explosion, fire, etc. are some of the common dangers to our assets. Moreover life insurance besides providing financial assistance to the insured, these policies provide investment opportunities and even pension plans at market interest rate. 1.3 Importance of Insurance Insurance benefit society by allowing individuals to share the risks faced by many people. But it also serves many other important economic and societal functions. Because insurance is available and affordable, banks can make loans with the assurance that the loans collateral is covered against damage. This increased availability of credit helps people buy homes and cars. Insurance also provides the capital that communities need to

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quickly rebuild and recover economically from natural disasters, such as floods or earthquakes. Insurance itself has become a significant economic force in most industrialized countries. Employers buy insurance to cover their employees against work related injuries and health problems. Businessmen also insure their property, including technology used in production against damage and theft. Because it makes business operations safer; insurance encourages businesses to make economic transactions, which benefit the economies of countries. Insurance companies perform a type of monetary redistribution they collect premium and eventually redistribute that money as payments. Depending on the type of insurance, redistribution can take place anywhere from a few months to many decades. Because of this delay between collections and paying out funds, insurance companies invest their funds to bring in extra revenues. Such investments help businesses and government finance their operations, and few months from those investments deport the operations of insurance companies. With these investments earnings, insurance companies can keep rates much lower than would otherwise be possible. 1.4. Privatization of Insurance The Indian insurance has finally opened up. The first move towards liberalization came with the Amphora Committee Report in 1993 which recommended the privatization of insurance. Indian stands to gain witty the following major advantages: Better products with more reasonable and affordable pricing Quick servicing Increased saving rate Long-term funds for infrastructure development will be available to the country Large inflow of foreign capital

It is debated that the insurance business does not produce profit in the first five year. Cross subsidization is a feature of the Indian Market. Event the fire portfolio which is considered profitable, cross subsidizes the other department. Tariff reductions are likely to reduce further. Insurer will have to institute proper claims management process in order to extract proficiencies.

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The govt. is soon to present the new model for taxing life insurance companies at internationally competitive rates. New entrants would be well advised to look ahead to the stage where brand strength will be a competitive advantage and sketch their alliances accordingly. 1.5. Opportunities in Insurance In Indian market, the opportunity for insurance companies is huge. The efforts of government companies have lacked sincerity, as there is large untapped market even after 45 years of nationalization. According to sources, 30 cores people of India can afford insurance however only 8 cores of them have taken any insurance. Life insurance premium collected in a year is only 2% of gross domestic product in India with that of 12% in USA. Total non-life insurance premium is a mere 0.6% of GDP which is almost negligible. On the basis of this it can be sold that there is huge scope for insurance in India. There is still much to achieve and a big market to explore. The latent demand foreseen in Indian market and the success of liberalized market in emergent economies make this a great opportunity. To avail this may international players including the world leaders have set up their business in India in last two years. Prudential life insurance was first company to tie up with an Indian company i.e. is ICICI and gets a license. Each company requires 100 crores of capital to start their business, which is a big amount to ensure the solvency of company at all times.

1.6.Types of Insurance 1. Life Insurance Life insurance is a contract for payment of a sum of money to the person assured on the happening of the event insured against. Usually the contract provides for the payment of an amount on the date of maturity or at specified intervals or at unfortunate death. The contract also provides for the payment of premium periodically to the corporation by the assured. 2. General Insurance

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General Insurance includes many areas of insurance like marine, motor, engg. Health, fire etc. the contract provides for the payment of an amount on the happening of some contingency. These types of contracts are annual in nature.

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RESEARCH METHODOLOGY
This deals with the research methodology that has been followed. Research methodology can be defined as the step by step procedure that is designed and followed for the purpose of doing a research work. Other main purpose is to design the work in such a way that all the areas to be covered in the research work fall in a correct manner and in the purview of the research work and nothing is left out the methodology is develop din such a way that the flow of the work is continuous and desired results are obtained. 2.1. SIGNIFICANCE & RATIONALE OF THE RESEARCH

This project provided me an opportunity to know the insurance sector and moreover help me for entering into an imsurance sector. The main rationale behind the study undertaken is to provide information about customers preferences and brand loyalty.To provide the information as to what are the reasons that the customer looks upon during a purchase of an insurance policy and what is the image of private insurance companies in their mind through interaction with them. DATA COLLECTION METHOD Universe Defined: Here the universe of the study is all the salaried people of different age group in India. Locale: Here the locale of the study is all the people working and living in Delhi & NCR. It is restricted to Delhi only because of time & resource constraints. Sample Size: The size of the sample was around 60 people considering the time constraint. Data Collection: Data has been collected through both primary and secondary approach. Primary Data is the data which is collected form direct interaction with the target sources and which is raw in hand and is used for the first time.Various sources are used like

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Personal Interview Telephone Interview Questionnaires

Secondary Data is the data which has been collected from different sources earlier i.e. through magazines, journals and internet and are used for the purpose of project/survey.Secondary data has been collected through various sources such as:

Internet Newspapers Reports The customers are sometimes biased towards the product and moreover the customer lacks the information about insurance.So the accurate conclusions may not be drawn on the basis of information collected.

LIMITATIONS

Some of the customers due to time constraints and availability of documents with them because of data was filled in a hurry which meant the data provided might not be 100% true.

The number of respondents were limited to 60 because of time constraints & assignments.

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MAJOR PLAYERS OF LIFE INSURANCE IN INDIA

1. Life Insurance Corporation of India
2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

ICICI prudential Life Insurance Co Ltd. HDFC Standard Life Insurance Co Ltd. Max New York Life Insurance Co Ltd. Birla Sun Life Insurance Co Ltd. Om Kotak Mahindra Life Insurance Co Ltd. Reliance Life Insurance Co Ltd. Allianz Bajaj Life Insurance Co Ltd. Ing Vyasa Life Insurance Co Ltd. SBI Life Insurance Co Ltd. Metlife Insurance Co Ltd. Sahara Life Insurance Co Ltd. Aviva Life Insurance Co Ltd. TATA Aig life Insurance Co Ltd.

15. Bharti AXA Life Insurance Co Ltd. 16. Shriram Life Insurance Co Ltd.

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CASE STUDY ON LIC

Company Profile:- It is the single largest Life Insurance Player of India having an life fund corpus of Rs. 1,86,024 crore (Approx.). It is the only player in the public sector life insurance segment. If we add up the asset base of all other private players who have recently ventured into India with local alliance after the liberalization of the Insurance sector in the 1999, then also it comes nowhere near to LIC. And moreover in the near future down the line 10 years , it can be predicted with 100% certainty that no other company in the life insurance segment would topple over LIC as per as asset base is concerned. No. of Agents:- 6,51,000 agents.

Life Insurance in India

Life insurance in India made its debut well over 100 years ago. In our country, which is one of the most populated in the world, the prominence of insurance is not as widely understood, as it ought to be. What follows is an attempt to acquaint readers with some of the concepts of life insurance, with special reference to LIC.It should, however, be clearly understood that the following content is by no means an exhaustive description of the terms and conditions of an LIC policy or its benefits or privileges. Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against. The contract is valid for payment of the insured amount during:

The date of maturity, or Specified dates at periodic intervals, or Unfortunate death, if it occurs earlier.

Among other things, the contract also provides for the payment of premium periodically to the Corporation by the policyholder. Life insurance is universally acknowledged to be an institution, which eliminates 'risk', substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of death of the breadwinner. By and large, life insurance is civilisation's partial solution to the problems caused by death.

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Life insurance, in short, is concerned with two hazards that stand across the life-path of every person: 1. That of dying prematurely leaving a dependent family to fend for itself.
2.

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

OBJECTIVES OF LIC

Spread Life Insurance widely and in particular to the rural areas and to the socially and economically backward classes with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost. Maximize mobilization of people's savings by making insurance-linked savings adequately attractive. Bear in mind, in the investment of funds, the primary obligation to its policyholders, whose money it holds in trust, without losing sight of the interest of the community as a whole; the funds to be deployed to the best advantage of the investors as well as the community as a whole, keeping in view national priorities and obligations of attractive return. Conduct business with utmost economy and with the full realization that the moneys belong to the policyholders. Act as trustees of the insured public in their individual and collective capacities. Meet the various life insurance needs of the community that would arise in the changing social and economic environment. Involve all people working in the Corporation to the best of their capability in furthering the interests of the insured public by providing efficient service with courtesy. Promote amongst all agents and employees of the Corporation a sense of participation, pride and job satisfaction through discharge of their duties with dedication towards achievement of Corporate Objective.

Mission of LIC
"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."

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Vision
"A trans-nationally competitive financial conglomerate of significance to societies and Pride of India."

Life Insurance Vs. Other Savings

Protection Savings through life insurance guarantee full protection against risk of death of the saver. in life insurance, on death, the full sum assured is payable (with bonuses wherever applicable) whereas in other savings schemes, only the amount saved (with interest) is payable. Aid to Thrift Life insurance encourages 'thrift'. long term saving can be made in a relatively 'painless' manner because of the 'easy instalment' facility built into the scheme (method of paying premium either monthly, quarterly, half yearly or yearly). take, for example, our salary saving scheme popularly known as sss. this scheme provides a convenient method of paying premium each month by deduction from one's salary. the deducted premium is remitted by the employer to the lic. the salary saving scheme can be introduced in an institution or establishment subject to specified terms and conditions. Liquidity Loans can be raised on the sole security of a policy which has acquired loan value. besides, a life insurance policy is also generally accepted as security for even a commercial loan. Tax relief Tax relief in income tax and wealth tax is available for amounts paid by way of premium for life insurance subject to income tax rates in force. assessees can avail themselves of provisions in the law for tax relief. in such cases the assured in effect pays a lower premium for his insurance than he would have to pay otherwise. Money when you need it

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A suitable insurance plan or a combination of different plans can be taken out to meet specific needs that are likely to arise in future, such as children's education, start-in-life or marriage provision or even periodical needs for cash over a stretch of time. alternatively, policy moneys can be so arranged to be made available at the time of one's retirement from service to be used for any specific purpose, such as for the purchase of a house or for other investments. subject to certain conditions, loans are granted to policyholders for house building or for purchase of flats.

Insurance For Women

Prior to nationalisation (1956), many private insurance companies would offer insurance to female lives with some extra premium or on restrictive conditions. However, after nationalisation of life insurance, the terms under which life insurance is granted to female lives have been reviewed from time-to-time. At present, women who work and earn an income are treated at par with men. In other cases, a restrictive clause is imposed, only if the age of the female is up to 30 years and if she does not have an income attracting Income Tax.

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

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LIFE INSURANCE PRODUCTS:

Whole life policy:

These are low-cost insurance plans where the sum assured is payable on the death of the insured A typical whole life policy runs as long as the policyholder is alive. In other words, the risk is covered for the entire life of the policyholder, which is why it is known as whole life policies. The policy money and the bonus are payable only to the nominee of the beneficiary upon the death of the policyholder. The policyholder is not entitled to any money during his or her own lifetime, i.e. there is no survival benefit. Whole life policies are fairly rigid and inflexible and are suitable only in a few, very specific cases. Whole Life Policy can be a good initial policy to buy since its cost is very low. That is an important consideration when one is just starting a career.

Endowment policy:

Under these plans, the sum assured is pay-able on the maturity of the policy or in case of death of the insured individual before maturity of the policy. Endowment policies cover the risk for a specified period at the end of which the sum assured is paid back to the policyholder along with the entire bonus accumulated during the term of the policy. It is this feature - the payment of the endowment to the policyholder upon the completion of the policys term -, which rightly accounts for the popularity of endowment policies. The original sum assured and the accumulated bonus - received back comes handy from the endowment can either be used for buying an annuity policy to generate a monthly pension for the whole life, or put it in any other suitable investment of his choice. As compared to whole life policies, the premium rates for endowment policies are higher and the bonus rates are lower. On the plus side, these polices offer an endowment representing a return on his premium payments payable to him in his own lifetime when the policy comes to an end. Money back policy: Unlike ordinary endowment insurance plans where the survival benefits are payable only at the end of the endowment period, money back policies provide for periodic payments

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of partial survival benefits during the term of the policy, of course so long as the policy holder is alive. An important feature of this type of policies is that in the event of death at any time within the policy term, the death claim comprises full sum assured without deducting any of the survival benefit amounts, which may have already been paid as money-back components. Similarly, the bonus is also calculated on the full sum assured Under money back policies premiums can be paid as per the insurance companys policy. These could be quarterly, half yearly or annually. The premiums for these policies are payable for the selected term of years, or till death if it occurs earlier. By buying such policies one can receive income at regular intervals other than the risk cover it provides. Also a good amount of bonus on the full sum assured is quite a good bargain

Term policy:

Under these plans, the sum assured is payable only on the death of the insured individual before expiry of the policy. Term policies; cover only the risk during the selected term period. If the policyholder survives the term, the risk cover comes to an end. A Term plan is designed to meet the needs of people who are initially unable to pay the larger premium required for a whole life or an endowment assurance policy, but they hope to be able to pay for such a policy in the near future. No surrender, loan or paid-up values are granted under these policies because reserves are not accumulated. If the premium is not paid with the days of grace, the policy will lapse without acquiring a paid-up value. However, a lapsed policy may be revived during the lifetime of the life assured but before the expiry of the period of two years from the due date of the first unpaid premium on the usual terms. Accident and / or Disability benefits are not granted on policies under the Term plan. Annuity (Pension Plan): These plans provide for either immediate or deferred pension for life. The pension payments are made till the death of the annuitant (per-son who has a pension plan) unless the policy has provision of guaranteed period.

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An annuity is an investment that one make, either in a single lump sum or through installments paid over a certain number of years, in return for which one receive back a specific sum every year, every half-year or every month, either for life or for a fixed number of years. After the death of the annuitant or after the fixed annuity period expires for annuity payments, the invested annuity fund is refunded, perhaps along with a small addition, calculated at that time. Annuities differ from all the other forms of life insurance discussed so far in one fundamental way - an annuity does not provide any life insurance cover but, instead, offers a guaranteed income either for life or a certain period. Typically annuities are bought to generate income during ones retired life, which is why they are also called pension plans. Annuity premiums and payments are fixed with reference to the duration of human life. Joint life policy: Joint life policies are similar to endowment policies in as much as these policies also offer maturity benefits to the policyholders, apart form covering the risks as all life insurance policies. But these are categorized separately as these cover two lives together thus offering a unique advantage in some cases; notable, for a married couple or for partners in a business firm Under a joint life policy the sum assured is payable on the first death and again on the death of the survivor during the term of the policy. Vested bonuses would also be paid besides the sum assured after the death of the survivor. If one or both the lives survive to the maturity date, the sum assured as well as the vested bonuses are payable on the maturity date. The premiums payable cease on the first death or on the expiry of the selected term, whichever is earlier. Accident benefits equivalent to the sum assured are available under this plan on the first death. However, if both lives are covered under Double Accident Benefit (DAB), the surviving life is covered under DAB until the end of the policy year, in which the first life dies under the cover of the policy. These benefits are available with respect to both lives if

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 Both lives perish simultaneously owing to an accident. To avoid such an eventuality, nomination is allowed under the policy OR Both die within the specified period as a result of the same accident OR The second life also dies in the same policy year as result of another accident. To avoid such an eventuality, nomination is allowed under the policy. Particularly for couples - Joint life policies provide dual-purpose income and risk protection for both belonging to every income group and class of society. Under a joint life plan though the premium payment stops after the first life's death, bonuses continue to accrue on the basic Sum Assured till Maturity Date or till the death of the second life, if earlier. Group insurance: Group Insurance offers life insurance protection under group policies to various groups such as employer-employee, professionals, co-operatives, weaker sections of society etc. It also provides insurance coverage to people under certain approved occupations at the lowest possible premium cost. Besides providing insurance coverage, it also offers group schemes to employers, which provide funding of gratuity and pension liabilities of the employers Group insurance plans have low premiums. Such plans are particularly beneficial to those for whom other regular policies are a costlier proposition. Group insurance plans extend cover to large segments of the population including those who cannot afford individual insurance. As such the premia one need to pay is comparatively lower and at the same time one can avail of insurance benefits. The main features of the schemes are low premium and simple insurability conditions. Premiums are based upon age combination of members, occupation and working conditions of the group. A number of group insurance schemes have been designed for various groups. These include employer-employee groups, associations of professionals (such as doctors, lawyers, chartered accountants etc.), and members of cooperative banks, welfare funds, credit societies and weaker sections of society. Creditor-Debtor groups are also offered group insurance schemes. Group insurance schemes providing uniform cover can be granted to outstanding loans. These groups are Members of primary housing societies where housing loans are granted

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by State Apex housing societies, borrowers granted loans by Institutional agencies in Public/Joint Sectors for housing purposes and borrower members of cooperative societies/banks formed by employees of the same employers Special plan: Special plans are insurance policy plans available from the national insurance providers to serve the needs of citizens that cannot be commonly classified or segregated. These special plans are designed to satisfy needs ranging from debt-clearance in event of the death of the insured to financial aid in the event of a medical mishap. Special plans also provide financial assistance for handicapped dependants as well as emergency surgery required if and when a medical condition arises. Since special plans are designed for people with diverse and specific needs, the average citizen may not necessarily need or use them. Yet, in the normal course of life, situations may arise when one may need to provide for unplanned or unexpected contingencies and mishaps.

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A COMPARATIVE STUDY OF LIC AND ICICI PRUDENTIAL POLICIES LIC and ICICI Pru both provide different policies and plans depending upon the various requirements of people. Different plans are been categorised under seven major categories of policies. Then a comparative analysis is done between the plans of both LIC and ICICI Prudential. Both the company provide similar types of plan just with the difference in the features or premium amounts.

Whole life policies LIC WHOLE OF LIFE PLANS The most cheapest form of LIC policy Premiums are payable through out the life Premium the life assured part is adjusted towards Sum assured is payable on the death of morality and administrative charges and rest is invested in plan of your choice. ICICI Prudential LIFE TIME PLAN Policy that meets your changing need over a lifetime

Bringing the difference in the plan of LIC and ICICI Pru we can find out that LIC plans are very simple to understand whereas the other provide plans according to your the changing needs of people.

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ENDOWMENT POLICIES

LIC ENDOWMENT WITH PROFITS

ICICI Prudential ICICI PRU SAVE N PROTECT

These are the policies of limited duration An ICICI ideal plan for those who want payable on maturity or death of the life to accumulate funds on a regular basis assured. with life cover

These plans are available with different It is a fixed term policy that combines option like with or without profit or saving with life cover. The premia is paid double or special endowments regularly during the term On death up to age: - basic premium returned without interest On death after age 7: - sum assured @3.5% compounded interest for first 4 yrs and then vested bonus.

We can make out comparing the plans of both the companies that while ICICI are more concerned about saving and are categorised for the different section of people. LIC is straight and simple plan.

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MONEY BACKS POLICIES LIC JEEVAN MITRA plan ICICI PRUDENTIAL ICICI PRU CASH BAK It combines life cover+liquidity+savings.

A high risk low cost plan and with profit An ideal plan for every milestone of life.

This plan provide for an additional It provides survival benefit after every 3 insurance cover, equal to the sun assured or 4 yrs and add-on benefit for a nominal in the event of policy holder death during extra premium. the term of policy. JEEVAN SURBHI Premium payable for limited periods available with periods of 12,15 and 18 yrs Money back at interval of 4 and 5 yrs as per policy term JEEVAN SANCHAY Plan having a provision of guarantee addition at 70p.a. per thousand and loyalty addition payable on date of maturity.

The LIC under money back policies provide various plans each having different kinds of features. On the other hand ICICI Pru, which combines all the features in just one single plan. The LIC plans like jeevan surbhi are suitable for high income and tax categories.

TERM INSURANCE PLANS

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LIC BIMA KIRAN premium paid on surviving of the term

ICICI PRUDENTIAL ICICI PRU LIFE GUARD life with uncertainties

A plan with the provision for return of An ideal low cost policy that covers your

Free term cover after maturity provided It comes with a choice of two convenient the policy is in full force Having an added attraction of loyalty addition JEEVAN GRIHA For people desirous of obtaining a housing loan with policy acting as Minimum premium payable 2400 per collateral security It ensure repayment of loan in the event of premature death of the borrower A high risk low cost plan Available as double and triple cover plans annum. It has no maturity benefits It gives the flexibility of accident and disability cover for a extra premium premium payment modes-one time and regular

Comparison between the plans of both the companies shows that while ICICI Pru provide more flexible and stable return plans the LIC are safer plan taking care of family as a whole. Again LIC provides different plan under this category of life insurance. CHILDREN POLICES

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LIC JEEVAN BALYA

ICICI PRUDENTIAL SMART KID

Plan provides for a monthly income up to Plan designed for critical educational age of 21 in case of unfortunate death of milestone include specialised course in parents Premium waiver benefit is available BAL VIDYA The plan takes care of family expenseson school college, health or just starting a All future payments are waived off career Most in lump sum at specific point of time. importantly the Childs will Money in regular monthly instalment and continue to receive the policy benefits. the country and abroad The sum assured is paid immediately from 100,000 to 300,000

We can make out that LIC provide different plans for children as compared to ICICI Pru, which gives only one plan for kids. Both aims at providing the parents aid for higher studies of their children. While LIC policies are designed to meet the different need of family budget ICICI Pru are more customer tailored.

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CONCLUSION The comparative analysis between the plans of both the companies shows that both differ in their projection and outlook while they aim at same targets and provides similar kind of returns. The LIC business is more about providing social security and financial safety net for the dependants. It ensures the life of the people providing life insurance product and services of high quality and providing resources for economic development. The logo of the company also shows image of corporation that cares. The advantage of LIC over its peers is that the sum assured comes wit sovereign guarantee On the other hand ICICI Pru has little different approach towards its business. They are more customers centric, provide quality circle, having superior risk management. They go for investment strategy to offer consistent, stable returns to policyholder. The ICICI Pru had an entire range of insurance product. Their aggressive strategy will certainly pay off one step ahead of competitors.

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GRAPH ANALYSIS
INSURANCE AVAILED This graph shows the number of people who are aware and thus availed the different kind of insurance product. The percentage of people who avail insurance plan is full100 % .

100 no of people 80 60 40 20 0 yes no

ANALYSIS: -As per todays market situation almost all the people are aware of insurance and have opted for some or the other type of insurance policy

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FACTORS IMPORTANT WHILE OPTING A POLICY The following graph is about factors that people look while opting for any insurance plan. The returns have the highest option of 90% and premium bags the second by 85%.

80 70 60 50 40 30 20 10 0

no. of people

Risk Cover

Tax Benefits

Returns &savings

Liquidity

ANALYSIS 1) Risk Cover as Savings through insurance guarantee financial protection against risk of death of policyholder by payment of sum assured and bonus if any. 2) Tax benefits as tax rebate can be availed U/S 88 in majority of Plans and U/S 80CCC(1) for investment up to Rs10, 000 in pension plans. 3) Return &Savings long term savings in a painless manner for future needs because of easy instalment facilities (monthly, quarterly, half yearly, yearly) and attractive returns. 4) Liquidity investment in money back policies guarantee periodical payments after every 3,4or5 years, loans can be raised on policies and security for commercial or housing loans.

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Insurance Company awareness The bar diagram shows the awareness of people among various companies prevailing in the market. The LIC is highest with 95% and ICICI Pru with 65%.

100 90 80
no. of people

70 60 50 40 30 20 10 0 LIC Om Kotak Mahindra Allianz bajaj

alysis

The concept of insurance means LIC is changing with time. Although most People know about LIC but their awareness about other insurance companies is also good.

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A COMPARATIVE STUDY OF LIC & ICICI PRUDENTIAL

90 80 70 60 50 40 30 20 10 0 LIC only ICICI only Both

PERCENTAGE OF PEOPLE OPTING FOR LIC AND ICICI PRU ANALYSIS 83% of respondents have availed LIC policies only 15% of respondents have availed ICICI Pru only 3% of respondents have availed both LIC and ICICI Pru showing preference for products of both companies

% of People

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INSURANCE COMPANY AWARENESS

100%

% of People

80% 60% 40% 20% 0% LIC ICICI

ANALYSIS 99% of respondents are aware of LIC as compared to 71% in case of ICICI. Thus everyone know about LIC and also peoples awareness about private insurance companies, ICICI is gaining momentum.

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BRAND LOYALTY On asking LIC and ICICI customers that will they try new insurer next time the results are-:

90% 80% 70% 60% 50% 40% 30% 20% 10% 0% LIC ICICI

FOR LIC 2% of LIC Customers will go for another insurance. 7% may try better products of other private insurance companies. But 91% of LIC customers will not go for another insurers. FOR ICICI PRU 44% of ICICI customers will surely go for better products of other insurers specially LIC. 48% may try another insurers. 8% will strict to LIC. Thus brand loyality for LIC is much higher than ICICI pru

Brand Loyalty

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FINDINGS AND ANALYSIS

1. Have you ever opted for Insurance from any Company? 61% 39% (a) Yes(b) No -

39%

61%

Yes No

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2. If Yes, Which Company have you taken Insurance from? LIC TATA AIG life Insurance HDFC Standard Life Insurance ICICI Pur Max New York Life Insurance Birla san life Insurance Met life insurance 42% 7% 12% 19% 8% 10% 2%

45%

42%

40%

35%

30%

25% 19%

20%

15%

12% 10% 8%

10%

7%

5%

2%

0% LIC TATA AIG ICICI Pur Max new life HDFC birla san life Met life insuracne

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3.

What made you select a particular Company for the Insurance? 9% 1% 7% 2% 78% 3%

(a) EMI (b) Brand name (c) Procedures (d) Facilities (e) Policies (f) Advertisement

80%

78%

70%

60%

50%

40%

30%

20% 9% 10% 3% 1% 0%
EM I B rand Name P rocedures Facilities P olicies A dvertisement

7% 2%

4. Which Company would you prefer if you have never applied for Insurance? LIC 56%

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Birla san life Insurance HDFC Standard Life Insurance ICICI Pur Max New York Life Insurance TATA AIG life Insurance Met Life Insurance

7% 12% 17% 8% 5% 3%

60% 50% 40% 30%

56%

19% 20% 10% 0% LIC HDFC Bank ICICI Bank Birla san life insurance TATA AIG Me t Life ins uracne 12% 7% 5% 3%

Suggestions or Comment about Insurances (a) Advertisement should be more on the advantages and fact rather the features. (b) There is a Tax saving factors while opting for Insurance. (c) Procedure should be made easier for the normal public as it consumes a lot of time and effort for providing all the documents. (d) Insurance is a need and not Luxury

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FINDINGS & SUGGESTIONS

This chapter deals with the concluded aspects of the study carried out on General perception about Life Insurance. The basic objective is for the study is for which study was carried out has been fulfilled in the earlier chapter, based on the objective interview schedule was designed. Data collected based on schedule was analyzed and some findings have emerged. Major Findings of the Study Based on the quantitative analysis the major findings of the study have been highlighted below. Most of the people are satisfied with the extent of their life insurance cover. They are not interested in buying more life insurance. People do not consider life insurance as a good savings because of low returns. As life insurance is a long term contract. Maximum people do not have faith on private life insurance companies, they still prefer LIC. Because of less advertising not many people are aware about private life insurance companies. Most of the people do not know about broker, corporate agents and banc assurance, they rely on their agents only The most preferred type of plan is money back. The reason being availability of funds after every five years which can be used for paying further premium, thus saving the regular income. Some people have no idea about what type of cover they have. Most of the people feel that life insurance is essential but they think returns are low. Some people have their doubts on the credibility and long stay of private insurance companies. Suggestions Advertising of the insurance product should stress on the need of security. Insurance should be popularized as the means of securing future rather than saving tax. New entrants should come out with innovative riders.

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Policies should be issued quickly and with less formalities Other service should also be improved. Newspaper/Magazines and television are the most effective medium of advertising life insurance. Insurance agents should be well trained.

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CONSOLIDATED FINDING AND ANALYSIS

At the end of the project we have came out with some of the conclusions which we would like to share in our report are as follows , Life insurance corporation is the biggest and the strongest company in the insurance sector. Life insurance corporation is the most reliable company in front of consumers. Enterance of private companies have laid to the foundation of an healthy competition in the market. Private companies are trying to attract the customers by giving policies which are compratively less rigid as compared to that of LIC. Life Insurance Corporation has strong hold in both the Rural and the urban areas. To include in the shortest possible manner we would state that, Life Insurance Corporation has been the trust of Indians from the years , but atlast the one who provides the best is the winner.
-

The Life Insurance Corporation should provide its customers with more new schemes. The Life Insurance Corporation should try to provide better services to its customers. The Life Insurance Corporation has to be more flexible , dynamic and innovative in its approach. The Icici pur should try to reduce the charges of its policies so that it can suited to the pockets of the middle income level group. The Icici pur should try to penetrate more into the rural areas.

After the collection of data from various primary sources there are certain findings which were made. On the basis on these findings the final analysis was made. The findings of the project are as under

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1) The salary of all the 50 respondents was divided into a slot of 50,000-2,00,000, 2,00,000-3,50,000 and 3,50,000-5,00,000. As per the finding the most preferred plan between the salary range of 50,000-2,00,000 was Money Back Plan. Out of the total 20 people in this range, 14 said that this plan was the best. In the salary range of 2,00,000-3,50,000. Endowndement plan was considered to be the best. Out of 18 people in this range 7 went for this plan. Finally in the salary range of 3,50,0005,00,000 again money back plan was considered to be the best 5 out of 12 persons in this group were in the favour. 2) The preference as per age group was calculated by dividing the age into the groups of 20-30,30-40,40-50 and 50-60. In the age group 20-30 people preferred money back plan. In age group 30-40 whole life plan was preferred most. In the age group 40-50 Money Back Plan was again considered as best and in this age group 50-60 pension plan was said to be the best. 3) As per aggregate preference of plans are concerned 19 respondent said that they preferred money back plan, 12 said that they like endowndement plan, 10 were in favour of whole life plan and 9 said they considered pension plan as best. 4) As per the findings of recall chart is concerned 16 respondent said that they can recall the name of ICICI, 15 said that they can recall the name of Birla, 11 said that they can recall the name of Tata and 8 said that they can recall the name of Kotak mahindra. 5) As far as reason for purchase is concerned, 15 respondents said that they purchase the life policy for investment, 13 said for tax saving, 12 said for protection and 10 said for saving. 6) In the final question which was about awareness level of ING VYSYA, the response received was not satisfactory, out of 50 respondent, 31 said that they dont know about the company and only 19 were aware about the company.

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RECOMMENDATION& CONCLUSION
There are certain flaws existing in this working of the insurance industry. There are some of the recommendation we ad come up with while doing this project. It will help to make insurance more important sector in todays economy. 1) The need of the hour is to devise a comprehensive strategy that will help the firms face the challenges of the future. The financial services industry around the world over is undergoing a major transformation. It is very important that trained marketing professionals who are able to communicate specific features of the policy should sell the policy. 2) From our research we could find out that people are not aware about the policies and features of insurance. Therefore LIC and ICICI are recommended to shed light on policies and explain the benefits, thus increasing the awareness. 3) The penetration of insurance in India is around 22%. This indicates that a vast majority of rural population is not covered. The market player needs to explore this untapped potential through their marketing and sales network. 4) The returns of the policies are not properly managed and never given in time. So, these must be looked at. 5) Pricing of insurance products, as empirically available in India, shows that pricing is not in consonance with market realities. Life Insurance premium is generally perceived, as being too high while general insurance (especially motor insurance) is priced too low. 6) Some insurance products, which are not available in India, should, be introduced in market. There are areas for new product development: product liability cover 7) Insurance companies will also had to get savvy in distribution. Enhanced marketing thus will be crucial. Already many companies have full operation Industry all risk policies, Large projects risk cover, Risk beyond a floor level, Extended public and

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capabilities over a 12-hour period. Facilities such as customer service center are already into 24-hour mode. These will provide services such as motor vehicle recovery. Technology will also play an important role on the market. The lines of distinction between banks insurance companies and brokerages are getting blurred. The future seems to belong to financial supermarkets that will offer a host of services and products to the consumer. In the next millennium all these activities would play a crucial role in the overall development and maturity of the insurance industry

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CONCLUSION
The various conclusions we had drawn from our project are: There has been tremendous change in the insurance history. And with it there has been continuous growth in this sector both in Indian as well as world context. The opening up of the insurance sector has changed the whole look of the industry. While the LIC in order to face the competition is coming with new strategies. New players like ICICI Pru are leading the sector due to their strategic management and tailored made projects.From our research also we conclude that though the awareness and people opting for LIC plans are more as compare to ICICI Pru but the later are gaining momentum in the market day by day. The primary reasons for buying an insurance policy, whether life or non-life is to protect us from vagaries of life. We do not invest in insurance for returns; rather we invest in it for regrettable necessities. Though a large proportion of policies available in the country provide for returns, but nobody is looking for returns to the inflation rate. So what does insurance offer, perhaps peace of mind, but even that takes time, due to poor claim performance The demand for insurance is likely to increase with rising per-capita incomes, rising literacy rates and increase of the service sector, as has been seen from the example of several other developing countries. In fact, opening up of the insurance sector is an integral part of the liberalization process being pursued by many developing countries Insurance is a Rs.400 billion business in India and yet its spread in the country is relatively thin. Insurance as a concept has not been able to make headway in India. There has been a strong fall in insurance business in recent years. Furthermore, it can be observed that non-life business is not increasing as strongly as life business. On the other hand, growth fluctuations have been relatively small with growth rates varying between 1% and 5%. Life insurance business by contrast achieved average growth rates of 6%, although the actual rates ranged from 0% to 13%. This shows on the one hand the increasing significance of life insurance as an instrument for old age provisions and on the other hand indicates the sensitivity of life insurance to changes in the institutional and economic environment. So lets conduct this business with utmost economy with the spirit of trusteeship; thereby making insurance widely popular.

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BIBLIOGRAPHY
Books
Marketing Management - by Phillip Kotler Principles of Marketing by Phillip Kotler & Gary Amstrong

Market Research- by Sangeeta Agarwal

Magazines:
Business India Business world INDIA TODAY INDIAN MANAGEMENT WEBSITES www.licindia.com www.irdaindia.org www.irda.gov.in

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QUESTIONNAIRE 1
1. Name: 2. Occupation 3. Do you know about Insurance? Yes No 4. Have you ever opted for Insurance from any company? Yes No 5. If Yes, Which company have you taken Insurance from? LIC SBI Insurance HDFC Standard Life Insurance ICICI Pur Max New York Life Insurance Birla san life Insurance TATA AIG life Insurance 6. How did you come to know about Insurance? Advertisement Word of Mouth Referred by your company / Friend 7. What made you select a particular company for the Insurance? EMI Brand name Procedures Facilities Policies Advertisement

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8. How do you like the Marketing strategy by different Insurance Company? Good Average Bad 9. What motivates you for selecting any Company for Insurance? EMI Brand name Procedures Facilities Policies 10. Advantages or Comment about Insurances 11. Which Company would you prefer if you have never applied for Insurance? LIC SBI Insurance HDFC Standard Life Insurance ICICI Pur Max New York Life Insurance Birla san life Insurance TATA AIG life Insurance
Members On The Board Of The Corporation
Shri D.K. Mehrotra, (Current-in-Charge & CHAIRMAN, LIC ) Shri T. S. Vijayan, (Managing Director, LIC ) Shri Thomas Mathew T. (Managing Director, LIC ) Shri A.K. Dasgupta, (Managing Director, LIC ) Shri R. Gopalan, (Secretary, Department of Economic Affairs, Ministry of Finance, Govt. of India.)

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Shri D.K. Mittal, (Secretary, Department of Financial Services, Ministry of Finance, Govt. of India.) Shri M.V. Tanksale, (Chairman & Managing Director, Central Bank of India ) Lt. General Arvind Mahajan (Retd.) Shri Anup Prakash Garg Shri Sanjay Jain Shri Ashok Singh Shri K.S. Sampath Shri Amardeep Singh Cheem

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