MINOR PROJECT REPORT

ON

MARKETING STRATEGIES OF
HDFC STANDARD LIFE INSURANCE
SUBMITTED IN PARTIAL FULFILLMENTOF THE REQUIREMENT OF THE
DEGREEBACHELOR OF BUSINESS ADMINISTRATION

SUBMITTED BY:
ASHISH GARG
Enrollment No. 08790201714

Under the guidance of

MS. SUPREET KAUR

SRI GURU TEGH BAHADUR INSTITUTE OF

MANAGEMENT & INFORMATION TECHNOLOGY
(Affiliated to GGSIP University, Delhi)
(2014-2017)
0

DECLARATION
I hereby declare that the project work entitled TO STUDY THE MARKETING
STRATEGIES

OF

HDFC

STANDARD

LIFE

INSURANCE

IN

DELHI/NCR submitted to the Sri Guru Tegh Bahadur Institute Of Management

& Information Technology (Affiliated To GGSIP University, Delhi) is record of
an original work done by me under the guidance of Ms. SUPREET KAUR,
faculty member, Sri Guru Tegh Bahadur Institute of Management & Information
Technology.

Place: Delhi

Signature of the scholar

Date:

ASHISH GARG
Enrollment No.
08790201714

CERTIFICATE
This is to certify that CHRISTOFER MASSEY student of Sri Guru Tegh
Bahadur Institute of Management & Information Technology of course BBA
Batch (2014-2017), has completed his research work titled MARKETING
STRATEGIES

OF

HDFC

STANDARD

LIFE

INSURANCE

IN

DELHI/NCR under the guidance and supervision of MS. SUPREET KAUR.

.The work submitted is genuine and authentic.

Signature of Director
Prof. (Dr) SANGEETA GUPTA

Signature of HOD
Ms. INDERPREET KAUR

Signature of Project guide

Ms. SUPREET KAUR
PLACE: Delhi

DATE:

Signature of scholar
ASHISH GARG
Enrollment No 08790201714

ACKNOWLEDGEMENT
With profound sense of gratitude and regard, I express my sincere thanks to my
guide and mentor MS. SUPREET KAUR for her valuable guidance and the
confidence she instilled in me, that helped me in the successful completion of
this project report. Without her help, this project would have been a distant
affair, her thorough understanding of the subject and professional guidance was
indeed of immense help to me.
I am also greatly thankful to the faculty members of our institute who cooperated with me and gave me their valuable time.

Signature of scholar
PLACE: Delhi

ASHISH GARG

DATE:

Enrollment No. 08790201714

TABLE OF CONTENTS
CHAPTER 1 INTRODUCTION

1.1 History
1.2 Function of insurance
1.3 Roles of insurance
CHAPTER 2 COMPANY PROFILE

15

2.1 Profile of the organization

2.2 Organizational chart
2.3 Vision and mission
2.4 S.W.O.T. Analysis
CHAPTER 3 CONCEPTUAL DISCUSSION

24

CHAPTER 4 RESEARCH METHODOLOGY

40

4.1 Objective
4.2 Research design
4.3 Limitation of the research
CHAPTER 5 DATA ANALYSIS

47

CHAPTER 6 FINDINGS

76

CHAPTER 7 RECOMMENDATIONS

75

ANNEXURE

77

BIBLIOGRAPHY

85

1.1

INTRODUCTION

Insurance is a financial protection and it gives compensation against financial losses due to
Death, Accident (Disability), Sickness, Retirement (long life), it serves as an excellent riskmanagement and wealth-preservation tool. Having the right kind of insurance is a critical
component of any good financial plan. Insurance allows individuals, businesses and other
entities to protect themselves against potential losses and financial losses at a reasonably
affordable rate. Insurance is needed if we want to protect ourselves from any financial loss.
Let us take life insurance as an example. If a father is the only earning member in his house,
and if the earning member faces premature death then his family will come into trouble, this
concept is called financial hardship. It would be very difficult for his family to replace his
income, so the monthly premiums ensure that if he dies, his income will be replaced by the
insured amount. The same principle applies to many other forms of insurance.
Everyone that wants to protect themselves or someone else against financial hardship should
consider insurance. This may include:

Protecting family after ones death from loss of income

Ensuring debt repayment after death

Protecting yourself against unforeseeable health expenses

Protecting your home against theft, fire, flood and other hazards

Protecting yourself in the event of disability

Protecting your car against theft or losses incurred because of accidents

Basically there are three types of Insurance

1. Life Insurance
2. Health Insurance
3. Vehicle Insurance

Life insurance: It is a contract between the policy holder and the insurer, where the
insurer promises to pay a designated beneficiary a sum of money (a Sum Assured) upon the

death of the insured person. Depending on the contract, other events such as critical
illness may also trigger payment. In return, the policy holder agrees to pay an amount
(Premium). In some countries, death expenses such as funerals are included in the
premium. The policy owner will be free from tensions because he knows that if anything
happens to him his family will be safe because his family will get the Sum Assured from the
Insurer.
Few companies do not provide insurance benefits to the policy holder if he has committed
suicide in the policy term and some companies provide insurance to those who commit
suicide but only if the policy holder commits the suicide after 1 year of the completion of 1 st
premium paid.
Health insurance: It is an insurance which provides financial protection against the risk
of incurring medical expenses. By estimating the overall risk of health care expenses, an
insurer can develop a routine finance structure, such as a monthly premium, to ensure that
money is available to pay for the health care benefits specified in the insurance agreement.
The benefit is administered by a central organization such as a government agency, private
business, or not-for-profit organization.
Vehicle insurance: It is also known as auto insurance, car insurance, or motor insurance,
it is the insurance purchased for cars, trucks, and other road vehicles. Its primary use is to
provide protection against physical damage and/or body injury resulting from traffic
collisions and against liability that could also arise from it.

1.2 HISTORY OF INDIAN INSURANCE

Insurance has a long history in India. Life Insurance in its current form was introduced in
1818 when Oriental Life Insurance Company began its operations in India. General Insurance
was however a comparatively late entrant in 1850 when Triton Insurance company set up its
base in Kolkata.
Life Insurance was nationalized in 1956 by consolidating the operations of various insurance
companies .General Insurance followed suit and was nationalized in 1973. It was set up as the
controlling body with New India, United India, National and Oriental as its subsidiaries. The
process of opening up the insurance sector was initiated against the background of Economic
Reform process, which commenced from 1991.
In 1907, the Indian Mercantile Insurance Ltd was set up. This was the first company to
transact all classes of general insurance business. In 1957 we saw the formation of the
General Insurance Council, a wing of the Insurance Association of India. The General
Insurance Council framed a code of conduct for ensuring fair conduct and sound business
practices.
In 1968, the Insurance Act was amended to regulate investments and set minimum solvency
margins. The Tariff Advisory Committee was also set up then. In 1972 with the passing of the
General Insurance Business (Nationalization) Act, general insurance business was
nationalized with effect from 1st January, 1973.

Reforms in Insurance Industry:

In 1993, the Government set up a committee under the chairmanship of RN

Malhotra, former Governor of RBI, to propose recommendations for reforms in the
insurance sector. The objective was to complement the reforms initiated in the
financial sector.

The committee submitted its report in 1994 wherein it recommended that the
private sector should be permitted to enter the insurance industry. They stated that
foreign companies to be allowed to enter by floating Indian companies, preferably

a joint venture with Indian partners. So that foreign companies can act as support
system for the Indian companies.

Following the recommendations of the Malhotra Committee report, in 1999, the

Insurance Regulatory and Development Authority (IRDA) was constituted as an
autonomous body to regulate and develop the insurance industry.

The IRDA was incorporated as a statutory body in April, 2000.

The key objectives of the IRDA include promotion of competition so as to enhance

customer satisfaction through increased consumer choice and lower premiums,
while ensuring the financial security of the insurance market.

The IRDA opened up the market in August 2000 with the invitation for application
for registrations. Foreign companies were allowed ownership of up to 26%.
The Authority has the power to frame regulations under Section 114A of the

Insurance Act, 1938 and has from 2000 onwards framed various regulations
ranging from registration of companies for carrying on insurance business to
protection of policyholders interests.

In December, 2000, the subsidiaries of the General Insurance Corporation of India

were restructured as independent companies and at the same time GIC was
converted into a national re-insurer. Parliament passed a bill de-linking the four
subsidiaries from GIC in July, 2002.

List of Life Insurance Companies in India

LIC

HDFC STANDRD LIFE

ICICI PRUDENTIAL

KOTAK LIFE INSURANCE

METLIFE

TATA ING

MAX NEWYORK

BIRLA SUNLIFE

RELIANCE

BAJAJ ALLIANZ

SBI LIFE

MARKET SHARE OF INDIAN LIFE INSURANCE COMPANIES

Figure: 1.1

1.3 COMPANY PROFILE

Established on 14th August 2000, HDFC Standard Life Insurance Co. Ltd. is a joint venture
between Housing Development Finance Corporation Limited (HDFC Limited) - India's
leading housing finance institution, and a Group Company of the Standard Life Plc, UK.
HDFC Ltd. holds 72.37% and Standard Life (Mauritius Holding) Ltd. holds 26.00% of equity
in the joint venture, while the rest is held by others.
Since its inception in 1977, the company has maintained the good will of consistent growth
and hence it is the market leader in mortgages. HDFC has developed significant expertise in
retail mortgage loans to different market segments and also has a large corporate client base
for its housing related credit facilities. With its experience in the financial markets, a strong
market reputation, large shareholder base and unique consumer franchise, HDFC was ideally
positioned to promote a bank in the Indian environment.
HDFC Standard Life offers a range of individual and group insurance solutions. HDFC
Standard Life's product portfolio comprises solutions, which meet various customer needs
such as Protection, Pension, Savings, Investment and Health. Customers have the added
advantage of customizing the plans, by adding optional benefits called riders, at a nominal
price. The company currently has 32 retail and 4 group products in its portfolio, along with
five optional rider benefits catering to the savings, investment, protection and retirement
needs of customers.
HDFC Standard Life continues to have one of the widest reaches among new insurance
companies with 568 branches servicing customer needs in over 700 cities and towns. The
company has a strong presence in its existing markets with a base of 2, 00,000 Financial
Consultants.

10

INCOROPATION OF

HDFC LIFE

HDFC Limited
HDFC Limited, India's premier housing finance institution has assisted more than 3.8
million families own a home, since its inception in 1977 across 2400 cities and towns through
its network of over 289 offices. It has international offices in Dubai, London and Singapore
with service associates in Saudi Arabia, Qatar, Kuwait and Oman to assist NRI's and PIO's to
own a home back in India. On March 2013, the total asset size has crossed more than Rs.
4.02413crores. The corporation has a deposit base of over Rs. 34,625 crores, earning the trust
of nearly one million depositors. Customer Service and satisfaction has been the mainstay of
the organization. HDFC has set benchmarks for the Indian housing finance industry.

Standard Life

Standard Life is a U.K. based company established in 1825 provides life assurance, pensions
and investment management propositions to over 6 million customers worldwide. The
Standard Life Group has around 10,000 employees across the UK, Canada, Ireland, Germany,
Austria, India, USA, Hong Kong and mainland China. At the end of December 2012 the
Group had total assets under administration of 170.1bn. Standard Life's diverse business
includes one of the largest life and pensions businesses in the UK with more than 4 million
customers and Standard Life Investments, currently manages assets of over 138.7bn
globally. On 10 July 2006, after 80 years as a mutual company, Standard Life Assurance
Company demutualised and Standard Life plc was listed on the London Stock Exchange.

11

MISSION :
To be the top life insurance company in the market.
This not only means being the largest or most productive company in the market but a
combination of several things like:
Customer service of highest order
Value for money for customers
Professionalism in carrying out the business
Increasing market share
Use of best technology for improved service standards
Innovative products to cater different needs of different customers.

VISION AND VALUES :

The most successful and admired life insurance company, which mean that they are the most
trusted company, the easiest to deal with, offer the best value for money,
and set the standards in the industry.
Values that they observe while they work:

Integrity

Innovation

Customer centric

People Care One for all and all for one

12

Team work

Joy and Simplicity

GROUP COMPANIES
HDFC Bank
HDFC Home Loans
HDFC Sales
CIBIL: Credit Information Bureau India Limited
HDFC Deposits
HDFC Mutual Fund
HDFC ERGO
HDFC securities
HDFC Life

PRODUCTS OF HDFC LIFE

PROTECTION PLANS: Protection Plans helps to shield family from uncertainties in life
due to financial losses in terms of loss of income that may dawn upon them in case of your
untimely demise or critical illness.

HDFC Terms Assurance Plan

HDFC Premium Guarantee Plan

HDFC Loan Cover Term Assurance Plan

HDFC Home Loan Protection

13

RETIREMENT PLANS: Retirement Plans provide with financial security so that when
professional income starts to ebb, one can still live with pride without compromising on their
living standards.

HDFC Life Classic Pension Insurance Plan

HDFC Personal Pension Plan

HDFC Immediate Annuity

HDFC SL Pension Maximus

SAVINGS & INVESTMENT PLAN: It basically focuses on people who thinks to keep their
family happy and are dependent on them so future expenses of the family are need to be
taken care of.

HDFC Life Sampoorn Samridhi Insurance Plan

HDFC Endowment Assurance Plan

HDFC SL Crest

HDFC SL ProGrowth Super II

HDFC SL ProGrowth Flexi

HDFC SL ProGrowth Maximiser

HEALTH PLANS: Health plans give the financial security to meet health related
contingencies. Due to changing lifestyles, health issues have acquired completely new
dimension overtime, becoming more complex in nature.

HDFC Critical Care P lan

HDFC Surgi Care Plan

CHILDRENS PLAN: Children's Plans helps to save so that one can fulfill their child's
dreams and aspirations. As a parent, one wish to provide their child with the very best that
life offers, the best possible education, marriage and life style.
14

HDFC Childrens Plan

HDFC SL Young Star Super II

HDFC SL Young Star Super Premium

SWOT ANALYSIS:

STRENGTHS:

HDFC Standard life insurance offers a range of individual and group insurance
solutions

HDFC Standard Life has wide network to service customer needs

All Investment made in graded assets with rating AA

It has a disciplined process

Free switching options online informing customers about the performance of their
investment by sending monthly reports and statements

Training provided to all people so that they themselves have product knowledge and
make people choose best plans as per their needs

First private company to get registered under IRDA

HDFC Standard Life was one of the first private life insurers to disclose the
embedded value of its business

WEAKNESSES:

They are unable to target rural areas as compared to LIC

Negligence to customers after the investment is sold

15

Customer rarely believes on private insurance companies as they prefer Government

Company

Retention of Employees and agents becomes difficult in this company

OPPORTUNITIES:

Life insurance has captured its mere15 20% growth therefore a wide open untapped
market is open to the company to develop, grow and measure its success

Strong brand helps to boost up the sales

THREATS:

People are hesitant to invest and put their money to the private life insurance company
with the fear of getting lost

Alternative financial services such as mutual fund, banking services, share and
securities also pose problems and threats to the working of the life insurance sector

Entry of more of Private Players in the market

Faster rate of employee attrition

Awards and Honor

HDFC Standard Life has been adjudged one of the Best Companies to Work for in
India in 2010

'Young Star Super' Voted 'Product of the Year 2010'

Ranked India's Most Trusted Private Life Insurance Brand in 2010 in a survey
Conducted by Economic Times-Brand Equity and the Nielsen Company

16

Financial and Operational highlights of HDFC LIFE for year ended

March, 2014
st
nd
Ranked1 inGroupReceivedPremiumand2 inIndividualWRPinprivatesector
28%growthvsPYinIndividualnewbusiness
Renewalpremiumhigherby17%vsPY
RegisterednetprofitofRs4.5bn
NBM at 20.7% for individual business

Expense ratio at 10.9% vs 11.6% PY

*
Conservationratio at92%
AssetsundermanagementatRs591bn,up40%

SolvencyRatioof204%againstaregulatoryrequirementof150%
MCEVRs77.8bnasatSeptember30,2014
AccumulatedprofitsofRs2.2bn

Ethical policies at HDFC LIFE

Fair Dealing

Working with Honesty & Integrity

17

The Board Members and Senior Management shall not engage in any business,
relationship or activity, which may be in conflict of interest with the business of the
Company

Senior Management of the Company is expected to devote their full time and efforts
during normal working hours to the service of the Company. No Discrimination and
Harassment

Compliance with Laws, Rules and Regulations

CORPORATE SOCIAL RESPONSIBILITY :

HDFC has made consistent efforts towards social upliftment by maintaining an active Social
Initiatives portfolio. The credit for crossing the confines of a mere profit making entity to
embracing interrelated social concerns rests on the vision and leadership of our founder
Chairman Mr. H. T. Parekh.
Through the year, HDFC continued partnering with development organizations for a variety
of programs in the social sphere. The projects are supported by HDFC through the Shelter
Assistance Reserve.
SHELTER ASSISTANCE RESERVE
During FY 2013-14 through the Shelter Assistance Reserve around 190 social and
development initiatives were supported. The overall utilization from the Reserve stood at Rs.
8.88 crores.

The segment-wise break-up of the utilization of reserve:

18

Figure :1.2
Some of development projects supported under the Shelter Assistance Reserve during 201314:
DEEDS
In India, there are 5 million hearing impaired individuals with over 20,000 babies. DEEDS
works with hearing impaired individuals by making them financially self-reliant.
DEEDS are the First ever catering institute for the Deaf in India. One-year Diploma Course
in Catering can be done by the Students who have successfully completed their tenth standard
examinations and it is certified by the Maharashtra State Vocation Board.

Project Chirag
Students of Mumbais H.R. College of Commerce & Economics have come up with a 5-point
Rural Transformation Model titled Project Chirag which deals with five areas Environment,
Education, Healthcare & Sanitation, Social Upliftment, and Economic Empowerment, with
the aim of truly lighting up rural lives in India.
For this the primary requirement was electricity and thus Phase 1 of the project was taken up
to light up dark villages through Solar lanterns which were made by physically & mentally
challenged individuals from economically backward communities. In phase 2 economic
upliftment activities was carried out by establishing public kitchens, improving educational

19

infrastructure and aids, adult literacy programmes as well as other skill set enhancement
training programs. For this the organization approached HDFC to partner lighting of villages
in Wada Taluka, Thane District.
SNEHA
HDFC partnered SNEHA in its initiative of providing solutions to issues of nutrition and
health in urban slum communities. SNEHA was founded in 1999 by a group of dedicated
doctors and social workers led by neonatologist and former dean of Lokmanya Tilak
Municipal General Hospital and Medical College in Dharavi, Mumbai to address the
concerns of unhealthy newborn babies and mothers to improve quality of care through
innovative solutions to problems in nutrition, education and health in urban communities. The
program is run in 9 wards of Mumbai specifically with health posts covering a population of
approximately 100,000 and with maternity homes/tertiary hospitals covering a radius of 6-7
kms.

UNIT LINKED INSURANCE PLAN

Unit Linked Insurance Plan (ULIP) is a life insurance solution that provides for the benefits
of protection and flexibility in investment. The investment is denoted as units and is
represented by the value that is called Net Asset Value (NAV). ULIPs combine the benefits of
an insurance policy and market-linked investment.
ULIP came into play in the 1960s and in 1971 the Unit Trust of India offered the Unit Linked
Insurance Plan. Unit Linked guidelines was notified by IRDA on 21st December, 2005 in
India to ensure that they lead to transparency and understanding of the products among the
insured.
Out of premium amount a part is utilized to provide life cover and rest is invested in units.
Different options such as 100% equity, balanced, debt etc are available to invest a part of
premium amount in units. The return and risk vary as per the option selected. ULIPs have
gained high acceptance due to attractive features they offer like flexibility, transparency,
liquidity. Unit linked plans are suitable for all customer profiles; however as a general belief
the risk averse investors tend to choose traditional plans and an informed customer prefers a
20

ULIP. In ULIP , the invested amount of premium after deducting all the charges and premium
for risk cover under all policies in a particular fund as chosen by the holder are pooled
together to form a unit fund. The entire risk is borne by the policy holder.

21

STRUCTURE OF ULIPs
ULIPs offered by different insurers have varying charge structures. The different types of fees
and charges are as follows. The insurers have the right to revise or cancel the fees and charges
over period of time.

Figure :1.3
Premium Allocation Charges: This is a percentage of premiums appropriated

towards charges before allocating the units under the policy.

Administration Charges: These are the fees for management of the plan and

levied by cancellation of the units.

Mortality Charges: These are the charges to offer for the cost of the insurance

coverage under the plan. It depends upon number of factors such as age, state of health
etc.

Fund Management Charges: These are the fees levied for the management of
funds and are deducted before arriving at Net Asset Value.

Surrender Charges: Surrender charges may be deducted for premature partial or

full encashment of units.

Fund Switching Charges: A limited number of fund switches may be allowed

each year without charges, with subsequent switches, subject to a charge.

Service Tax Deduction: Before allotment of units the applicable service tax is
deducted from the risk portion of the premium.

22

TYPES OF FUNDS UNDER ULIPs

FUND

DETAILS

RISK & RETURN

RATING

Short Term Fund

Low capital risk as exposure

Low

is only the short-term

securities
Income Fund

High potential return due to

Moderate

higher duration & credit

exposure

Balanced Fund

Dynamic Equity exposure to

Moderate to High

enhance returns

Blue Chip Fund

Exposure to large-cap

Very High

equities & equity related

securities
Opportunities Fund

Exposure to mid-cap
equities & equity related
securities

23

Very High

ADVANTAGES OF ULIPs
ULIPs distinguish it through multiple benefits that it provides to customers. The plan is one
stop solution for everything customer wants. ULIPs are different from traditional plans purely
because they are much transparent, charges are shared with the customers before sale of
products so as to enable customer to make an informed decision. Customers have the
flexibility to choose their life cover. Also they have the choice of multiple fund options based
on risk appetite, thereby enabling the investors to make desired returns.

Some of the advantages of ULIPs:

Life protection

Flexibility

Investment and saving

Tax planning

Transparency

Riders

Wealth creation

Partial withdrawal

LIFE
PROTECTION
WEALTH
CREATION

SAVING and
INVESTMENT

ADVANTAGES
PARTIAL
WITHDRAWL

TAX
PLANNING

OF
ULIPS

FLEXIBILITY

RIDERS
TRANSPARENCY

24

BUSINESS FIGURES FOR THE MONTH OF April 2014

Sales of ULIPs constitute a huge chunk of the business of life insurance companies.
Insurance agents used to pitch ULIPs plans to prospective buyers due to high commissions on
ULIPs. After the release of new guidelines on Unit-linked insurance plans (Ulips) in
September last year, life insurance companies have had to restructure their Ulips plans and
the scenario has changed to a certain extent. Now as the commissions on ULIPs have been
slashed, agents do not find it as lucrative as earlier. Its impact can been in the business figures
for the month of May 2012 that had been submitted by Life insurance companies in
India to Insurance Regulatory and Development Authority (IRDA) looks a little bleak when
compared with last years business figures .
Out of 22 operational private life insurance companies, 16 companies have collected lesser
premiums in April this year as compared to their collections in April last year.
The 6 private life insurance companies that are an exception to this are SBI Life, Star
Union Dai-chi, India First Life, AEGON Religare, Tata AIG and DLF
Pramerica; which have shown improvement in their collections in May 2012 over that in
May 2011.

25

Figure : 1.5

UNIT LINKED INSURANCE PLANS (ULIPs) OF DIFFERENT

COMPANIES :

HDFC LIFE offers following ULIPs:

HDFC SL CREST

HDFC SL Young Star Super II

Unit Linked Pension Maximus

HDFC SL CREST
Min entry age

30
70

Max entry age

Max Maturity age

80

26

Min premium

50000

Max Premium

No Limit

Death Benefit

Fund Value+ Sum Assured of Rs. 1000

Maturity Benefit

Higher of Fund Value or Guarantee Vesting

Value

Fund Allocation Charges

2.5 %

Premium
payment
Min entry
age term

14

10

Max entry age

55

Max Maturity age

65

Min premium

50000

Max Premium

No Limit

Death Benefit

Sum Assured or Fund Value

whichever is higher

Maturity Benefit

Guaranteed NAV of Rs. 15

Fund Allocation Charges

4% for year 1-2

3% for year 3
2% for year 4-5

Premium Payment Term

5 years

27

HDFC SL YOUNG STAR

SUPER 2

Max Maturity age

75

Min premium

15000

Max premium

No Limit
Sum Assured is given to the family,
future premiums are waived &
company pays 50% of the premiums to

Death Benefit

the beneficiary on annually & fund

value on maturity

Maturity Benefit

Fund Value

Fund Allocation Charges

4% for year 1-7

1% for year 8+

Premium Payment Term

10 20 years

PENSION MAXIMUS (SP)

28

UNIT
LINKED

ICICI PRUDENTIAL LIFE INSURANCE

ICICI PRUDENTIAL Offers following types of ULIPs:

ICICI Pru Pinnacle Super

ICICI Pru Smart Kid

ICICI Pru Life Link Pension SP

29

ICICI Pru Pinnacle Super

Min entry age
18
Max entry age
65
Max Maturity age
Min premium

75
50000

Max Premium

NO LIMIT

Death Benefit

Sum Assured + Fund Value

Maturity Benefit

Guaranteed NAV of Rs. 10

Fund Allocation Charges

6% for year 1
5% for year 2
3% for year 3-5

Premium payment term

5 years

ICICI Pru Life Link Pension SP

Min entry age

Max entry age

Max Maturity age

35

70

80

30

Min premium

Rs. 200000

Max Premium

No Limit

Death Benefit

Fund Value

Maturity Benefit

Higher of
guaranteed NAV
and NAV on date

Fund Allocation

of maturity
5%

Charges
Premium payment term

10

ICICI Pru Smart Kid

Min entry age

Max entry age

20

60

Max Maturity age

70

Min premium

Rs. 18000

Max Premium

Rs.100000

31

Death Benefit

Company will pay Lump

sum payment of Sum
Assured

Maturity Benefit

Fund Value

Fund Allocation Charges

2% for year 1
0 for year 2 +

Premium payment term

10, 15, 20 or 25

COMPARATIVE ANALYSIS
ICICI Pru Pinnacle Super and HDFC SL CREST

Fund allocation charge is higher in ICICI Pru Pinnacle Super whereas HDFC SL
CREST has a maximum charge of 4%.

In ICICI Pru Pinnacle Super, on the death of the policy holder, company pays Sum
Assured+ Fund Value where as in CREST, company pays higher of two but the
mortality charges of Pinnacle Super is higher than CREST due to which the total of
Sum Assured+ Fund Value results less than the total of CRESTs Sum Assured and
Fund Value.

In CREST there is Guarantee NAV of Rs. 15 where as in Pinnacle Super it is Rs. 10.

32

ICICI Pru Smart Kid and HDFC SL Young Star Super II

Minimum and Maximum age at entry is 18-65 in Young Star Super II where as in

ICICI Pru Smart Kid it is 20-60.

Minimum Premium in Young Star Super II is only Rs.15000 as against in ICICI Pru
Smart Kid it is Rs.18000.

In Young Star Super II, there is no maximum limit for premium as against in ICICI
Pru Smart Kid it is Rs. 100000.

In ICICI Pru Smart Kid the product is offered only to those who have at least one

child whereas in Young Star Super II, it is not mandatory to have a child.

ICICI Pru Life Link Pension (SP) and UNIT LINKED PENSION MAXIMUS
(SP)

Minimum age at entry is 35 in ICICI Pru Life Link Pension (SP) whereas in Unit
Linked Pension Maximus (SP) its 30 years.

Minimum premium amount is Rs. 200000 in case of ICICI Pru Life Link Pension
(SP) whereas its Rs. 50000 in case of Unit Linked Pension Maximus (SP).

In case of ICICI Pru Life Link Pension (SP) Fund Allocation Charges is 5% whereas
its 2.5% in case of Unit Linked Pension Maximus (SP).

AVIVA LIFE INSURANCE

AVIVA LIFE offers following types of ULIPs:

33

AVIVA Wealth Protect

AVIVA Young Scholar Advantage

AVIVA does not offer any ULIP

pension plans.

Min entry age

Max entry age

65

Max Maturity age

75

Min premium

60000

Max Premium

No limit

Death Benefit

Sum Assured or
Fund Value
whichever is
higher

Maturity Benefit

Guaranteed
maturity value or
Fund Value

AVIVA Wealth Protect

whichever is higher

AVIVA Young Scholar Advantage

34

Fund Allocation

15% for year 1

Charges

2% for year 2 to 5

Premium Payment Term

5 years

Min entry age

21

Max entry age

50

Max Maturity

70

age
Min premium

20000

Max Premium

No Limit

Death Benefit

Sum Assured is
given to the
family, future
premiums are
waived off. No
fund value paid
on maturity

Maturity Benefit

during death
Fund Value

Fund Allocation

6% for year 1

Charges

4% for year 2-5

Premium

2-3% for year 6+

10-25 years

Payment Term

35

COMPARATIVE ANALYSIS
Aviva Wealth Protect and HDFC SL CREST

Minimum Premium is higher in AVIVA Wealth Protect where as CREST has

minimum Premium amount of Rs. 50000.

In AVIVA Wealth Protect, total fund allocation charges are 17% where as in CREST
its 15%.

In AVIVA Wealth Protect there is no guarantee of Minimum NAV at maturity. Only

highest NAV would be given recorded in 7 yrs whereas in CREST, policy holder gets
the benefit of minimum guaranteed NAV of Rs. 15 at maturity with Daily NAV
tracking.

Aviva Young Scholar Advantage and HDFC SL Young Star Super

II
Fund allocation charge is higher in Aviva Young Scholar Advantage where as Young

Star Super II has a maximum charge of 4%.

In Aviva Young Scholar Advantage, fund value is not paid on maturity in case of
unfortunate death of the policy holder while in Young Star Super II, Fund Value is
paid on the maturity date to the beneficiary in case of unfortunate death of policy
holder.

In Aviva Young Scholar Advantage the product is offered only to those who have at
least one child whereas in Young Star Super II, it is not mandatory to have a child so
as to invest. You can plan the future of your child to be born.

In Aviva Young Scholar Advantage, minimum premium is Rs. 20000 whereas in

Young Star Super II its Rs. 15000.

In Aviva Young Scholar Advantage option of partial withdrawal is not available

whereas in Young Star Super II, one can make lump sum partial withdrawals of
minimum Rs. 10,000 after the 5th year of policy.

36

OBJECTIVE :
The objective of the project is to make a comparative study of UNIT LINKED INSURANCE
PLANS (ULIPs) of HDFC LIFE with that of some major selected players in the insurance
industry and study the consumer perception towards the ULIPS and various insurance
companies. The comparative analysis is based on the data collected from Delhi-NCR.

OBJECTIVES OF THE PROJECT

To identify the strength and the weaknesses of the HDFC LIFE.

To identify the awareness among consumers about the ULIPs.

To study the consumer perception towards various insurance companies.

37

2.1 RESEARCH METHODOLOGY

Research is an art of scientific investigation through search for new facts in any branch of
knowledge. It is a moment from known to unknown. Research always starts with a question
or a problem. Its purpose is to find answers to questions through the application of the
scientific method. It is a systematic and intensive study directed towards a more complete
knowledge of the subject studied. As marketing does not address itself to basic or
fundamental question, it
Does not qualify as basic research. On the contrary, it tackles problems, which seem to have
immediate commercial potential. In view of the major consideration, marketing research
should be regarded as applied research. We may also say that marketing research is of both
types problem solving and problem oriented. Marketing research is as systematic and
objectives study of the problems pertaining to the marketing of the goods and services. It may
be emphasized
that it is not restricted to any particular area of marketing, but is applied to all the phases and
aspects.

38

2.2 RESEARCH OBJECTIVES

To study the awareness about ULIPs among people

To find out what factors people consider while making an investment and whose
opinions do they consider while investing

To find out their perception about HDFCs Unit Linked Insurance Plans.

2.3 RESEARCH DESIGN

Research design is a framework for conducting project. Research design in this case is a
Descriptive Research.

TYPE OF RESEARCH
This study is quantitative in nature as all the data collected with the help o the questionnaire
has been analyzed in the form of percentages and depicted in the form of pie charts.

2.4 DATA COLLECTION

1) Data to be collected.
Data includes facts and figures, which are required to be collected to achieve the objectives of
the project, that is, to determine the present position and satisfaction of customer of HDFC
Life.

39

a) Primary Data
The data that is being collected for the first time or to particularly fulfill the objectives of the
project is known as primary data.
These types of data were,
- Responses of consumer.
- Identifying pros and cons of the brand.
The above primary data were collected through responses of consumer was conducted
through questionnaires prepared for them.

b) Secondary Data
Secondary data are that type of data, which are already assembled and need not to collected
from outside. These types of data were
i) Company Profile
ii) Product Profile
iii) Competitors Profile
The aforesaid data were collected through Internet and company s financial report.

2) Data Collection Method

For the given project, the primary data was gathered through Survey technique, which is the
most popular and effective technique for data collection. The survey was completed with the
use of questionnaire.

3) Sampling

40

Sample is the small group taken under consideration from the total group. This small group
represents the total group. The customer list was taken from HDFC Life Insurance customer
database.

SAMPLE SIZE
The sample size of the survey was 120, but only 100 completely filled responses were
received. Out of these 70 were male and 30 were female. The sample of respondents was
carefully selected covering people in all age groups and with different occupations. . I have
selected people of age group from 21 and above.
AGE GROUP

NUMBER OF PEOPLE

21-30

32

31-40

44

41 and Above

24

SAMPLING TECHNIQUE
Probability random sampling technique was used for the selection of respondents. Within
Probability random sampling convenient sampling was adopted.

ULIPs which are focused on in Research are:

Children Plan

Saving and Investment Plan

Retirement Plan

Target Respondent
The study shall focus on the following focus groups in order to get an overall perception from
people.

41

People employed in private services

Government Employee

Self employed

Retired people

1. IN WHICH INSTRUMENT DO YOU INVEST?

1. Mutual Funds
2. Fixed Deposits
3. Shares and Stocks
4. Insurance
5. Others (please specify)

Figure : 3.3

Out of the various forms of investment identified as mutual funds, stocks and

shares, insurance products and government bonds, around 22% preferred stocks

42

and shares and around 34% preferred insurance products. The rest of the
respondents preferred other products.

2. WHAT DO YOU CONSIDER WHILE MAKING AN INVESTMENT DECISION?

1. Friends Opinion
2. Brokers Opinion
3. Family Opinion
4. Own Decision
5. Others

Figure : 3.4
While making investment decisions around 45% of the respondents considered their

own decision and another 40% respondents considered their familys opinion, 5%
gives importance to the brokers advice and only 3% of them consider factors such

43

as market share of the company. The remaining 7% took advice of people other than
those mentioned above.

3. ACCORDING TO YOU WHAT IS THE AMOUNT OF RISK INVOLVED IN ULIPs?

1. High risk
2. Moderate risk
3. Low Risk
4. They are Safe

Figure : 3.5
Among the people who own ULIPs, 54% of them had a view that moderate risk is

involved in ULIPs

44

4. WHEN DID YOU INVEST IN ULIP?

1. Last year
2. 2-3 years back
3. 4-5 years back
4. More than 5 years

Figure: 3.6

Among the people who owns ULIPs of HDFC, 50% of them have invested 2-3

years back.

45

5. WHILE INVESTING, DID YOU COMPARE IT WITH THE OTHER COMPANYs

PLAN?
1. Yes

2.
If yes what features did you compared?

1. Annual Premium
2.

Maturity Benefit

3.

Min- Max Age at Entry

4.

Death Benefit

5.

Policy Term

6.

Premium Allocation Charge

7.

Others (Please specify in the box below)

46

No

Figure : 3.7
Out of the respondents who invest in HDFC ULIPs, 62% compare the features of

products with that of other company products. Maturity benefit is compared by 30%
of the respondents and entry age is least compared i.e. only by 4%

6. DID THE AGENT EXPLAIN ABOUT THE POLICY TERMS AND CONDITIONS?
1. Yes
2. No

Figure : 3.8

Out of the respondents who invest in HDFC ULIPs 80% are completely aware

about the policy terms and conditions and the rest 20% are not completely aware.

47

7. HOW WAS THE AGENTS BEHAVIOUR TOWARDS YOUR QUESTIONS?

Excellent

Good

Satisfactory

Bad

Figure : 3.9

60% of the customers who invested in HDFC ULIPs feel that the behavior of the

insurance agents was Excellent towards their questions and collected proper
feedback from them, 30% of the customers feel that the behavior of agents was
satisfactory and the remaining 10% feel that the behavior was not up to the mark.

48

8. DO YOU THINK THERE IS TRANSPARENCY IN THE APPROACH OF HDFC

STANDARD LIFE AGENTS

Yes

No

Figure : 3.10

85% of the customers feel that there is transparency in the approach of HDFC

Standard Life Insurance and 15% of customers feel that the approach used is not
transparent.

49

9. DO YOU THINK THE PRODUCTS AND SERVICES OF HDFC ARE MORE

LUCRATIVE THAN THE COMPETITORS?

Yes

No

Figure : 3.11

80% of the HDFC customers feel that the offers given by them are more lucrative

than the competitors and the rest prefer other brands over HDFC.

50

10. RATE THE AFTER SALES SERVICES OFFERED BY HDFC STANDARD LIFE
INSURANCE.
Excellent
Not up to the mark

Figure : 3.12

86% of the customers feel that the after sales services offered by HDFC Bank are

Excellent and the rest 14% feel that the after sales service are not up to the mark.

51

11. ARE THE UNIT LINKED INSURANCE PLANS PROVIDED BY HDFC BANK
VALUE FOR MONEY.

Yes

No

Figure : 3.13
95% of the customers feel that HDFC Standard Life is Value for Money and the rest

5% feel that it is not.

52

CONCLUSION

Majority of the respondents were aware about ULIPs.

HDFC Standard life is one of the most trusted private insurance companies.

Almost half of the respondents take decision on their own while making an
investment while Family Opinion is the second most important factor considered by
the respondents.

Majority of the respondents consider Maturity Benefit as the most important factor
while making investment in ULIPs.

Majority of the customers feel that HDFC ULIPs provide value for money.

Most of the customers were extremely happy with the behavior of the insurance
agents.

A large majority of the customers feel that HDFC Life Insurance policies are value for
money.

Majority of the customers feel that HDFC staff provide good after sales services.
53

Majority of the customers feel that the offers provided by HDFC Life are more
lucrative than the competitors.

RECOMMENDATIONS

HDFC Life should create more awareness among people about the ULIPs through
advertisements.

HDFC Life should provide better services even after the plan is taken by customer
like the Financial Consultants can guide the customer in switching the fund option so
that he/she can get maximum return. This will not only be beneficial for the customer
but it will result in positive image of the company in the mind of the customer.

HDFC Life must understand the challenges that it is facing from the competitors and
must use the strengths to overcome the threats it is facing.

Lastly, when it comes to looking into the future of the insurance companies it will be
more and more competitive for all as almost all the products and services are same,
therefore HDFC Life should devise more unique strategies to win over their
customers, to retain them and to attract more customers.

Limitations of the Research

Due to limited time the study was conducted in a limited area (Delhi), because of

which the customer responses obtained may have some biasness specific to the
region.
54

 The sample size also had to be kept small because of time constraint again and thus

may not be sufficient to find out the appropriate results.

The quality of the data collected may have been affected by reluctant nature of

respondents to respond clearly to some of the questions.

BIBLIOGRAPHY
Books:

Armstrong, Gary; Marketing: An Introduction, ,Seventh edition(2008)

Pearson Education, New Delhi

Kotler, Philip; Marketing Management (the Millennium Edition), (2009)

Pearson Education New Delhi

Kothari,

C.R;

Research

Methodology:

Research

Methodology-An

Introduction, second Edition(2011), New Age International Limited, New

Delhi

Website and Links

www.hdfclife.com
http://www.myinsuranceclub.com/insurance-news/are-life-insurance-companies-missing-thegood-old-ulips
http://www.hdfc.com/others/social_initiatives.asp

55

ANNEXURE:
Questionnaire

RESPONDENTS PROFILE
NAME:
AGE:
21 30

31 40

41 and above

GENDER:
Male

Female

OCCUPATION:
1.

Business

2.

Govt. Service

3.

Retired

4.

Private Company

5.

Others (Please specify)

56

1. IN WHICH INSTRUMENT DO YOU INVEST?

1.

Mutual Funds

2.

Fixed Deposits

3.

Shares and Stocks

4.

Insurance

5.

Others (please specify)

2. WHAT DO YOU CONSIDER WHILE MAKING AN INVESTMENT DECISION?

1.

Friends Opinion

2.

Brokers Opinion

3.

Family Opinion

4.

Own Decision

5.

Others

57

3. ACCORDING TO YOU WHAT IS THE AMOUNT OF RISK INVOLVED IN ULIPs?

1.

High risk

2.

Moderate risk

3.

Low Risk

4.

They are Safe

4. WHEN DID YOU INVEST IN ULIP?

1.

Last year

2.

2-3 years back

3.

4-5 years back

4.

More than 5 years

5. WHILE INVESTING, DID YOU COMPARE IT WITH THE OTHER COMPANYs

PLAN?
1.

Yes

2.

If yes what features did you compared?

1.

Annual Premium

2.

Maturity Benefit

3.

Min- Max Age at Entry

4.

Death Benefit

5.

Policy Term

6.

Premium Allocation Charge

58

No

7.

Others (Please specify in the box below)

6. DID THE AGENT EXPLAIN ABOUT THE POLICY TERMS AND CONDITIONS?
Yes
No

7. HOW WAS THE AGENTS BEHAVIOUR TOWARDS YOUR QUESTIONS?

Excellent
Good
Satisfactory
Bad

8. DO YOU THINK THERE IS TRANSPARENCY IN THE APPROACH OF HDFC

STANDARD LIFE AGENTS
Yes
No

9. DO YOU THINK THE PRODUCTS AND SERVICES OF HDFC ARE MORE

LUCRATIVE THAN THE COMPETITORS?

Yes
No

59

10. RATE THE AFTER SALES SERVICES OFFERED BY HDFC STANDARD LIFE
INSURANCE.
Excellent
Not up to the mark

11. ARE THE UNIT LINKED INSURANCE PLANS PROVIDED BY HDFC BANK
VALUE FOR MONEY.
Yes
No

60