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Title of the Project

LIFE INSURANCE- A CASE STUDY


(Submitted in partial fulfillment for the Degree of B.COM
Honours in Accounting & Finance under the University of
Calcutta)

Submitted by
Name of the Candidate: PIYUSH KHETAN
Registration No.: A01-1112-1255-12
Roll No.: 368

Supervised by
Name of the Supervisor: Mr. SHOUVIK SIRKAR
Name of the college: St. Xaviers College, Kolkata

Month & Year of Submission


MARCH, 2015
PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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ACKNOWLEDGEMENT

I have chosen the topic of LIFE INSURANCE- A CASE STUDY,


as my FINANCE project. I am deeply grateful to my supervisor,
SIR SHOUVIK SIRCAR for all his guidance and help. I am also
thankful to my parents and friends who helped me in framing the
base

of

the

project

and

guided

me

in

developing

the

infrastructure of the project.


I am also thankful to all the parents and guardians of students of
St. Xaviers College and my relatives in completing my survey on
Life Insurance without their help this project would have been
incomplete.
I am also very thankful to St. Xaviers College, Kolkata and the
University of Calcutta fraternity for introducing a system of
making an Entrepreneurship Project. This project has allowed me
a practical exposure in the insurance sector and a brief
introduction in the life insurance product offered by Life Insurance
Corporation of India and various private sectors.

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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LIFE
INSURANCE
-A
CASE STUDY

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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CONTENTS
INTRODUCTION
2. OBJECTIVE OF THE STUDY
3. RESEARCH METHODOLOGY
REVIEW OF LITERATURE
2.
SCOPE OF THE STUDY
3.
LIMITATIONS
4.
CONCEPT OF LIEF INSURANCE
5.
HISTORY OF LIFE INSURANCE
6.
INTERNATIONAL COMPARISON
7.
WHY LIFE INSURANCE
8.
TAX BENEFITS
9.
10. COMPANY PROFILE: LIC
A. INTRODUCTION
B. MISSION & VISION
C. OBJECTIVES
D. TYPES OF LIFE INSURANCE
11. SURVEY DATA ANALYSIS AND
INTERPRETATION
14 COMPARISON BETWEEN LIC AND PRIVATE
15 SECTOR
MARKET SHARE OF LIFE INSURANCE
COMPANIES
1.

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

5
6
7
8-9
10
10
11
12
13
14
15
16
17
18
19-25
26-33
34
35-36

Page 4

16
17
18
19

RECOMMENDATIONS
FINDINGS
CONCLUSION
REFERENCES

37
38
39
40

INTRODUCTION
It is the uncertainty that is risk, which gives rise to the necessity
for some form of protection against the financial loss arising from
death. Insurance substitutes this uncertainty by certainty. The
primary purpose of life insurance is the protection of the family.
Insurance in its various forms protects against such misfortunes
by having the losses of the unfortunate few paid by the
contribution of the many that are exposed to the same risk. This
is the essence of insurance the sharing of losses and substitution
of certainty for uncertainty.
In any activity of life there is a possibility that a desired event
may fail to occur and that pecuniary (financial) loss may arise. In
adventures by sea the ship may fail to make the port (remember
Titanic!); or the cargo may be damaged or lost. In the adventure
of life itself, the life may fail and death may occur, causing
suffering to dependants. Death comes to all sooner or later, and it
is the only truth in this world. The rest as they say is all maya
(illusion). So if death is the only truth, then why do we ignore the
implications of the event? Because of the nature of its
permanence, and all pervasive; death requires understanding the
financial implications on the dependents. Life insurance is
therefore the most important of all forms of insurance. Its
significance pales the other forms of not just insurance but also all
investment instruments. The theory of insurance, in general

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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terms, may be expressed to mean that the good fortune of the


many compensates for the misfortune of the few.
The insurance company is concerned with any factor that may
affect normal longevity, and once the contract is entered into, and
premiums are regularly paid by the policyholder, the company is
at a risk on a permanent contract which it cannot break. From the
collation of a vast amount of data, an assessment can be made of
the rate of mortality or the likelihood of death occurring at each
age. Numbers can be quoted, but which individuals will die at
each age cannot be stated. Consequently, all who pay life
insurance premiums to the common fund do so with the same
willingness that the fund shall be used to compensate the estates
of those contributors at whatever age in life they may die, within
their respective contract period. This is the basic theory of life
insurance.

OBJECTIVE OF THE STUDY


Indian life insurance industry has undergone a sea change. It has
experienced new challenges of intense competition and struggle
for survival since the introduction of insurance reforms since 1999
Hence, the major focus of the present study is on the following
objectives:
To study the concept of life insurance and the reasons behind
choosing life insurance and its importance;
To study the tax benefits of having your life insured;
To study about Life Insurance Corporation of India and various
types of life insurance provided by LIC and comparison between
LIC and Reliance Insurance;

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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To analyze and interpret data collected through a survey about


preference of insurance sector,
To study and analyze the performance of LIC and private sectors in the period
2003-04 to 2013-2014
To suggest suitable measures, wherever necessary to the
policymakers concerned for improving their performance,
productivity and profitability.

RESEARCH METHODOLOGY

Data collection;
The study is based on the two types data is obtained
from They are:
Primary data
Secondary data

Primary Data;

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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Primary Data is obtained through the survey conducted


through surveymonkey.com as well as websites of life insurance
corporation of India and other private sectors.

Secondary Data
Case study method has been used in this study. This study heavily
depends on secondary data. The relevant and required data have
been collected from secondary sources such as national as well as
international research papers, articles, Newspapers and annual
reports of IRDA. The factors studied in detail include number of
insurance offices, first year premium, number of polices sold and
probability of LIC and private companies.

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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REVIEW OF LITERATURE
Balachandran, S. (2001)5 in his book on Customer Driven
Services Management concludes that the insurance industry is
fast growing and mostly becoming a customer-driven and
customer-centric one. He also advocates that when the insurance
products are attractive to the customers, then only the insurance
industry flourishes in the market and serves its purpose of profit
earning and also income generation.
Srivastava, D.C. and Srivastava, S. (2001)6 in their book on
Indian Insurance IndustryTransition and Prospects discuss
analytically the financial significance of insurance industry, its
contribution to Indian economy and also the transitory prospects
and challenges of insurance industry due to liberalization and the
opening up of the sector to private players.
Mark S. Dorfman (2002)7 in his book on Introduction to Risk
Management and Insurance reviews the salient features of the
insurance industry and also the role played by the private
enterprise. The different types of insurance intermediaries are
also discussed at length with suitable illustrations incorporated
wherever necessary.
Ajay Mahal (2002)9 in his article on Assessing Private Health
Insurance in India Potential Impacts and Regulatory Issues
asserts that the entry of private health insurance companies in
India is likely to have an impact on the costs of health care, equity
in the financing of care and the quality and cost-effectiveness of
such care. However, he mentions that an informed consumer and
a well-implemented insurance regulation regime in many cases
eliminate some of the bad outcomes.
Patil Kallinath, S. (2002)10 in his thesis on Life Insurance
Corporation of India, Its Products and their Performance
Evaluation: A Special Reference to Gulbarga District conducts a
PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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study which covered a period of five years from 1994-95. During


this period, the Corporation launched various new plans. It is
found that the incidence of insurance coverage of agricultural
groups and agricultural labour is very low and the insurance
products with fewer premiums and covering more risk are the
most preferred policies by the people. The study further reveals
that the entire insurance business is urban biased and the
demonstration of product features by the agents is not
satisfactory.
Ramesh Lal Dhanda (2002)12 in his thesis on Divisional
Performance Evaluation of LIC Business in North Zone states that
the factors affecting policy purchase decisions of the insured are
the risk cover and also the tax benefits. The ratio of management
expenses to total premium income, the productivity analysis for
agents, the average percentage of death claims settled and the
overall outstanding claims ratio are found important yard sticks
for measuring the Divisional performance of LIC.
Rejda, G.E. (2002)13 in his book on Insurance and Risk
Management analyses the relationship between insurance
industry and risk management techniques. The concepts of
Enterprise Risk Management and Risk Based Capital are discussed
mainly to highlight the importance of managing risks by insurance
companies in such a manner to enable them to minimize the loss
of their risks.
Appa Rao Machiraju (2003)14 in his article Marketology opines
that most of the facts are stubborn things and the very important
fact is that industry marketers experienced increasing
competition day by day. The combination of technology and
trained manpower can be incredibly powerful and that is nothing
but the Marketology
Deloitte & Touche Tomhatsu India (2003)16, the Global
Management Consultancy, advises the LIC of India, to ramp up its
PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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long- term strategies by closely linking them with the short and
medium-term plans and to strengthen them both asset-liability
machinery and also risk management system. The Consultant
expresses satisfaction over the guaranteed products offered by
LIC and mentions that there was no comparison with Unit Trust of
India. The Report further touches upon major restructuring issues
like corporatisation, removal of sovereign guaranties and
increasing the paid-up capital from Rs.5 crores to Rs.100 crores.

SCOPE OF THE STUDY


As spelled out in the objectives, the study confines only to
the performance of the public and private sector insurance
players during the post-liberalization regime. It is hoped that a
comparison of performance of this 80 kind would help to bring out
factors associated with efficient and inefficient functioning of the
units. This would also open the way for an elaborate analysis of
the functioning of the LIC of India in comparison to the functioning
of the private sector life insurance companies. Before one goes
for assessment, there is also a need to know the factors that drive
the efficiency and effectiveness and to which the insurance
players have to pay due attention. But, the scope of the
conclusions arrived at in this study are limited. Many changes
may take place continuously and unless we make a constant
study of the impact of these changes and their influences, it may
not be possible to assess correctly and comprehensively the
trends in the performance of different companies. Further, the
literature available on life insurance industry is also very limited
and hence, the scope of the present study is made narrower.

LIMITATIONS

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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The study has some limitations. The present study has been
limited to life insurance business and also confined to the tenyear period of postliberalization. The non-life insurance business
and the performance of the life insurance industry before
liberalization are not well-considered in the study. Only the major
developments taken place during the pre-liberalization period are
considered wherever necessary. The study is only representative
and not an exhaustive one. Insurance industry is both extensive in
area and complex in structure. An accurate picture of the present
conditions of the industry could not be drawn with out a further
detailed analysis of the specific conditions at different places and
on different lines of trade. A comparative study between the
public and private 81 sector units is made in the study on the
basis of some selected variables only. But, there can be a greater
diversity of the variables taken form other angles.

CONCEPTUAL FRAMEWORK : WHAT IS


LIFE INSURANCE?

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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SOURCE: www.clientfirstservices.in/insurance/concept-of-life-insurance

Life insurance (or commonly final expense insurance or life assurance,


especially in the Commonwealth) is a contract between an
insured (insurance policy holder) and an insurer or assurer, where the
insurer promises to pay a designated beneficiary a sum of money (the
"benefits") in exchange for a premium, upon the death of the insured
person. Depending on the contract, other events such as terminal
illness or critical illness can also trigger payment. The policy holder typically
pays a premium, either regularly or as one lump sum. Other expenses
(such as funeral expenses) can also be included in the benefits.
Life policies are legal contracts and the terms of the contract describe the
limitations of the insured events. Specific exclusions are often written into
the contract to limit the liability of the insurer; common examples are claims
relating to suicide, fraud, war, riot, and civil commotion.

HISTORY OF LIFE INSURANCE IN INDIA


SOURCES: en.wikipedia.org/wiki/Life_Insurance_Corporation_of_India

1912 : Indian Life Assurance


Companies Act

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

enacted as the first statute to

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1938 : Insurance Act


comprehensive provisions
for effective control over
the activities of insurers
1956 : Nationalization of Life Insurance sector
Formation of LIC : Merger of 245 Indian and
foreign insurers
1993: Malhotra CommitteeInitiation of reforms
Assessment of functionality of
Indian insurance sector

Private sector be permitted to


1999 : Insurance Regulatory and Development
Authority (IRDA) Act
Formulation of IRDA
crucial policy changes in the insurance
sector of India

International
Comparison
life
Safeguard
interests of
of insurance
insurance
The Indian life insurance market is drawing intense attention,
fuelled in part by the fast expansion of its insurance markets and
PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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the fact that this growth potential is now available to all (subject
to the regulatory restriction on foreign equity holding).India is the
second most populous country of the world with more than one
billion population. The economic growth record is strong (more
than 6% during the past one decade).Since opening up of Indian
Insurance sector for private participation, India has reported an
increase life insurance penetration. But compared to UK, France,
South Korea, Japan and South Africa, India is way behind. Among
developing counties it stands second to South Africa. There is
much scope for the life insurance sector to develop in India.
SOURCE: www.mse.ac.in/pub/working%20paper%2036.pdf

2013

Life Premium (b
$)

Insurance
density
($)

Insurance
Penetration (%)

World

2332

595

7.0

USA

492

3710

8.0

Japan

399

3979

10.0

UK

218

4579

13.0

France

194

4269

10.0

China

109

121

3.4

India

57

54

5.2

Brazil

25

252

3.1

WHY LIFE INSURANCE ???

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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All of us face the following


risks:
1. Dying too soon
2. Living too long

Life Insurance is needed :

To ensure that your immediate family

has some financial support in the event of your demise

To finance your childrens education and other needs

To have a savings plan for the future so that you have a constant source of income after retirement

To ensure that you have extra income when your earnings are reduced due to serious illness or accident

To provide for other financial contingencies and life style requirements

Who needs Life Insurance:


Primarily, anyone who has a family to support and is an income earner needs Life Insurance. In view of the economic
value of their contribution to the family, housewives too need life insurance cover. Even children can be considered
for life insurance in view of their future income potential being at risk.
How much Life Insurance is needed:
The amount of Life Insurance coverage you need will depend on many factors such as:

How many dependants you have<="" li="">

What kind of lifestyle you want to provide for your family

How much you need for your childrens education

What your investment needs are

What your affordability is

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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TAX BENEFITS

INCOME
SECTION

TAX

GROSS ANNUAL SALARY

HOW MUCH TAX CAN YOU


SAVE?

SEc. 80C

Across All income Slabs

Upto Rs. 33,990 saved on


investment
of
Rs. 1,00,000.

Sec. 80 CCC

Across all income slabs.

Upto Rs. 33,990 saved on


Investment of Rs.1,00,000.

Sec. 80 D

Across all income slabs

Upto Rs. 3,399 saved on


Investment
of
Rs. 10,000.

TOTAL SAVINGS
POSSIBLE

Rs37,389
Rs. 33,990 under Sec. 80C and under Sec. 80 CCC , Rs.3,399
under Sec. 80 D, calculated for a male with gross annual income
exceeding Rs. 10,00,000.

Sec. 10 (10)D

SOURCE

Under Sec. 10(10D), the benefits you


receive
are
completely
tax-free,
subject to the conditions laid down
therein.

: https://www.licindia.in/tax_benefit.htm

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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COMPANY PROFILE:

"yogakshemam
vahamyaham"

-A CASE STUDY

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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INTRODUCTION
Life Insurance Corporation of India (LIC) is an Indian stateowned insurance group and investment companyheadquartered
in Mumbai. It is the largest insurance company in India with an
estimated asset value of 1560482 crore(US$240 billion).[2] As of
2013 it had total life fund of Rs.1433103.14 crore with total value
of policies sold of 367.82 lakh that year.[citation needed]
The company was founded in 1956 when the Parliament of
India passed the Life Insurance of India Act that nationalised the
private insurance industry in India. Over 245 insurance companies
and provident societies were merged to create the state owned
Life Insurance Corporation.
Created on 1st Sept. 1956 by LIC Act (19th Jan. 1956).
Merger of 245 companies( 154 life insurance companies, 16
foreign companies & 75 provident companies).
Assets estimated- US $240 billion.
Headquarter- Mumbai
8 zonal offices, 118 divisional offices, 3500 servicing offices,
2048 Branch offices, 54 Customer Offices, 25 Metro Area
Service Hubs and a number of Satellite Offices located in
different parts of India.

Mission
Explore and enhance the quality of life of people through
financial security by providing products and services of aspired
attributes with competitive returns, and by rendering resources
for economic development.

Vision
PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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A trans-nationally competitive financial


significance to societies and Pride of India.

conglomerate

of

OBJECTIVES
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.
Conduct business with utmost economy and with the full
realization that the money belongs to the policyholders.
Act as trustees of the insured public in their individual and
collective capacities.
SOURCE: http://businesstoday.intoday.in/story/max-rajesh-sud-on-lifeinsurance-in-india/1/203380.html

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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Term Life Insurance


Increasing/Decreasing term policies
Convertible Term Assurance Policy
TYPES
OFTerm
LIFE
Level
LifeINSURANCE
Insurance
Renewable term life Insurance

Endowment Insurance

Joint life endowment plan


Money back endowment plan
Marriage endowment plan

Permanent (Whole) Life


Insurance
Ordinary whole life plan
Limited payment whole life plan

Unit Linked Plans

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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TERM INSURANCE
Sum assured is payable only in the event of death
during the term.
In case of survival, the contract comes to an end at
the end of term.
Term Life Insurance can be for period as long as 40
years and as short as 1 year.
No refund of premium
Non-participating policies
Low premium as only death risk is covered.

COMPARISON OF TERM INSURANCE


POLICY BETWEEN LIC AND RELIANCE
INSURANCE
LIC Anmol Jeevan-1 Table Reliance Term Plan
164
PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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This is the chipset pure risk


plan. This plan is also allowed
to
physically
handicapped
persons with standard extra
rates. Proposals are considered
on the basis of medical report
& special report. On maturity
no amount will be paid to the
policyholder. On the event of
death of the policyholder
during policy term sum assured
will be paid to nominee.

This insurance policy is designed


for those who only want life cover
for the protection of their family,
and do not wish to save for
themselves. It can also be useful
to business firms that wish to
provide financial security to their
business against the sudden loss
of
partners
or
valuable
manpower. Since there is no
saving
element
or
bonus
provision, the premium is very
low. Hence, this is a high-risk plan
with a low premium.
Features: Features: a) Purely a term plan
a) Purely a term plan
b) Entry age minimum 18 years b) Entry age minimum 18 years
and maximum 55 year
and maximum 65 year
c) Maximum premium paying c) Maximum premium paying
term is 25 year
term is 30 year
d) Loan facility N.A.
d) Loan facility N.A.
e) Maturity amount = Sum e) Maturity amount = Sum
assured
assured

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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Modes allowed:Premiums can be paid regularly


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

Modes allowed:Premiums can be paid regularly


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

ENDOWMENT POLICY
In an endowment policy, periodic premiums are received
by the insured person (in 10, 15 or 20 years) and a lump
sum is received either on the death of the insured or
once the policy period expires.
Endowment insurance plan is a type of investment
oriented plan.
Gives the policy holder triple benefits of savings, wealth
creation, and insurance coverage.
Types: Joint Life Endowment Plan
Marriage Endowment Plan
PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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Educational Endowment Plan

COMPARISON OF ENDOWMENT
INSURANCE POLICY BETWEEN LIC AND
RELIANCE

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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LIC
Endowment
Policy
Table-14
is the key to all your financial
needs. It is an inexpensive
and easy way to protect you,
your family or your business.
In a nutshell this plan will keep
you financially prepared for all
the special occasions in your
life - your daughters wedding,
your
childs
university
education or even a new office
for your business - by
eliminating the burden that a
shortage of money creates. In
the event of your untimely
death, LIC Endowment Policy
will also assist your loved ones
through this difficult time by
the financial support that it
provides.
LIC
Endowment
Policyalso gives you the
additional
benefit
of
participating in the companys
profits, which you will receive
at the end of the policy period.

Reliance Endowment Plan


Reliance
Life
Insurances
Reliance Endowment Plan is
the key to all your
Financial needs. It is an
inexpensive and easy way to
protect you, your family or
your business. In a nutshell
this plan will keep you
financially prepared for all the
special occasions in your life your daughters wedding, your
childs university education or
even a new office for your
business - by eliminating the
burden that a shortage of
money creates. In the event of
your untimely death, Reliance
Endowment Plan will also
assist your loved ones through
this difficult time by the
financial
support.
Thatit
provides also gives you the
additional
benefit
of
participating in the companys
profits, which you will receive
at the end of the policy period.
Features: a) Entry age minimum is 5
year and maximum 65 year
b) Maturity age minimum is 18
year and maximum 75 year
c) Minimum premium paying
term is 5 year and maximum
35 year in case of regular and
in case of single 15 year
d) Maturity benefit:- Sum
assured + bonus

Features: -a) Entry age


minimum is 12 year and
maximum 65 year
b) Maturity age maximum 75
year
c) Minimum premium paying
term is 5 year and maximum
55
d) Most popular plan for
fulfilling all long/short term
financial needs
e)
Maturity
benefit:-COLLEGE,
Sum KOLKATA
PIYUSH
KHETAN, ST.XAVIERS
assured
+
bonus,
Final
additional bonus is also given,

Page 26

3.Permanent (whole) life insurance


Remains active throughout the life of the policy holder and
premiums have to be paid every year.
When the policy holder dies, the face value of the policy,
known as the death benefit, is paid to the person or
persons named in the life insurance policy (the beneficiary or
beneficiaries).
The insured receives a fixed sum at periodic intervals during
survival and full sum assured is paid on death of the policy
holder without any deduction (anticipated whole life
insurance).

Products offered
The Whole Life Policy
The Whole Life Policy- Limited Payment
The Whole Life Policy-Single Premium
Jeevan Anand

4. UNIT LINKED PLANS


It has emerged as one of the fastest growing insurance products
A combination of insurance as well as investment.
The premium amount is invested in the stock market and
returns better income on the maturity period.
Better for long-term investment option.
PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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ULIPs generally provide higher returns as large portion of the


funds are invested in equities.
There is also option of switching over from one fund to
another if it does not seem to be profitable.

PRODUCTS OFFERED
Endowment Plus
Flexi Plus

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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SURVEY
QUESTIONNAIRE
,
ITS DATA
ANALYSIS AND
INTERPRETATION

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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DATA ANALYSIS AND


INTERPRETATION
HERE, THE DATA HAS BEEN COLLECTED THROUGH A
SURVEY DONE BY ME WITH HELP OF SURVEYMONKEY.COM
FROM 21ST MARCH 2015 TO 29TH MARCH,2015 . THE
NUMBER OF RESPONDENTS HAS BEEN 42 PEOPLE
COMPRISING MAINLY OF PARENTS & GUARDIANS OF
STUDENTS OF ST. XAVIERS COLLEGE KOLKATA AND OTHER
CALCUTTA UNIVERSITY COLLEGES AS WELL.

SOURCE:https://www.surveymonkey.com/xavpiyush/projectonlifeinsu
rance/?sm=kE85uaZdmyQ1GBvx4MAShvmqoxKxwpnLyHlNcrcNXCg
%3d

1. In which company you have Life Insurance Policy?


a) Public Life Insurance

b) Private Life Insurance

SECTOR

NO. OF
RESPONDENTS

SHARE

PUBLIC SECTOR
LIFE INSURER

28

70

PRIVATE SECTOR
LIFE INSURER

14

30

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

(%)

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LIC VS PRIVATE SECTOR

Public sector
Private sector

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

2. Among various insurance companies why did you chose the above
mentioned company?
a) Due to reputation of the company

b) Due to Price of premium of policy [

c) Due to benefit of the policy

d) Flexible premium payment options [

PREFRENCE

NO. OF
RESPONDENTS

SHARE

REPUTATION

16

40

PRICE OF PREMIUM

20

BENEFIT

15

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

(%)

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FLEXIBLE
PREMIUM
PAYMENT

12

25

Reasons while choosing an insurance company


Reputation
Price of Premium
Benefits
Flexible Premium
Payment

Interpretation:This study shows that respondents prefer to take insurance


depends on individuals preference. Respondents prefer
reputation than any other factors. Reputation has 40% share &
Flexible premium payment has 25% share. These are the two
measure factors that are taken into consideration
3. Is the premium within your budget?
a) Yes [

b) No

PREMIUM

NO. OF
RESPONDENTS

SHARE

YES

22

55

NO

20

45

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

(%)

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Premium under Budget?


Yes
No

Interpretation:This study shows that respondents are more concern with


premium of policy. 55% of respondents are satisfied with the
payment of insurance premium & 45% of respondents are not
satisfied with the payment of insurance premium.

4. Period of plans selected?


a) 0-10 years

b) 10-15 years

c) 15-20 years [

d) 20 or more [

PREMIUM PERIOD

NO. OF
RESPONDENTS

SHARE

0-10 YEARS

15

10-15 YEARS

20

15-20 YEARS

11

25

20 YEARS OR MORE

19

40

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

(%)

Page 33

Premium Payment Period


0-10 Years
10-15 Years
15-20 Years
20 Years Or More

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

5. What is the best option of investment?


a) Post Office schemes [

b) Life Insurance

c) Mutual Fund

d) Share Market

INVESTMENT
OPTION

NO. OF
RESPONDENTS

SHARE

POST OFFICE

15

LIFE INSURANCE

20

MUTUAL FUND

15

SHARE MARKET

20

BANK DEPOSITS

30

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

(%)

Page 34

Investment Option

Post Office

Life Insurance

Mutual Fund

Share Market

Bank Deposits

Interpretation:This study shows that respondents investment option for


investing there valuable resources. Most of the respondents are
risk averse.30% respondents invests there funds in bank deposit
because they have less risk & they are older which gives them
fixed & regular return .Respondents invest their fund in share
markets are 20% because they have the ability to take high risk.
Respondents investing in mutual fund has 15% share showing
they are moderate investors.

6. Which promotional media do you think is the best one to make people
educate about an insurance policy
a) TV advertisement
b) Hoardings

[
[

c) Paper advertisement

d) Banners

e) Agents

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

]
]

Page 35

PROMOTIONAL
MEDIA
TV
ADVERTISEMENT
HOARDINGS
PAPER
ADVERTISEMENT
BANNERS
AGENTS

NO. OF
RESPONDENTS
6

SHARE
(%)
30

2
3

10
15

1
8

5
40

Promotional Media

TV Advertisement
Hoardings
Paper Advertisement
Banners
Agents

Interpretation:This study shows that respondent while taking insurance consider


the promotional strategies of companies. Respondents prefer the
olden ways like agents for taking insurance because it gives
better details of insurance product & helps in further investment
related education. Agents has 40% share in this study. TV
advertisement has 30% share because easy access to TVs.
Nowadays all the families have TV sets so it easy to attract
PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

Page 36

potential customers. Hoardings , Banners ,Paper advertisement


has little share 10% ,5% , 15% respectively.it shows customer are
not so much rely on those type of marketing strategies.

COMPARISON BETWEEN LIC AND OTHER


PRIVATE LIFE INSURANCE COMPANIES
MARKET SHARE BASED ON TOTAL
POLICIES POST LIBERALIZATION IN 1999
SOURCE: www.ibef.org/industry/insurance-sector-india.aspx
100

96.75

94.21

91.48

90

89.09
82.83
76.58

80

73.93

70.36

68.48

70

64.56

60
50

LIC

PRIVATE SECTOR

40
30

23.42

29.64

35.44

17.17

20
10

26.07

31.52

3.25

5.79

8.52

10.91

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

The market share of LIC of India was 96.75% in the year 200405.It has decreased to 64.56% in the year 2.13-14. While that of
the private sector was 3.25% in the year 2004-05 and increased
to 35.44% in the year 2013-14. There are concerns over Life
Insurance Corporation of Indias declining market share based on
total policies and concurrent rise of private insurers who have just
PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

Page 37

entered ten years ago. Innovative products, smart marketing and


aggressive distribution channels has enabled private life
insurance companies to sell policies. As of today, Life Insurance
Corporation of India has retained the market share based on total
policies.

Market share of insurance company


Name of the company
Life Insurance Corporation of India

Market share(%)
64.56 %

ICICI Prudential Life Insurance Co

6.91 %

Allianz Bajaj Life Insurance Co

4.75%

SBI Life Insurance Co

2.98%

Birla Sun Life Insurance Co

1.72 %

HDFC Standard Life Insurance Co

1.66 %

TATA- AIG Life Insurance


Company

1.46 %

Max New York Life Insurance Co.

1.28 %

Aviva Life Insurance

1.08 %

Om Kotak Mahindra Life Insurance

0.71 %

ING Vysya Life Insurance Co.

0.54 %

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

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PNB MetLife Insurance Co.

0.37 %

Reliance Life Insurance Co.

0.46%

SAHARA LIFE

0.03%

Market Share
ICICI Prudential Life Insurance Co

Life Insurance Corporation of India

Allianz Bajaj Life Insurance Co

SBI Life Insurance Co

Birla Sun Life Insurance Co

HDFC Standard Life Insurance Co

TATA- AIG Life Insurance Company

Max New York Life Insurance Co.

Aviva Life Insurance

Om Kotak Mahindra Life Insurance

ING Vysya Life Insurance Co.

PNB MetLife Insurance Co.

Reliance Life Insurance Co.

SAHARA LIFE

SOURCE: businesstoday.intoday.in/story/expert...life-insurance...v.../201887.html

INTERPRETATION
Innovative products, smart marketing and aggressive
distribution channels has enabled private life insurance
companies to sell policies. As of today, Life Insurance Corporation
of India has retained the market share based on total policies.
PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

Page 39

RECOMMENDATIONS
There is huge potential market for LIFE INSURANCE companies in
India as out of 110 crore population only 8 crore people are
insured. The insurance companies should educate people about
insurance, its importance, different policies, and benefits of
policies.
The people opt for policy by taking into consideration price of
premium of policy, benefits of policy and least importance is given
to brand name. So the life insurance companies should look over
the price of premium, benefits of policy and even flexible
payment options from the point of untapped potential market in
India.
The price of premium of a policy must be within the budget of
common man and life insurance companies should provide
flexible payment options. By doing so, the private insurance
companies can surely capture the untapped market along with
creating brand name.
Life Insurance has huge past experience around the world. But
coming to Indian perspective its positioning is not properly done
in the customers mind. The advertisement of LIC of India & other
private sectors should contain briefly relevant message about its
policy and benefits of a policy. It should formulate strategies for
attracting customers though good promotional activities and
PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

Page 40

informative ads, so that common man can have an idea of what a


life insurance company is offering in a policy

FINDINGS
1. As the people think that insurance is a tool to protect their
family & a tax saving device. They are aware of the fact &
realizing its, importance. The companies should try to expand &
build up its infrastructure because there is a large potential for
insurance in India.
2. Company should come up with more branches in with the
objective and goals to meet the demands & expectations of the
public. Because the entrance of private players will increase the
competition and it would be a tough task to secure a good
position in market.
3. Since , LIC of India & Reliance Life Insurance is leading with
several companies policies it should be easy for them to
penetrate into the market and secure a good position if they pay
greater attention to the service part provided to their customer
and thereby forming a long and trusted relationship.
4. As seen from the survey that at present 70% of the customer
are having insurance policy out of which 87.5% of the customer
are planning for new investments. So it can be a good potential
for the company and they should make an attempt to trap these
customers.

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

Page 41

CONCLUSIONS
From the project analysis and interpretation the conclusions are:
1)

Most untapped insurance market in India contains mostly


middle class and lower class people.

2)

The customers give preference more to Brand name and


flexible payment. Premium of policy and benefits of the
policy
options
are
given
less
importance.

3)

Even though the premium price is not within the customer


budget, if the benefits offered by policy are good customers
is
ready
to
take
the
policy.

4)

The customers want the premium price to be within the


budget,
with
good
benefits.

5)

The private insurance companies are unable to tap the


untapped insurance market certain strategies should be
formulated
to
grab
the
market.

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

Page 42

6)

Innovative products, smart marketing and aggressive


distribution channels has enabled private life insurance
companies to sell policies. As of today, Life Insurance
Corporation of India has retained the market share based on
total policies.

REFERENCES

1. BOOKS/MAGAZINES REFFERED:
STUDY GUIDE- PRINCILES &
GENERALINSURANCE, by AIMA.

PRACTICES

OF

LIFE

Books published by INSURANCE INSTITUTE OF INDIA


LIFE-INSURANCE, by Mc GILL
INSURANCEWATCH.
MONEYOUTLOOK.
2. WEBSITES REFFERED:
WWW.SURVEYMONKEY.COM
WWW.WIKIPEDIA.COM
WWW.MONEYOUTLOOK.COM
WWW.INSURANCE.IND.COM
PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

Page 43

WWW.LICINDIA.IN
3. OTHER REFERENCES
en.wikipedia.org/wiki/Life_Insurance_Corporation_of_India
www.mse.ac.in/pub/working%20paper%2036.pdf
www.clientfirstservices.in/insurance/concept-of-life-insurance

http://businesstoday.intoday.in/story/max-rajesh-sud-on-life-insurance-inindia/1/203380.html
businesstoday.intoday.in/story/expert...life-insurance...v.../201887.html

PIYUSH KHETAN, ST.XAVIERS COLLEGE, KOLKATA

Page 44

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