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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
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ACKNOWLEDGEMENT
of
the
project
and
guided
me
in
developing
the
Page 2
LIFE
INSURANCE
-A
CASE STUDY
Page 3
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.
5
6
7
8-9
10
10
11
12
13
14
15
16
17
18
19-25
26-33
34
35-36
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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
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RESEARCH METHODOLOGY
Data collection;
The study is based on the two types data is obtained
from They are:
Primary data
Secondary data
Primary Data;
Page 7
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.
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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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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.
LIMITATIONS
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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.
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SOURCE: www.clientfirstservices.in/insurance/concept-of-life-insurance
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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
Page 14
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
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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
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TAX BENEFITS
INCOME
SECTION
TAX
SEc. 80C
Sec. 80 CCC
Sec. 80 D
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
: https://www.licindia.in/tax_benefit.htm
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COMPANY PROFILE:
"yogakshemam
vahamyaham"
-A CASE STUDY
Page 18
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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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
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Endowment Insurance
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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.
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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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COMPARISON OF ENDOWMENT
INSURANCE POLICY BETWEEN LIC AND
RELIANCE
Page 25
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.
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Products offered
The Whole Life Policy
The Whole Life Policy- Limited Payment
The Whole Life Policy-Single Premium
Jeevan Anand
Page 27
PRODUCTS OFFERED
Endowment Plus
Flexi Plus
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SURVEY
QUESTIONNAIRE
,
ITS DATA
ANALYSIS AND
INTERPRETATION
Page 29
SOURCE:https://www.surveymonkey.com/xavpiyush/projectonlifeinsu
rance/?sm=kE85uaZdmyQ1GBvx4MAShvmqoxKxwpnLyHlNcrcNXCg
%3d
SECTOR
NO. OF
RESPONDENTS
SHARE
PUBLIC SECTOR
LIFE INSURER
28
70
PRIVATE SECTOR
LIFE INSURER
14
30
(%)
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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
PREFRENCE
NO. OF
RESPONDENTS
SHARE
REPUTATION
16
40
PRICE OF PREMIUM
20
BENEFIT
15
(%)
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FLEXIBLE
PREMIUM
PAYMENT
12
25
b) No
PREMIUM
NO. OF
RESPONDENTS
SHARE
YES
22
55
NO
20
45
(%)
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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
(%)
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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.
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
(%)
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Investment Option
Post Office
Life Insurance
Mutual Fund
Share Market
Bank Deposits
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
]
]
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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
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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
Market share(%)
64.56 %
6.91 %
4.75%
2.98%
1.72 %
1.66 %
1.46 %
1.28 %
1.08 %
0.71 %
0.54 %
Page 38
0.37 %
0.46%
SAHARA LIFE
0.03%
Market Share
ICICI Prudential 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
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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
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.
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CONCLUSIONS
From the project analysis and interpretation the conclusions are:
1)
2)
3)
4)
5)
Page 42
6)
REFERENCES
1. BOOKS/MAGAZINES REFFERED:
STUDY GUIDE- PRINCILES &
GENERALINSURANCE, by AIMA.
PRACTICES
OF
LIFE
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
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