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BY CHANI RAJ
CERTIFICATE
This is to certify that the project entitled, Analysis of consumer investment buying
behavior and market potential Of ULIPs in the NCR Region, submitted in partial
fulfillment of the degree of Master of Business Administration (MBA) as per requirement,
is based on original project study, conducted by Chani Raj (Enroll. No. 07BS 1073),
under my guidance and supervision.
Place: Gurgaon
ACKNOWLEDGEMENT
I take this opportunity to express my deep sense of gratitude to all those who have
contributed significantly by sharing their knowledge and experience in the completion of
this project work.
My first word of gratitude is due to Mr. Dipanjan Hore, Sales Manager-Kotak Direct, my
corporate guide, for his kind help and support and for his valuable guidance throughout
the project. I am thankful to him for providing me with necessary insights and helping
me out at every single step.
My heartfelt thanks to our respected Faculty Guide namely Prof. Vikram Sharma.
Without his continuous help the project would not have been materialized in the present
form. His valuable suggestions helped me at every step.
Finally, I would also like to thank all my dear friends for their kind cooperation, advice
and encouragement during the long and arduous task of preparing this report and
carrying out the project.
At last but not the least, who are always at the top of my heart, my dear family members
whose blessings, inspiration and encouragement have resulted in the successful
completion of this project.
Date: 15 May,2009
Chani Raj
EXECUTIVE SUMMARY
Trust needs to be developed among the customers both as far as the ULIP as
a product is concerned
Building trust by providing the customers with adequate knowledge about the
company and then the product.
Enhancing the level of awareness in terms of the company, their Partners and
then the product and special emphasis among the female chunk of the
population.
INTRODUCTION TO INSURANCE
HISTORY OF INSURANCE
Im sure weve all heard of the word, and have an idea of how it works. Is it a great
thing? Is it something concrete or abstract? It depends on the context of the situation.
A quick, simple definition of insurance could be as follows: Reimbursement in a
situation of loss. Usually, someone decides that insurance is needed. In order for the
concept of insurance to arise, a prepayment of some type is required. In the case of
typical, everyday general auto, health and life insurance, for example, the pre payment
is in the form of a premium. Prior to the eve of the year 2000, thousands of people
flocked to the stores, stocking up on numerous supplies. They feared that something
catastrophic was going to take place once the clock struck midnight, and if so, they
wanted to do prepare. Isnt this a form of insurance? Sure in its basic definition. The
supplies they purchased would act as reimbursement in the case of loss.
Early insurance goes back to the Egyptian times. It was known that around 3000 BC,
Chinese merchants dispersed their shipments among several vessels to avoid the
possibility of damage or loss. There are some insurance companies around today in
the United States that provided insurance back in the mid 1700s, as well as some that
provided relief to banks during the 1930s and the Great Depression. Today, there is
insurance for any aspects of daily living: Business, Auto, Health, Life and Travel. Each
of those categories includes sub-categories, branching off into numerous divisions.
From the beginning human societies sought ways to soften the shocks of existence.
Our ancestors were very much aware that no individual could go it alone, that only by
pooling the resources of the many could the unfortunate few be helped.
This simple notion of mutuality persists like a welcome footpath through the incredible
tangle of human history. While empires have risen and collapsed, through wars,
famines and pestilence, during the ebb and flow of struggling generations, the idea of
insurance as the victory of human thought over the rude violence of life
Even as human society emerged from the darkness of unrecorded time, we see it at
once. In ancient Babylonia, where from the confluence of two rivers, enterprising
merchants sent caravans and ships to trade with all parts of the known world: with
Egypt, Phoenicia, India and China.
5
To reduce the risk of robbery, plunder and capture for ransom, the Babylonians devised
a system of contracts in which the supplier of capital for a venture agreed to cancel the
loan if the trader was robbed of his goods. The trader who borrowed the capital paid an
extra amount for this protection (a premium) in addition to the usual interest. As for the
lender, collecting these premiums from many traders made it possible for him to absorb
the losses of the few. This arrangement proved to be more appealing and sensible than
the earlier one of pledging not only the traders ships and other tangible property, but
also his life (as a slave) and those of his family as well. Accordingly, the practice was
sensibly legalized in the Code of Hammurab.
These arrangements became well known to the Phoenicians and to the Greeks,
Hindus we discover a comprehensive code of sea laws, including a principle of jettison
or general average. It states that if it becomes necessary to throw goods overboard in
order to lighten the ships, such sacrifice for the common benefit should be made good
by a common contribution. The very word insurance is derived from the Latin word for
security.
Under Section 10(l0A) (iii) of the Income Tax Act, any payment received by way
of commutations of pension out of the Jeevan Suraksha annuity plans is
exempt from tax
Under Section 10(10D), any sum received under a Life Insurance policy (not
being a Key Man policy) is also exempt from taxation. But it is wise to
remember that Pensions received from Annuity plans are not exempted from
Income Tax.
Section 80 CCC provides a deduction of up to Rs.10,000/- to an individual
assessee for any amount paid or deposited to effect or keeping in force any
annuity plan of LIC for receiving pension from the fund referred in sections 10
(23AAB). Presently LIC's Jeevan Suraksha plan is one such plan using such
benefit.
A policy, which provides for life insurance where the policy value at any time varies
according to the value of the underlying assets at the time. ULIP is 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 it has attained
called as Net Asset Value (NAV).
A unit-linked insurance plan provides both insurance and investment benefit. In unitlinked plans, the premiums paid are invested in funds offered by the company; the
policyholder determines the appropriate ratio of investments into these funds. The funds
are generally invested in equities, debt instruments, money market instruments, and
government securities.
The value of the policy is determined on any day by multiplying the number of
units issued by the value of units on that day. The value of these units is called the Net
Asset Value (NAV) and is normally published in newspapers on a daily basis. Unit-linked
insurance products are risky because the premium money invested is subject to market
risk. The funds do not offer a guaranteed or assured return. Insurance companies will
only show you a projected return, which may or may not be achieved during the term of
the policy.
Are
Ulips
Similar
To
Mutual
Funds?
In structure, yes; in objective, no. Because of the high first-year charges, mutual funds
are
a
better
option
if
you
have
a
five-year
horizon.
But if you have a long term investment horizon, then ULIPs have an edge. To explain
this further a ULIP has high first-year charges towards acquisition (including agents
commissions).
As a result, they find it difficult to outperform mutual funds in the first five years. But in
the long-term, ULIP managers have several advantages over mutual fund managers.
Since policyholder premiums come at regular intervals, investments can be planned out
more
evenly.
Mutual fund managers cannot take a similar long-term view because they have bulk
investors who can move money in and out of schemes at short notice.
COMPANY PROFILE
KOTAK GROUP is one of the top most financial product service providers in India.
It is one of India's leading financial conglomerates, offering complete financial solutions
that encompass every sphere of life. From commercial banking, to stock broking, to
mutual funds, to life insurance, to investment banking, the group caters to the financial
needs of individuals and corporates.
The group has a net worth of over Rs5,824 crores, employs around 20,000
people in its various businesses and has a distribution network of branches,
franchisees, representative offices and satellite offices across 370 cities and towns in
India and offices in New York, London, San Francisco, Dubai, Mauritius and Singapore.
The group services around 4.4 million customer accounts. It comprises of following sub
units which combines to form such a vast company and group of people.
1. Kotak Securities.
2. Kotak Insurance.
3. Kotak Mahindra bank.
4. Kotak Mutual funds.
5. Kotak Private equity.
6. Kotak Investment banking.
7. Kotak Reality funds.
.
The Kotak Mahindra Group was born in 1985 as Kotak Capital
Management Finance Limited. This company was promoted by Uday Kotak, Sidney A.
A. Pinto and Kotak & Company. Industrialists Harish Mahindra and Anand Mahindra
took a stake in 1986, and that's when the company changed its name to Kotak
Mahindra Finance Limited. Since then it's been a steady and confident journey to
growth and success.
10
KOTAK DIRECT
KOTAK DIRECT (A Subsidiary of KOTAK SECURITIES) deals with ULIPs (Unit
Linked Insurance Plans). It was started in 2007 with the Head office in Mumbai. The
various branches of Kotak Direct are located throughout the country & new branches
are opening up as well.
Kotak Securities, a subsidiary of Kotak Mahindra Bank, is the stock-broking and
distribution arm of the Kotak Mahindra Group. The institutional business division, which
brings you AKSESS, primarily covers secondary market broking. It caters to the needs
of foreign and Indian institutional investors in Indian equities (both local shares and
GDRs). The division also has a comprehensive research cell with sectoral analysts
covering all the major areas of the Indian economy.
Kotak Securities Ltd. is one of the oldest and leading stock broking houses in India with
a market Kotak Securities Ltd. has also been the largest in IPO distribution .
Kotak Securities has 877 outlets servicing over 4, 30,000 customers and a coverage of
321 cities. Kotaksecurities.com, the online division of Kotak Securities Limited offers
Internet Broking services and also online IPO and Mutual Fund Investments.
Kotak Securities Limited has over Rs. 3300 crore of Assets Under Management (AUM)
as of 31st March, 2008. The portfolio Management Services provide top class service,
catering to the high end of the market. Portfolio Management from Kotak Securities
comes as an answer to those who would like to grow exponentially on the crest of the
stock market, with the backing of an expert.
11
STRATEGIC
Zonal Head
LEVEL OR
Area Head
MIDDLE
LEVEL
Territory Head
TEAM of
10 TO 20
Sales Manager
OPERATI
ONAL
LEVEL
Relationship Manager
12
CUSTOMER
SUPPORT
AGENTS
(RMs & SRMs)
Appointment
(After talking to prospective clients
)
PRE APPROACH
needs)
APPROACH
13
FUNCTIONS OF THE
OPERATIONS TEAM
If client is convinced & interested, the following process needs to be
performed by the OPERATION TEAM before the policy is dispatched to the policy
holder.
Completion of Forms &
Crosscheck at Branches
Form is
NO
Error Free
fFrFreeFree
YES
Primary underwriting (Zonal
Office)
NO
Form is
Error Free
fFrFreeFree
YES
Case is picked
Policy
NO
Error Free
fFrFreeFree
14
YES
Policy Dispatched to
Depending upon the needs & wants, clients have the option of choosing
between any of these three plans which provides them with various benefits & growth
options along with an Insurance cover.
15
Kotak Safe Investment Plan is a Unit Linked Insurance Plan that combines the
benefits of insurance and capital market returns into one. This plan from the stable of
Kotak Life Insurance is a true reflection of the companys essence: innovation that will
benefit the investor.
What makes investing in Kotak Life Insurance truly unique is that you enjoy a
Guaranteed Maturity Value with varying degrees of equity exposure depending on your
risk appetite. So if the market value of your units is higher, you reap the benefits with the
peace of mind that whilst in a bear market your investment is under-pinned by the
Guaranteed Maturity Value. And there is more, the returns are totally Tax free.
Every child is different. Each has their own set of dreams and aspirations. As a parent
you would like to provide your child with all the building blocks that could develop his or
her potential to the fullest. This could mean extra coaching or tuition for talented
16
children, special training or equipment for natural athletes or professional training for
born singers. Headstart Child Plans is a specially tailored, cost-effective plan, aims to
give your children the financial means to pursue his or her dreams and live them.
available under this benefit is equal to the basic sum assured (subject to a maximum
of Rs.10 lacs).
This benefit can be added to the basic life insurance plan to provide financial support
in the event of medical emergencies. On the first occurrence of critical illness during
the term of the plan, you would receive a portion of the sum assured to reduce your
financial burden in this emergency. The maximum Critical Illness Benefit that you
can avail of is equal to half the basic sum assured (subject to a maximum of Rs.20
lacks).
In case of the unfortunate death of the proposer, this benefit keeps the policy alive
by waiving all future premiums on the policy.
18
POLICIES
KSAP
KSIP
HEADSTART
FEATURES
ENTRY AGE
MATURITY AGE
MIN: 0 Years
MIN:0Years
MIN:18 Years
MAX:65Years
MAX:65Years
MAX:60Years
MIN:18Years
MAX:75Years
MIN:18Years
MAX:75Years
REGULAR:10/15
/20/25Years
FOR MINOR:
10Years or 18 less
MAX:70Years
MIN: 10Years or 18
minus age at entry for
minors; whichever
Is higher
19
POLICY TERMS
MINIMUM
PREMIUM
MAX: 30Years
Max: 25 Yrs.
REGULAR PPT:
Rs.15, 000 p.a.
REGULAR:
REGULAR PPT:
Rs.15, 000 p.a.
LIMITED PPT:
Rs 36,000p.a.
LIMITED PPT:
Rs 25,000 p.a
for 4-10 Yrs
Rs 50,000 p.a.
for 3 Yrs
MIN: 0.5 X
BASIC SUM
ASSURED
(Policy
term
x
annual premium.)
MAX: Any multiple
of
premium,
subject
to
underwriting
20
MIN: 0.5 X
(Policy
term
x
annual premium.)
MAX: Any multiple
of premium,
subject to
underwriting
RIDERS
BENEFITS
Critical Illness
Benefit
Critical Illness
Benefit
Permanent
Disability
Benefit
Permanent
Disability
Benefit
NO RIDERS
BENEFITS
Accidental
Disability
Guardian
Benefit:
Premiums waiver
protection on
disability.
Accidental
Disability
Guardian
Benefit:
Premiums waiver
protection on
disability.
Accidental
Death Benefit
Accidental
Death Benefit
Preferred Term
Benefit
Life Guardian
Benefit
21
PLA
N
USP
KSAP
Upto
275
return
on
KSIP
%
HEADSTART
Guaranteed
&
year premium at
all
fund.
maturity
investors.
first
&
type
assured
bonuses.
22
of
Dynamic
Floor
COMPARISON OF CHARGES:
POLICIES
KSAP
KSIP
HEADSTART
CHARGES
Years
PREMIUM
ALLOCATION
CHARGES
POLICY
ADMINISTRATION
CHARGES
<3600
0
>=36000
Years
charges
Years
Allocation
2-5
2%
Nil
14%
68%
6-10
1%
Nil
>2
3.5%
86%
11+
Nil
Nil
93%
4-10
99%
>11
100%
(15k to
25k)
Rs.65p.m. at
commencement of the
policy, inflating by 5%p.a.
=<Rs.20000 -7%
>20000-3.5%
<Rs100000: flat
fee of Rs.75 p.m.
in year 1and Rs 40
p.m. in year2
onwards.
>Rs.100000: No
23
charges
Guaranteed/dy
namic money
market fund
0.6
%
Dynamic
money
market fund
0.6
%
Opportunities fund- 2%
FUND
MANAGEMENT
CHARGES
Guaranteed/dy
namic gilt fund
Guaranteed/dy
namic bond
fund
Guaranteed/dy
namic floating
rate fund
Guaranteed/dy
namic
balanced fund
1%
1.2
%
Dynamic
gilt fund
Dynamic
bond fund
1%
1.2
%
Dynamic
floating rate
fund
1.2
%
1.2
%
Dynamic
balanced
fund
1.3
%
Guaranteed/dy
namic growth
fund
1.5
%
Dynamic
growth fund
Aggressive
growth fund
1.3
%
1.5
%
Aggressive
growth fund
1.6
24
1.6
SWITCHING
CHARGES
MORTALITY
CHARGES
Rs.
500
will
be
charged for every
additional switch.
No mortality charges in 1 st
year.
From
year
2nd
onwards, the cost of life
cover & will be levied by
cancellation of units on a
monthly basis.
Age
(Yrs)
2
5
3
5
4
5
5
5
25
Mortali
ty
charge
s
1.
54
1.
83
3.
57
9.
04
(Per
000)
PARTIAL
WITHDRAWAL
CHARGES
Partial
withdrawal
not
allowed in the first 3
years. From year 4th
onwards, a part of the
fund
value
can
be
withdrawn.
No other expense charges
for the 1st two withdrawals
in
the
policy
year.
Additional expense of
Partial withdrawal
not allowed in the
first
3
years.
Subsequently,
(7-N) % is charged
on
each
withdrawal, where
N is the no. of
year.
COMPARISON OF PLANS
CHILDREN PLANS
Children plan are those plans which are launched targeting young couples and who have a
lot of dreams for their children, but may be their income will not allow them to fulfill their
dreams after years down the line when their children actually want a adequate of lump sum
with them for the purpose of higher education, professional qualification etc. As life is
uncertain, these plans are launched keeping in mind that, whether parents will be their or
not, children can fulfill their dreams.
26
27
From the above table, we can assume that Birla Sun life is providing maximum
returns, but in the case of demise of proposer Kotak OM is the most beneficiary for
family of proposer.
FAMILY PLANs
These plans are more focused on future protection and savings. As these plans are
very different from children plans, because children plans are considered to be long
term plans or most of the times considered for a fixed time period and some of the
condition make it safe for Insurance companies to make it minimum exit period, but
on the other hand Family Plans are more transaction based plans.
28
Allocation charges
Fund management charges
Policy administration charges
Death benefits
Growth rate-30%p.a.
Charges as fund management charges and mortality charges
Policy administration are considered as a part of allocation charges
and adjusted as a part of allocation charges only.
29
SURVEYS
SURVEY 1
In order to understand the behavior of customers towards ULIPs and to determine the
various factors which a consumer actually takes into account while buying a ULIP, a
survey was done.
We prepared a questionnaire consisiting of 13 factors which plays an important
role in choosing a ULIP and asked the respondents to rate these factors on a scale of 1
to 5(1 being least important & 5 being most important). This questionnaire was not
specific to any particular company and aimed at determining the most important factors
from the consumer point of view. With the help of data thus obtained, a complete
analysis was done and results were obtained.
Sample Size:
30
The sample size of the survey was 100. The respondents were ensured complete
confidentiality of their opinion and view.
Sample Population:
Our sample population belonged to all the sections of the society i.e. higher income
group, middle income group and lower income group. As a result of this, the data thus
obtained was not confined to a particular section of the society and represented the
view and opinion of all the classes of society in large.
31
ANALYSIS OF SURVEY 1
FACTOR
S
QUESTIONNAIRE
No.
10
11
12
13
10
11
12
13
14
15
16
17
18
19
20
32
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
33
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
34
87
88
89
90
91
92
93
94
95
96
97
98
99
100
SUM
474
415
308
372
425
212
389
451
397
384
291
363
434
AVERAGE
4.74
4.15
3.08
3.72
4.2
5
2.1
2
3.8
9
4.5
1
3.97
3.84
2.91
3.63
4.34
MEDIAN
MODE
S. D.
0.596623
5
0.79
6
1.22
8
0.98
6
0.9
9
1.1
6
0.9
4
0.7
5
0.91
5
1.14
3
1.27
2
0.99
1
0.69
9
VARIANCE
0.355959
6
0.63
4
1.50
9
0.97
1
0.9
8
1.3
4
0.8
9
0.5
6
0.83
7
1.30
7
1.61
8
0.98
3
0.48
9
35
The 5 most important factors while buying an insurance plan especially ULIPs are as
follows:
Sr.
No
FACTOR
AVER
-AGE
MEDI
-AN
36
MODE
S.D.
VARIANCE
Return On Investment
4.74
0.59662
0.3559596
Financial Health
(Company)
4.51
0.74529
0.55545
Comparison with
Financial Products
4.34
0.69949
0.48929
Tax Saving
4.25
0.98857
0.97727
Policy Features
4.15
0.79614
0.63384
37
Financial Health of the company gets an average of 4.51 (on a scale of 5) with
both mean & median being 5. S.D & Variance are 0.75 & 0.56 respectively which
also show quite a high degree of similarity in the views but comparatively lesser
than RETURN ON INVESTMENT Factor.
Comparison with Financial Products, Tax Saving & Policy Features are also very
important factors & plays a very important role in the purchase of an Insurance
Policy.
The above 5 factors are the most important ones which affect the purchase of an
Insurance Policy.
An Insurance company needs to pay a lot of attention on these factors before
developing a policy as they play utmost importance in the purchase of an
Insurance Policy
38
SURVEY 2
In order to understand the market potential of ULIPs in the NCR region, we prepared a
questionnaire asking demographic questions such as name age, sex, occupation etc.
This questionnaire was not specific to any particular company and aimed at determining
if
There is any relation between age and preference for ulips
Income and preference for ulips
Occupation and income for ulips
. With the help of data thus obtained, a complete analysis was done and results were
obtained.
Sample Size:
The sample size of the survey was 280. The respondents were ensured complete
confidentiality of their opinion and view.
Sample Population:
Our sample population belonged to the NCR region namely Delhi, Gurgaon,Noida and
Greater Noida.
MARKET PROFILE-DELHI
39
UNIT
DESCRIPTION
Population
Lac./Crores
15,412,000
Area
Sq km
1,483 sq km 2
Literacy Rate
81.82 %
83.63%
60.28%
MARKET PROFILE-GURGAON
40
PARAMETERS
UNIT
DESCRIPTION
Geographical Area
Sq. Km.
220
Population
Lac.& Crore
5,73,542
Population Density
331
77 %
Population
Literate.
Literacy Rate
city
is
an
ideal
combination
of
traditional
modernization
It has got a high purchasing power
Youth and old age person are found more in this city.
Mostly all the call centres of big MNCs are in this city.
41
culture
and
MARKET PROFILE-NOIDA
BRIEF DEMOGRAPHY OF THE CITY
PARAMETERS
UNIT
DESCRIPTION
Population
Lac./Crores
293,908
Area
Sq km
203.16sq km 2
Literacy Rate
68 %
74%
61%
The city makes for a good market place but the mostly there are small,
crowded, traditional markets
There are many offices and many of the persons are working in these
offices so this city has good potential for the product placement.
The persons here are much aware about the ULIPs than any other city.
But there are only a few mid-sized markets
The city and its consumers are growing up because of the growing
industry.
42
PARAMETERS
UNIT
DESCRIPTION
Population
Lac./Crores
1,73,542
Area
Sq km
173.16sq km 2
Literacy Rate
68 %
74%
61%
43
p^ q^
n
P = p^ Z
DELHI
p^ =%age who are interested =60/70=8
q^ = 15
Z= 1.96
85 15
70
P = 85 1.96
P=851.96 x 4.26
P=858.37
P= {76.63%, 93.37 %}
44
GURGAON
p^ =%age who are interested = 55/70=78
q^ = 22
Z= 1.96
P = 78 1.96
78 22
70
P=781.96 x 4.95
P=789.70
P= {68.30 %, 87.70%}
Therefore ULIP can be found popular among 68.30 %to 87.70%of population
above 21 years of age and above 2 lacs income group in Gurgaon.
NOIDA
p^ =%age who are interested = 52/70=74
q^ = 26
Z= 1.96
P = 74 1.96
74 26
70
P=741.96 x 5.24
P=7410.27
P= {63.63 %, 84.27%}
Therefore the market potential for the region of Noida ranges from 63.63 %,
to 84.27%
45
GREATER NOIDA
p^ = 80
q^ = 20
Z= 1.96
P = 80 1.96
80 20
70
P=801.96 x 4.78
P=809.37
P= {70.63 %, 89.37%}
Therefore ULIP can be found popular among 70.63% to 89.37% of population
above 21 years of age and above 2 lacs income group in Greater Noida.
46
Number
who prefer
to have
ULIP
Number
who do not
prefer to
have ULIP
Total
number
sampled in
each
region
Noida
Gurgaon
Greater
Noida
Delhi
Total
52
55
56
60
223
18
15
14
10
57
70
70
70
70
280
Suppose we find out the proportion of people who prefer to have ULIP:
Pn Proportion in Noida who prefer ULIP
Pg Proportion in Gurgaon who prefer ULIP
Pu Proportion in Greater Noida who prefer ULIP
Pd Proportion in Delhi who prefer ULIP
47
Let:
Ho: Pn= Pg=Pu=Pd Null hypothesis
H1: Pn, Pg, Pu and Pd are not all equal Alternate Hypothesis
Combined proportion who prefer ULIP = 223/280 = 0.8
Total number
sampled
Estimated
proportion who
prefer ULIP
Number
expected to have
ULIP
Total number
sampled
Estimated
proportion not
preferring ULIP
Number
expected not to
buy ULIP
Noida
Gurgaon
Greater
Noida
Delhi
70
70
70
70
0.8
0.8
0.8
0.8
56
56
56
56
70
70
70
70
0.2
0.2
0.2
0.2
14
14
14
14
48
Frequency
preferring
to invest in
ULIP
Observed
Frequency
Expected
Frequency
Frequency
preferring
not to
invest in
ULIP
Observed
Frequency
Expected
Frequency
Noida
Gurgaon
Greater
Noida
Delhi
52
55
56
60
56
56
56
56
18
15
14
10
14
14
14
14
fe
52
55
56
60
18
15
14
10
fo-fe
56
56
56
56
14
14
14
14
(fo-fe)^2
-4
-1
0
4
4
1
0
-4
16
1
0
16
16
1
0
16
Total= 2.92
49
(fo-fe)^2)/fe
0.28
0.01
0
0.28
1.14
0.07
0
1.14
Valid
Age * Preference
Missing
Total
Percent
Percent
Percent
280
100.0%
.0%
280
100.0%
a) 21-30 yrs
b) 31-40 yrs
c) 41-50 yrs
d) >50 yrs
50
Yes/no
>50/21-30/31-40/41-50
Total
Yes
No
21-30
102
25
127
31-40
59
18
77
41-40
27
14
41
>50
34
35
222
58
280
Total
In the above table we are studying the cross tabulations between age and
preference either to go for ULIP or not.
Chi-Square Tests
Suppose we find out the proportion of people who prefer to have ULIP:
Pa Proportion in age group 21-30 who prefer ULIP
Pb Proportion in age group 31-40 who prefer ULIP
Pc Proportion in age group 41-50 who prefer ULIP
Pe Proportion in age group >50 who prefer ULIP
Total proportion of interested people = 224/280= 0.8
Age group
Total number
sampled
Estimated
proportion who
prefer ULIP
21-30
31-40
41-50
>50
127
77
41
35
0.8
0.8
0.8
0.8
51
Number expected
to have ULIP
Total number
sampled
Estimated
proportion not
preferring ULIP
Number expected
not to buy ULIP
102
62
33
28
127
77
41
35
0.2
0.2
0.2
0.2
25
Fo
Fe
102
59
27
34
25
18
14
7
15
fo-fe
102
62
33
28
25
15
8
7
(fo-fe)^2
0
-3
-6
6
0
3
6
0
0
9
36
36
0
9
36
0
(fofe)^2)/fe
0
0.14
1.09
1.28
0
0.6
4.5
0
52
If we try to find out that if there is any relation between income and preference to
invest in ULIP, we find the tabulated data as follows:
Crosstabs
Valid
Income * Preference
Missing
Total
Percent
Percent
Percent
276
98.6%
1.4%
280
100.0%
Yes/No
Total
Yes
No
Upto 2
Lacs
55
10
65
2-5 Lacs
97
22
119
5-7 Lacs
47
12
59
7-10 Lacs
17
25
> 10 lacs
53
Total
223
53
276
Chi-Square Tests
Suppose we find out the proportion of people who prefer to have ULIP:
Pa Proportion in income group (upto 2 lacs) who prefer ULIP
Pb Proportion in income group (2-5 lacs) who prefer ULIP
Pg Proportion in income group (5-7 lacs) who prefer ULIP
Pc Proportion in income group (7-10 lacs) who prefer ULIP
Pe Proportion in income group (>10 lacs) who prefer ULIP
Total proportion of interested people = 223/276= 0.8
Income group
Total number
sampled
Estimated
proportion who
prefer ULIP
Number
expected to
have ULIP
Total number
sampled
Estimated
proportion not
preferring ULIP
Number
expected not to
buy ULIP
Upto 2
lacs
2-5 lacs
5-7 lacs
65
119
59
25
0.8
0.8
0.8
0.8
0.8
52
95
47
20
65
119
59
25
0.2
0.2
0.2
0.2
0.2
12
13
23
54
7-10 lacs
Above 10
lacs
Fo
fe
55
97
47
17
6
10
22
12
8
2
fo-fe
52
95
47
20
6
13
23
12
5
2
(fo-fe)^2
3
2
0
-3
0
-3
-1
0
3
0
9
4
0
9
0
9
1
0
9
0
(fo-fe)^2)/fe
.173
0.04
0
0.52
0
0.69
.043
0
1.8
0
55
If we try to find out that if there is any relation between occupation and preference
to invest in ULIP, we find the tabulated data as follows:
Crosstabs
Valid
Occupation* Preference
Missing
Total
Percent
Percent
Percent
280
100.0%
.0%
280
100.0%
Govt Service/Student/Others/Pvt
Service/Business
Total
Yes
No
Govt Service
24
28
Student
13
14
Others
24
30
Pvt Service
107
39
143
Business
56
65
224
56
280
Total
Government service
Private Service
Student
business
others
Chi-Square Tests
Suppose we find out the proportion of people who prefer to have ULIP:
Pa Proportion in occupation group (Govt service) who prefer ULIP
Pb Proportion in occupation group (private service) who prefer ULIP
Pg Proportion in occupation group (student) who prefer ULIP
Pc Proportion in occupation group (business) who prefer ULIP
Pe Proportion in occupation group (others) who prefer ULIP
Total proportion of interested people = 224/280= 0.8
Occupation
Govt
service
Private
service
Student
Business
Others
28
14
30
143
65
0.8
0.8
0.8
0.8
0.8
22
11
24
114
52
28
14
30
143
65
0.2
0.2
0.2
0.2
0.2
29
13
Total number
sampled
Estimated
proportion who
prefer ULIP
Number
expected to
have ULIP
Total number
sampled
Estimated
proportion not
preferring ULIP
Number
expected not to
buy ULIP
Fo
fe
24
3
fo-fe
22
(fo-fe)^2
4
57
(fo-fe)^2)/fe
.18
13
24
107
56
4
1
6
39
9
11
24
114
52
6
3
6
29
13
2
0
-7
4
-2
-2
0
0
-4
4
0
49
16
4
4
0
0
16
.36
0
.42
.30
.67
1.3
0
0
1.23
58
RECOMMENDATIONS
1. Building trust by providing the customers with adequate knowledge about the
company and then the product.
2. The private players should try to establish Brand awareness and credibility
especially among the senior customers so as to divert their interest from the clean
sweep made by LIC and UTI.
3. The companies should target more of female consumers as they have money to
invest but are completely unaware about the options available to them and ULIP
should be made to look more attractive to them.
4. Adequate advertisement via appropriate media should be done by the various
companies as is done in the case of mutual Funds.
5. Customers are not aware about the ULIP being offered by their own banks.So,
proper counters should be there to facilitate customer awareness.
6.
7. ULIP is a highly untapped market and here the right strategies and hitting the bulls
eye by propagating the most sought after benefit among the customers will attract
most of the customers.
8. Every individual should be encouraged to do insurance planning. Life Insurance
cover should be taken when young and the person is able to service the
premiums. The amount of coverage depends on the requirements.
63
64
Questionnaire No.
Sir/Madam,
Sr.
No.
Factors
Return on Investment
Policy Features
Investment Risk
Length of Investment
Tax Savings
Forced Savings
65
10
11
12
13
Sr. No.
Company
Rank*
ICICI Prudential
LIC
OTHERS
66
.
Thank You for your cooperation & we assure you complete confidentiality of
the information you have so kindly, sincerely & patiently shared with us.
67
QUESTIONNAIRE
We are conducting a survey on the Unit Linked Insurance Plan (ULIP). We request
the Respondents to provide their valuable views on the same by answering to this
Questionnaire .The information provided by you will be used solely for Academic
purpose and to study the present Market Potential of ULIP.
NAME:
PLACE:
AGE:
a) 15-20 yrs
b) 21-30 yrs
c) 31- 40 yrs
d) 41-50 yrs
e) >50 yrs
GENDER:
a) Male
b) Female
OCCUPATION:
a) Government Service
b) Private Service
c) Business
d) Student
e) Others
ANNUAL INCOME:
a) Up to 2lacs
c) 5-7 lacs
d) 7-10 lacs
e) Above 10 lacs
b) HDFC Standard
d) Kotak Life
68
REFERENCES
Books:
1. Churchill & Brown; Basic Marketing Research;Thomas Publications,5th edition
2. Paul Hague, Nick Hague and Carol-Ann Morgan; Market Research in Practice; Kogan
Page limited,1st South Asian edition 2004.
3. Harper W.Boyd, Jr. Ralph Westfall, Stanley F. Stasch; Marketing Research; All India
Traveller Book Seller, 7th edition.
4. William O. Bearden, Richard G. Netemeyer, Mary F. Mobley; Handbook of Marketing
Skills; SAGE Publications.
5. Malhotra Naresh (2002), Marketing Research, Prentice Hall of India.
6. Kotler Philip(2004),Marketing Management
Websites:
69
www.kotakdirect.in
http://www.thehindubusinessline.com/2005/07/04/stories/2005070401261200.htm
www.wikipedia.org
http://www.thehindubusinessline.com/2004/09/14/stories/2004091400100900.htm
www.mouthshut.com
www.financeindiamart.com
www.businesstoday.com
www.howstuffworks.com
www.google.com
www.icici.com
www.kotak.com
www.hdfcbank.com
Personnel:
1
2
70