SURVEY ON LIFE INSURANCE PRODUCT AT CHATHAM

SAW MILL

Submitted By :
TANAMURUGAN
MBA [INSURANCE MANAGEMENT]
PONDHICHERRY UNIVERSITY

Supervised By:

External Guide: Internal Guide:

Mr.N.C Saravanan{IFS} Dr.
Deputy conservator of forest), Faculty,
chatham
 ACKNOWLEDGEMENT
I

TABLE OF CONTENTS

Introduction of

Insurance:
Insurance, in law and economics, is a form of risk management primarily used to

hedge against the risk of a contingent loss. Insurance is defined as the equitable

transfer of the risk of a loss, from one entity to another, in exchange for a premium,

and can be thought of as a guaranteed and known small loss to prevent a large,

possibly devastating loss. An insurer is a company selling the insurance; an insured

or policyholder is the person or entity buying the insurance. The insurance rate is a

2
factor used to determine the amount to be charged for a certain amount of insurance

coverage, called the premium. Risk management, the practice of appraising and

controlling risk, has evolved as a discrete field of study and practice.

Definition:

“Insurance” is a contract between the insurer and the insured under which the

insurer undertakes to compensate the insured for the loss arising from the risk

insured against. In consideration, the insured agrees to pay a premium regularly. The

person whose risk is insured is called “Insured” or “Assured”. The person who

agrees to compensate the loss arising from the risk is called the “Insurer” or

“Assurer” or “Underwriter”.

Thus, the concept “Premium” implies that it is the consideration paid by the

insured to the insurer for the risk undertaken by the latter. Premium is usually

required to be paid in cash and advance payment of the premium is a condition

precedent to the creation of a binding contract of insurance.

The term ‘Assurance’ is applied to contracts, where the risk insured against is

certain to happen but the time of its happening is uncertain. Thus, the risk insured

against death is a contract of assurance. The instrument containing the contract of

insurance is called a ‘Policy’. The thing or property which forms the basis of

insurance is called the ‘subject matter’ of insurance. The interest of the assured in

the subject matter is called the insurable interest.

3
Classification of Insurance:

Insurance can be classified into two broad categories

A. Life insurance

B. Non-life insurance

The Non-life insurance can be classified further into General insurance and

Miscellaneous Insurance. The following are the four kinds of General insurance:

1) Marine insurance

2) Fire insurance

3) Personal Accident insurance

4) Vehicle insurance

The Miscellaneous insurance can be classified in to:

1) Fidelity Guarantee insurance

2) Crop insurance

3) Burglary insurance

4) Flood insurance

5) Cattle insurance

4
 6) Cash in transit insurance.

These are discussed briefly:

1) Life Insurance

Life insurance is a contract whereby the insurer in consideration of a

premium paid either in a lump sum or in periodical installments undertakes to pay an

annuity or certain sum of money, either on the death of the insured or on the expiry

of a certain number of years, whichever is earlier.

2) Marine Insurance

Marine insurance is a contact of insurance under which the insurer

undertakes to a indemnify the insured against losses incidental to marine adventure.

It may cover loss or damages to the ship, cargo, freight, vessels or any other subject

of a marine adventure.

3) Fire Insurance

Fire insurance is a contract o agreement between the insurer and the

insured whereby the insurer undertakes to indemnify the insured for destruction of

or damage to property caused by fire or other specified perils during an agreed

period of time, in return for payment of a premium in lump sum or by installments .

4) Motor Vehicle Insurance

5
 Motor vehicle insurance falls under General insurance. Its importance

increasing day to day. In Motor insurance the owner’s liability to compensate people

who were killed or injured through the negligence of the motorists or drivers is

passed on to the insurance company. Motor insurance business is the largest single

section of accident insurance, if judged by premium income, but this relates to motor

business as a whole.

5) Personal Accident Insurance

Personal accident insurance is a contract of insurance. It provides an

absolute protection against death or disability arising solely and directly from

accident caused by violent external and visible means.

6) Fidelity Guarantee Insurance

Fidelity guarantee insurance falls under the miscellaneous class of

insurance. This is the type of contract of insurance and also a contract of guarantee

to which general principle of insurance apply. Fidelity guarantee does not mean the

guarantee of the employee’s honesty. But it guarantees the employer for any

damages or loss resulting from the employee’s dishonesty or disloyalty. The insurer

is liable to compensate the said loss to the employer as prescribed by the contract.

7) Crop Insurance

A contract of crop insurance is a contract to provide a measure of

financial support to farmers in the event of a crop failure due to drought or flood.

6
This insurance covers all risks of loss or damages relating to production or rice,

wheat, millets, oil, seeds and pulses etc. Insurance of all crops all risks of loss or

damage has not yet found a beginning in our country.

8) Burglary Insurance

Burglary insurance falls under the classification of insurance of

property. In the case of a burglary policy, the loss or damages of household goods

and properties and personal effects due to theft, larceny, burglary, housebreaking

and acts of such nature are covered. The actual loss is compensated.

9) Cattle Insurance

A contract of cattle insurance is a contract whereby a sum of money is

secured to the assured in the event of death of animals like bulls, buffaloes, cows

and heifers. It is a contract against death resulting from accident, disease,

parturitions or pregnant condition as the case may be. The insurer usually undertakes

to pay the excess sum in the event of loss.

10) Cash in Transit Insurance

Cash in transit insurance is one of the contracts of insurance which

falls under the category of miscellaneous insurance. This form of insurance covers

to the insured against any loss in the event of money or cash being stolen from his

business premises or while it is being carried from or to the bank. The scope of cash

in transit insurance is important to any business as large sum of money are drawn

from banks to pay wages and to meet the day to day expenses.

7
 Company Profile:

About Chatham saw mill

The Govt. Saw mill, Chatham was established in the year 1883 with the second hand

imported machines with the primary objective to meet the local requirement of sawn

timber for constructional works. The mill was taken over by the Andaman Forest

Department in the year 1912 and during the Second World War; its working got

completely paralised due to the bombing by the Allied Forces. However, after the

Second World war, the working of the mill was revived to meet the continued need

of sawn timber of the islanders for constructional purposes and the requirement of

the sawn timber of the Islanders further increased manifold after the settlement of

people from the erstwhile East Pakistan, Sri lanka , Burma and different states of the

country during the 50s and 60s.

8
All the major timber trees ( padauk, Marble wood , Chooi, sagwan, Black Chuglam,

Thingam, toungpeing, pyinma, Gurjan, koko,Mohwa, Badam, white Chuglam,

lalchini, Jungliaam, yewji, Nabbe, Red Dhup, Lamba pathi, Thitpock,Didu) of

Islands are used as raw material in the mill. The entire production of sawn timber in

the mill is sold under the coverage of an Administered for furniture making,

construction purpose. The export of timber from the Islands to main land is strictly

prohibited.

History
The legacy of Chatham began in the year 1789, when Lt. Archibald Blair landed

here with the aim to establish a Naval base. He started the survey from Chatham

Island for establishing the British footholds in the Islands. Thus, Port Blair became

the starting point of various activities to develop the Islands as a safe place to deport

hard-core convicts and to develop the Harbour base. The 100 mtrs long Chatham

Bridge connects Port Blair with Chatham Island. This historic bridge was initially

constructed out of timber. Later, it was renovated to o modern bridge with concrete

structures, which exists today.

Location and site:

The Chatham Sawmill located near the Port Blair town, about 5 km

from the Airport , at 11’41 N latitude and 92’43 Longitude with an area of 7.3 ha

9
has enough to share in the backdrop of the colonial legacy and the history that

shaped the Andaman and Nicobar Islands.

Banker:
The 6 major banks with which Chatham Sawmill deals with

are as follows:

 State Bank of India

 Syndicate Bank

 Axis Bank

 Punjab Bank

 UTI Bank

 Canara Bank

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Objectives and activities:
The majority of good quality logs are consumed by the wood based industries and

the remaining logs which may contain knots, shakes, splits and sponges etc. are

brought to the govt. Saw mill Chatham for production of sawn timber where

utmost possible extent of good quality sawn timber is salvaged to meet the

requirements of local public, furniture marts as well as Govt. Departments for

various public works. Besides, the premier timber of Andamans “the Andaman

padauk” is handled by govt. Saw Mill only.

The initial annual log intake capacity of the mill was around 20000 cum., but

to the lesser availability of logs due to various reasons, the mill is presently

consuming around 12000 – 13000 cum of logs annually. Presently, the annual

production of sawn timber of Chatham saw mill ranges between 5000 to 6000

cum. of which, more than 90% is sold locally at the price fixed by Andaman

and Nicobar Administration on year to year basis. However, the balance

quantity of sawn timber which is not consumed locally, is shipped to Chennai and

Calcutta Govt. Depots for disposal by auction. The present annual average

turnover of the Chatham saw mill is around Rs. 6 crores.

11
Day to day work:
The functioning of the mill is organized with the help of various section. The log

depot segregates the logs received from the forests and feeds them into the mill

,while the mill section performs the conversion of round logs into various sizes. The

Timber processing unit carries out the seasoning and preservative treatment of sawn

timber to increase its longevity. Yard section handles the converted Sawn timber as

well as their sales. The other units such as Construction unit, Mechanical unit , Saw

Doctoring unit, Electrical unit, Dispensary, Canteen and security etc are working in

unison to ensure the smooth functioning of the Mill.

Plant and machinery:

The Mill is equipped with old imported machinery. Their

efficiency has gone down over the years due to normal wear and tear, as inevitable

to those old machines. At present the mill at Chatham has the following plant and

Machinery:

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1) 72” BRAND HEADRIG- Main Breakdown Machine( make – Stenner of

Trivertion, England) installed in 1984 replacing the original 8 BRAND

HEADRIG. and its cost Rs 40 lakhs.

2) 54”BAND HEADRIG- Stand-bye breakdown Machine, ( make-Grand

Foundary, Patiala) installed in 1974/75 and its costs Rs 24 lakhs.

3) EDGER MACHINE- Edging the slabs (Make- Sandeep Industrial Co.,

Ludhiana) installed in 2000-01 and its costs 55 lakhs.

4) 54”BAND RE-SAW- Re sawing of sawn timber (Make- Sandeep Industrial

Co., Ludhiana) installed in 2000-01 and its costs 45 lakhs.

5) 48”BAND RE-SAW- Re sawing of sawn timber ( make – Stenner of

Trivertion, England) installed in 1956-57 and its costs 41 lakhs.

6) 42”BAND RE-SAW- Re sawing of sawn timber ( make – Stenner of

Trivertion, England) installed in 1956-57 and its costs 41 lakhs.

7) BUTTING BENCHES- End cutting (Make- locally fabricated) installed in

1956-57,and cost Rs 51 lakhs.

8) BRAND SAW SHARPENER-(MAKE- Sandeep Indusrial CO., Ludhiana)

installed in 2003-2004.

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Infrastructure:
M.L Barakuda : 1 No.

Truck (Leyland) : 2 Nos.

Mini Truck : 1 No.

Crane : 1 No.

Fork lift : 1 No.

Jeep (Diesel) : 1 No.

Jeep ( Maruti) : 1 No.

Ambulance ( Donated under MPLAD) : 1 No.

Details of Regular staff and Industrial employees:

A.Regular staff 135

B. Industrial employees
i)Skilled/Technical 248
ii)Regular Mazdoors 307
iii)Daily Rated Mazdoors 41
Total 596
Grand Total(A+B) 731

Revenue and Expenditure (Rupees in Lakhs):

14
YEARS REVENUE EXPENDITURE

{RUPPEES I N LAKH} {RUPPEES I N

LAKH}
200-01 718 946

2001-02 591 892

2002-03 591 884

2003-04 526 881

2004-05 265 994

2005-06 407 903

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16
 Organisation structure

of Chatham Sawmill

Organization structure:
Organization structure is the frame work within which the company grows. A

structure should be flexible to admit changes whenever needed. It is a diagrammatic

representation of the various positions in the enterprise and the formal relationship

among them.

Organization structure is a pattern in which various parts are interrelated or inter

connected. The structure depicts the relationship among various positions and

activities.

The top management of the company consists of the Chairman, Managing Director

and Chief Executive Officer. The function is established over all long term goals and

broad policies of the company including the master budget.

The middle management of the company comprises of departmental heads such as

Production department, Finance department , it has General Manager, Assistant

General manager,. Under marketing management it has manager and senior

executive officer and in human resource department it has HR manager, senior

17
executive and junior executive. The functions of middle management is formulation

of suitable policies the department level and periodical review of performance.

Operating management is the lower level of management. It consists of junior

executive, superiors, office manager , trainers and trainees. Their function is to plan

day to day activities and to perform them in a systematic way and also to assign

work to all the employees and undertake supervision.

The Mill complex is under the charge of a Deputy Conservator of Forests, assisted

by one Production Manger on the production side, one Asst. Mill Manger on sales

side, one Asst. Constructional engineer on civil works, one superintendent timber

Treatment Plant on the timber Treatment preservation side. One saw filer in the

sawn doctoring unit, one Range Officer on the log receipts side and one Range

Officer on sawn timber sale side. Besides, there is a Security Officer assisted by

Security Inspector and Watch and Ward Staff to look after the security in the respect

of Chatham Saw Mill. There is a small dispensary, which is looked after by a

medical officer and his Para medical staff. A labour welfare officer to looks after the

welfare of the workers. At present around a thousand numbers of industrial

ministerial and executive staffs are working in the Chatham Saw Mill and are

dependent for their livelihood on this mill.

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Section/Units

1. Log Depot Deals with raw material (logs)

2. Saw Mill Deals with the conversion of logs.

3. Saw Doctoring Deals with the maintenance of Saw

Blades.

4. Timber Yard Storing and sales of sawn timber

5. Sale Counter, Vijay Sale of Sawn Timber on retail basis

Baugh to individual consumers.

6. Mechanical Workshop Look after all machinery and attends

to mechanical work of other
divisions also.

7. Electrical Unit Looks after electrical works of the

mill and maintains the electricity
supply of entire Chatham Islands. It
also maintains the stand by
generator (248 kw) of the Mill and
attends to electrical works of other
divisions also.

8. Marine Workshop Maintains the marine crafts of the

division.

9. Building Construction Maintains all the building and Jetties

Unit of Forest Department in Chatham.

10. Timber Treatment Unit Treatment of timber both chemically

and by Seasoning (about 600 cum
each annually)

11. Wood Workshop Makes furniture required for Forest

Department and concentrates on
utilizing ill waste to the possible
extend.
12. Vanakriti Sale counter for Wooden Souvenirs
and Handicrafts Items made out of
Padauk and other Ornamental
Woods of Andamans
13. Department Canteen Caters to Mill workers with
nutritious diet at concessional rates

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 (a statutory obligation also).

14. Chatham Dispensary Provides First aid services to Mill

workers (A statutory obligation
also).

15. Forest Labour Club Gives recreational facilities to

workers.

16. Security Wing Looks after the security of the Mill

Division.

Key person of Chatham saw mill:

Mr N.C Saravanan [IFS} Deputy conservator of Forests

Mr Gopal Singh Assistant mill manager

Mr. Viswanath Gope Production manager

Mr. Vijay Nayre Assistant Constructional Engineer

Mr. Bala Subramani Assistant Electrical Engineer

Mrs. Lata Hegde Prasad Forest Ranger{ Chatham }

Mr.P.S.Viswadevan Forest Ranger{ Yard }

Mr. Deepak Johnson Superintendent of timber treatment

plant
Mr. Viswanath Gope Mechanical Engineer

Miss. Lalitha Forest Ranger{ Log depot }

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 Departmentation
It is the process of grouping individual jobs into departments. It involves grouping

of activities and employees into departments so as to facilitate the accomplishment

of organisation objectives.

Various departments:

 Finance departments

 Production department

 Human Resource department

FINANCE DEPARTMENT:

Finance is everything. Nothing will move without adequate support by finance. The

role of finance department is like is a brain of body.

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Finance department of Chatham Saw mill takes care of the following:

 Managing the day-to-day cash flows of the company

 Compilation of the financial needs of the company

 Co-ordination of various departments and branches regarding their financial

requirements.

 Co-ordination with the bankers of the company.

 Interacting with auditors for finalization of the company.

 Reporting the management regarding the financial health of the company.

 Fulfilling various accounting standards

HUMAN RESOURCE DEPARTMENT:

Man management plays a vital role in functioning of any company. The Chatham

saw mill human resource department takes care of the following functions:

 Selection and posting of right personnel for right job is the foremost activity

of the HRD

 Assignment of job roles.

 Taking care of the needs of the staff personnel.

 Co-ordination and movement of personnel with all the departments.

 An effective HR will take the company to glory.

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Attendance maintaining:

Each and every person should sign in the attendance register file, it will be checked

for the regularity of the employees at a regular interval of one month.

Personal Data maintaining:

Every employee’s personal data is maintained. It contains their educational

qualification, experience, memos, certificate and performance for their appraisal,

disciplinary actions etc. Each and every employee should sign this.

Manpower Planning:

 Recruitment

 Selection

 Training

 Promotion

 Transfer

 Dismissal

Labour welfare:

• Provident fund

• Gratuity

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 • Bonus

• Incentive

• Employee loan

PRODUCTION DEPARTMENT:

Production is the functional area responsible for turning inputs into finished outputs.

Through a series of Production processes. The production manager is responsible for

making sure that raw materials are provided and made into finished goods

effectively. He or she must make sure that work is carried out smoothly, and must

supervise procedures for making more efficient and more enjoyable.

The production and planning department will set standards and targets for each

section of the production process. The quantity and quality of products coming off a

production line will be closely monitored. In businesses focusing on lean

production, all employees will monitor quality at every stage of production , rather

than at the end as is the case for businesses using a quality control approach.

The stores department will be responsible for stocking all the necessary tools,

spares, raw materials and equipment required to service the manufacturing process.

Where sourcing is unreliable, buffers stock will need to be kept the use of

computerised stock control systems helps keep stocks at a minimal but necessary

level for production to continue unhindered. The above are the functions of

production department.

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25
Insurance Adopted by

chatham saw mill

company

26
Bima Gold
Introduction

Bima Gold is a Money Back type plan where total premiums paid under the
policy shall be paid back to the policyholder in installments at the specified

durations in case of survival and Sum Assured shall be paid in case of death during

the term of the policy irrespective of whether or not any survival benefits have been

paid earlier.

Since this is a high risk cover low premium policy, it is highly recommended for

young people with high responsibility with lower income. Though the maturity

benefits are not attractive, the short term financial needs of the family in case of

premature death will be taken care of . Being a Money Back type Plan, the money

becomes available at regular intervals. The amount my be used for short term

financial needs like, purchase of household durables or for children’s education. Or

the amount received as survival benefit can be re invested in any secured investment

so that the policy holder will have a substantial lumpsum amount at the end of the

term of the policy.

Bima Gold has been introduced to celebrate the 50 Golden years of LIC and will

only be available upto 31st March, 2006.

27
Benefit:

Survival Benefit
Payable at the end of the specified durations provided the policy is in full force as

given below:

For policy term 12 years: 15% of the Sum Assured under Basic Plan at the end of

each 4th & 8th policy year.

For policy term 16 years: 15% of the Sum Assured under Basic Plan at the end of

each 4th, 8th &12th policy year.

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For policy term 20 years: 10% of the Sum Assured under Basic Plan at the end of

each 4th, 8th, 12th & 16th policy year.

Maturity Benefit:

Payment of total amount of premiums paid (excluding extra/optional rider

premiums, if any) plus Loyalty Additions, if any, less the amount of survival

benefits paid earlier in case of Life Assured surviving to the end of the term.

Auto-cover facility:

If, at least two full years’ premiums have been paid in respect of this policy, any

subsequent premium be not duly paid, risk (death) cover shall continue for a period

of two years from the date of First Unpaid Premium.

Mode Rebate:

The following table shows the rebate available on the mode of premium
payment.

Mode Rebate
Yearly 2.0 % of tabular premium
Half-Yearly 1 % of tabular premium

Sum Assured Rebate:

The following table shows the rebate available on the Large Sum Assured

29
 Sum Assured Rebate per 1000 S.A

0 to 49,999 Nil

50,000 to 99,999 Rs.2.50

1,00,000 to 1,99,999 Rs.7.50

2,00,000 and above Rs.10.00

Death Benefit:

Payment of an amount equal to Sum Assured under the Basic Plan immediately on

death of the Life Assured during the term of the policy provided the life cover is in

force.

Premium payment:

Regular Premium payable throughout the policy term .The sample premium rates for

the basic plan are as under: -

Age Annual Premium per 1000 SA

12 16 20
15 65.70 56.90 41.75
20 66.50 57.45 42.25
25 67.00 58.00 42.85
30 68.05 59.05 44.00
35 70.85 61.55 46.45
40 76.05 65.90 50.40
45 84.25 72.40 56.15
50 96.10 81.60 64.25
55 110.65 93.10 74.45
60 128.50 - -

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Eligibility condition and other

restrictions:

FOR BASIC PLAN

Minimum Age at entry 14 - 63 years

Maximum Age at maturity 75 years
Term of the Policy 12, 16 and 20 years.
Minimum Sum Assured Rs. 40,000 /-
No limit (Sum Assured will be in multiples of
Maximum Sum Assured
Rs.5,000 /- only.)
Yearly, Half-yearly, Quarterly, Monthly or
Mode
through salary deductions.
REBATES / EXTRA FOR MODE OF PREMIUM PAYMENT AND HIGH
SUM ASSURED

Mode Rebate / Extra

Rebates are available at the following rates:

Yearly mode 2% of tabular premium
Half-yearly mode 1% of tabular premium
Quarterly and SSS modes NIL
Monthly mode 5% extra on tabular premium
High Sum Assured Rebates:
Less than Rs. 50,000 NIL
Rs. 50,000 and Less than Rs.1
NIL
Lakh
Rs. 50,000 and Less than Rs.1
Rs.2.5 per thousand Sum Assured
Lakh
Rs. 1 Lakh and Less than Rs.2
Rs.7.5 per thousand Sum Assured
Lakh

31
Rs. 2 Lakh and above Rs.10 per thousand Sum Assured

Jeevan Saral

Introduction

Jeevan Saral is a new-generation plan, which primarily covers risk and has a blend

of innovative flexible features. It is a unique plan having good features of the

conventional plans and the flexibility of unit-linked plans. To the policy holder it

provides higher cover, a smooth return, liquidity and a lot of flexibility. This plan

will cater to those who perceive insurance more as financial protection and wish to

make provision for future contingencies.

Under this plan, death cover will be same irrespective of age at entry and term but

the sum payable at maturity will differ for different entry ages and terms. The Plan is

ideally suited to those who may need money for life contingencies, education of

children, salaried persons as also for those with uncertain income as there is a

facility of auto cover in case premium due remains unpaid for 1 year, after 3 years

premiums have been paid. Auto cover will continue for a period of 1 year.

Benefits
Provided the policy is in full force :

• Maturity Benefits :

Maturity Sum Assured + Loyalty Additions, if any

32
• Death Benefits :

250 times the monthly basic premium + Return of premiums paid, excluding

extra/rider premium and first year premium + Loyalty Addition if any.

• Term Rider benefit :

The choice of additional death cover is also available under the plan

as a Term Assurance Option. An amount equal to the Term Assurance Sum

Assured is payable on death during the policy term.

• Accident Benefit Option :

Accident benefit is available up to a maximum of Rs. 25 lakhs. This

is inclusive of the maximum limit of Rs. 25 lakhs placed as other life

insurance plans.

• Mode Benefit :

The following table shows the rebate available on the mode of premium

payment.

Mode Rebate

Yearly 2%

Half-Yearly 1%

Quarterly / Monthly Nil.

33
Features

• Minimum Age at Entry - 12 yrs (Completed)

• Maximum Age at Entry - 60 yrs (nearer Birth Day)

• Maximum Maturity Age - 70 yrs

• Minimum Premium - Rs. 250/- per month for entry age up

to 49 years and Rs. 400/- per month for entry age 50 years and above.

• Maximum Premium - 10,000 per month (In Multiple of Rs.

50)

• Modes Allowed - Yearly, Half yearly Quarterly and

monthly under Salary Saving Scheme.

• Loyalty Addition after 10 years.

• Loan available after payment of 3 years premiums.

• Liberal Special Surrender Value after 3 years premiums have been paid.

34
• Partial withdrawals from 4th year onwards in case of high premium policies.

Money back policy

Features:

Unlike ordinary endowment insurance plans where the survival benefits are payable

only at the end of the endowment period, this scheme provides for periodic

payments of partial survival benefits as follows during the term of the policy, of

course so long as the policy holder is alive. .

In the case of a 20-year Money-Back Policy (Table 75), 20% of the sum assured

becomes payable each after 5, 10, 15 years, and the balance of 40% plus the accrued

bonus become payable at the 20th year. .

For a Money-Back Policy of 25 years (Table 93), 15% of the sum assured becomes

payable each after 5, 10, 15 and 20 years, and the balance 40% plus the accrued

bonus become payable at the 25th year. .

An important feature of this type of policies is that in the event of death at any time

within the policy term, the death claim comprises full sum assured without

deducting any of the survival benefit amounts, which have already been paid.

Similarly, the bonus is also calculated on the full sum assured

35
.

Benefits:

Introduction:
Insurance Regulatory & Development Authority (IRDA) requires all life insurance

companies operating in India to provide official illustrations to their customers. The

illustrations are based on the investment rates of return set by the Life Insurance

Council (constituted under Section 64C(a) of the Insurance Act 1938) and is not

intended to reflect the actual investment returns achieved or may be achieved in

future by Life Insurance Corporation of India (LICI) . .

For the year 2004-05 the two rates of investment return declared by the Life

Insurance Council are 6% and 10% per annum. .

Product summary .

These are Money Back type Assurance plans that provide financial protection

against death throughout the term of plan along with the periodic payments on

survival at specified durations during the term. .

Premiums:

Premiums are payable yearly, half-yearly, quarterly, monthly or through salary

36
deductions as opted by you throughout the term of the policy, or till the earlier

death. .

Bonuses:

This is a with-profit plan and participate in the profits of the Corporation’s life

insurance business. It gets a share of the profits in the form of bonuses. Simple

Reversionary Bonuses are declared per thousand Sum Assured annually at the end of

each financial year. Once declared, they form part of the guaranteed benefits of the

plan. Final (Additional) Bonus may also be payable provided policy has run for

certain minimum period. .

Death Benefit: :

The Sum Assured plus all bonuses to date is payable in a lump sum upon the death

of the life assured during the policy term irrespective of the Survival benefit

/benefits paid earlier.

Survival Benefits:

The percentage of Sum Assured as mentioned below will be paid on survival to the

end of specified durations :

% of Sum Assured paid at the end of specified duration

Plan
Duration
75 93

37
 5 20% 15%
10 20% 15%
15 20% 15%
20 40% 15%
25 - 40%

All bonuses declared upto the maturity date will also be paid along with the final

survival benefit. .

Market plus policy

This is a unit linked deferred pension plan. You can take the plan with or without

risk cover. You can also choose the level of cover within the limits, which will

depend on whether the policy is a Single premium or Regular premium contract and

on the level of premium you agree to pay. .

The allocated premiums will be applied to purchase units as per the Fund type

chosen. Your Unit Account will be subject to deduction of charges as specified in

the Policy Conditions. The value of the units in the Unit Fund may increase or

decrease, depending on the investment return of the assets representing the chosen

Fund.

Payment of Premiums: You may pay premiums regularly at yearly, half-yearly or

quarterly intervals over the term of the policy. The minimum annual premium will

38
be Rs.5,000/- increasing thereafter in multiples of Rs.1,000/-. Alternatively, a Single

premium can be paid subject to a minimum of Rs.10,000 and thereafter in multiples

of Rs.1,000.

Benefit

A) Death Benefit:

If the Life cover is opted for, the Sum Assured under the Basic Plan together with

the Fund Value of units either as a lump sum or as pension. In case the policy is

taken without life cover, then the Fund Value of the units held in the Policyholder’s

Unit Account shall be payable either as a lump sum or as a pension.

The amount of pension will depend on the then prevailing immediate annuity rates

under the annuity option chosen.

B) Benefit on Vesting:

On your surviving to the date of vesting, the Fund Value of the units held in your

Unit Account will compulsorily be utilised to provide a pension based on the then

prevailing immediate annuity rates under the relevant annuity option. However, you

may opt to commute up to one-third of the Benefit to be paid as a lump sum.

Further, you may choose to purchase pension from LIC or other life insurance

company.

39
Accident Benefit Option: If you have opted for life cover, you may opt for Accident

Benefit equal to life cover subject to minimum Rs. 25,000 and maximum Rs. 50

lakh (taken all policies with LIC of India and other insurers). In case of death by

Accident, an additional sum equal to Accident benefit will be payable.

Eligibility Conditions And Other Restrictions:

Basic Plan:

Minimum Age at entry : 18 years completed

Maximum Age at entry : 70 years (age nearer birthday). However if life cover is

opted for, then 65 years

Minimum Age at vesting: 40 years (age last birthday)

Maximum Vesting Age: 75 years (age last birthday)

Minimum Deferment Term: 5 years

Minimum Sum Assured : Rs. 25,000 for Single premium, Rs. 50,000 for Regular

premium

Maximum Sum Assured :

Single Premium - Equal to single premium

Regular Premium - 20 times of the annualized premium

40
 Need of the Study
 The study was mainly undertaken to analysis the employees attitude for

knowing the need and wants of the Insurance Policy at Chatham saw mill.

 The study was the way for the further improvement in Insurance Policy of

Chatham saw mill.

 The study was useful to understand the employee awareness about insurance

policy at Chatham saw mill.

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42
43
 Research Methodology:-
Research is one of the most important parts in the survey to collect information and

knowledge. Marketing research is defined as the systematic design, collection,

analysis, and reporting of data and findings relevant to a specific marketing situation

facing the company.

Problem and Research Objective:-

Our main objective was to find out

 To the assess the Insurance related procedure,

 To identify the insurance gap.

 To find out employees satisfaction about insurance policies.

The main problem was how to find out the insurance agent person in the company.

To get all this information a thorough planning had to be done, so I first started with

designing the questionnaire for the respondent whom I was going to target and to

know about their investment pattern. The main things to be known from the

respondent were:

1. There Annual turnover

2. Who are there bankers

3. who are your insurer

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 4. what are the production of the mill

Research plan -

The research process depends upon developing the most efficient plan for gathering

the needed information. Designing a research plan calls for decisions on the data

sources, research approaches, research instruments, sampling plan, and contact

methods.

Data source:-
For this project both primary and secondary data were the most valuable source of

information.

Secondary data:-

Secondary data provide a starting point for research and offer the valuable source of

information.

The secondary data was the most important source for my project because my first

aim was to find out the how many people having the insurance in the mill and ;what

are benefit getting from insurance company so for this reason I started collecting the

some sources which can help me in finding out the desired information about the

insured person.

The some sources are as follows:-

 Internet

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  Company Records

 Office superintend in mill.

Primary data:-

Primary data are data freshly gathered for a specific purpose. The various sources of

primary data for my project are as follows.

 People from industries

 Personal interview

Research Approaches:-
From the two data source which I have mention above secondary data are the easiest

way to gather and the cost of collecting this data is very low and easily available

from the respective association. And I started by collecting this directory from the

various sources, because at the starting point of the survey this information play a

important part for me and this help me to short out the people which, I can meet

with them to collected more information about them or who are my target people.

After collecting the secondary data or information from the secondary sources then I

started collecting from primary sources to narrow down my research. There are

basically four ways to collect data.

 Survey Research: - This method was the most appropriate way

to collect data. And I have used this method in my project to

find out the company need by identifying the people from mill.

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  Observational Research:- This method was not used by me in

my project ,because this survey have no use for me

 Focus-group Research: - This method is also not used by me in

my survey.

 Behavioral data:-This method was also not used by me in my

survey.

Research Instruments:-
There is various way of research instrument of collecting primary data, the various

methods are:-

1. Questionnaires.

2. Psychological tools.

3. Mechanical Devices.

4. Qualitative Measures.

From the above mentioned research instruments I had used only Questionnaires

technique to find out the various information about company such as their turnover,

who are the insurer, what are the benefit take from insurance, why are the insurance

policy taken. And this was the technique which I felt the best way to extract

information about the company.

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 Sampling Plans:-
After collecting entire data and deciding on the research approach and instruments,

now I had to decide on the sampling plan which was one of the important task,

because from the bunch of people I had to select only those people ,whom I can

target from now onward .There are two way of sorting the data.

o Sampling Unit: - who is to be surveyed? And now my task

was to define the target population, which will be sampled

from the number of people.

o Sample Size: - large sample give more reliable result than

small sample, so for this reason I had taken around 20 people

to whom I should focus upon, because my target was only 13 .

Contact Methods:-

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Once the client had been decided now my task was how to contact them ,and for me

there only two ways of contacting them .

1. Personal Interview: - this method was the most appropriate

way of survey, because by personal interview I came to know

their feeling about the Chatham saw mill. Their personal

behavior and many more things.

2. Telephone: - This method is not used by me my project,

because I couldn’t gather maximum information .

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 Limitation of study:
 Difficult the collect the data with in a short period of time.

 They were not giving same data for academic purpose also due to privacy.

 They were not allowing to meet various executives of the company.

 The internet information can be irrelevant.

 The respondent will be limited so cannot be collect the maximize

information.

 The respondent may be biased.

 Due to language problem, it is possible that respondents are not be able to

understand the questionnaire and can cause misleading result.

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 ANALYSIS DATA AND

INTERPRETATION
1) Are you taking insurance?

Option Percentage of Respondent

Yes 75%

No 25%
Total 100%

2) What are the Insurance (life insurance or General insurance ) taken?

Option Percentage of Respondent

Life insurance 100%

General insurance 0%

Total 100%

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3) What life insurance policy is taken?

Option Percentage of Respondent

Bima gold policy 25%

Money back policy 25%

Jeevan saral policy 25%

Market plus policy 25%

Total 100%

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4) Are you satisfied with Life insurance policy?

Option Percentage of Respondent

Yes 85%

No 15%

Total 100%

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5) Do you use Intermediary / Broker for Risk cover?

Option Percentage of Respondent

Yes 40%

No 60%

Total 100%

6) What are the products manufactured?

Option Percentage of Respondent

Sawn Timber 99%

Furniture 1%

Total 100%

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7) How is insurance helpful to you?

Option Percentage of Respondent

For my family’s social security 36%

For medical aid 22%

For savings and investment 38%

Others 4%

Total 100%

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8) What is the benefit getting from insurance?

Option Percentage of Respondent

For Worker Compensation benefit 73%

For Machine Compensation benefit 17%

For Tax Concession benefit 10%

Total 100%

9) What are Expenses of Chatham saw mill?

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 Option Percentage of Respondent
For Utilities 43%

For Insurance 20%

For Rent 12%

For Payroll 25%

Total 100%

10) What are the labour welfare activities?

Option Percentage of Respondent

Provident fund 45%

Gratuity 40%

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 Bonus 15%

Total 100%

11) Do you use recycled in all or some of your product?

Option Percentage of Respondent

Yes 40%

No 60%

Total 100%

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OBSERVATION AND FINDINGS
 75% of respondent are take the insurances and remaining 25% of respondent

are didn’t take the insurance.

 90% of respondent are use the life insurance, which is the highest percentage

of user the general insurance to show the Asses of insurance.

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 25% of respondent are using the Bima gold policy,25% of respondent are

using the Money back policy, 25% of respondent using the Jeevan saral

policy.where the rest are using Market plus policy.

 85% of respondents are satisfied with the Life insurace policy because LIC

provide the compensation of his life. 15% of respondent didn’t satisfy with

the life insurance.

 40% of respondents are using Intermediary /broker for the risk covered and

balance 60% of respondents are using intermediary / broker for the risk

covered.

 Only few employees were having awareness relating to insurance .

 99% of sawn timber was produced by Mill and remaining 1% produced for

furniture.

 They doesn’t take General insurance policies like fire insurance, personal

accident policy, motor policy, medical claim policy.

 The mill was several benefit getting from Insurance such as 73% for worker

compensation benefit, 17% for worker compensation benefit and remaining

10% for Tax concession benefit.

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  The mill having some expenses such as 43% of expenses for utilities, 20% of

expenses for insurance , 12% of expenses for rent, and 25% for payrolls.

Suggestion
 Now they are taking only LIC policies, The company if possible can increase

number of insurance policies and GIC policies also like Group insurance,

Machine insurance, Motor insurance etc.

 It is found that there is no awareness of some of the employees to take the

insurance policies

Bibliography
Internet Websites:
 www.licindia.com

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  www.licindia-market-plus.com
 www.licindia-bima-gold.com
 www.licindia-jeevan-saral.com
 www.licindia-money-back.com
 www.google.com

ANNEXURE

Questionnaire

PART-I
PERSONAL DETAILS:-

1. Name of the Respondent:

2. Address:

3. Age

a. 18-20

b. 20-30

c. 30-50

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4. Marital Status

a. Married

b. Unmarried

5. No. Of .children

a. One

b. Two

c. Above two

6. Sex

a. Male

b. Female

7. Designation:

8. Years of Service:

a. 1-3 years

b. 3-6years

c. Above 6years

9. Scale of Pay:

a. Below 5000

b. Above 8000

c. Below 10,000

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13. What is the safety measure at the time of work?

14. What are the benefits to the employees?

a. Sickness Benefit

b. Disable Benefit

c. All the above

15. How many Shifts in the mill?

a. One

b. Two

c. Not applicable

16. Who is your Insurer?

17. Who is your Banker?

18. What percentage of your employee is male and female?

19. What is the Rank of the Chatham saw mill?

a. First rank

b. Second rank

c. Third rank

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PART –II

1) Are you taking insurance?

2) What are the insurance taken by you?

a. Life insurance

b. General insurance

c. Both

3) Which life insurance policy is taken by you?

a. Bima gold policy

b. Money back policy

c. Jeevan saral policy

d. Market plus policy

4) Which General insurance policy are taken?

a. Group accident insurance

b. Health insurance

c. Plant insurance

d. Machinery

5) Are you satisfied with life insurance policy?

a. Yes

b. No

6) Are you satisfied with General insurance policy?

a. Yes

b. No

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7) Do you use intermediary/ Broker for risk cover?

a. Yes

b. No

8) What are the productions of mill?

9) What are benefits getting from Insurance?

10) What are expenses of Chatham saw mill?

11) What are the labour welfare activities?

12) Medical coverage.

a. Company pays 100% of cost

b. Company and employee share cost

c. Employee pays 100% of cost

d. This benefit not offered

13) Long term care Insurance.

a. Company pays 100% of cost

b. Company and employee share cost

c. Employee pays 100% of cost

d. This benefit not offered

14) Do you have claim so far?

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a. Yes

b. No

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