FINAL PROJECT REPORT

CONSUMER BEHAVIOUR TOWARDS VARIOUS INVESTMENT AND INSURANCE PRODUCTS

. A Survey

A PROJECT REPORT
IN THE PARTIAL FULFILLMENT OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION (MBA) (2005-2007)

SUBMITTED BY:
MUKESH KUMAR MBA-IV

UNDER THE GUIDANCE:

MS. JASNOOR KAUR

SUBMITTED TO:

SAS
INSTITUTE OF INFORMATION TECHNOLOGY & RESEARCH MOHALI

ACKNOWLEDGEMENT

If words are considered as symbol of approval and taken of appreciation then let the words play my the heralding role of and expressing thanks I am indebted to Mrs. Nisha Kapoor- Agency Manager, in ICICI Prudential Insurance Co., Mohali, for providing me an opportunity to go through project report. I would like to express my sincere gratitude towards Ms. Jasnoor Kaur (Coordinator) for having provided me this golden opportunity to fulfillment of my final project report for this span of time and also for letting me work on this project. sincerest gratitude

(MUKESH KUMAR)

PREFACE
Risks and uncertainties are part of lifes great adventure- accidents, illness, theft, natural disaster they are all built into working of the universe waiting to happen. So far that there is a solution - insurance. To overcome these risks and uncertainties this project describes about various policies and schemes of different insurance companies. How these companies provide different benefits to policyholders. Insurance is a cooperative venture where risks and uncertainties are shared by many. Now a days a lot is being done to create awareness among the insuring public about the need and importance of the insurance in the field of a human being. In this direction IRDA has planned to create awareness through electronic and print media. A study of life insurance describes the meaning, various policies, comparison and their analysis market prospective changing customer scenario.

CONTENTS
1) Preface 2) Acknowledgement 3) Introductions : Definition Need for Life Insurance Role of Government Role of Life Insurance Evaluation of Insurance Industry in India Future Scenario 4) Opening of Insurance Sector in India Objectives of Liberalization of Insurance 5) Changing Expectations of Customers 6) Major Players in Life Insurance ICICI Prudential Life Insurance of India (LIC) HDFC Standard Life 7) Comparison of the products of various companies

8) Research Methodology Research Methodology Objectives Limitations

9) Data Analysis and Findings 10) Conclusion Findings Suggestions 11) Appendices Question Bibliography

INTRODUCTION
Insurance is basically risk management device. The losses to assets resulting from natural calamities like fire, flood, earthquake, accident etc. are met out of the common pool contributed by large number of persons who are exposed to similar risks. This contribution of many is used to pay the looses suffered by unfortunate few. However the basic principle is that loss should occur as a result of natural calamities or unexpected events, which are beyond the human control. Secondly insured person should not make any gains out of insurance. It is natural to think of insurance of physical assets such as motor car insurance or fire insurance but often be forget that creator all these assets is the human being whose effort have gone along way in building upto assets. In that scene human life is a unique income generating assets. Unlike physical assets, which decrease with the passage of time, the individual become more experienced and mature as he advances in age. This raises his earning capacity and the purpose of life insurance is to protect the income to individual and provide financial security to his family, which is dependent on his income in the event of his pre-mature death. The individual also himself also needs financial security for the old age or on his becoming permanently disabled when his income will stop. Insurance also has an element of saving in certain cases. Insurance is are rupees 400 billion business in India and yet its spread in the country is relatively thin. Insurance as a concept has not being able to make headway in India. Presently LIC enjoys a monopoly in Life Insurance business while GIC enjoys it in general insurance business. There have been very little option before the customer to decide the insurer. A successful passage of the IRA bill have clear the way of private sector operators in collaboration with their overseas partners. It is likely to bring in a more professional and focused approach. More over the foreign

players would bring sophisticated actuarial techniques with them, which would facilitate the insurer to effectively priced the product. It is very important that the trained marketing professionals who are able to communicate specific features of the policy should sell the policy. In the next millennium all these activities would play a crucial role in the overall development and maturity of the insurance industry. DEFINITION GENERAL DEFINITION :In the words of John Magee, Insurance is a plan by which large numbers of people associate themselves and transfer to the shoulders of all risks that attach to individuals FUNDAMENTAL DEFINITION :In the words of D S Hansell, Insurance may be defined as a social device providing financial compensation for the effects of misfortune, the payments being made from the accumulated contributions of all participating in the scheme. CONTRACTUAL DEFINITION :In the words of justice Tindall Insurance is a contract in which a sum of money is paid to the assured as consideration of insures incurring the risk of paying a large sum upon a given contingency. CHARACTERISTICS OF INSURANCE Sharing of risk Co-operative device Evaluation of risk Payment on happening of special event The amount of payment depends on the nature of losses incurred NEED OF THE LIFE INSURANCE :The original, basic intention of life insurance is to provide for ones family and perhaps others in the event of death. Originally, polices were to provide for short

periods of time, covering temporary risk situations, such as sea voyages. As life insurance became more established. It was realized what a useful tool it was in a number of situations, including : 1. Temporary needs/ threats : The original purpose of Life Insurance remains an important element, namely providing for replacement of income on death etc. 2. Regular Saving : Providing ones family and oneself, as a medium to long-term exercise (through a series of regular payment of premiums). This has become more relevant in recent times as people seek financial independence from their family. 3. Investment : Put simply, the building up of saving while safeguarding it from ravages of inflation. Unlike regular saving products are traditionally lump sum investments, where the individual makes are one time payment. 4. Retirement : Provision for ones on later years has become increasingly necessary, especially in changing culture and social environment. One can buy a suitable insurance policy, which will provide periodical payments in ones old age.

BENEFITS :
1. It is superior to traditional saving machine As well as providing a secure vehicle to build up saving etc. it provides piece of mind to the policy holder. In the event ultimately death, of say the main earner in the family, the policy will pay out guaranteed sum assured, which is likely to be significantly more then the total premiums paid. With more traditional saving vehicles, such as fixed deposits, the only return would be the amount invested plus any interested accrued.

2.

It encourages saving and forces thrift: Once an insurance contract has been entered into, the insured has an

publication to continue paying premiums, until the end of the term of policy, otherwise the policy will lapse. In other words, it becomes compulsory for the insure to save regularly and spend wisely. In contrast savings held in a deposit account can be accessed or stop easily. 3. It provides easy settlement and protection against creditors Once a person appointed for receiving the benefits or a transfer of rights is made (assignment), a claim under the life insurance contract can be settled easily. In addition, creditors has no right to any mommies by the insurer, where the policy is written under trust. Under the married womans act the money available from the policy forms a kind of trust, which creditors can not claim on. 4. It can be encashed and facilities borrowing: Sum contracts may allow the policy can be surrendered for a cash amount, if policy holder is not in a position to pay the premium. A loan, against certain policy, can be taken for a temporary period to tide over the difficulty. Presence of life insurance policy facilitates credit for personal or commercial loans as it can be offered as collateral security. 5. Tax relief : The policy holder obtains income tax rebates by paying the insurance premium. The specified form of saving which enjoys a tax rebate u/s 88 of the income tax act. Include Life Insurance premiums and contribution to a recognized PF etc.

GOVT. ROLE :
============ Govt. keen to reduce the dependency on the state via private pension provisions. They have a choice between using compulsion and incentives. Most of the

govt. choose the later method. Tax relief is guaranteed in the pension plants and is extremely generous, reflecting the value that the govt. and the society and large place on the provision of retirement benefits. Tax treatments of the benefit varies by country and by benefits. In India, the proceeds of gratuity and provident fund are tax free in the hand of the members. In UK, a certain amount of the proceeds can be taken as tax lump sum and reminder as taxable income. Benefits due on withdrawl from schemes are generally taxed unless they are transferred to another scheme or approved pension plan.

ROLE OF LIFE INSURANCE

Role 1 : Life Insurance as investment Insurance is an attractive option for investment. While most people recognize the tax hedging and tax saving potential of life insurance, many are not aware of its advantages as an investment option as well as. Insurance products yield more compared to regular investment option as this is besides the added incentives (read bonuses) offered by insurers. You can not compare an insurance product with other investment schemes for simple reason that it offers financial protection from risks, something that is the missing in non- insurance products. Infact, the premium you pay for a investment against risk. Thus, before comparing with other scheme, you must accept that a part of total amount invested in life insurance goes towards providing for the risk cover, while the rest is used for savings. In life insurance, unlike non-products, you get maturity benefits on survival at the end of the term. In other words, if you take a life insurance policy for 20 years and survive the term the amount investor as premium in the policy will come back to you with added returns. In the unfortunate event of death within the tenure of the policy, the family of the deceased will receive the sum assured.

Now, let us compare insurance as an investment options. If you invest Rs. 10000/- in PPF, year money grows to Rs. 10950 at 9.5% interest over a year. But in this case, the access to your funds will be limited. One can withdraw 50% of the initial deposit only after four years. The sane amount of Rs. 10000/- can give you an insurance cover of upto approximately Rs. 5 to 12 lacs. (depending upon the plan, age and medical condition of life insure etc.) and this amount can become immediately available to the nominee of the policy holder on death. Thus insurance is a unique investment avenue that delivers sound returns in addition to protection. Role 2 : Life Insurance as Risk Cover First and foremost, insurance is about risk cover and protection financial protection, to be more presize-to help out last once unpredictable losses. Designed to safe guard against losses suffered on account of an unforeseen events. Insurance provide you with that uniqueness sense of security that no other form of investment provides. By buying life insurance, you buy peace of mind and are prepared to face any financial demand that would hit the family incase of an untimely demise. To provide such protection, insurance firms collect contributions for many people who face the same risk. A loss claim is paid out of the total premium collected by the insurance companies, who act as trustees to the monies. Insurance also provides a safeguard in the case of accident or a drop in income after retirement. An accident or disability can be devastating and an insurance policy can lend timely support to the family in such time. It also comes as a great help when you retire, in case untoward incident happens during the term in the policy. With the entry of private sector player in insurance, you have a wide range of products and services to choose from. Further, many of these can be further customized to fit individual/group specific needs considering the amount you have to pay now, its worth buying some extra sleep.

ROLE 3 : Life Insurance as Tax Planning Insurance serves as an excellent tax saving mechanism too. The Govt. of India have offered tax incentives to life insurance products in order to facilitate the flow of funds into productive assets. U/S 88 of Income Tax Act 1961, an individual is entitled to rebate 20% on the annual premium payable on his/her life and life of his/her children or adult children. The rebate is reducible from tax payable by a individual or Hindu undivided family. This rebate is can be availed upto a maximum of Rs 12000/on payment of yearly premium of Rs 60000/- a year, you can buy anything upward of Rs 100000/- in sum assured. This means that you get Rs 12000/- tax benefit. This rebate is deductible from the tax payable by an individual or a Hindu undivided family. THE EVALUATION OF INSURANCE INDUSTRY IN INDIA : Life Insurance in its modern form is a western concept. The Indian insurance industry is as old as it is in other part of the world. Although life insurance business has been taking shape for the last 300 years, it came to India with the arrival of Europeans. First Life Insurance Company was established in 1818 as Oriental Insurance Company, mainly to provide for widows of Europeans. The companies that follow mainly catered to Europeans and charged extra premium on Indian Lives. The first insurance company insuring Indian Lives at standard rates was BOMBAY MUTUAL LIFE INSURANCE COMPANY, which was formed in 1870. This was also the year when 1st Insurance act was passed by the British Parliament. The years subsequent to the Swadeshi movement saw the emergence of several insurance companies. At the end of the year 1955 there were 245 insurance companies. All the insurance companies were nationalized in 1956 and brought under one umbrellaLIFE INSURANCE CORPORATION OF INDIA (LIC) which enjoyed a monopoly of the Life Insurance business until near the end of 2000. by enacting the IRDA act 1999, the Govt of India effectively ended LICs monopoly and opened the doors for private Insurance companies.

Collaboration of Indian Companies with Foreign Companies Indian Company Kotak Mahindra Tata Group Sundram Finance Spic ILFC Alpic Finance 20th Century Vysa Bank Cholamandlam SBI HDFC ICICI Hindustan Times IDBI Max India Foreign Partner Chubb AIG Winterthur Metlife Cigna Allianz Canada Life ING Axa Alliance Capital Standard Life Prudential Commercial Union Principal New York Life

FUTURE SCENARIO :Before looking in future prospectus of the insurance industry, we must take a look into its past history. The independent India started with private sector Insurance companies. These companies were nationalized by the union govt in 1956 to form a monopoly known as Life Insurance Corporation of India has being under public sector

for over four decades till the govt. opened the insurance sector for private companies in 2000. When the insurance Industry was nationalized, it was consider a land mark and a milestone on the way to the socialistic pattern of society that India had chosen after independence. Nationalization has lent the industry solidity and growth, which is unparalleled. Forever, along with these achievements there also grew a feelings of insensitivity to the needs of the market, traditions in adoption of modern practices to upgrades technical skills coupled with a scene of lethargy which probably led to a feeling amongst that the insurance industry was not fully responsive to customers needs. The life insurance corporation of India has not succeeded in extending the insurance cover to all the needy people of the country due to various reasons. LIC could not insure very fast growth of insurance in India even in a long period extending over four decades. Hence the penetration of insurance is very low in India. The following indicates as explained and support this contention : 1. While per capita insurance premium in developed country is high, it is quite low in India. For instance, per capital insurance premium in India in 1999 was only $8 while it was $4800 for Japan $1000 for Republic of Korea, $887 for Singapore, $823 for Hong-Kong and $144 for Malaysia. 2. Similarly the penetration of insurance is also assessed by the ratio of Insurance premium to gross domestic products in a country. While insurance premium as a percentage of GDP was 14 % in Japan, 13% for South-Africa, 12% for Korea, 9% for UK and France. It was only around 2% in India in 1999. hence the penetration of insurance is low here. 3. The penetration of Insurance is also assessed by a ratio of Insurance premium to gross domestic savings (GDS). While insurance premium as a percentage of GDS was 52% for UK, 35 % for other European and American countries, it was only 9% in India in 1999. Hence even this index indicates low level of penetration of insurance in India.

4.

The share of India in the world market in terms of gross insurance premium is again very small. For instance while Japan has 31%, European union 25%, South Africa 2.3%, Canada 1.7% share of global insurance premium is only 0.3% for India.

OPENING OF INSURANCE SECTOR IN INDIA

The union government of India decided to open the insurance sector to make it more dynamic and customer friendly. OBJECTIVE OF LIBERALIZATION OF INSURANCE :The Main objective for the opening up the Insurance sector to the private insures as under : To provide better coverage to the India citizens. To augment the flow of long term financial resources to finance the growth of infrastructure. Indian Insurance industry has ten new entrants in year 2000-2001 in Life Insurance sector. S.No 1 2 3 4 5 6 7 8 9 10 Reg No 101 104 105 107 109 110 111 114 116 117 Date of Reg 23.10.2000 15.11.2000 24.11.2000 10.01.2001 31.01.2001 12.02.2001 20.03.2001 02.08.2001 03.08.2001 06.08.2001 Name of Company HDFC Standard Life Insurance CO. Ltd Max New York Life Insurance CO. Ltd ICICI Prudential Life Insurance CO. Ltd OM Kotak Mahindra Life Insurance CO Ltd Birla Sun Life Insurance CO. Ltd Tata AIG Life Insurance CO. Ltd SBI Life Insurance CO. Ltd ING Vyasya Life Insurance CO. Ltd Allianz Bajaj Life Insurance CO. Ltd Metlife Insia Life Insurance CO. Ltd

Insurance Industry in the year 2000 has one new entrant in Life Insurance Business name :S.No 1 Reg No 121 Date of Reg 03.01.2002 Name of Company AMPSANMAR Assurance Co. ltd

CHANGING CUSTOMER EXPECTATIONS IN INSURANCE SECTOR PRE TO POST LIBERALISATION

RESEARCH OBJECTIVE AND METHODOLOGY

OBJECTIVE :To provide insight into customers experiences prior to recent liberalization, mapping changes in expectations after liberalization and perceived performance of insurance players viz a viz expectations. RESEARCH APPROACH :In depth qualitative study to capture indicative trends which can be strictly validated, if required : Geographical coverage : Delhi, Mumbai, Kolkata, Hyderabad and Banglore RESEARCH DESIGN :RESPONDENT SEGMENT Life Policy Holders : Old Customers : Taken Insurance prior to liberalization only. Evolved Customer : Taken insurance both in per and post liberalization. New customers : Taken Insurance in post liberalization only.

Sources of information on Insurance and Product Awareness Friend, colleagues, relatives and agent additionally from direct Low awareness of several Insurance mailers, customer meets products due to poor communication Internet and media in spite of availability. Rising level of awareness of new product of both LIC and private Company

CHANGING CUSTOMER EXPECTATIONS LIFE

EXPECTATIONS FROM THE COMPANY: Premium notice should be settled regularly. Premium payment reminder should be sent through SMS and E-Mail. Cheque payment at bank, imternt and special collection centres ( Om Kotak in Mumbai ) Payment through credit cards. Facility of purchasing policy through more channels. Flexible/wider range of products. Focus on cutomer education. Fine/prints devi in detail, correct disclosures. Transparent and fair dealings. Information on new products/services through call centres, internet, mailers, new agent customer meets. Set up toll free help line. Where customer is cancelled is deposited should be entitled to be the commission thereof.

COMPANY PROFILE
INTRODUCTION
ICICI Prudential Life Insurance Corporation Ltd. was incorporated on 20.7.2002. This company is a joint venture of ICICI(74%) and Prudential PLC UK(26%). The company was granted certificate of registration for carrying out Life Insurance Business, by the Insurance Registry and Development authority on Nov 24.2000. it commenced commercial operations on Dec 19.2000, becoming one of the few private sector players to enter the liberalized arena. DETAILS OF ICICI :This is Indian participate company of this insurance Co.. ICICI Ltd was established in 1955 by World Bank, the govt. of India and the Indian Industry, to promote industrial development of India by providing project and corporate finance to Indian Industry. Since inception, ICICI has grown from a development bank to a financial conglomerate and has become one of the largest public financial institutions in India. ICICI has thus far financed all the major sectors of the economy, covering 6848 companies and 16851 projects. DETAILS OF PRUDENTIAL PLC :Prudential Plc was founded in 1848. Since then it has grown to become one of the largest providers of a wide range of savings products for the individuals including life insurance, pensions, annuities, unit trust and personal banking. It has presence in 15 countries, and caters to the financial needs of over 10 million customers.

Prudential is the largest life insurance company in the United Kingdom. Asia has always been an region for prudential and it has had a presence in Asia for 75 Years. In fact Prudential first Overseas operation was in India, way back in 1923 to establish Life and General Branch agencies. This is the only company who market maximum product with goof feature in competition with LIC. In my opinion these companys stand seconds in merits. It has introduced the following Insurance product :1. 2. 3. 4. 5. 1. Save n Protect Cash Back Smart Kid ICICI PRU Life Guard Life Time Pension.

SAVE N PROTECT :It is a fix term policy that combines saving with life cover in this plan, you pay

premium regularly during the term. On death of the life assure upto age 7 years the basic premium paid will be return without interest. On the death of the life assured after 7 years, the beneficiary will get the sum assured, guaranteed additions 3.5% compounded interest annually for the first 4 years and the vested bonuses was the policy matured at the end of the term, you can get the full sum assure and guaranteed addition, 3.5% a compounded annually for the 1st 4 years as well as the vested bonuses. Minimum Age 0 years Maximum Age 60 years Term to Avail the plan : Minimum term 10 years, maximum term 30 years The maximum cover ceasing age is 70 years. 2. CASH BANK :-

A fixed term policy of 15 to 20 years in which premiums are paid through out the term of the policy. Survival benefit payment at regular intervals are paid to provide you with the liquidity full sum assured, along with the guaranteed addition 3.5% compounded annually for the 1st four years at the vested bonuses would be payable on death, irrespective of the survival benefit paid. On death of the life assured, the beneficiary will get the full sum assure, the guaranteed bonuses and the vested bonuses, irrespective of the survival benefit already paid. The survival benefit payable are as per the table : Policy Term At end of year 15 Years Survival pay. a basic 3 6 9 12 15 (Maturity) sum assured 10% 15% 20% 25% 50% gur add. bonus Policy Term % At the end of year sum assured 4 8 12 16 20 (Maturity) 10% 15% 20% 25% 50% gur add. bonus 20 Years Survival pay a % bas

Minimum Age 16 Years Maximum Age 55 years

Term to Avail Plan: Minimum Term 15 years Maximum Term 20 Years

The maximum maturity age is 70 years 3. SMART KID :Smart kid is so designed that it provides you the flexibility to structure the benefit in accordance to your needs. You get the security of assured payments under your plan depending upon the benefit structure chosen by you. Whats more, you can decide the term of the plan, so that the benefit are paid when you need it. You can also choose the policy to mature between 22-25 years of the childs age. In case of survivals during the term of the policy you can get the payouts after some intervals. At the end of 10 yr of the policy 12 yr of the policy 15 yr of the policy 17 yr of the policy Minimum Age 0 Years Maximum Age 12 years Parents of Minimum age 20 years and Maximum age 60 years Term to Avail Plan: Minimum Term 10 years Maximum Term 25 Years 4. LIFE TIME PLAN :ICICI Prudential Life time Pension Plan combine the best of investment and insurance. The solution gives the power of maintaining your life style needs for as long as you live. It is a regular premium plan it gives you the freedom to choose the amount, the premium, and invest your money in the market-linked funds, to generate potentially higher returns. A part of the premium paid is used to pay for the death benefit (if any) opted for by you and the rest be invested in the plan of your choice. Childs age 15 years 17 years 20 years 22 years Payouts 20% of the sum assured 25% of the sum assured 25% of the sum assured 30% of the sum assured + GA + VB

On the retirement date the accumulated value of the units will be used to purchase and annuity-to provide you with regular income for life. Minimum Age 18 Years Maximum Age 60 years Term to Avail Plan: Minimum Term 10 years Maximum Term 52 Years 5. LIFE GUARD :Under this plan, a sum assure is payable in case of death of the life assure during the term of contract. One can choose the lump sum that would replace the income lost to ones family in the unfortunate event of the ones death. Since this nonparticipating (without profits) plan is a pure, risk cover plan, no benefits are payable on survival to the end of the term of the policy. Minimum Age 18 Years Maximum Age 50 years Term to Avail Plan: Minimum Term 5 years Maximum Term 25 Years Maximum age that plan covers is 65 years Minimum premium payable is 2400 per annum

PROFILE
OBJECTIVES :-

Spread Life Insurance much more 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 responsible cost. Maximum mobilization of peoples savings by making insurance-linked savings adequately attractive. Bear in mind, in the investment of funds, the primary obligation to its policy holders, whose money it holds in trust, without losing sight of the interest of the community as whole, keeping in view national priorities and obligation of attractive return. Conduct business with almost and with the full realization that the money belongs to the policy holders. Act as trustees of the insured public in their individual and collective capacities. Involve all people working in the corporation to the best of their capability in furthering the interests of the insured public by providing efficient service with courtesy. Promote amongst all agents and employees of the corporation a sense of participation, pride and job satisfaction through discharge of their duties with dedication towards achievement of corporate objective. PRODUCTS :1. 2. 3. 4. 5. 6. Term Insurance Plan Endowment Plan Money Back Plan Jeevan Mitra Plan Jeevan Sathi Plan Jeevan Surbhi Plan

7.

Children Plan a. b. c. Bal Vidya Jeevan Chhaya Children Money Back

TERM INSURANCE PLAN :Availability of Plan :Minimum Age of 12 Years Maximum Age of 60 Years Term to Avail Plan :Minimum Term 5 years Maximum Term 55 years Maximum Age that plan cover 70 years ENDOWMENT PLAN Availability of the plan : Minimum age 12 years. Maximum age 65 years. Term to Avail plan : Minimum term 5 years. Maximum term 55 years. Maximum age that the plan cover 75 year. MONEY BACK PLAN :Term to Avail Plan : 20,25 and 30 years for regular premium.

Maximum age that plan will cover till 70 years. JIVAN MITRA POLICY :Availability of the Plan :Minimum Age 18 years Maximum Age 50 years Term to Avail plan :Minimum Term 15 years Maximum age 30Years Maximum Age that Plan cover is 70 years. JIWAN SATHI Availability of the Plan :Minimum Age 20 years Maximum Age 50 years Term to Avail plan :Minimum Term 15 years Maximum age 30Years Maximum Age that Plan cover is 70 years. CHILDREN PLAN :1. 2. CHILD AS A POLICY HOLDER PARENTS AS A POLICY HOLDER & CHILD AS BENIFICIARY

Child as a policy Holder : Jeewan Sukanya Jeewan Kishore

Jeewan Sukanya :Availability of the Plan :Minimum Age 1 years Maximum Age 12 years Term to Avail plan :Minimum Term 38 years Maximum age 49Years Maximum Age that Plan cover is 20 years. CHILDREN MONEY BACK POLICY :Availability of the Plan :Minimum Age 0 years Maximum Age 10 years Term to Avail plan :Minimum Term 16 years Maximum age 26Years Maximum Age that Plan cover is 26 years.

GENERAL BENEFITS :PREMIUM WAIVER BENEFITS :For a policy taken on the life of a child (children policies-Jeewan Kishore, Jeewan Sukanya, Jeewan Balya & children money back policy) the premium is paid by the proposer. Under these policies the proposers life is not covered. It means if proposer dies before maturity of the policy, no money becomes payable to the family. On the death of the proposer, the family will loose the income of the propser. In addition to this problem, the other family members has to continue the payment of

premium. To avoid this problem, the premium waiver benefit can be opted for, by the proposer. Under this benefit, if the propser dies before maturity of the policy, future premium are waived future premium not be paid by the other family members. The premium waiver benefit may be obtained by paying some extra premium depending upon the age of the policy holder. This extra premium is calculated 100 rupee of basic premium per thousand. TERM RIDER BENEFIT :Under children money back policy, the life risk covered is that of the child. If the proposer dies pre maturely, no money becomes payable to the family. To avoid this problem the term rider can be added to the childrens money back policy. Under this benefit if proposer dies before 18 years of the child a sum equal to 20% of the sum assure becomes payable to the family. Other benefits to the child TAX BENEFIT :The premiums paid under the plan qualify for rebate U/s 88 of the Income Tax Act, 1961 and the returns are fully exempted under sec 10(10D). OPTIONAL BENEFITS :Critical Illness, Double Sum Assured Benefits, Accidental Death Benefit etc.

HOUSING DEVELOPMENT FINANCE CORPORATION LTD. (HDFC):

Founded in 1977, HDFC is today the market leader in housing finance in India and has extended financial assistance to more than 15 lacs homes. HDFC has more than 110 offices in India presently. It has also one international office in Dubai and 3

more services associate in Kuwait, Qatar and sultanate of OMAN. HDFCs assets base amount to over 15,000 crore. Its financial strength is reflected in highest safety rating of FAAA and MAAA awarded by CRISIL and ICRA two of Indias leading credit rating agency respectively, for the last 6 year consecutively. It has a depositor base of over 11 lacs customer and a deposit agents force of over 46,000 of the total deposit, 73% are sourced from individual and trust depositors, which demonstrates the tremendous confidence that retail investors have in the company. HDFC- promoted companies have emerged to meet the investors and customers needs. HDFC bank for commercial banking, HDFC Mutual Fund for mutual fund products, to be followed very shortly by HDFC Standard Life Insurance Company for the life insurance and pension products. Being an institution that is strongly committed to the highest standards of quality and excellence, HDFC has won several accolades in the past few years. One such award is the Ramakrishnan Bajaj National Quality Award for the year 1999. This award was instituted to award recognition to Indian companies for business excellence and quality achievement. HDFC is the only company so far to receive this award in the service category.

STANDARD LIFE ASSURANCE COMPANY ( SLAC ) :

Founded in 1952, Standard Life has been at the for frontry of the UK Insurance industry for 176 years by combining sound financial judgement with integrity and reliability. The kingdom, Ireland, Spain, Germany and some more with representative office in Hong-Kong and China. One of the most recent success was the launch of standard Life Bank on 1st January 1998. In less than 20 months, the bank collected Rs. 28,000 crore in deposit. The introduction of its innovative mortgage product in Jan. 1999, had an immediate impact on the UK market, accounting for 11% of all new lending within the first operational tear. The current loans outstanding amount to Rs. 43,300 crore.

Standard Life has total assets of Rs. 55,000 crore and new premium income last year 33,000 crore. Its UK investment portfolio account for approximately 2% of all shares listed in the London Stock Exchange. Its one of the new Insurance companies in the world to receive AAA rating from two of the leading international credit rating agencies. Moodys and Standards And Poors. The latter described Standard Lifes ability to meet its claim obligations as overwhelming under a variety of economic conditions. Not surprisingly, Standard Life is rated as one of the few strongest companies in the world, in financial terms. The quality and value standard Life brings to this venture are immense. The companys reputation in UK market remains unrivalled. Besides being voted Company of the ears for overall service, for the third consecutive year. Standard Life was recently voted Company f the decade by independent brokers.

PRODUCTS
1. 2. 3. 4. TERM ASSURANCE PLAN ENDOWMENT ASSURANCE PLAN MONEY BACK PLAN CHILDRENS PLAN

5. 6. 7. 8.

PERSONAL PENSION PLAN SINGLE PREMIUM WHOLE OF LIFE INSURANCE PLAN UNIT LINKED PENSION PLAN UNIT LINKED ENDOWMENT PLAN

Protection against uncertainties of life

TERM ASSURANCE PLAN :Minimum age 18 years. Maximum age 60 years. TERMS TO AVAIL PLAN : 20,25 and 30 years that plan can cover till 65 years. ENDOWMENT PLAN :Minimum age 12 years. Maximum age 60 years. TERM TO AVAIL LOAN :Minimum term 10 years. Maximum term 30 years. Maximum age that plan can cover till 75 years. MONEY BACK PLAN :Term policy term 10 15 20 No. of years from policy date 5 10 15 40% 30% 25% 30% 25% 25%

20

25

25 30

20% 15%

20% 15%

20% 15%

20% 15% 15%

Minimum age 12 years. Maximum age 60 years. TERM TO AVAIL PLAN :Minimum term 10 tears Maximum age 30 tears Maximum age that plan can cover till 75 years. CHILDEREN PLAN :Option On the death of the insured On maturity person during the policy Maturity benefit term Future premiums waived Sum assured + bonuses and the policy continued Accelerated benefit plan till maturity Sum assured + bonus paid On the survivals of the and the policy stops insurance. Parent of the maturity date Double benefit plan Sum assured + bonus paid Sum assured paid, future Sum assured + bonuses premium waived and the paid continue Minimum age 18 years Maximum age 60 years TERM TO AVAIL PLAN :Minimum term 10 years Maximum term 25 years Maximum age that plan can cover till 75 years PERSONAL PENSION PLAN :-

Minimum age 18 years Maximum age 60 years SINGLE PREMIUM WHOLE OF LIFE INSURANCE :Minimum age 18 years. Maximum age 70 years You can buy the product on a single life basis Minimum sum assured Maximum sum assured 25000 500000

Premium : Rs 950 per thousand of sum assured GENERAL BENEFITS :PREMIUM WAIVER BENEFIT :For a policy taken on the life of a child (children policies Jeewan Kishore, Jeewan sukanya, Jeewan balya and children money back policy) the premium is paid by the proposer. Under these polices the propsers life is not covered. It means if proposer dies before maturity of the policy, no money becomes payable to the family. On death of the proposer, the family will loose the income of the proposer. In addition to this problem the family has to continue the payment of premium. To avoid this problem, the premium waiver benefit can be opted for, by the proposer. Under this benefit, if the proposer dies before maturity of the policy, future premium are waived future premium not to be paid by the other family members. The premium waiver benefit may be obtained by paying some extra premium depending upon the age of the policy holder. This extra premium is calculated per 100 rupee of basic premium per thousand.

As it is difficult to compare all the policies of all the companies because they vary in their benefits etc. So in this project I am comparing only four policies of three Companies i.e. HDFC Standard Life, LIC, ICICI Prudential. Policies are named as : TERM ASSURANCE PLAN ENDOWMENT ASSURANCE PLAN MONEY BACK PLAN CHILD ADVANTAGE PLAN

Min to Max Age 18-60 years Name of the company Age of the person Term of the policy Sum assured Basic premium (without any premium) Returns (on death) Returns (on maturity) other benefits NI2

Premium Base Comparison Term Plan

HDFC SLIC 30 years LIC 30 years ICICI PRO 30 years

Min to Max. term 10-30 years OM KOTAK 30 years

10 years 1,00,000 10,300

10 years 1,00,000 9,324

10 years 1,00,000 11,809

10 years 1,00,000 11,237

S.A. + Bonus

S.A. + Bonus NI2 (WOP), (ADB)

S.A. + Bonus NI2 (ADBR),(ABR)

S.A. + Bonus NI2 (CI),(ADB)(PDB)

(CI),(ADB),(ASA)

Min to Max Age 12-60 years Name of the company Age of the person

Premium Base Comparison Endowment Plan

HDFC SLIC LIC ICICI PRO

Min to Max. term 10-30 years OM KOTAK

30 years

30 years

30 years

30 years

Term of the policy

20 years

20 years

20 years

20 years

Sum assured Basic premium (without any premium)

1,00,000 5,100

1,00,000 4,895

1,00,000 5,216

1,00,000 5,321

Returns (on death)

S.A. + Bonus

S.A. + Accumulate d Bonus

S.A. + Bonus

S.A. + Bonus

Returns (on maturity) Other benefits

S.A. + Bonus

S.A. + Bonus

S.A. + Bonus+ GA (ADB), (ABR), (CI), (MSR)

S.A. + Bonus

(CI),(ADB), (DSA),(WOP)

(WOP), (ADB)

(CI),(ADB)(DSA), (2GD), (TB)

Min to Max Age term 12-60 years Name of the company Age of the person Term of the policy 30 years 20 years

Premium Base Comparison Money Back Policy

Min to Max.

HDFC SLAIC

LIC

ICICI PRO

10-30 years OM KOTAK

30 years 20 years

30 years 20 years

30 years 25 years

Sum assured 1,00,000 Basic 7,585 premium (without any premium) Returns (on death) Returns (on maturity) S.A. + Bonus Return after 5-5 years For 20 Years Policy 20%-20% and 20% alte 5-5 years gap+ Bonus

1,00,000 6,380

1,00,000 7,019

1,00,000 6,040

S.A. + Bonus

S.A. + Bonus S.A. + Bonus Return after 5-5 years For 20 Years Policy 20%-20% and 20% alte 5-5 years gap+ Bonus

Return after 5- In 20 years 5 years For 20 Years Policy 20%20% and 20% alte 5-5 years gap+ Bonus Policy returns after 4-4 years gap. 1st year-10% 2nd year-15% 3rd year-20% 4th year-25% On maturity50%+ Bonus (ADB), (DAB), (CI), (MSR)

Other benefits

(CI),(ADB), (DSA),(WOP)

(WOP), (ADB)

(CI),(ADB), (PDB), (2GD)

Min to Max Age of Child 0-17

Premium Base Comparison Min to Max. term Children Policy

LIC 6 years 15 years 1,00,000 ICICI PRO 6 years 15 years 1,00,000 10-30 years OM KOTAK 6 years 15 years 1,00,000

Min to Max Age of Policy Holder 12-60 years Name of the company Age of the Child Term of the policy Sum assured HDFC SLIC 6 years 15 years 1,00,000

Basic premium (without any premium) Returns (on death)

7,500

6,380

7,991

7,620

Future premium waived and Policy continue till maturity Sum assured+ Bonus

Future premium waived and Policy continue till

Future premium waived and sum assured immediately

Future premium waived and Policy continue till maturity

Returns (on maturity)

maturity after the death Return after 2- Return after 22 years gap 20 % 20%-30% -30% and 2 years gap on maturity S.A.+ Bonus

Sum assured+ Bonus

Other benefits

(ADB,(WOP)

Bonus (PWP), (TRB) (ADB),(IBR), (ABR),(WOP)

(LGB),(ADB),(WOP)

OTHER BENEFITS :1. 2. 3. 4. 5. Tax Benefit Loan Facility The policy holder can pay the premium yearly, half yearly and quarterly If policy holder avail any additional, he will paid more premium The best of most popular plan of: HDFC ICICI LIC OM KOTAK 6. 7. CHILDREN PLAN LIFE TIME JEEVAN MITRA CAPITAL MULTIPLE

When the age of the person grow old. The premium also increased Premium rate increased in case of person taking intoxicants in comparison to healthy person.

1) 2) 3)

Questionnaire method was used by me, with most of the questions as the closed ended questions. Sample Size - 200 Age Group - above 22

OBJECTIVES OF THE STUDY :1. To know about the requirement habit of the people in the region of Chandigarh & Mohali. 2. To know about the views of people regarding various Insurance Companies. 3. 4. 5. Position of the Insurance companies in the mind of the consumer To know about the competition regarding various Insurance Companies. To find out the position of Insurance Companies in the market.

LIMITATIONS :1. 2. 3. Most of the people are not interested to give the right data. Some people dont know about the private Companies. A span of 4 weeks training was too short for survey.

DATA ANALYSIS AND FINDINGS :QUES 1 : Awareness of the Various companies : S.No. A B C D E Particulars ICICI HDFC OM Kotak Mohindra MAX New York Life Insurance SBI Life Insurance %age 70% 60% 5% 15% 10%

70% 60% 50% 40% 30% 20% 10% 0%

%age ICICI HDFC OM Kotak Mohindra MAX New York Life Insurance SBI Life Insurance

Respondent response about the awareness of the insurance Companies QUES 2 : How the people know about the companies

S.No. A B C D

Particulars Newspaper TV Ads Banners/Posters Friends

%age 75% 60% 2% 90%

90% 80% 70% 60% 50% 40% 30% 20% 10% 0% %age Newspaper Banners/Posters TV Ads Friends

QUES 3: What the people think about the Insurance S.No. A B C Particulars Necessity for protection Security Imposition of an extra burden of expenses A compulsory tool for tax saving %age 89% 5% 78%

90% 80% 70% 60% 50% 40% 30% 20% 10% 0% % age Neccesity for protection Security Imposition of an extra burden of expenses A compulsory tool for tax saving

QUES 4:

Main considerations that a customer looks at while purchasing an Insurance Policy.

S.No. A B C D E

Particulars TAX SAVING PROTECTION PENSION INVESTMENT

%age 90% 75% 80% 25% 35%

90% 80% 70% 60% 50% 40% 30% 20% 10% 0% % age TAX PENSION SAVING INVESTMENT PROTECTION

QUES 5 :

What a respondents see while purchasing a Insurance from the Company.

S.No. A B C D E F

Particulars Standing and Goodwill of the company Product Range of the company Advertisement being released by the company Services being given by the company Communications and knowledge of the Representatives Returns of Bonus declared by the company

%age 90% 10% 5% 80% 10% 85%

90% 80% 70% 60% 50% 40% 30% 20% 10% 0% %age Standing and Goodwill of the company Product Range of the company Advertisement being released by the company Services being given by the company Communications and knowledge of the Representatives Returns of Bonus declared by the company

QUES 6 : Excising Policy

S.No. A B

Particulars Yes No

%age 80% 20%

80% 70% 60% 50% 40% 30% 20% 10% 0% %age Yes No

QUES 7 :

From where a respondent purchase the previous Insurance Policy

S. No. A B C D

Particulars Directly from the company Any unknown agent Any known agent Others

%age 10% 10% 75% 5%

80% 70% 60% 50% 40% 30% 20% 10% 0% % age Directly from the company Any unknown agent Any known agent Others

QUES 8 : Other Investment and Saving Tools where respondent Invest

S. No. A B C D E F

Particulars NSC Bank Deposits KVP Tax Saving Bonds PPF and Post Office Others

% age 90% 40% 5% 55% 92% 5%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% % age

NSC KVP PPF and Post Office

Bank Deposits Tax Saving Bonds Others

CONCLUSIONS
FINDINGS AND RECOMMENDATIONS :
1. The Monopoly of LIC has been broken because private Insurance companies came into the market. 2. 90% respondents are aware of privatization of Insurance Industry and 10% respondents do not know about private companies.

3. 80% people know about ICICI Insurance Company. 75% people know about HDFC Insurance Company and 15% people know about other companies. 4. Some people preferred to the private companies because of their better services. 5. Some people believe only or preferred only Public Insurance companies like LIC. 6. As majority of the population of Chandigarh & Mohali City belongs to the service class so they consider tax saving rather than purchasing a Life insurance. 7. The Financial growth of Private companies is much more than Life Insurance companies 8. The private companies always keep in touch with their customers with the latest information. 9. Most of the respondent said that private companies should not be trustworthy. 10. Most of the people go for Children benefit because of Triple benefit. 11. Now, a days people preferred to invest the money in Insurance policy rather than in Banks because of better benefits of Insurance polices growth money with life cover. 12. The respondents are above 45 they believe in Public Insurance companies and those respondents who are less than 45 believe in Private Insurance companies. 13. HDFC has made its presence felt in the market in a short span of time.

SUGGESTIONS :
1. Advertisement should be done on Television and especially Posters and Banners. This will greatly help in raising awareness level. 2. 3. Insurance company should show more commitment with the customer. Private companies give better services to the customers comparatively to Public companies.

4. 5.

The private company should create good relation and communication. Private companies should work together to spread awareness regarding the benefit given by the Private Companies.

6. 7.

Private Insurance Companies give some discount to attract the customer A public relation officer should be appointed in the company who deals with customers and their needs.

8. 9.

Cross training should introduce in Private Companies. Private Companies needs to the market their product better and should create greater awareness about their product and services. They need extensive marketing advertising about the additional benefit provided by them in comparison to the policies offered by LIC.

10.

Agents have got maximum influence on a customer. They are the one who introduce the prospect to different policies. So agents should be given full-fledged training and the training should be strict.

11.

Special emphasizes should be on known cover policies because these type of policies have more potential in the market.

BIBLIOIGRAPHY
Study Material Of HDFC STANDARD LIFE INSURANCE Study Material Of LIC Study Material Of ICICI PRUDENTIAL WEBSITES

www.hdfcstandardlife.com www.licindia.com www.icicipufile.com www.bimaonline.com

http://www.hdfcstandard.com http://www.iciciprulife.com http://www.bimaonline.com

http://www.licindia.com